Sitting of 7 November 1991

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

    Special Constables
    Mr. Pawsey: To ask the Secretary of State for the Home Department what impact recent changes to the conditions of special constables have had on recruiting; and what plans he has further to increase numbers of specials.
    The Parliamentary Under-Secretary of State for the Home Department (Mr. Peter Lloyd): We are taking a series of measures to increase the strength of the special constabulary with the aim of recruiting an additional 10,000 special constables. We launched a national recruiting campaign at the beginning of this year and are shortly introducing a pilot scheme to pay a bounty to specials, as a further boost to recruitment. The latest information, from a sample of forces, suggests that strength increased by up to 6 per cent. in the first half of this year.
    Mr. Pawsey: I am grateful to my hon. Friend for that exceedingly full and comprehensive reply—the type of reply that we have come to expect from this Minister. Does he agree that more special constables would do a great deal to reduce levels of crime, particularly if they were better trained and more adequately remunerated? Will he redouble his efforts to establish a corps of special constables who would play the same part as the Territorial Army vis-à-vis the regular Army?
    Mr. Lloyd: I am grateful to my hon. Friend for his opening remarks, after which perhaps I should be brief in answering his supplementary question. The specials certainly show the kind of public spirit and professionalism of the Territorials. The difference, of course, is that the specials are not preparing for a conflict that we hope will never happen. They are already directly and effectively involved in the fight against crime—which, alas, is all too real—and are performing the role that my hon. Friend wants them to perform.

    Work Camps
    Mr. Speller: To ask the Secretary of State for the Home Department if he will provide open air work camps for younger offenders serving custodial sentences.
    The Minister of State, Home Office (Mrs. Angela Rumbold): Purposeful work is an important part of the
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    regime for young offenders. There are at present opportunities to undertake agricultural and horticultural work in the open air at 23 young offender institutions.
    Mr. Speller: Is my right hon. Friend aware that her Department may to some extent be missing the point? There is general disgust at the short non-custodial sentences that are being passed because of the absence of space in prisons of various sorts. In view of the number of military establishments underused and basically secure, should not we use those—and, if need be, make use of military personnel, too—to enable us to stop the amazing amount of re-offending by those on non-custodial sentences?
    Mrs. Rumbold: There are tough and dirty jobs for youngsters who are on probation and in non-custodial care, so I would not necessarily accept my hon. Friend's strictures on that point. I repeat what my right hon. Friend told the House on Tuesday: if the prison population continues to rise, he will consider calling on the assistance of the military and, possibly, calling for the use of military accommodation.
    Mr. Fraser: Has it occurred to the Minister that the problem is that there are plenty of young people camped out in the open air, but that they do not have any work?
    Mrs. Rumbold: The question refers to young offenders. Those in young offender institutions are occupied satisfactorily, to a certain extent, in open air work.
    Mr. Marlow rose——
    Mr. Speaker: Mr. Mellor. No, Mr. Marlow.
    Mr. Marlow: I am very flattered, Mr. Speaker.
    What are we going to do about those young thugs and hooligans who have no respect for authority, no respect for law and order, no respect for property, no respect for elderly people and who terrorise communities? Is it not time that instead of having open air imprisonment we had an open air thrashing or open air stocks to stick them in?
    Mrs. Rumbold: I well understand my hon. Friend's outrage at the behaviour of some youngsters today. Had he been in his place on Tuesday, when my right hon. Friend made the opening speech on the Loyal Address, he would have heard him say that the Government would introduce a measure to deal with the young thugs, as my hon. Friend calls them, who indulge in joyriding, a practice which hon. Members in all parts of the House deplore; those young people will, therefore, be offending.
    Mr. Sheerman: Is not it time that the Minister ignored some of the siren voices behind her? She knows that the peak age for offending is 18. The 16 to 18-year-old group is the very group that has been punished by the Government. They have been punished by being stripped of their ability to claim benefit and by the pushing down of the real value of their training allowance. They have been punished in terms of unemployment and homelessness. Is not it about time that we had some more positive policies? Then young people would respect the Government.
    Mrs. Rumbold: Is not it time that Opposition Members realised that there is an absolute necessity for young people to grow up with respect for the law, property and persons? There is absolutely no need for young people to

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    commit crimes when they have available to them perfectly good training courses that have been provided by the Government and with Government money.
    Mr. Shersby: Does my right hon. Friend recall that until the Criminal Justice Act 1988 amended the law, the penalty for taking away a vehicle without consent was up to three years' custodial sentence? That penalty was reduced at the time to six months. Is it my right hon. Friend's intention to restore a custodial sentence of up to two years for that offence?
    Mrs. Rumbold: Yes, Sir.

    Policing, Cumbria
    Mr. Campbell-Savours: To ask the Secretary of State for the Home Department what representations he has received from Cumbria county council on the question of policing in the county.
    The Secretary of State for the Home Department (Mr. Kenneth Baker): I am considering the police authority's application for an additional 24 police posts for 1992–93.
    Mr. Campbell-Savours: Has the Home Secretary noted the dramatic 52 per cent. increase in crime in west Cumbria, which is reflected in vandalism, violence, intimidation of the elderly, intimidation of shopkeepers, ram-raiding and burglary? Does he regard those figures as appalling? When he talks about appointing 1,000 police officers nationally, does he understand that that means only 1·5 additional police officers per constituency, which does not begin to meet the problem? We need 30 police officers immediately. The people of Workington demand those appointments.
    Mr. Baker: The hon. Gentleman will recall that since we have been in office, there has been an increase in the strength of the Cumbrian police of 110 uniformed officers and 144 civilians, making a total increase of 254. There were eight extra police officers this year, seven of them on patrol duties. I understand the hon. Gentleman's concern, because I have seen the reports of the increase in vandalism and hooliganism in Workington. I assure the hon. Gentleman that since we have been in office we have increased expenditure for the Cumbrian police authority by 80 per cent.
    Mr. Campbell-Savours: It is not enough.
    Mr. Baker: When Labour were in office they cut police expenditure by 2 per cent.
    Mr. Campbell-Savours: Do something.
    Mr. Speaker: Order.
    Mr. Favell: My right hon. Friend may have read reports in the newspapers today that the European Commission wants to abolish newspaper boys and girls in Cumbria and elsewhere in the United Kingdom. Are the police likely to be involved in that?
    Mr. Baker: Not as far as I know.
    Mr. Hattersley: Is the problem to which the Home Secretary referred special to Cumbria or is it a general one? Can he tell us of one chief officer of police in Britain who believes that he has sufficient police officers to perform the duties imposed upon him?
    Mr. Baker: About eight or 10 chief constables are not asking for an increase in police forces for next year—[Interruption.]—and I shall be glad to send the right hon. Gentleman a list. If he is so proud of police numbers, he should recall that when he was a member of the Labour Cabinet he cut police expenditure and left our police 8,000 under establishment. He is the guilty one.
    Mr. Paice: I am sure that the public in Cumbria and elsewhere realise that no other Government would allocate these extra resources for the police. When my right hon. Friend is considering Cumbria's representations, will he also consider the position of Cambridgeshire, where the number of police per thousand population is the lowest in the country?
    Mr. Baker: I shall certainly consider that. As I said, I have secured increased expenditure next year for another 1,000 uniformed police officers, in addition to the further 600 this year. Since 1979, there has been an increase of 15,000 uniformed officers, whereas their numbers were cut under the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley).
    Mr. Campbell-Savours: On a point of order, Mr. Speaker:
    Mr. Speaker: No point of order arises from this.
    Mr. Campbell-Savours: I wish to raise the matter on Adjournment.
    Mr. Speaker: On the Adjournment. Yes, all right.

    Child Molesters
    Mr. Cryer: To ask the Secretary of State for the Home Department if he will make a statement on sentencing policy towards sex offenders who have molested children.
    The Minister of State, Home Office (Mr. John Patten): This is a serious issue. The Criminal Justice Act 1991 endorses the severity with which the courts view these offences and strengthens their powers to protect the public from offenders. Courts will be able to impose on a sexual offender who poses a serious risk to the public a longer custodial sentence than would be justified solely by the seriousness of the offence. The courts will be able to order longer and more intensive supervision and treatment for sex offenders.
    Mr. Cryer: What does the Minister say to my constituents who, following abuse by their father for many years, summoned up enough courage to give evidence in court after he attacked the 10-year-old granddaughter of the family? After they had gone through the ordeal of giving evidence, their father, who was found guilty of eight serious charges with nine being left on the file, was put on probation and allocated to a hostel not two miles from where his last victim lives and where he can be seen by the family as they pass through the town centre. Does the Minister realise that that is deeply upsetting to the family, who have been devastated by the experience? Some form of custody—whether in hospital or in prison is a moot point—is required to give peace of mind to the people who gave evidence and who displayed much courage and fortitude in so doing.
    Mr. Patten: I entirely understand the strong feelings of the hon. Gentleman's constituents and I sympathise with them. He will appreciate that I am not aware of the details of the case. The hon. Gentleman is concerned about the placement of this convicted person in a nearby hostel, so if he will give me the details of the case I shall have it investigated by Her Majesty's inspectorate of probation.
    Rev. Martin Smyth: The Minister has shown concern about sentencing patterns, but does his concern extend beyond that to cases where the prosecution service has not been prepared to prosecute an accused person? Does not that leave others open to molestation as well?
    Mr. Patten: The Crown prosecution service always faces the difficult task of obtaining adequate evidence to secure a conviction in court. However, it should be some consolation to the hon. Gentleman and the hon. Member for Bradford, South (Mr. Cryer) that in the past five years the average sentence for rape has increased by 70 per cent. The Criminal Justice Act will allow for much longer supervision of sex offenders after they are released from gaol. My opinion is that sex offending cannot be cured, but it can and should be better supervised and controlled.
    Mr. Dickens: Does my right hon. Friend agree that many of the views that I have expressed in the House, which at times have been received with ridicule and dismay, have become law subsequently? If the Home Office really wants to stop the abuse of children and the rape of women, it must pass a law allowing the castration of the perpetrators, not for a first offence, in case there is a mistake, but for a second offence—unless people are unfit to plead. That is the way to stop it and that sanction would hardly ever have to be used because it would be the ultimate deterrent for men.
    Mr. Patten: My hon. Friend's suggestion is not the present intention of Her Majesty's Government. We intend to reinforce the courts,as we have done in the Criminal Justice Act 1991, by sustaining their powers to sentence convicted sex offenders to life imprisonment. The reforms introduced by my right hon. Friend the Home Secretary will mean two things: first, convicted sex offenders will, rightly, spend much longer in prison; and, secondly, they will be supervised when they are released.

    Racist Attacks
    Mr. Cohen: To ask the Secretary of State for the Home Department what recent representations he has received urging him to take new action to combat racist attacks.
    Mr. Kenneth Baker: In the new year I will publish a progress report on the work of the police service and other agencies in tackling the problem of racially motivated attacks. I make it clear that there should be no place for racially motivated attacks in our country.
    Mr. Cohen: Is the right hon. Gentleman aware that it has been calculated that there is one racial attack every 30 minutes and that the savagery of such attacks has increased? With racism on the increase in Europe and in this country because of high unemployment, is not there a danger that there could be yet more racial assaults in Britain? Have not calls for action by organisations such as the Society for Black Lawyers been met by Government
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    intransigence? Is not it time to have a specific crime of racial harassment, as I proposed in my 1985 Racial Harassment Bill?
    Mr. Baker: I do not agree with the hon. Gentleman's latter point. I recognise that there has been an increase in racially motivated attacks—there was a rise in 1990. As the hon. Gentleman knows from a debate on London which he attended, last year nearly 3,000 attacks were reported in London—an increase of 8 per cent. The clear-up rate is about 30 per cent. I assure the House that, in all the speeches that I have made at police meetings and conferences this year, I have repeatedly stressed to the police that I want them to give this type of crime high priority.
    Mr. Janman: Clearly the tributary of the River Tiber that runs through Leyton is already foaming. Does my right hon. Friend agree that the best and most subtle way to prevent such attacks is to ensure that the British people know that they have a Government who are taking the steps necessary to keep firm control of immigration and particularly to prevent people from abusing our immigration rules by entering this country under the bogus concept of being political refugees? I congratulate my right hon. Friend on the steps that he has taken to do just that.
    Mr. Baker: We have followed a policy of keeping tight control of immigration. As my hon. Friend knows, I shall introduce the Asylum Bill to deal with that problem. Over the years, successive Governments of all complexions have worked to improve race relations and Britain probably has the best record in Europe for harmonious race relations.

    Asylum
    Mr. Corbyn: To ask the Secretary of State for the Home Department what representations he has received concerning the access to advice of asylum seekers.
    Mr. Peter Lloyd: Following my right hon. Friend's statement about asylum on 2 July, we have received about 100 letters from hon. Members and about 750 from members of the public and interested organisations. Most have included comments on the availability of advice for asylum seekers.
    Mr. Corbyn: Will the Minister concede that the proposal in the Asylum Bill removes the right of people seeking political asylum to have access to green form advice? Is he aware that that proposal has been met with horror by advice agencies, legal aid practices and members of the United Kingdom Immigrants Advisory Service? Should not he announce that he will withdraw those parts of the Bill and give people seeking political asylum the same rights to legal advice as anyone else would have, rather than introduce this appalling system under which they will not have the same equality before the law?
    Mr. Lloyd: The hon. Gentleman is quite mistaken. There are no such proposals in the Bill and we never suggested that there should be. We have said that immigration and asylum cases are unique in that the Government and the United Nations fund a free, professional legal advice and representation service in the shape of UKIAS and the Government fund free solicitors' advice through the green form. With the extension of appeal rights to all asylum seekers, it is not unreasonable

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    to propose—as the Lord Chancellor and my right hon. Friend the Home Secretary propose—that this anomalous double provision should end and that increased resources for advice should be concentrated on UKIAS, especially as the service has a better record of winning cases than solicitors and is more cost effective.
    Mr. Nicholls: It is clear to solicitors and to many other people that our present asylum procedures are being abused. That should stop. Does my hon. Friend agree that it does the cause of racial integration no good at all that our procedures should be abused? Does he reject the comments that we have heard from the Opposition which have much more to do with their courting votes than with human rights?
    Mr. Lloyd: Of course asylum procedures should not be abused. Those who are making asylum claims should have access to free professional legal advice, as they want it. We propose to deal with abuses and to ensure that asylum seekers have the free legal advice that they need.
    Mr. Darling: Does the Minister accept that UKIAS is not capable of providing the same level of professional advice as can presently be provided under the legal aid system? Does he accept that individuals should have the right to choose representation which represents the best value for money and that there is no saving to the Treasury under his proposals? Will he explain why he wrote to UKIAS on 7 October threatening that unless it accepted the Government's proposals he would withdraw its funding or curtail it completely?
    Mr. Lloyd: What I said to UKIAS—I have had two meetings with the organisation and written to it—is that the availability of green form aid is finally a matter for the Government and Parliament, not for UKIAS. I also said that as we are increasing UKIAS's funding and its ability to represent and advise, if it was unwilling to advise those seeking advice on asylum, it called into question whether the funding for advice, not representation, should go to UKIAS. There is an alternative. We could fund all advice through the green form, but that would not be especially helpful to asylum seekers, as UKIAS has a better record of success in giving advice and making representations to adjudicators and tribunals.
    Mr. Lawrence: What proportion of asylum seekers come into this country on visitors' permits and then decide that they are in fear of persecution just as their permits come to an end? Is not it easy to give those people advice?
    Mr. Lloyd: Yes. About three quarters of asylum claimants are already in the country, many of them legitimately as students or visitors and some of them illegitimately, as they have entered the country illegally. Each case needs to be considered on its merits. There can be reasons why people make a claim for asylum after they have been here for some time and we consider all cases properly. We believe that every asylum seeker, whether in-country or arriving at the ports, should have access to good free legal advice.

    Free Television Licences
    Mr. Skinner: To ask the Secretary of State for the Home Department whether he will now introduce free television licences for pensioners; and if he will make a statement.
    Mr. Peter Lloyd: As I have made clear to the hon. Member on the many previous occasions on which he has asked this question, we have no plans to introduce free or concessionary television licences for all pensioners. That would be a crude and non-selective instrument of social policy costing £470 million a year. It would benefit many pensioners who can well afford the fee and would mean that other licence holders would have to pay £116 for their colour licence.
    Mr. Skinner: This Tory Government are a hard-hearted bunch. Have not we reached a pathetic state of affairs when, as a result of the 1988 decision, 75-year-old widows in warden accommodation cannot have a free television licence, yet others who are younger might receive it because they qualified before 1988? Now, with all their claptrap about citizens charters, the Government have had the BBC send to every Member of Parliament letters carrying the Tory party propaganda that they cannot allow pensioners to have a free television licence. They should be ashamed of themselves.
    Mr. Lloyd: Not merely does the hon. Gentleman ask the same question each time; he asks the same supplementary. The only difference this time is that arrangements have been made for the BBC to collect the licence fee, but the rules are precisely the same as they were when they were collected by the Government. The hon. Gentleman ought to bear it in mind that the rules are very clear. It is possible for local authorities to organise their elderly people's accommodation provision in such a way as to gain the concessionary licence. The benefit should be given to those who are most in need of it. We have concentrated the money that the hon. Gentleman would give to pensioners, whether they need it or not, into the income support rates of those who are worst off. That is the correct, fair and just way to do it.
    Mr. Hind: Does my hon. Friend accept, however, that among pensioners, particularly those who took up residence in sheltered accommodation after 1988, there is a real fear of injustice, in that some of them have to pay the full licence and some of them do not? I hope that my hon. Friend will look at that problem, together with the BBC licence as a whole. Pensioners are aware that they do not have to pay for ITV or any other channels but that they are called upon to pay for BBC television programmes. My hon. Friend should look at the licence as a whole.
    Mr. Lloyd: We are going to look at the whole question of BBC financing and the licence fee in the run-up to the renewal of the charter.
    Mr. Salmond: Will the Minister reconsider the point made by the hon. Member for Bolsover (Mr. Skinner)? Is the Minister aware that Members of Parliament, and anybody else with two homes, need only one television licence to cover both homes, the assumption being that they are not watching television simultaneously in both homes. Will the Minister therefore announce a concession:

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    that all old age pensioners should be given the right to watch television without having to pay for a television licence?
    Mr. Lloyd: I do not believe that the hon. Gentleman correctly states the law. No doubt a BBC inspection van will be visiting him.

    Television Franchises
    Mr. Simon Coombs: To ask the Secretary of State for the Home Department if he will make a statement on the recent allocation of regional television franchises by the Independent Television Commission.
    Mr. Kenneth Baker: The commission was carrying out the responsibilities laid on it by Parliament in the Broadcasting Act 1990. The decisions on channel 3, and other licences, are a matter for the commission.
    Mr. Coombs: In view of the widespread and sometimes ill-founded criticism of the recent franchise round and despite the uniform excellence of the successful tenders, will my right hon. Friend nevertheless consider the possibility of providing a review system so as either to show up ways in which it could be improved in future or to demonstrate that an extremely good job has been done by the Independent Television Commission?
    Mr. Baker: I think that a good job has been done by the ITC, but I am prepared to consider any representations that are made to me about the future determination of licences. The situation will change in the 1990s and beyond. There will be a greater proliferation of services, well beyond these licences, and at least one other channel, channel 5.
    Mr. Maclennan: Does the Home Secretary share the view of the right hon. Member for Finchley (Mrs. Thatcher) in her letter to the outgoing chairman of TV-am? Does he feel like offering a similar apology?
    Mr. Baker: When there are 40 bids for 16 licences, some companies will lose out. The system has resulted in new blood coming into the television industry. Some of the companies that have been displaced have, in their time, displaced others. The opportunity that they now have is to become independent production companies, an opportunity that they did not have in the last round of licence decisions.
    Dame Janet Fookes: Can my right hon. Friend answer a riddle for me? How is it that Television South West passed the quality threshold, offered by far the most money but still lost?
    Mr. Baker: That is a riddle for the ITC, not me, to answer. The ITC made the determination and it would be inappropriate for me to comment upon the matter, especially as I believe that it is now sub judice, because the company has applied for judicial review.
    Mr. Corbett: Does the Home Secretary, in common with his right hon. Friend the former Prime Minister. now feel too painfully aware that the franchise round has ended in farce, with some companies losing their licences for offering too much and others failing because they offered too little? Will the right hon. Gentleman now acknowledge that a system based on the highest bid was always likely to undermine the quality and variety of British television?
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    What message has he for the 2,000 television staff who lost their jobs in the run-up to the franchise round, and the similar number who will now be put out of work?
    Mr. Baker: I do not agree at all. New blood has come into the industry, and many of the companies now have the opportunity to become independent production companies. I do not agree with the hon. Gentleman's assertion that the franchise round has been unsuccessful. On the contrary, we have always sought to increase viewer choise. We introduced Independent Television; the Labour party was against it. We have introduced new opportunities for television, and we will introduce a new channel—Channel 5. We believe in more viewer choice and more competition. That will improve quality, and the Labour party has always resisted that.
    Mr. John Greenway: Does my right hon. Friend agree that the Broadcasting Act 1990 placed on the ITC the requirement to ensure that all bids were sustainable and stable for the whole 10 years of the franchise? Is not the ITC's judgment that that is the case both with the existing franchisees who have retained their licences and with some of the newer companies? At the press conference at which the ITC announced the licences Mr. Simon Albery, who ran the campaign for quality television, said to me, "Quality has won".
    Mr. Baker: I am sure that that will prove the case. Whenever there has been a change within television in this country there has always been the accusation that quality would suffer. That has not happened. Over the past 30 years, as choice and competition have worked their way through, variety and quality have improved.

    Political Asylum
    Mr. Roger King: To ask the Secretary of State for the Home Department what is the present level of those seeking political asylum; and what were the comparable figures in 1989.
    Mr. Kenneth Baker: Between January and September this year the average monthly total of those seeking political refugee status in this country has been about 3,800. The monthly average in 1989 was 950. These figures exclude dependants.
    Mr. King: Is my right hon. Friend aware of the widespread concern at the large number of people seeking political asylum? Is he further aware that in a city such as Birmingham, where problems arise over bringing families into the United Kingdom, there is widespread disgust and dismay at the high number of bogus asylum applications? Is he also aware that he has the united resolve of Conservative Members for the speedy passage of his Bill?
    Mr. Baker: I thank my hon. Friend. I said that the average number was 3,800. The actual figure for applications in October was 4,400 and the number is likely to reach between 45,000 and 50,000 this year, whereas we used to receive 2,000 or 3,000 applications. This is a serious and important problem which has to be tackled. That is why we shall introduce the Asylum Bill, which will be debated next week. I am surprised that the Labour party has decided to oppose it.
    Mr. Madden: Is the Home Secretary aware of the legal opinion that to restrict access to legal advice and

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    representation in asylum and immigration matters may be a breach of the law? Will he instruct his Ministers to stop trying to bribe and blackmail the United Kingdom Immigrants Advisory Service, which does not wish to collude in the Government's plans to pander to Essex man by restricting the longstanding traditional rights of people fleeing violence and persecution to seek refuge in this country?
    Mr. Baker: This country has a long tradition of accepting genuine political refugees, but there is no doubt that the fact that three quarters of all applications are made by people who have been living in this country for weeks, months and, in some cases, years, is tantamount to an abuse of the system. What we must do is to distinguish between bogus and genuine refugees. That is what we will do, and we will do it fairly. Not only that—we intend to increase and extend the right of access to an appellate system, which does not exist at the moment.
    Mr. Ashby: Does my right hon. Friend agree that the greatest injustice to genuine asylum seekers is to be found in the enormously long delays that occur in the processing of applications? What steps has my right hon. Friend taken to reduce those delays?
    Mr. Baker: In May of this year, we were pressed by Amnesty International and other refugee groups to speed up the process of determination, and the Bill before the House, which will be debated next week, sets out a scheme that will allow determination to be decided within a period of three months. That applies not only to a decision but to appearing under an appellate process. That will speed up the existing time, which can be anything up to two to three years. It is important that we decide the matter quickly because, if we do so, the bogus applicants can be returned to the countries from which they came.

    Rural Magistrates Courts
    Mr. Ieuan Wyn Jones: To ask the Secretary of State for the Home Department whether he has any plans to close or amalgamate rural magistrates courts in England and Wales during the next 12 months.
    Mr. John Patten: No, Sir. Proposals for the closure of magistrates courthouses or the amalgamation of petty sessional divisions are the responsibility of magistrates courts committees after consulting those concerned.
    Mr. Jones: What guidelines does the Home Department give to magistrates courts committees on how they should approach the closure and amalgamation of rural magistrates courts? I am sure that the Minister will be aware—representing a rural area, as I also do—that there is considerable concern about closures and amalgamations that lead to both defendants and witnesses having to travel vast distances. Does he agree that access to justice is more important than administrative convenience?
    Mr. Patten: I entirely agree with the hon. Gentleman. That is an extremely important point, and access to justice in rural areas is, indeed, subject to guidance from the Home Office. Let me add that, in taking recent decisions concerning rural areas, the Home Office has almost invariably supported those who have felt that rural courthouses should be kept open. I have looked up my
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    own record over the past six months, and I find that the only courthouse whose closure I approved was in Leicestershire and was precisely 500 yd from a new courthouse costing £8 million which we had erected to take its place.
    Mr. Bellingham: Does my right hon. Friend agree that, if justice is to be seen to be done, it is far better for it to be dispensed closer to the community in which the crime took place? Will he join me in saluting the work done by some of the small magistrates courts in west Norfolk, such as those in Hunstanton and Fakenham, and does he agree that every effort should be made to ensure that they stay open?
    Mr. Patten: It is extremely important that small rural benches—provided that they are large enough to provide the necessary range of skills and an adequate number of people to dispense rural justice—are kept. But it is also the case that suggestions for amalgamation of rural—or, indeed, urban—benches come not from my right hon. Friend the Home Secretary but from the magistrates courts committees in the areas concerned.
    Mr. Randall: Is the Minister aware that the Opposition approve in principle of measures to enhance the cost effectiveness of our magistrates courts system? Is he also aware, however, that the Government's policy of strict cash limits can in some cases be seen as a blunt instrument whose use could result in closures of courts in many local communities? Will the Minister now tell the House how many local magistrates courts he estimates are likely to close as a result of the Government's new funding policy? Or has he not bothered to work it out?
    Mr. Patten: The Government's new funding policy—which was supported by the Labour party during the passage of the Criminal Justice Act 1991, so the hon. Gentleman cannot complain about that—is aimed at ensuring that the workload is taken into account in allocating resources while encouraging the management of magistrates courts to improve the efficiency of local justice so that it is better carried out. Suggestions for closures and amalgamations come from the individual magistrates courts committees in the areas in question.
    Sir Anthony Grant: Is my right hon. Friend aware that I am extremely grateful to him for the wise decision to retain the St. Neots and Huntingdon courthouses? Is he also aware that there has been considerable disquiet over the proposed amalgamation of the St. Neots and Huntingdon bench? Will he carefully consider the representations that I have sent to him on that subject?
    Mr. Patten: I am glad that my hon. Friend believes that I took a wise decision over those courthouse closures and they remain open. I will of course carefully consider any correspondence that my hon. Friend has sent to me.

    Electoral Register
    Mr. Harry Barnes: To ask the Secretary of State for the Home Department what are his Department's plans to maximise the number of people on the 1992–93 electoral register; and if he will make a statement.
    Mrs. Rumbold: As in previous years we shall conduct a nationwide advertising campaign in the early autumn to encourage people to complete and return the electoral

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    registration form. We shall also continue our annual research into the working methods of electoral registration officers, and produce updated best practice notes to assist them in compiling an accurate register.
    Mr. Barnes: The current electoral register is a mess. One million people are missing from it according to the Office of Population Censuses and Surveys. There is to be a new register on which the general election could be fought. There is time to put the register right. Will the Government spend advertising money to achieve that? Only 0·3 per cent. of the advertising budget is spent on electoral registration. We have time to put things democratically right if the Government will act now.
    Mrs. Rumbold: The hon. Gentleman should know that advertising money is being spent and electoral registration officers are working hard to ensure that their electoral registers are up to date and accurate.

  PRIME MINISTER

    Engagements
    Mr. Jessel: To ask the Prime Minister if he will list his official engagements for Thursday 7 November.
    The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): I have been asked to reply.
    Hon. Members: Where is he?
    Mr. Speaker: Order. I call the Leader of the House.
    Mr. MacGregor: This morning my right hon. Friend the Prime Minister had a bilateral with President Bush in Rome. He is currently attending the NATO summit now under way there. That summit will set the future course for NATO to ensure that it remains as it has been—a bedrock of stability in a still uncertain world. The fact that Opposition Members should regret the fact that my right hon. Friend is in Rome, shows how little attention they pay to defence and NATO matters. [Interruption.]
    Mr. Speaker: Order. This kind of thing gives a very bad impression elsewhere.
    Mr. Jessel: On Europe, to put it beyond all doubt in this House, in the country, and on the continent, will my right hon. Friend reaffirm that it is the policy of Her Majesty's Government that Britain shall not go down the route of a federal Europe and that it is for Britain to decide on the future of her own currency?
    Mr. MacGregor: I am happy to give my hon. Friend the assurance that we are not going down the route of a federal Europe. With regard to a single currency and economic and monetary union, my right hon. Friend the Prime Minister has made it clear that the Government are not prepared to commit Britain now to a single currency. We will be able shortly to debate those matters more fully in the House, but we have on many occasions made it clear that this Parliament will decide on the single currency issue at some date well into the future if and when it should arise.
    Mr. Kinnock: Is the—[Interruption.]
    Mr. Speaker: Order. I call Mr. Kinnock.
    Hon. Members: Where is he?
    Mr. Kinnock: All present and correct, Sir.
    Is the Leader of the House aware that three times in the past 24 hours the Chancellor of the Exchequer has refused to answer direct questions about the Government's plans for further increases in VAT? Is that not surprising because the Chancellor has repeatedly been eager to make precise pledges of cuts in income tax to 20p in the medium term? Will the right hon. Gentleman tell us now, in precise terms, what are the Government's plans for making further increases in VAT?
    Mr. MacGregor: The right hon. Gentleman will be all present on the Opposition Benches for some time to come and will not be leading for Britain at future NATO summits. In answer to his question, the right hon. Gentleman knows very well that the commitment to income tax is one that would extend over the lifetime of the future Parliament and perhaps beyond that. That is a general commitment for some time to come. No precise dates have been given. It is not for the right hon. Gentleman to ask questions about tax, given the very high public spending commitments to which his party is committed.
    Mr. Kinnock: The Leader of the House has even changed the line on what the Chancellor said on income tax this morning. As far as talking about tax is concerned, I realise the right hon. Gentleman's sensitivity. His Government have, after all, lifted the tax burden on the British people to the highest of any Government in history. The right hon. Gentleman is wriggling. Since the Prime Minister has announced the target rate for income tax, surely he can announce the target rate for VAT. If he can tell us the one, surely he can tell us the other. Why are the Government so specific on income tax and so shifty on VAT?
    Mr. MacGregor: The right hon. Gentleman knows perfectly well that the commitment on income tax is a longer-term one and that we hope to achieve it as and when conditions permit and when it is prudent to do so. We have made that clear on many occasions. But it is really not for him to argue the case about taxes because, as we well know—[Interruption.] Opposition Members do not like that. The reason they do not like it is that they are so sensitive about it. We know perfectly well that the Labour party has committed itself to an additional £35,000 million of public spending and no capping on local authority expenditure. The two combined would mean a very high increase in the tax and community charge burden on all people.
    Mr. Kinnock: The longer that the right hon. Gentleman speaks, the less he convinces. Will he tell us now? After making huge rises in VAT in the past 12 years, what are the Government's plans to make further increases in VAT?
    Mr. MacGregor: The Government have made their public expenditure plans absolutely clear, and they are clear on the normal basis. It is equally clear—the right hon. Gentleman has not refuted this—that, in fact, the £35 billion spending commitment of the Labour party would mean either a very big increase in income tax and/or a very big increase in VAT, and it would be likely to be both.
    Mr. Michael Brown: Does my right hon. Friend agree that the Government's proposals to introduce powers to

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    prevent local authorities from excessive spending by means of capping will be very well received by all those in Labour-controlled authorities who have to put up with excessive tax bills? Does my right hon. Friend agree also that those people will not welcome the pledge that was given from the Opposition Benches yesterday to ensure that high-spending Labour authorities can go with gay abandon to yet higher spending?
    Mr. MacGregor: My hon. Friend is absolutely right. It is a point that will have to be stressed again and again. On top of the increased taxes—direct and indirect taxes that would come from their spending pledges—the Opposition have now committed themselves to no capping on high-spending local authorities. That can mean only higher community charge and council tax bills as well.
    Sir David Steel: To ask the Prime Minister if he will list his official engagements for Thursday 7 November.
    Mr. MacGregor: I have been asked to reply.
    I refer the right hon. Gentleman to the reply that I gave some moments ago.
    Sir David Steel: Is the Lord President aware that, at the end of last week, the Secretary of State for the Environment and the Secretary of State for Trade and Industry warmly welcomed the Government committee report recommending, among other environmental measures, an increase in petrol tax? They have referred that recommendation to the Chancellor of the Exchequer. Will he ensure before the Budget that, in any such conservation measure, account is taken of the needs of rural areas where—[Interruption.]
    Mr. Speaker: Order. Interruptions take a lot of time.
    Sir David Steel: Admittedly including the area that we will represent after today, in rural areas in which the car is a necessity and in which the cost of petrol is alreay high, what compensatory measures are the Government prepared to support?
    Mr. MacGregor: My right hon. Friends have not committed the Government to any position on tax, but I notice that, as usual, the right hon. Gentleman wants to have it both ways. As it would put it, the Liberal Democratic party claims to make people face up to hard decisions by increasing pricing and taxes. However, because some of its Members of Parliament come from rural areas, they want those rural areas to be protected. It is typical of the right hon. Gentleman and his party to make different noises in different places.
    Mr. Lord: Does my right hon. Friend agree that nothing is more damaging to the fabric of a nation than the failure properly to educate its children? May I urge him to press for a return to traditional standards of teaching in our primary schools as soon as possible?
    Mr. MacGregor: I am sure that my hon. Friend will agree that what we are doing through the national curriculum, and especially in the testing of seven, 11, 14 and 16-year-olds, will ensure not only that we can monitor progress on standards, but that pupils who are falling behind will be given the assistance that they need to improve. The point of our educational reforms is to improve standards.
    Mr. Menzies Campbell: To ask the Prime Minister if he will list his official engagements for Thursday 7 November.
    Mr. MacGregor: I have been asked to reply.
    I refer the hon. and learned Gentleman to the reply that I gave a few moments ago.
    Mr. Campbell: The right hon. Gentleman will be aware that 22 November is the first anniversary of the sinking of the fishing vessel Antares in the Firth of Clyde as a result of its gear being snagged by the submarine HMS Trenchant. However, is he aware that the Royal Navy is proposing to hold a similar exercise in the same waters on the day immediately following that anniversary? Is not the timing of that exercise particularly insensitive, and is there any reason why it should not be postponed for a period of, say, a week as a mark of respect to the crew of the Antares, all of whom perished when the vessel was sunk?
    Mr. MacGregor: I am sure that the hon. and learned Gentleman knows the considerable steps that have been taken by my right hon. Friend the Secretary of State for Defence and by the Minister of State for the Armed Forces to deal with the aftermath of that tragic incident. I shall draw the hon. and learned Gentleman's particular point to my right hon. Friend's attention.
    Mr. Rathbone: As our Prime Minister is away at such an important summit conference—important for the security of the whole of the western world—does my right hon. Friend think it appropriate at this moment to reaffirm the Government's commitment to that European pillar, the Western European Union?
    Mr. MacGregor: Yes, I agree with my hon. Friend. We have made it absolutely clear that, in our view, that body will play an important part in our future defence position. I am sure that that will be discussed today at the North Atlantic Treaty Organisation.
    Mr. Gareth Wardell: To ask the Prime Minister if he will list his official engagements for Thursday 7 November.
    Mr. MacGregor: I have been asked to reply.
    I refer the hon. Gentleman to the reply that I gave a few moments ago.
    Mr. Wardell: In view of his admission some weeks ago that this Government have imposed the heaviest tax burden in British history, will the right hon. Gentleman now apologise for the Chancellor's wholly inaccurate statement to the House yesterday that the Government have been cutting taxes ever since 1979?
    Mr. MacGregor: The truth of the matter is that we have seen a substantial reduction in direct tax rates, a substantial improvement in standards of living and, as a result of the reduction in tax rates, an improvement in the tax base, which has enabled us not only to achieve increased public spending on a large scale in our key priority areas, especially health, but to achieve a reduction in direct income tax and, overall, considerably to improve our public sector borrowing requirement.
    Q.5 Mr. Andrew Mitchell: To ask the Prime Minister if he will list his official engagements for Thursday 7 November.
    Mr. MacGregor: I have been asked to reply.

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    I refer my hon. Friend to the reply that I gave a few moments ago.
    Mr. Mitchell: Does my right hon. Friend accept that there is widespread support among parents for the Government's proposal that schools should make their public examination results available for publication in common form? Does he agree that that would give parents an objective answer to the question, "How is my child's school doing?", as well as further pressing back the frontiers of choice in education?
    Mr. MacGregor: I entirely agree with my hon. Friend. He refers to an important part of the reforms that we are undertaking. I pay tribute to him for first raising the subject of league tables for schools' performances in the Bill that he introduced earlier in the year. League tables of examination results, destinations of school leavers, truancy rates and all the other items that we are suggesting will be an important aid towards improving parental choice. I was glad to note that that was endorsed by the chairman of the Audit Commission this morning.
    Ms. Primarolo: Will the Leader of the House explain why the Government voted against the EC directive on maternity leave which would have given women a minimum of 16 weeks of maternity leave and protection from being sacked because they are pregnant? This is the second time in less than two weeks that the Government have failed to respond to the Prime Minister's so-called commitment to women's equality. Why should women believe anything that the Government say?
    Mr. MacGregor: The hon. Lady is wrong. An agreement was reached yesterday which represents a sensible balance on maternity pay. It carries forward the interests of women without imposing an undue burden on
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    employers. The Government abstained on a different aspect relating to the treaty of Rome basis. We did not believe that the issue should have come within that particular article. That is why we abstained. The political agreement was reached clearly.
    Under our policies more than one in three of the jobs created in the European Community for women were created during the past eight years in Britain. That is a clear indication of the opportunity and choice that we give.
    Q.6 Mr. Thorne: To ask the Prime Minister if he will list his official engagements for Thursday 7 November.
    Mr. MacGregor: I have been asked to reply.
    I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Thorne: Does my right hon. Friend agree that the figures given yesterday for expenditure on the national health service, education and transport show our clear commitment to expenditure on those items? Does he agree that those people in the House who advocate expenditure without saying how much they are prepared to spend are entirely unconvincing?
    Mr. MacGregor: My hon. Friend is right. The autumn statement yesterday demonstrated that we have substantially increased in real terms—after inflation—the spending in each of the three areas that my hon. Friend mentioned. Indeed, in health the additions announced yesterday represent £50 more for every man, woman and child in Britain. That means that the increase in health spending since we took office is 55 per cent. in real terms. My hon. Friend is also right to draw attention to the high additional spending programmes of some £35 billion advocated by the Labour party, which would put a crippling tax burden on so many families in Britain.

Business of the House
3.31 pm
Dr. John Cunningham: Will the Leader of the House tell us the business for next week, please?
The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): The business for next week will be as follows:

MONDAY 11 NOVEMBER—Second Reading of the Local Government Finance Bill (first day).

TUESDAY 12 NOVEMBER—Conclusion of Second Reading of the Local Government Finance Bill.

Consideration of timetable motion on the Local Government Finance Bill.

WEDNESDAY 13 NOVEMBER—Second Reading of the Asylum Bill.

Motion relating to the Social Security (Adjudication) Amendment (No. 2) Regulations.

THURSDAY 14 NOVEMBER—Second Reading of the Coal Industry Bill.

FRIDAY 15 NOVEMBER—Debate on the citizens charter on a motion for the Adjournment of the House.

MONDAY 18 NOVEMBER—Second Reading of the Competition and Service (Utilities) Bill.

It may be for the convenience of the House to know that, subject to the satisfactory progress of business, the House should rise for the Christmas recess not later than Friday 20 December. It may also be for the convenience of the House to know that as Easter day is relatively late, on 19 April, the Easter recess will include the whole of the week beginning Monday 13 April.
Dr. Cunningham: Members and their families will be grateful to the Leader of the House for making the latter announcements. I certainly thank him on behalf of my right hon. and hon. Friends.
Can the Leader of the House confirm that the Competition and Service (Utilities) Bill will be not only given its First Reading tomorrow but printed and published so that we have the traditional two full weekends before the Bill comes before the House for its Second Reading?
Will the Leader of the House confirm that, well before the Maastricht summit, we shall have two days of debate on the important developments in the European Community? Does the Prime Minister intend to speak in that debate, as we believe he should? Can the Leader of the House assure us that the Government will table a substantive motion for that debate which sets out clearly and unambiguously the position of Her Majesty's Government and the details of that position?
Will the Leader of the House think again about the Government's apparent determination to railroad the poll tax No. 2 Bill through the House? May I remind him that the Prime Minister said on radio during the Conservative party leadership election last year that the Government and the House had been bounced into the poll tax because proper consideration and thought were never given to it? The Bill was railroaded through the House; there was never an honest majority for it.
Is it not ridiculous, given the chaos that the Government have caused in local government finance, to repeat that folly with the Bill to replace the poll tax, whose Second Reading will take place next week? I urge the Leader of the House, in the interests not merely of the
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Opposition but also of local government and all those responsible for and involved in the provision of services, to think again about how the House will deal with that Bill.
Has the Leader of the House seen the report that I have here—"NHS Reforms: The First Six Months", a survey of directors of public health medicine, which was carried out by Middlesex polytechnic? Is he aware that almost two thirds of directors responding expressed concern for the future well-being of the services and their ability to meet their obligations to patients under the Government's health service reforms? They also expressed anxiety about the future of funding from public expenditure for those services. Will the Leader of the House arrange for the Secretary of State for Health to make a statement in response to the serious matters raised in the report?
Mr. MacGregor: I am grateful to the hon. Gentleman for his opening comments. As he knows, it was in fulfilment of a promise to the House that I would always endeavour to announce the dates of those two recesses as early as possible, because I well understand that that is for the convenience of Members.
It is the intention to publish the Competition and Service (Utilities) Bill tomorrow, as we are anxious to fulfil the commitment of two weekends' notice.
I confirm that I will arrange a two-day debate in advance of the Maastricht summit and that my right hon. Friend the Prime Minister will lead for the Government in that debate. We are considering the form of the debate, but at present we are inclined to have a substantive motion.
On the question of a timetable motion for the Local Government Finance Bill, we are providing two full days for the Second Reading on top of the debate yesterday in the Queen's Speech. In addition, as the hon. Gentleman will see when the timetable motion is published later today, we are giving considerable time for debates in Committee on that Bill. The crucial point is the need for local authorities to have time to introduce the council tax in place of the community charge. That is precisely our desire—to ensure that we get a replacement within the timetable that we have committed ourselves to—and it is important that local authorities have plenty of time to prepare for it. That is why, while giving full time for debates in the House, we are anxious to get on with the Bill with all due speed.
I have not had a chance to look at the NHS document that the hon. Member for Copeland referred to, but it does not seem to me to be an appropriate subject for a statement. The hon. Gentleman will know that we could have debated the health service this week if the Oppositon had so wished; and there will be other opportunities for health service matters to be debated in the House.
Several Hon. Members ose——
Mr. Speaker: Order. There is great pressure on time today, and I regret that I shall have to put a 10-minute limit on speeches on the last day of debate on the Queen's Speech. I ask for single questions directed to the business for next week and not on wider matters.
Sir John Stokes: In view of the poor coverage in the newspapers of the five-day debate on the Queen's Speech—on some days there was not a line of report even in the so-called quality papers—would my right hon. Friend consider——
Mr. Speaker: Is this to do with business for next week?
Sir John Stokes: Yes. I hope that it will be dealt with immediately, Sir. As a matter of urgency, will my right hon. Friend consider whether the high price of Hansard can be reduced so that the public may read what we are doing here?
Mr. MacGregor: I do not think that that is a matter for me. I believe that an announcement on this matter was made by one of my hon. Friends, but I shall look into it. We endeavour to cover the costs of Hansard. That is why the current move was made.
Mr. James Wallace: The Leader of the House may know that on this Bench we do not have any objection in principle to timetabling legislation from the outset, but think that it should be done only if there has been proper consultation with all the Opposition parties and, indeed, with interests on the Government side. What steps has he taken or does he intend to take before tabling the timetable motion to consult widely throughout the House to ensure that particular matters of contention, including specific provisions relating to Scotland, are given adequate time for debate?
Mr. MacGregor: Consultation is taking place in the usual way, although it is open to hon. Members to make representations. The hon. Gentleman's general point is appropriate for the Committee under the chairmanship of my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), which is looking at various matters affecting sittings and timetables.
Mr. Bob Dunn: Will my right hon. Friend consider rearranging one of next week's debates so that we can have a debate on the Labour party and its history, bearing in mind that its founders were men and women of conviction, determination and principle, none of which we are seeing on the Opposition Benches today? Does he also agree that the only person of principle on the Labour Benches is the right hon. Member for Chesterfield (Mr. Benn), who said the other day,
"If we've changed our mind to win, we could change our mind when we've won"?
Mr. MacGregor: I do not want to get too contentious in business questions, but my hon. Friend's point about the fact that the Labour party has changed a large number of its principles and certainly a large number of its policies is one that I make frequently as I travel round the country. The reason is that we have been successful throughout the 1980s in the principles that we have followed and the policies that we have pursued. My hon. Friend's comment about the statement of the right hon. Member for Chesterfield (Mr. Benn) is accurate and needs to be repeated time and again.
Mr. George Foulkes: On a point of order——
Mr. MacGregor: Fortunately, the right hon. Gentleman's prediction will not happen.
Mr. Foulkes: On a point of order——
Mr. MacGregor: What may happen and is possible is to have, not next week——
Mr. Foulkes: Ah.
Mr. MacGregor:—but on some future occasion an opportunity to debate these matters.
Mr. Foulkes: That is better.
Mr. Speaker: Order. I hope that my plea does not fall on deaf ears. We have a heavy day ahead of us.
Mr. Alfred Morris: Is it not morally offensive and a very urgent matter that people who, in order to sustain their breathing, now have to pay not only for nebulisers but also a service charge plus value added tax? Is the Leader of the House aware that people who are poor and chronically ill are now being charged £20 for servicing plus £3·40 VAT? Is that not the first tax ever on breathing? May we have a statement about it next week?
Mr. MacGregor: Statements have already been made. We have made it clear and spelt it out time and again that there can be no charges for national health services except where specifically allowed by statute.
Mr. Richard Tracey: In the light of a continuing series of tragic events arising from hooligans snatching cars for so-called joyriding, can my right hon. Friend give the House any intimation of progress towards legislation, which, I am sure, would be agreed on both sides of the House, to deal with these outrages?
Mr. MacGregor: There is concern on both sides of the House about this matter and I am sure that both sides would agree that joyriding is not the right description. I am glad that my hon. Friend referred to it as "so-called" because it is far from joyriding. We are making good progress on the technical details of the legislation. I can confirm that we shall introduce the Bill as soon as we can.
Mr. Dave Nellist: Will the Leader of the House consider that, in the run-up to next Wednesday's debate on the Asylum Bill, Government Members, particularly Back-Bench Tory Members, and tabloid newspapers will attempt to create an atmosphere to justify the Bill by talking about numbers? Is it not a fact that in 20 of the past 27 years there has been a net outflow of people from this country? In July, the Home Office admitted to me that since 1964 786,000 more people have left Britain than have entered it. When we discuss the Asylum Bill——
Mr. Speaker: Order. Is not that the sort of speech that might be made in a debate? Will the hon. Gentleman ask a question about the debate?
Mr. Nellist: When we discuss the Asylum Bill next Wednesday, will it be in order for me to accuse the Government of playing the pre-election racist card?
Mr. MacGregor: That is an outrageous suggestion, and I refute it entirely. The hon. Gentleman has got it wrong, because the Asylum Bill deals with people seeking political refugee status. It does not deal with immigration generally, or net inflows and outflows. I make that absolutely clear to the hon. Gentleman. The Bill is about political refugees, and we have made it clear that there will be no change in the position of genuine political refugees. We are concerned, however, that the number of applicants for asylum status has risen from 100 a week only three years ago to 1,000 a week. Not all of those are likely to be proved to be genuine political refugees, so it is important that we improve the mechanisms for dealing with the position. The hon. Gentleman should not try to interpret the Bill in any other way.
Mr. Alistair Burt: During next week's debate on the citizens charter, will there be an opportunity to explain to the patients in my constituency why expenditure on the national health service fell by 2 per cent. between 1974 and 1979 and has increased by 20 per cent. since the Government took office?
Mr. MacGregor: I am sure that my hon. Friend is right. I know that he carries out his constituency duties with great devotion on Fridays, but I hope that he will be here to make that point and many others on the citizens charter in relation to the health service.
Mr. Andrew Faulds: Will the right hon. Gentleman make it clear to the Prime Minister that the heritage lobby wants no feminist gesture in any impending and important appointments in the heritage field? Think about it.
Mr. MacGregor: I am sure that there will be no gestures. I do not know what the hon. Gentleman is talking about, but I am sure that the decision will be taken on merit.
Mr. Robert G. Hughes: Will my right hon. Friend arrange a debate next week specifically on local government in our inner cities? If we have such a debate, will the House be able to analyse why there is a peculiar triple achievement in too many councils? A combination of high spending and rotten services has been brought about by Labour councils.
Mr. MacGregor: It will be appropriate for my hon. Friend to raise those points in the two-day debate next week.
Mrs. Margaret Ewing: On the debate to be held on Monday and Tuesday next week, will the Leader of the House advise us on whether the Government will publish additional information on the implications of banding and how it will affect people, in order to assess the level of payment that people will have to make? Is he aware, for example, that we have calculated that the Secretary of State for the Environment, who will lead for the Government on that Bill, will pay considerably less for his sumptuous home in Belgravia—his second or third home—than a first-time buyer in Scotland's Grampian region?
Mr. MacGregor: We have already published a great deal of information on the Bill and have no intention of publishing any more between now and Monday.
Mr. Andrew MacKay: Is my right hon. Friend aware that there is grave concern that we shall not have a debate on Europe until 21 November, because during that time the Opposition's policy may change yet again and we shall not be able to hear why Labour Members are so enthusiastic for a single currency immediately?
Mr. MacGregor: My hon. Friend has in mind the seven changes that have already been made to the Opposition's position. We shall have to wait and see whether another change is made between now and the time that we hold the debate. I cannot absolutely confirm the date of that debate. We hope to hold it on 21 November. However, as I told the Committee chaired by my right hon. Friend the Member for Westmorland and Lonsdale when giving evidence to it earlier this week, when one discusses
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business more than one week ahead, it must always be subject to changes that inevitably take place. We intend to hold the debate about 21 November, and my hon. Friend will have to be patient until then.
Mr. George Galloway: May I draw the attention of the Leader of the House to early-day motions Nos. 46 and 47?
[That this House calls upon the Government to establish an inquiry into the circumstances surrounding the events in London in September 1986 in which Mr. Mordechai Vanunu was lured out of London to Italy, whereafter he was drugged, kidnapped and returned to Israel where he is currently serving a lengthy prison sentence in solitary confinement.]
In view of the bizarre and mysterious death in the Atlantic this week of the British publisher, Robert Maxwell, and the claims being made this morning that he may have been murdered, and given the riddle, wrapped in a mystery inside an enigma which the whole issue of the so-called Mirrorgate has now become, will the right hon. Gentleman allow a debate to take place and, in view of the call that has already been made to him—he said that he would give the request consideration—conduct a Government inquiry into the whole issue of Mirrorgate and the sinister and mysterious events?
Mr. MacGregor: Let us be clear about what I said when the matter was raised previously. I said that, if there were any allegations about companies involved in illegal arms sales, it would be right for those to be investigated. But I made it clear that there had to be specific allegations, and then the Department of Trade and Industry would look into them. That is what I said, and I wish to make it perfectly clear.
As for a debate in the House, I feel that in the light of yesterday's tragic incident—others have paid tribute to Mr. Robert Maxwell—I do not think that this would be the right time to discuss the matter.
Mr. Anthony Coombs: Given the increasing perception of the importance of the traditional and rigorous methods of education for improving standards in classrooms, and Government reforms in relation to the national curriculum assessment that is underpinning them, may I ask my right hon. Friend to arrange a debate next week to see what actually goes on in the classroom? We could then, in particular, refer to the desire of the Labour-controlled Manchester city council to introduce an idiotic form of anti-sexism by which it would ban the use of words such as "chairman", "manning the office" and even "master bedroom"? Is that indicative of the kind of non-rigorous standards which too often apply to Labour-controlled local education authorities and which are doing nothing to benefit education standards in this country?
Mr. MacGregor: I share my hon. Friend's views on that subject, and I recall other Labour-controlled councils doing such things in the past. It is a great waste of time, effort and money to pursue such courses. As for raising the matter in the House, we shall soon have the Second Reading of the Education (Schools) Bill, and that will provide an opportunity to raise some of those issues.
Mr. Greville Janner: May we have an early debate on the environmental importance of the planting of national forests such as that which is to be created shortly in Leicestershire? Is the right hon.

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Gentleman aware that a local campaign—which rejoices in the name "Stump up for woody fund"—has had to be organised to raise funds for such planting? This matter should not be left to private donations but should be considered by the House as an issue of public concern.
Mr. MacGregor: There will be a debate tomorrow on the environment on the Government's progress report on the previous White Paper when all such matters can be raised and when we shall he making clear the substantial progress, over a wide range of issues of environmental concern, that we have made in the past year.
Mr. John Wilkinson (Ruislip-Northwood): Will my right hon. Friend clarify which Ministers will open and reply to the very significant debate on the citizens charter next Friday? Has he any intention of ensuring that it is well structured and focused debate rather than just a well-intentioned meander?
Mr. MacGregor: I can confirm that the Financial Secretary to the Treasury will open the debate. It will be a well focused debate because there is a great deal of material about which we can talk. It will certainly not be a meander.
Mr. James Lamond: As next Tuesday's business will, in all probability, include the introduction of three new Members wishing to take their places here, may I ask the Leader of the House to arrange for a good turnout of the Cabinet on that occasion to welcome such of the Tory candidates who were able successfully to present Tory party policy to the electorate?
Mr. MacGregor: The hon. Gentleman is making a number of presumptions.
Mr. Tony Favell: Has my right hon. Friend noticed that, during questions this afternoon, there has been no objection from Opposition Members to a substantive motion to conclude the two-day debate on Europe? Does he suspect, as I do, that some of them wish to gag other Opposition Members so that they do not expose the differences of view on the Opposition Benches? Maastricht will determine the way in which the people of this country are governed for decades to come. It is absolutely vital that Members are free to speak unwhipped.
Mr. MacGregor: I do not doubt that there are still substantial divisions on this issue within the Labour party, just as there have been some last-minute conversions.
Mr. David Trimble: In light of the discussions about extending the powers of Select Committees, particularly the suggestion that seems to be emanating from the Government that Select Committees should handle the Committee stage of Bills, does the right hon. Gentleman intend to consult the Ulster Unionist party on that matter, because we have an interest in it?
Does the right hon. Gentleman think that it is wise to hold next Friday's debate on the citizens charter when, despite the importance that the Government attach to it, they have still not managed to publish a charter for the whole United Kingdom?
Mr. MacGregor: We have published a large number of individual charters, and we shall continue to do so.
I do not know where the suggestion about Select Committees dealing with Bills came from, but it did not
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come from me and was not in the memorandum that I put before the Select Committee chaired by my right hon. Friend the Member for Westmorland and Lonsdale.
Mr. John Bowis: May I join the shadow Leader of the House in his request for a debate on railroads so that, in light of yesterday's announcements, Conservative Members can highlight the fact that public transport investment under this Government is at the highest level since the Conservative Government of the 1950s, that in London it is three times the level that it was under the Greater London council and 25 per cent. more than in Paris? That would be better than having to listen to more figures being plucked out of the air by the Opposition.
Mr. MacGregor: I agree with my hon. Friend, who has made a good point. If my hon. Friend catches your eye, Mr. Speaker, he can elaborate on that point later today.
Mr. William McKelvey: Being a Scot, is not the Leader of the House ashamed to fail to announce that next week he will move towards the setting up of a Select Committee on Scottish Affairs? Is it part of his master plan to wait until there are no Conservatives north of the border, so that he has a good excuse?
Mr. MacGregor: The hon. Gentleman knows well the position about a Select Committee on Scottish Affairs. He also knows that the Scottish Grand Committee has been meeting during the summer to discuss a whole range of Scottish issues. I am glad that we have been able to get that going again.
Mr. Tony Marlow: When did the House surrender power to the European Community with regard to majority voting on such issues as maternity pay and hours of work? If the House has not surrendered those powers to European institutions by majority voting, can we sort the matter out before we consider surrendering any further powers and being taken for another ride?
Mr. MacGregor: We abstained because we were disputing the treaty base and legal base of the maternity pay issue—the only one that came before the Council yesterday.
Mr. Gerald Bermingham: In the near future, may we have a debate, for which I have asked many times, on the prison population and the prison staffing system, particularly bearing in mind the fact that the first contract has now been awarded to Group 4 in respect of the new Wolds prison? Is it not time that we discussed the issue on the Floor of the House?
Mr. MacGregor: The issue could be raised today.
Mr. James Paice: It would be helpful if my right hon. Friend could say when we will return after Christmas.
Will my right hon. Friend reconsider his rejection of the request of the hon. Member for Copeland (Dr. Cunningham) for a statement on the health service? A statement or a debate would allow us to point out that yesterday's commitment to a further £2·7 billion is more than any previous commitment by the hon. Member for Livingston (Mr. Cook) and is nearly up to the figures being wafted about by the Leader of the Opposition, from which he is now being forced to back down.
Mr. MacGregor: I gave our record on the health service a few moments ago, and I would be happy to elaborate on it. It is possible to elaborate on the public spending aspects of the health service in today's debate. The only reason for not finding time next week is that we have a lot of Bills to be getting on with and that will dominate the programme, as it always does, in the early weeks. I hope that we shall have plenty of opportunities to return to this issue.
Mr. Robert Maclennan: Does the Lord President recall that his predecessor, Lord St. John of Fawsley, led the way in setting up the procedure to enable Bills to be considered by a Committee of the House before being given a Second Reading or being considered in Committee? Did he support that, and if he did will he consider the appropriateness of using the procedure for the Asylum Bill, which has aroused massive opposition from all the bodies that are concerned with refugee and immigration matters? We need to have the facts from them before we consider the Bill in detail.
Mr. MacGregor: The Bill has also aroused considerable support among many people. I remember that procedural experiment. Indeed, one of the Bills that I took through Committee was subjected to it. But to get the real benefit, it must be used for particular types of Bill, and it would not be appropriate for the Asylum Bill.
Mr. Geoffrey Dickens: Will my right hon. Friend find time next week for a debate on overseas trade? A debate would give me an opportunity to draw attention more fully to the plight of three companies in my constituency, one of which has £24 million-worth of contracts in its pocket but the lines of credit to the USSR are not open. The second is having difficulty in getting payment from Turkey, and the third is having a job shipping its goods to Iraq because of United Nations sanctions. My local companies cannot be the only companies in this position. Therefore, a debate would be important.
Mr. MacGregor: These are complex issues and each case is different. I cannot promise my hon. Friend a debate next week, so he will have to find other ways of raising the issue.
Several Hon. Members rose——
Mr. Speaker: We have a heavy day ahead of us, but I am reluctant to curtail business questions. I shall call the hon. Members who have been rising, provided they are brief. But I hope to get on to the debate by 4.10 pm.
Mr. Tony Banks: Provided the Prime Minister will stay in the country long enough next week, may we expect a statement from him giving his pathetic, cringing, whingeing reasons why the Conservative party lost all three by-elections today, or does the Leader of the House expect the Tories to win one of them?
Mr. MacGregor: Those matters are entirely hypothetical. Therefore, I shall not comment on the question of a statement because it does not arise.
Mr. Jimmy Wray: Will the Minister allow time to debate the report of Dr. Forwell of the Greater Glasgow health board, which highlights the dire poverty in the Greater Glasgow area?
Mr. MacGregor: Not next week.
Mr. Thomas Graham: Is the Leader of the House aware that an inquiry is being held into toll increases on the Erskine toll bridge? Recent press reports state that the Secretary of State will privatise the toll bridge, sack its 32 workers and employ a private company. Will the right hon. Gentleman ask the Secretary of State to make a statement showing whether the public are wasting their time by attending the inquiry and whether all the money that was spent on setting it up has been wasted? My constituents' time is being wasted by the facade of an inquiry, because at the end of the day the Secretary of State will abolish the right of local people to have a say by privatising the bridge.
Mr. MacGregor: I shall put that point to my right hon. Friend the Secretary of State. I am sure that he will have a satisfactory answer.
Mr. Terry Lewis: Does the Lord President recall that, when the Prime Minister was a Social Security Minister, he announced the closure of the DHSS resettlement centres but assured the House that replacement beds in the private and voluntary sectors would be available for those who were displaced? Will he take it from me that, when the resettlement centres finally close next March, those replacement beds will not be ready? What is to be done, and may we have a debate in the House?
Mr. MacGregor: I cannot fit in a debate next week, and I have already mentioned the pressures on parliamentary time in the next few weeks. We have a full legislative programme—not only all the Second Reading debates but the two-day debate on European issues. I shall draw the hon. Gentleman's point to the attention of my right hon. Friend the Secretary of State.
Mr. Ron Brown: Is it not clear that, in terms of the health service, most people have had their chips, particularly in the Lothian region, where the local health board is trying to set up a deal with Reo Stakis in order to produce the promised new hospital, which should have been resourced under the health service? Is this not disgraceful? Is this not backdoor privatisation? Should we not have a debate next week to discuss it?
Mr. MacGregor: I am not aware of that issue, but there is not time for a debate on it next week.
Mr. David Winnick: Given the continued financial speculation about the Maxwell business concerns, will we have a statement next week if, despite denials, the Daily Mirror is up for sale? Does the right hon. Gentleman recognise that it would be totally unacceptable for that newspaper to go into the hands of those who already have substantial press holdings? It is wrong that so many newspapers throughout the nation are owned by so few people. Indeed, that in itself should be the subject of an early debate.
Mr. MacGregor: As I think the hon. Gentleman recognises, he is raising hypothetical questions. All that I can say is that I have noted what he has said.
Mr. Paul Flynn: In the interests of the citizen's right to information, will the right hon. Gentleman ensure that next Friday we have a statement on the furious row which is going on in secret between

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Nuclear Electric and the nuclear installations inspectorate on the safety of Magnox reactors, particularly Trawsfynydd reactor No. 1? Problems discovered with the outlet valves which have caused embrittlement and corrosion could lead to a sudden collapse of the core because of pressure and could eventually result in ignition of the graphite and fuel in the core. This is an important matter because it affects three other Magnox reactors, and it should be publicly debated.
Mr. MacGregor: I shall look into the point with my right hon. Friend the Secretary of State for Energy. As I am sure the hon. Gentleman recognises, because I do not know the details of any issue that may arise, I cannot promise a statement.
Mr. Peter Hain: Will the Leader of the House find time next week for a Government debate on cot deaths? There are more than 2,000 cot deaths a year throughout Britain. Recent evidence from New Zealand shows that, when the New Zealand Government mounted a nationwide television and publicity campaign advising mothers to put their children to sleep on their backs or sides, not to smoke and to breast-feed, the number of cot deaths was cut by half. Although the British Government accept that evidence, they have refused to fund a nationwide publicity campaign. Five children in Britain may die today in that way. yet their mothers and fathers are ignorant of that evidence. Why are not the Government acting urgently to publicise that information?
Mr. MacGregor: I am sure that we all share the hon. Gentleman's anxiety about cot deaths. His point about publicity and advertising could be raised in a variety of ways in the House, but I shall draw it to the attention of my right hon. Friend the Secretary of State for Health.
Mr. Bob Cryer: May we have a statement next week on the Bradford hospital trust, which is deeply in debt, has lost 300 jobs, closed a baby unit in St. Luke's hospital and is now in crisis because the chief executive, Dr. Mark Baker, is resigning and moving elsewhere before the whole thing tumbles down around his head? May we have an urgent statement about the absurd policy which brought a crisis to Bradford hospitals and a diminution of service to the people?
Mr. MacGregor: We have had opportunities for many debates on and questions about trust hospitals, and there will be other opportunities for the hon. Gentleman to raise points about that matter.
Mr. Dennis Skinner: Why does not the Leader of the House throw his weight about with the Minister of Agriculture, Fisheries and Food? I have asked the Minister about half a dozen times to make a statement on dioxin in Bolsover and contaminated milk. Now he knows that Bolsover Coalite will close its incinerator at the end of the month. It will be revealed today in a television programme that there is a cluster of breast cancers among women in the area where the dioxin was found—50 per cent. more than in other parts of Derbyshire. Contamination levels in the River Doe Lea are 1,000 times higher than the appropriate safety levels. It is high time that a statement was made. The Leader of the House should tell the Minister of Agriculture, Fisheries and Food to make one so that he can be cross-examined.
Mr. MacGregor: I have of course raised the issue with my right hon. Friend the Minister of Agriculture, Fisheries and Food, because the hon. Gentleman has raised it before. As the hon. Gentleman knows, the problem involves three farms, and since the statement was made to the House last June, a detailed research programme on the affected and neighbouring farms is being undertaken by the Ministry of Agriculture, Fisheries and Food. Tests are also being undertaken by Her Majesty's inspectorate of pollution. The results of the initial testing by the Ministry of Agriculture, Fisheries and Food's programme were published on 2 October.
However, the analytical work is complex and time-consuming, and the results of the research programme are unlikely to be available before the new year. I assure the hon. Gentleman that they will be published as soon as the work is completed. It is obviously complex work, but I assure him that the results will be published as soon as the work is done.
Mr. Brian Wilson: Do the Government intend to debate the MORI report commissioned by the Department of Social Security to investigate the plight of 16 and 17-year-olds as a result of the Government's decision to deprive them of the right to benefit, in view of the fact that that policy, which I regard as probably one of the cruellest and most irresponsible pursued by this or any other Government, was the personal work of the present Prime Minister? In view of the fact that the MORI report commissioned by the Government found that decision to be the major cause of destitution among young people, is it not appropriate to debate it? As it is a Government report commissioned at considerable expense, would it not be an extraordinary waste of public money if the report were not debated in the House so that its terrible findings might be acted upon?
Mr. MacGregor: I have not especially studied the report, but, as I have said, Government time in the next few weeks is very short. Clearly other opportunities are available to hon. Members to raise such issues if they wish to do so.
4.10 pm

Prime Minister
Mr. George Foulkes (Carrick, Cummock and Doon Valley): On a point of order, Mr. Speaker. Is it within your power to draw the Prime Minister's attention to the fact that his first responsibility is to the House of Commons, that there is a Prime Minister's Question Time every Tuesday and Thursday and that we have a Foreign Secretary and a Secretary of State for Defence who are quite able to deal with international and defence commitments overseas? The Prime Minister should be here at Prime Minister's Question Time—or is he afraid of the Leader of the Opposition?
Mr. Speaker: That is patently not a point of order for me.
Mr. Foulkes: But it is.
Mr. Speaker: Of course the House of Commons is important, but the interests of the nation are equally important.
The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): Further to that point of order, Mr. Speaker. It is right to say to the House and to the nation that the Prime Minister is presently with the President of the United States and the Heads of State of most European Governments and others. They are discussing important matters which affect the future defence not only of this country but of the western world. I think that the vast majority of the nation would expect my right hon. Friend to be there with the other leaders.

Statutory Instruments, &c.
Mr. Speaker: With permission, I will put together the Questions on the statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &c.).
That the draft Building Societies Act 1986 (Modifications) (No. 2) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Disability Living Allowance and Disability Working Allowance (Northern Ireland Consequential Amendments) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Merchant Shipping (Prevention of Oil Pollution) (Amendment) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.
That the Students' Allowances (Scotland) Regulations 1991 (S.I., 1991, No. 1522) be referred to a Standing Committee on Statutory Instruments, &c.
That the Bathing Waters (Classification) (Scotland) Regulations 1991 (S.I., 1991, No. 1609) be referred to a Standing Committee on Statutory Instruments, &c.
That the Testing in Primary Schools (Scotland) Amendment Regulations 1991 (S.I., 1991, No. 1682) be referred to a Standing Committee on Statutory Instruments, &c.
That the Child Minding and Day Care (Registration and Inspection Fees) Regulations 1991 (S.I., 1991, No. 2076) be referred to a Standing Committee on Statutory Instruments, &c.
That the Immigration (Carriers' Liability Prescribed Sum) Order 1991 (S.I., 1991, No. 1497) be referred to a Standing Committee on Statutory Instruments, &c.
That the Family Credit (General) Amendment Regulations 1991 (S.I., 1991, No. 1520) be referred to a Standing Committee on Statutory Instruments, &c.—Mr. Neil Hamilton.]
Question agreed to.

Orders of the Day

  Debate on the Address
  Order read for resuming adjourned debate on Question [31 October].
  Most Gracious Sovereign,
  We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.—[Mr. Peter Walker].
  Question again proposed.

  Debate on the Address

    The Economy
    Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition and also, for a Division only, the amendment in the name of the leader of the Liberal Democrat party.
    In view of the pressure of time, I shall have to limit speeches to 10 minutes between 7 o'clock and 9 o'clock. I hope that the hon. Members who are fortunate enough to be called before will bear in mind that limit in fairness to their colleagues.
    4.13 pm
    Mr. John Smith: I beg to move, at the end of the Question, to add:
    But humbly regret that the Gracious Speech seeks to continue economic policies which have caused a deep and damaging recession, falling output and investment, rising unemployment and record levels of business failures and house repossessions; and call upon the Government to adopt a programme for recovery which will encourage investment and rising levels of employment by the promotion of sustained investment in the manufacturing sector, by encouraging industrial innovation through the application of science and technology and by fully exploiting the potential of the neglected regions through vigorous regional policies, and by providing new opportunities in education and training which are crucial to Britain's economic recovery and future prosperity.
    Once again, in his autumn statement yesterday, the Chancellor of the Exchequer was forecasting an economic upturn. There is, of course, nothing new in that. Month after month, as the British economy has languished in a deep and damaging recession, the only reaction from a puzzled and beleaguered Government is the claim that it is not as bad as it seems and that good times are round the corner.
    Right from the beginning, it was even denied that there was a recession at all. At the time of last year's autumn statement, both the Prime Minister and the Chancellor of the Exchequer were deeply involved in just such an exercise. When it could no longer be denied that there was a recession, the Chancellor retreated to his second line of defence. He told the Treasury and Civil Service Select Committee that the recession would be "shallow and short-lived". As we know, however, from the evidence contained in yesterday's autumn statement, the recession has been deeply damaging to Britain's economy.
    In 1991, growth disappeared, falling to minus 2 per cent., instead of taking the upward direction predicted by the Prime Minister when he was Chancellor, only 12 months ago. Fixed investment has collapsed by almost 11

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    per cent. Manufacturing investment has fallen by almost 20 per cent. Manufacturing output is expected to decline by 4·25 per cent. this year.
    No one could possibly pretend that this debilitating economic experience was, or is, shallow or short-lived. But never a word of apology, let alone a word of explanation, ever comes from Ministers whose incompetence has caused Britain to be at the bottom of the league tables among the leading industrial nations: bottom of the league for growth, bottom of the league for investment, bottom of the league for job creation. Not a word of apology, or even of explanation, to those who have suffered the consequences of their mismanagement of the economy—those who owned and worked in the 45,000 business enterprises that failed this year, with 860 failing in every week of the year, and the 85,000 families who have lost their homes as a result of the record level of repossessions, running now at 1,635 every week.
    Mr. Conal Gregory: Will the right hon. and learned Gentleman also confirm that this Government have achieved the highest fall in inflation of any country in the European Community?
    Mr. Smith: But it was a fall from a very high level of inflation. In case the hon. Gentleman's purpose is to divert me from the consequences of the recession, let me remind him that I was referring to the 85,000 families who have lost their homes.
    Most of all, however, one should have regard for the 750,000 people who have lost their jobs since last year's autumn statement, which blithely proceeded on the wholly mistaken assumption that there would be no increase in unemployment. Once again—as the Chancellor revealed in a reply yesterday to my hon. Friend the Member for Durham, North (Mr. Radice)—the Government are assuming, in this year's autumn statement, that there will be no rise at all in unemployment in the year ahead. Frankly, no one should take that seriously. None of the economic commentators who the Chancellor claims agree with him in his assessment is prepared to go along with that assumption. That is an error right at the heart of all the calculations in the autumn statement, just as it was an error right at the heart of all the calculations in last year's autumn statement.
    Mr. Tony Marlow: The right hon. and learned Gentleman says that he is concerned about unemployment. We accept that he is concerned about unemployment, but he knows—although I am sure he will not admit it—that if the heavens were to fall in and there were to be the return of a Labour Government, there would be the mother and father of a financial crisis. In those circumstances, what would the right hon. and learned Gentleman do? Would he increase interest rates and abort the recovery? Would he devalue the pound and embark upon another cycle of inflation? Or would he—the only other alternative available to him—cut the necessary expenditure on sensible and sensitive issues like the national health service? What would he do?
    Mr. Smith: My concern about unemployment is so generous that I am prepared to consider the future of the hon. Gentleman, who I think is going to be unemployed a little sooner than he thinks. He is one of those who are arguing for the general election to be delayed for a personal reason. What I shall be concerned about in the
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    economic policies that I shall follow will be to seek to rescue this country from the financial consequences of this Government's period in office. The next Labour Government will not have a fortunate inheritance, but the hon. Gentleman cannot blame Opposition Members for that. The Conservatives have been in power for 12 years; it is a little late for the hon. Gentleman to notice the problem.
    The price of the recession has been and remains high in economic, political and human terms. After all, this is the second worst recession since the second world war, exceeded in severity only by the recession in the early part of the Government's period in office. Neither the Government nor the hon. Member for Northampton, North (Mr. Marlow) should be under any illusions that the public may be in an easily forgiving mood.
    Indeed, I notice that one business man is so furious and frustrated with the Government's economic mismanagement and its effects on his business and livelihood that he is suing the Treasury in the High Court. As was reported in the Financial Times on 1 October, the Government sought to have the action struck out before the High Court, but the motion failed and the case appears to be proceeding.
    The plaintiff is a Mr. Mark Harries, a Cardiff business man. He accuses the Government of, among other things, the following errors:
    "Selling valuable public industries, such as water and the telephone service, at one quarter of their worth".
    [HON. MEMBERS: "Guilty."] Mr. Harries has a strong case, as the House will realise as I proceed through his pleadings. The other charges are:
    "Creating a false economy in the 1980s and causing property prices to inflate at a time when he purchased four properties on mortgage;
    Not keeping proper control over the Bank of England, so that interest rates almost doubled and he had difficulty keeping up payments on his mortgage loans;
    Creating an economic climate in which demand for properties diminished dramatically, so that he was deprived of his collateral and was unable to borrow more money…or diversify into other business;
    Causing continual and increasing unemployment which deprived him of enough customers with money to use his services;
    Causing him great emotional stress owing to the danger of total business failure and subsequent 'unemployment, penury and destitution'".
    These views are wholly objective:
    "Mr. Harries says that he has no political affiliations and no personal animosity towards the government or any of its members."
    In saying so, he shows himself a man of great generosity as well.
    I remind Treasury Ministers that the case is still proceeding and they may have to give evidence at some stage. After the initial hearing, Mr. Harries said:
    "We are prepared to go the whole way to win the point. It will cost thousands of pounds, but it's a matter of principle. You can forgive the odd one or two mistakes, but you can't forgive mistake after mistake, blunders all the time."
    How true.
    The case will be interesting. I shall be fascinated to see what defences the Government produce to Mr. Harries's case. I must confess that I would not mind presenting the case in the High Court myself, even though I see some potential problems. Too many witnesses will probably want to give evidence against the Government. Those

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    could include the 45,000 businesses that have gone under this year, let alone the 85,000 families who have lost their homes and the 750,000 extra unemployed people.
    I wondered whether the Chancellor had remembered that litigation when he presented the autumn statement yesterday, for that could provide useful material for the plaintiff and his advisers. After all, it revealed how much of a confidence trick last year's autumn statement was. When he speaks today, the Chancellor should have a care not to undermine further the Treasury's case for the defence.
    I have in mind some of the misleading answers that the right hon. Gentleman gave to questions following his statement yesterday. The House may recollect an exchange that took place between my hon. Friend the Member for Neath (Mr. Hain) and the Chancellor during questions on the autumn statement yesterday. My hon. Friend asked the right hon. Gentleman about the Government's prospective intentions to increase VAT, and asked him to answer the question yes or no. A similar matter was canvassed on the "Today" programme on Radio 4 this morning. In reply to my hon. Friend's allegation, the Chancellor said:
    "The hon. Gentleman is totally wrong",
    and went on to give us this pearl of wisdom:
    "One can increase spending and cut taxes at the same time. I do not know where the hon. Gentleman has been—he has not been in this House very long—but we have been doing that ever since 1979."—[Official Report, 6 November 1991; Vol. 198, c. 468.]
    That is simply not true. The Government have not been cutting taxes since 1979. In fact, it is not a matter of dispute between hon. Members on each side of the House that the proportion of national income going in taxation has risen—from 34·25 per cent. in 1979 to 37·75 per cent. in 1991. How can the Chancellor have been cutting taxes since 1979? When the Chancellor was taxed with the matter this morning, he said that the Government had been cutting taxes since the early 1980s. That is the oldest trick in the book.
    The Government get into power in 1979. They increased national insurance contributions by 2·5 per cent.—[HON. MEMBERS: "Come off it."] They do not like to hear this: they hope that the public have forgotten all this. The Government increased national insurance contributions by 2·5 per cent., which is almost the direct equivalent of 2½p on the standard rate of income tax: to most people, it means much the same thing. The Government then almost doubled VAT, from 8 to 15 per cent. Although they had said in the election campaign that the Labour charge that they would double VAT was deplorable gutter politics, they did it within a couple of weeks of getting into power.
    Mr. David Ashby: Will the right hon. and learned Gentleman give way?
    Mr. Smith: Before the hon. Gentleman leaps to his feet, I should just like to finish my point.
    The change in the proportion of income going in taxation since 1981 is quite different from the change since 1979, and to use 1981 as the starting point is conveniently to leave out the years in which taxes were actually increased. The House and the nation need to be treated
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    somewhat more seriously than the Chancellor has been treating us. We are not as gullible as all that.
    Mr. Ashby: Will the right hon. and learned Gentleman say by how much he would increase taxation were a Labour Government to get into power?
    Mr. Smith: We believe that we need to introduce a much fairer system of income tax, and we have spoken about that on many occasions. [HON. MEMBERS: "How much?"] The proposals are well understood by the public.
    Mr. Ian Taylor: The right hon. and learned Gentleman says that he will increase public expenditure—presumably over and above the increases announced yesterday. To finance such a move, he will have to have recourse to higher taxation or higher borrowing and interest rates. By how much will taxation be increased? How much more will the basic rate taxpayer have to pay under his Government?
    Mr. Smith: The hon. Gentleman completely fails to take account of how much of yesterday's public expenditure increase was committed to the costs of recession—about £4 billion of that money was committed to such costs. The answer to his question is that, if we run an economic policy that does not lead us into recession, we shall have the resources to increase public expenditure.
    Despite the Government's recent experience, they appear to have learnt very little. Once again, when they talk about the future of the economy, they advance a case based on bogus reassurances about sustained and successful recovery. It is the same technique as they have used month after month, as the recession has deepened and spread through all parts of the economy and all parts of the nation. In June, the Chancellor detected what he chose to call "vague stirrings" of recovery, which he thought would first manifest themselves in the housing market. He told David Frost on his morning programme, "The signs are there."
    Hon. Members will recall that in an earlier debate I referred to the robust rubbishing of that proposition by the president of the House-Builders Federation, Mr. Upsall. When Mr. Upsall heard about these "vague stirrings", particularly in the housing market, he wrote to the Chancellor the following day:
    "I have consulted widely within the housebuilding industry and there is no foundation whatsoever for your assertion."
    In case the Chancellor believes that that is the only evidence that I am going to introduce on that point, I noticed that, undeterred by the Chancellor's experience of being rubbished by the president of the very industry on which he was commenting, the Secretary of State for the Environment, that bold gentleman, claimed only this week that recovery was evident in the housing market. In The Guardian on 5 November, he claimed that the evidence of housing starts
    "powerfully reinforce the Chancellor's message."
    He went on to say:
    "They herald renewed hope for all those anxious to move house. Britain is pulling out of recession."
    However, the House-Builders Federation was once again alert to the Government's claims. I am glad that it pays such close attention to Ministers' comments. The federation represents builders accounting for 70 per cent. of national output. Again on 5 November in The Guardian,

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    Mr. Roger Humber, a director of the federation, gave an equally sharp response. He said "Rubbish" to the Secretary of State for the Environment. He also said:
    "Customer confidence is falling, house sales are weakening, and confidence is clearly undermined by rising unemployment."
    So much for the "vague stirrings" that we were promised last June.
    In support of the case made by the House-Builders Federation, house prices fell for the third month in succession in September. According to the Halifax building society, there is no sign of an early recovery. The latest figures for mortgage lending issued by the Building Societies Association show a further decline in September.
    Mr. Dennis Skinner: I am pleased that my right hon. and learned Friend has referred to the housing market. The situation has become so bad that the ex-Prime Minister has her house in Dulwich on the market and she has had to cut its price twice. According to the newspapers, she has now resorted to placing it in the Evening Standard's small ads in an attempt to sell it.
    Mr. Smith: My hon. Friend's kindness takes me aback. His generosity is as great as his perspicacity, and I am grateful to him for drawing that point to my attention.
    One of the executives of the Building Societies Association told The Financial Times on 24 October:
    "There is normally a clear upturn in the market when people return from holiday at the end of August, but there has been absolutely no indication of any renewed activity this autumn."
    As the Chancellor's "vague stirrings" seemed to lack persuasive power, he has taken to gardening metaphors. In Blackpool he claimed to have detected "green shoots" of recovery. Against that background of blinding blue, he saw some green shoots of recovery.
    I had the pleasure of listening to the Chancellor at the Guildhall. On that occasion, he talked about being
    "on the road to recovery"
    on the basis of a claim that retail sales were on an upward trend. Unfortunately for the Chancellor, Sir Ian Maclaurin of Tesco was in the audience. Immediately after that speech, he pointed out on "Newsnight" that that was not the case. He said that there was no rise in the trend in retail sales—[Interruption.] I do not think that the Chancellor heard what Sir Ian Maclaurin said, but I did. I took part in that programme. He said that he worked in the industry, was in the retail trade and, I believe, is a chairman of one of the federations. He denied what the Chancellor had said.
    The Chancellor of the Exchequer (Mr. Norman Lamont): I rushed back from Mansion House especially to hear the right hon. and learned Member for Monklands, East (Mr. Smith), because I am always entertained by his interventions. Sir Ian Maclaurin made it clear that he was talking about grocery sales. Will the right hon. and learned Gentleman tell us whether retail sales over the past three months were higher than in the previous three months, and were they higher than retail sales in the first three months of the year?
    Mr. Smith: I am glad that the Chancellor raised that point. I have the retail sales figures in September issued by the Central Statistical Office—[HoN. MEMBERS: "Answer the question."] I am entitled to produce the evidence. The Chancellor's case was that retail sales were on a rising trend. Let us consider the figures. In July, they were 120·8;
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    they fell in August to 119·3 and were unchanged at 119·3 in September. During the immediately preceding three months the trend was downwards—from July to September—not upwards. Perhaps even more significantly, the trend was down in September 1991 as against September 1990. How on earth can it be claimed that there is a rising trend when, over the past three months, it has been going downwards and is lower than it was a year ago?
    Only yesterday, the Society of Motor Manufacturers and Traders published the most recent figures on car sales. Almost unbelievably, in October, the sale of new cars was down by 22·5 per cent. on the same month last year. That reversed the trend of the previous three months when the rate of decline and demand had begun to ease. The motoring correspondent of the Financial Times gives his opinion today:
    "The sharp drop in sales appears to confirm industry fears that the intense marketing campaigns of recent months served merely to pull sales forward from the final quarter."
    Vauxhall said that there was
    "no sign of an end to the current sales slump."
    Those worrying trends in the car industry come on top of the latest manufacturing output figures, which show a drop of 1·1 per cent., and a 2·7 per cent. fall in engineering output.
    Having failed to produce very much in the way of facts for his Guildhall audience, the Chancellor hit on a new theme. The vital ingredient, he said, was confidence. With perhaps unconscious irony, he said:
    "Confidence doesn't come from politicians' speeches."
    How certainly true that is, particulary of this discredited and incompetent Administration, who specialise not in creating by their policies a basis for real confidence about our economy but in the year-in, year-out peddling of worn-out and increasingly unconvincing confidence tricks. What could be the basis for confidence would be an investment-led recovery from recession. That is exactly what the Government are not achieving. Although the Government forecast an extremely weak recovery in fixed investment last year—in the autumn statement, it was predicted to be 1·25 per cent.—we know from experience and from comparing last year's autumn statement with this year's that we should not accept Government predictions uncritically.
    Since we heard the Chancellor on the radio this morning claiming that one should accept his forecasts because other forecasters agree with him, we should look at what other forecasters predict for fixed investment in 1992. The Chancellor says—
    Sir Peter Tapsell: Will the right hon. and learned Gentleman give way?
    Mr. Smith: If the hon. Gentleman will allow me, I am, as he must know, in the middle of giving some statistics.
    A range of other forecasters—[Interruption.] I am very good at giving way. Conservative Members cannot complain. I have given way to every hon. Member who asked me to give way. I shall give way to the hon. Member for East Lindsey (Sir P. Tapsell), who is quite happy to wait for me to finish the part I am dealing with, and if he could nod to the unruly members of the Cabinet on the Government Front Bench and ask them to cool it a little, I will get round to him all the more quickly.
    Plus 1·75 per cent., says the Chancellor. The IMF forecast minus 2 per cent., the CBI minus 2·3 per cent., the London business school minus 1·9 per cent., Phillips and

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    Drew minus 2·4 per cent., Greenwell Montague minus 2·5 per cent., NatWest bank minus 2·7 per cent., Shearson Lehman minus 2·1 per cent. [Interrupton.] They are all out of step except our Norman when it comes to those predictions. Even more ominously, both the CBI and the National Institute of Economic and Social Research forecast manufacturing investment to fall next year by between 8 and 9 per cent. Of course, that fall is after taking account of the precipitous decline in manufacturing investment this year.
    Sir Peter Tapsell: As the right hon. and learned Gentleman is making, as he is fully entitled to do, a most interesting tour d'horizon of the economic scene, what does he criticise, if anything, in the autumn statement? In particular, does he think that the Government should have announced further increases in expenditure for 1991–92 above those that were announced yesterday?
    Mr. Smith: I do not want to be discourteous to the hon. Gentleman, but I spent some time criticising precisely those matters when we discussed the autumn statement yesterday.
    I should, however, like to make one relevant point on that matter. One substantial omission from the autumn statement was the Government's failure to increase investment in industry and training. There is no question about that. The Government talk about priority areas, but as soon as one identifies a priority area, one also identifies non-priority areas and, sad to say, the Government's non-priority areas include industry and training. What really needs to be done—[Interruption.] The Government should finally realise—[Interruption.] This is relevant to my response to the hon. Member for East Lindsey.
    The Government should finally realise the importance of the manufacturing sector to the British economy. I suspect that the hon. Gentleman would agree with Opposition Members when we emphasise the fact that manufacturing is the basic wealth creator for our economy and our society. It is also—this should concern the Government, who are predicting a deterioration in our balance of payments—the indispensable, internationally tradeable part of our economy.
    As we face the challenges of the single market after 1992, which are coming nearer by the day, the Government should realise that Britain will remain at the bottom of the economic league unless we consciously stimulate sustained investment in manufacturing and promote science and technology, so that our economy operates at the leading edge of innovation and produces new products, and unless we embark on a skills revolution to mobilise the undeveloped skills of our people, especially our young people, for the benefit of our economy and society.
    The Queen's Speech does not show a proper appreciation of the deadly damage that has been done to our economy by a Government who are now running out of time, just as they have already run out of ideas. As Mr. Harries, that determined plaintiff to whose action I wish every success as he proceeds with it in the High Court, reminded us,
    "You can forgive the odd one or two mistakes, but you can't forgive mistake after mistake, blunders all the time."
    No matter how long the Government seek to delay the election, that will remain the judgment of the electorate.
    4.42 pm
    The Chancellor of the Exchequer (Mr. Norman Lamont): I apologise to the House because I have been caught by surprise. I thought that the right hon. and learned Member for Monklands, East (Mr. Smith) was just beginning his attack on the Government.
    The right hon. and learned Gentleman devoted a certain amount of time to the economic forecast, but it must have been quite clear to my right hon. and hon. Friends that what really upset the right hon. and learned Gentleman about the forecast that I published yesterday was that it is good news for the economy and therefore bad news for the Labour party. It shows that we are on track for recovery, and that recovery will gather momentum next year.
    The right hon. and learned Gentleman also talked about the forecast that was made at this time last year, when we said that we would make dramatic progress on inflation. He has not told the House his view of that forecast on inflation. When we said at this time last year that we would get inflation down to 4 per cent., the right hon. and learned Gentleman scoffed, but that forecast has been vindicated. Today, inflation is 4·1 per cent. and it is set to fall further. With unit labour costs actually falling, underlying inflation will continue to fall throughout next year. As I have made clear, inflation according to the retail prices index may rise a little early next year as special factors, especially mortgage interest payments, drop out of the calculation before falling back again to 4 per cent. by the end of 1992. Factory gate inflation will be at its lowest level since the 1960s. That is the measure of our considerable achievement.
    I do not think that the right hon. Gentleman mentioned inflation but, unlike him, we have never wavered from the view that the defeat of inflation is a necessary condition for growth and economic success. Unlike the right hon. and learned Gentleman, we have never flinched from the measures that are necessary to deal with opposition—[Interruption.]—to deal with inflation—[Horn. MEMBERS: "Ah."] we have never flinched from the measures that are necessary to deal with both of them. The story of the past year has been about the dramatic progress that we have made and the lack of support and the lack of determination to defeat inflation that has been evident from the Opposition.
    As inflation has fallen, we have cut interest rates, but after each of those cuts, the right hon. and learned Gentleman for Monklands, East has leapt to his feet, rushed to the television studios and demanded another cut, another 1 per cent. As one of the newspapers said, he is "Mr. One Per Cent." Whatever the level of interest rates, the right hon. and learned Gentleman thinks that they should be lower. He was at it again the other day immediately after the Mansion House speech when he said that, if he were Chancellor, he would hope to cut interest rates "quite quickly". The truth is that, if he were ever to become Chancellor of the Exchequer, the only thing that he would do "quite quickly", would be to put up interest rates. He would have to do that. "Mr. One Per Cent." cut would become "Mr. One Per Cent." rise.
    The right hon. and learned Gentleman does not understand that it is precisely because our approach has been prudent that our interest rate cuts have been sustained. As a result, businesses and the foreign exchange

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    markets have realised that we are on course for stable and lasting low inflation. That is, and will continue to be, the achievement of this Government.
    Mr. Robert Sheldon: If those changes have been the consequence of prudence, what has been the cause of the rising levels of interest rates that we have seen in the past two years?
    Mr. Lamont: The right hon. Gentleman knows well that we increased interest rates, and that we did not flinch from doing so, to deal with inflation. That has been the main object of our policy and it is the basis for achieving growth again. It is because I can reply to the right hon. Gentleman in that way that the markets have confidence in us. They know that we will stick to the policies that are needed. That is why confidence in our prospects is beginning to show through.
    The right hon. and learned Member for Monklands, East ridiculed the latest CBI survey that showed that business optimism is at its highest level for three years. He did the same thing the other night on television, but if the right hon. and learned Gentleman had done his homework, he would know that that survey has a well established track record as an excellent predictor of output.
    In addition. the rate of growth of narrow money—another good indicator of GDP—is now above the centre of its target range. Export optimism and output expectations are up. Manufacturing output, exports and retail sales—I shall come to the right hon. and learned Gentleman's point on retail sales in a moment—have all increased in the past three months compared with the previous three. There is every reason to believe that we are emerging from recession.
    The whole House will have heard what the right hon. and learned Gentleman said about retail sales. The facts are that, in the last three months for which there are published figures—July, August and September—retail sales are up 0·5 per cent. on the previous three months—[Interruption.]—0·5 per cent. was what I said—[Interruption.]—on April. May and June. In the three months to September, the index was 119·8 compared with 119·1 for the three months to June. I ask the right hon. and learned Gentleman to withdraw his earlier remarks, which were quite wrong.
    Mr. John Smith: I ask the Chancellor to explain why, if this is a recovery, the figures are down 0·5 per cent. on the same period last year.
    Mr. Lamont: The right hon. and learned Gentleman knows perfectly well that I was making the point that retail sales are beginning to recover from their low point. The whole House will have observed that the right hon. and learned Gentleman did not only misrepresent the facts, but sought to misrepresent the views of the other people on that television programme.
    Mr. Smith: In that case, and if it is a rising trend, will the Chancellor explain why the figure in September—[Interruption.] I am sorry, I mean July. Will the Chancellor explain why the figure for July is higher than the figures for August and September? [Interruption.] Perhaps the House will listen for a moment because this is an important point which is crucial to the Chancellor's case. How can there be a rising trend when the July figure drops in August and drops again in September?
    Mr. Lamont: The right hon. and learned Gentleman is being absurd. He takes one month's figure and says that—[Interruption.] No. The right hon. and learned Gentleman is utterly absurd. I quoted the figures to the House. The House heard the figures and heard clearly that the level of retail sales for the past three months is up on the previous three months. It is also higher than for the first three months of this year. I ask the House whether in its opinion that is or is not the beginning of a trend.
    Mr. Geoffrey Dickens: Does my right hon. Friend concede that his autumn statement yesterday and his remarks today in the House have been so well received by the City, the confidence of which we must always maintain, that shares are rapidly rising today? That is how confident the City is.
    Mr. Lamont: I am glad to have that up-to-date and welcome news from my hon. Friend.
    The second half of this year will see a modest rise in output, just as I predicted in the Budget. I forecast that in 1992 the economy will grow by about 2·25 per cent. That is a cautious forecast. It is a realistic one. It is similar to that made by the London business school, the National Institute of Economic and Social Research, the International Monetary Fund and, indeed, the majority of City forecasters, contrary to what the right hon. and learned Gentleman sought to imply.
    Mr. D. N. Campbell-Savours: Repeatedly in recent months, the Chancellor has gone on television and tried to assure the British people that manufacturing output was rising. Yesterday, he said:
    "manufacturing output may also now be picking up".—[Official Report, 6 November 1991; Vol. 198, c. 452.]
    Why is he changing his position? Why was it "may" yesterday when he was sure that manufacturing output was rising only a few weeks ago?
    Mr. Lamont: The hon. Gentleman is mistaken. Manufacturing output for the past three months is higher than that for the previous three months, as is industrial production. I was referring to total output in the whole economy, for which we do not yet have the figures.
    As the impact of the interest rate cuts that we have made continue to feed through to demand, the recovery will gather momentum. We predict that the increase in output from the second half of this year to the second half of next year will be 2·75 per cent. In 1992 exports will rise by about 6 per cent., manufacturing output will rise by about 3·25 per cent.—the right hon. and learned Gentleman professed to be interested in manufacturing—and domestic demand will rise by about 3 per cent.
    Of course, the right hon. and learned Gentleman does not want to know. He has to distort the figures. He does not believe in recovery. He does not want a recovery. He is terrified that there will be a recovery. That is why he and some of his hon. Friends have sought on television and in the House to say that we shall be in recession until investment starts to rise and unemployment starts to fall. That is their definition of recession, and it is an interesting one. Business investment was falling during half the term of office of the last Labour Government, and unemployment was rising for four years out of five. So under that definition, the economy was in almost permanent recession under Labour.
    Next year non-oil GDP is forecast to grow by 2·25 per cent. If that is a recession, we were in recession for the

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    entire period during which Labour was last in power. Growth in non-oil GDP was never higher than 2 per cent. in any year of Labour's term of office.
    Mr. Neil Kinnock: On the subject of the growth rate, could the Chancellor tell us whether the estimate of 2·25 per cent. of non-oil GDP growth next year was made by the same person or the same group, or on the same basis, as the forecast that this year growth would be 0·9 per cent. when it has been minus 2·5 per cent.?
    Mr. Lamont: The right hon. Gentleman knows very well that that estimate is in line with the majority of forecasts. It is not simply an optimistic Government forecast: it is one which is supported by the IMF, the Confederation of British Industry and many other reputable organisations.
    The Labour party has sought to deploy another argument. It seeks to belittle bringing inflation down. Its line of argument is that getting inflation down is easy in a recession. That is the point that the Leader of the House keeps making. There is just one problem with that argument. If it is so easy, why did not the last Labour Government do it when they had the chance? In their recession in 1974–75, GDP fell by 3·25 per cent. Manufacturing output fell by almost 11 per cent. Unemployment rose and disposable incomes fell. But did Labour's recession help to get inflation down? In 1974, prices rose by 16 per cent. In the following year, they rose by 24 per cent.
    The Leader of the Opposition conceded in the House the other day that we were on track to get inflation down to German levels, but he then dismissed that achievement by saying that Germany was growing while we were in recession. The right hon. Gentleman might like to know that, again according to the IMF, we will grow faster than Germany next year. He did not admit that.
    Britain is on track for a steady, non-inflationary recovery. That is precisely what business and industry need—a recovery that will gather in strength and will be sustained. It will be sustained because it will be soundly based. It will be based on low inflation and the supply-side reforms that have transformed the British economy during the past decade: lower taxes, simpler taxes, less regulation, privatisation and trade union reforms. Those are the reforms that have revolutionised the competitiveness and productivity of the British economy.
    Mr. John Smith: The right hon. Gentleman mentions lower taxes. Will he now justify to the House of Commons his remark in this place that the Government have been cutting taxes since 1979? Given the increase in national insurance and the huge increase in value added tax from 8 per cent. to 17·5 per cent., how can he possibly justify what he said?
    Mr. Lamont: The right hon. and learned Gentleman knows that we have cut tax rates. On almost every occasion that we have done so, the right hon. and learned Gentleman has voted against the cut. The right hon. and learned Gentleman says that the burden of taxation in the whole economy has increased since 1979. We have admitted that. It is true. We replaced excessive borrowing amounting to up to 9 per cent. of GDP with sound finance.
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    Let me ask the right hon. and learned Gentleman a question. If the burden of tax has increased, that seems to me a good reason to try to bring it down. Why does not the right hon. and learned Gentleman agree? Why does he say that we are wrong to reduce taxes? Why does he vote against tax reductions every time that we make them? Why does he want to fight the next election on a platform of increasing taxes? That seems a most extraordinary thing for the right hon. and learned Gentleman to do.
    Mr. Smith: The right hon. Gentleman just admitted that the burden of taxation has increased in the way I described. How then can he say that the Government have been cutting taxes since 1979? Will he be a man and withdraw that claim?
    Mr. Lamont: I admitted what has been admitted many times in the House before. In the first two years, where did the burden come from? To some extent, it came from increased North sea oil and corporate taxes. We have been reducing income tax rates steadily since we have been in office, and we intend to continue doing so.
    Another matter in which the right hon. and learned Gentleman was not interested was export performance, which, of course, has been outstanding. We are not only holding our share of world markets but increasing it. It looks likely that our share of world trade in manufactures will rise for the third year running, for the first time in at least a quarter of a century. That again gives the lie to those who said that Britain's businesses could not compete within the exchange rate mechanism.
    The right hon. and learned Gentleman talks a lot about investment. What about the £19 billion-worth of direct investment which flowed into the United Kingdom last year—investment which shows the confidence that our policies command with overseas investors. The right hon. and learned Gentleman went to Tokyo recently. We know why he had to go. I am sure that we all sympathise. He had to try to convince the Japanese that they could trust a Labour party run by the unions. Did he tell them about Labour's plans to introduce a minimum wage? Did he tell them about his plans to legalise secondary picketing? Did he tell them about the unions who, at the Trades Union Congress denounced Japanese investment as "alien"?
    Who would want to invest in Labour's Britain? The foreign investment we are now seeing would be inconceivable under a Labour Government. That investment is already helping to reduce the trade deficit, and by the mid-1990s, that investment will make Britain a net car exporter for the first time in two decades.
    Mr. Alan Williams: Will the right hon. Gentleman give way?
    Mr. Lamont: I shall give way, but I am anxious to make some progress after this intervention.
    Mr. Williams: I was in charge of inward investment in the last three years of the last Labour Government. By the time that we left office, there were more than 1,500 foreign companies operating in Britain. I negotiated with Hitachi, Toshiba, Aiwa, Hoffman-La Roche, and with Ford to bring that company to Bridgend. The right hon. Gentleman need not lecture us about inward investment. The Government did not invent it—it was there when they arrived.
    Mr. Lamont: I am well aware of what the right. hon. Gentleman did and I congratulate him. He should communicate his enlightened attitude to his friends in the trade union movement.
    Overall, business investment rose by 45 per cent. in the three years to 1989 and was at a record level in the first half of 1990. At that time, businesses in this country were investing a sixth of national income—the highest share for the past 30 years.
    Even after the fall during the past year, business investment is still higher than in the first half of 1988, itself a record at the time. In fact, the proportion of national income going into business investment today is higher than at any time under the last Labour Government. Business investment lags the cycle, but it will recover during next year, picking up as the recovery gathers pace. It will increase by more than 4 per cent. in the year to the second half of 1992.
    I heard the Leader of the Opposition refer to manufacturing investment. As in many things, the right hon. Gentleman is a bit behind the times. He has quoted figures on manufacturing investment, but what he does not always understand is that much investment which used to be done by manufacturing companies is now subcontracted to service companies. What is the result? If one studies the figures, one will find that core investment in plant and machinery—which is what Opposition Members are really interested in—is 50 per cent. higher today than it was in 1979. That tells us about investment in manufacturing industry.
    Nor should we forget that the quality of investment, by which I mean its profitability, has improved dramatically at the same time. The corporation tax reforms of 1984 made the system simpler and fairer. The right hon. and learned Member for Monklands, East wants to reintroduce those tax breaks, at a cost of billions. Perhaps he would put corporation tax back up again to pay for them. Whenever the right hon. and learned Gentleman is asked a difficult question, he recites his favourite phrase—investment and training, investment and training, investment and training. I must warn him that he is beginning to sound like a parrot that has learnt one thing. It is true that he has some colourful markings, fine feathers and a wonderful beak, but his repertoire is very limited.
    The right hon. and learned Gentleman ought to learn a few new words and themes. What he cannot grasp is where money for training and investment comes from. Business does not need his tax breaks to invest it needs profits—the word that he never mentions. In the 1970s, profits were eaten away by inflation, but in the 1980s they rose sharply. As we come out of recession, profits are beginning to rise again. That is exactly what British business needs to train more, invest more, and create more jobs. It does not need the help of the right hon. and learned Gentleman: it just needs the right conditions—low inflation and high profits.
    In the past few months, the rate of increase of unemployment has fallen sharply. Unemployment may continue to rise for some time yet, but it will peak sooner and at a lower rate than it did following the last recession.
    The way to get unemployment down is to get inflation down. That is the lesson from all the best performing economies in the world. Delivering low inflation is the most important way that the Government can help people back into jobs. But it is not the only thing that we can do. We can reduce unemployment by making the labour
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    market work better, so that, when jobs are created, the people are there to fill them at a wage that employers can afford to pay.
    That is why we have introduced training credits for 16 and 17-year-olds. By the end of the next Parliament, they will cover the whole country, and we are expanding initiatives to help the unemployed.
    Next year we shall spend more than two and a half times as much in real terms on training, enterprise and vocational education as the last Labour Government. However, publicly funded training is only part of the story. Employers' training expenditure, as the latest CBI survey reveals, shows clearly that businesses are spending at record levels on training even in a recession. That is a measure of how business has become better and more energetic in its training, and it is partly a tribute to my right hon. Friend the Secretary of State for Employment and his policies.
    Yesterday, we announced extra resources to help to increase student numbers. In 1979, in Labour's "Opportunity Britain", only a privileged few—12 per cent.—of our young people went on to higher education. Next year, it will be one in four—60,000 students more than this year. By the end of the decade, it should be one in three. That is a remarkable achievement. It is a Conservative Government who hold out the ladder of opportunity to our people. As a result, Britain has the best educated, most skilled, most highly trained work force in its history.
    There was one remarkable omission in the speech of the right hon. and learned Member for Monklands, East. Earlier in the debate on the Queen's Speech, my right hon. Friend the Prime Minister spelled out at some length our position on the intergovernmental conference on monetary and political union. We cannot say that the right hon. and learned Gentleman made the position of the Labour party at all clear.
    The Leader of the Opposition talks about what he calls the illusion of sovereignty, as he called it on the "Today" programme, and he attacks the Government for not being positive enough. However, when I asked him what he meant and why he said that, he would not answer. He avoided the question by saying that he wanted more regional policy and that he wanted to give away our fiscal freedom. He wanted more of our taxpayers' money to be spent not by the British Government in Britain on what the House decides, but by the Community elsewhere in Europe on what the Commission decides. The right hon. Member for Bethnal Green and Stepney (Mr. Shore) agrees with me and knows that what I am saying is precisely right.
    So I ask the Leader of the Opposition again. In the national executive committee document, the Labour party says that it supports a single currency and that it thinks that that is the only way to stop the currency speculators. The Opposition are still living in the 1960s world of Harold Wilson, obsessed with currency speculators. What we need to know now is which of the conditions that we set during negotiations they would drop. Are they urging us to give a firm commitment in favour of a single currency? We have made our position clear. The right hon. and learned Member for Monklands, East has said that they favour an unconditional commitment to a single currency. Unless the right hon. and learned Gentleman denies it, that is the only conclusion that we can draw.
    Mr. A. J. Beith: I would like to be clear about what the Chancellor is saying. Is he saying that the Government will accept a single currency on conditions that he can now define?
    Mr. Lamont: The Government have made it clear that we are not prepared to give a commitment to move to a single currency. We believe that, if monetary union happens, it should be on an evolutionary basis, driven by the market. That is and always has been our position. It is the position of the Opposition that is shrouded in obscurity. When we listened to the right hon. Gentleman, we heard that he wants to give a commitment to a single currency without any conditions whatsoever. That appears to be his position.
    Dame Elaine Kellett-Bowman: Would my right hon. Friend make it clear to the Opposition that their illusion of a regional policy in an enlarged EC may be a different kettle of fish from what it used to be. Few, if any, of our regions would qualify for assistance under regional criteria, and Opposition Members ought to know that.
    Mr. Lamont: My hon. Friend makes a shrewd point and is precisely right. Any expansion of regional policy is not likely to be to the benefit of this country, and I am grateful to her for drawing our attention to that fact.
    Yesterday, I announced our public spending plans for the next three years. Once again, we have shown that there is no contradiction between our prudent policies and high-quality public services. We have honoured our commitments and allowed expenditure to rise to meet the unavoidable consequences of the recession. But neither spending nor the PSBR will rise to the heights of previous recessions. Government expenditure will peak at 42 per cent. of GDP, compared to 47·5 per cent. in 1982–83 and a skyscraping 49·25 per cent.—very nearly half the nation's income—under Labour.
    We remain committed to balancing the budget over the economic cycle. In 1987–88, we repaid debt equivalent to 3 per cent. of GDP, comparable to our assumption next year of a 3 per cent. PSBR. Compare that with Labour's peak of 9·5 per cent.—the equivalent of £55 billion today.
    Our objective remains to balance the budget over the cycle. Just imagine how preposterous a goal that would be for the right hon. and learned Gentleman to state. Even yesterday, he wanted more money for training, for transport and for industry. Now that he has had a day to reflect, the whole House will be waiting for his answer to some vital questions. Does he accept the pledges made by Opposition spokesmen to spend more than we plan to? How would he pay for them? [HoN. MEMBERS: "Answer."]
    Let us start with the National Health Service. I announced an increase in plans of £1·5 billion for the NHS—£1·5 billion which will help the NHS upgrade buildings and hospital equipment. Spending on hospital and community health services will rise by more than 5 per cent. in real terms between this year and next, bringing the total real increase in NHS spending since 1979 to well over 50 per cent. We could not have made our commitment to the NHS clearer. What a contrast with the Labour party—the party that cut nurses' pay and, in one year, cut NHS capital spending—hospital building—by 22 per cent. Fine words but poor action from the Labour party. So would the right hon. and learned Gentleman spend more? Now is his chance to tell us how much. [HON. MEMBERS: "Answer. "]
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    We also announced an extra £1·4 billion for British Rail and London Transport. Next year they will invest more than three times as much as they did in 1979. If the right hon. and learned Gentleman were standing here, would he spend more? His hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) would like to, but would he? Now is his chance to tell us how much. [HoN. MEMBERS: "Answer."]
    What about education? We have more students in higher education than ever before. Pupil-teacher ratios in our classrooms are at their lowest ever, and spending per pupil is up more than 40 per cent. The leader of the Opposition plucked a figure our of the air and said that he would spend £2·6 billion more. We he licensed to do that? Would the right hon. and learned Gentleman give him the money? If he would, how much? [HON. MEMBERS: "Answer."]
    Next year, the aid budget will increase by 2 per cent. in real terms. Again that is not good enough for the hon. Member for Cynon Valley (Mrs. Clwyd). She wants to put it up in a single Parliament by more than £3 billion. Would the right hon. and learned Gentleman give her the money? Now is his chance to tell us. How much? [HON. MEMBERS: "Answer."]
    In April, the right hon. and learned Gentleman published what he called a shadow Budget. Why does not he publish a shadow autumn statement? Then he could give us the answers. He must tell us this; is the level of spending that we have announced too high, too low or just about right? Is the level of borrowing too high, too low or just about right? We have set out our expenditure plans for the next three years, on which we shall fight the election. The country wants the same from the Labour party.
    In the document "Meet the Challenge, Make the Change" the Labour party promised that it would publish its detailed spending plans at the time of the election. now that the election is a little closer, the hon. Member for Copeland (Dr. Cunningham) tells us that it will not publish its plans. What is the Labour party hiding? We know what it is hiding: the cost of unaffordable spending plans and the massive increases in taxation that it knows are needed to pay for them.
    We have costed the hundreds of pledges made by the right hon. and learned Gentleman and his colleagues, and we know that they add up to £35 billion. The right hon. and learned Gentleman has never quarrelled with the detail of any of our estimates. The £35 billion of extra spending means £35 billion of extra tax—perhaps not right away. Perhaps he would try to borrow some more, but he could not delay the evil day for long. Eventually, it would mean skyscraping taxes, not only for the better-off, but for everybody. The right hon. and learned Gentleman always forgets that what the Government give, they first must take away, and a Labour Government would take away a lot from the British people.
    The right hon. and learned Gentleman claims that he would get the money from growth. We have heard that one before. That is what Labour Oppositions always say, but Labour Governments always fail to deliver, because their policies of intervention and regulation throttle recovery. Growth would peter out under Labour.
    Even if Labour could somehow spend the growth created by Conservative policies, the right hon. and learned Gentleman still would not have the money. He clearly has not read the public expenditure plans any more carefully than he has read the forecast. The plans that we

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    have published for the next three years already take account of growth. Those plans are consistent with our objective of balancing the budget over the medium term. If the right hon. and learned Gentleman wants to spend more, he must either borrow more, or tax more, or both.
    The British people have seen through Labour's deceit. They know what a Labour Government would mean. Since the war, living standards have risen half again as fast under Conservative Governments as under Labour. Since 1979, living standards have risen by almost 37 per cent. We have cut income tax rates. The plans that I announced yesterday show that, even when times are difficult, we will continue to improve public services and to honour our commitments.
    It is this argument that leads to the right hon. and learned Gentleman's increasing desperation—a desperation that manifests itself in his peculiar determination never to have one consistent policy when he can have two contradictory ones. He thinks that we should cut interest rates further and faster; but at the same time says that we should stay in the exchange rate mechanism. We know that it is our cautious approach that has enabled us to cut interest rates and keep the pound stable. He wants to increase spending; but he claims that he will not put up taxes. We know that it is our firm control of public spending that has enabled us to cut tax rates. He says that we should improve competitiveness and strengthen the supply side; but he wants to introduce a minimum wage and bury business under a mountain of bureaucracy. We know that low inflation and a more flexible labour market is the way to create wealth and jobs. He says that there is no recovery. A few weeks ago on the radio, he said that the recovery would be weak and faltering. His right. hon. Friend the Leader of the Opposition has told us that the recovery is heading for an inflationary boom. We know we are headed for sustained, non-inflationary growth.
    A Labour Government would bring higher taxes, higher inflation, higher interest rates and higher unemployment. Their policies would leave the nation with no prospect of economic recovery and no hope of improving the public services. This Government are dedicated to a sustainable, economic recovery based on stable, low inflation.
    We are dedicated to a tax system that gives people the incentive to work and the opportunity to save. We are dedicated to using the fruits of these policies to improve the public services of the nation—not only providing our health, education and transport systems with increased resources, but securing improved performance from them.
    This Government's objectives are shared by the nation, and the economic policy which serves those objectives deserves the support of this House. I ask the House to reject the amendment and to support the Loyal Address.
    5.18 pm
    Mr. A. J. Beith: There could hardly be more of a contrast between this year's debate on the Loyal Address and our debate last year. Hon. Members may have forgotten in the interval what happened.
    Last year's debate was marked by a speech by the right hon. and learned Member for Surrey, East (Sir G. Howe), who was in the Chamber a moment ago, rather like Banquo's ghost, but has disappeared, in rather the same way. That speech was probably one of the most dramatic
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    and remarkable, although it was quiet in delivery, that many of us have heard in the whole of our time in this House, because it was the undoing of a Prime Minister.
    The speech pointed to the impossibility of papering together deep divisions over Europe by the use of sophisticated language. It blew open those divisions, but did not stop the present Prime Minister saying, when he spoke as Chancellor in that debate:
    "I believe that they will vote for the consistency, courage and conviction with which my right hon. Friend the Prime Minister has led this country so successfully for so long."—[Official Report, 14 November 1990; Vol. 180, c. 599.]
    Conservative Members did not wait to find out whether people would vote for that courage and conviction, but bundled out the then Prime Minister, the right hon. Member for Finchley (Mrs. Thatcher) pretty quickly once they had had the encouragement of a Liberal Democrat by-election win and the exposure of the divisions by the right hon. and learned Member for Surrey, East.
    In the same debate, the then Chancellor forecast the same growth that has been forecast today—a growth that did not happen. It was the beginning of the protracted end of the Government. The next stage in that process has been a Gracious Speech full of apologies. The apologies may be veiled and may take the form of a reversal of previous policies, but they nevertheless constitute the admission of how wrong the Government have been. The council tax Bill exists because the poll tax was the disaster that so many hon. Members said it would be. That view was expressed by everyone on the Opposition Benches and a few Conservative Members, but was ignored as the Government arrogantly used the power of an artificial majority to force the poll tax through.
    Similarly, the Gracious Speech is an apology for the privatisation process that has taken place, because it has led to the wholesale transfer of monopolies from the public to the private sector without serious competition, or adequate regulation to replace competition where it could not exist. That is why the Queen's Speech contains a commitment to introduce legislation to reinforce the regulation of privatised utilities. It concerns privatisations that have taken place in the past few years under processes and with measures of regulation which the Government said were more than adequate, dismissing all our criticisms. The Government's admission that they must return to that issue is another apology, but return they must, as anyone who considers what is happening in British Telecom—the bills paid by the customers or the salary received by the Chairman of that company—will be quick to point out.
    Another apology has been made in all the charter proposals for public services. It is an apology for the steady decline in public services during the decade or more in which the Government have been in power. That decline will not be arrested by charters of citizens' rights in those services, desirable though some aspects of those may be. Yet again, it is an apology for failure.
    The apology that is missing from the Queen's Speech is for the recession. Nowhere do the Government admit that they have produced a recession which they regret, or that they have magnified the extent of that recession by past policies. Rather, they tell us what they told us last year—that they will maintain conditions for sustained growth. Are those the conditions that provided the recession or are they something different? Sustained growth sounds unconvincing in the mouth of the Government because, in

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    the past few years, Britain has grown at a rate well below trend growth and below the OECD average, managing a paltry 0·75 per cent. in 1990 and with a projected fall of 2 per cent. during 1991.
    The Government cannot maintain conditions for sustained growth if they do not introduce such conditions. That must include long-term investment in key areas of training, education, research and development, and transport. Governments should concentrate on such matters. They are no good at running industries, and probably not much good at picking winners and deciding where in the economy investment can best be directed. They must ensure that the matters for which Governments must be relied on are properly provided. Education and training are at the heart of that list, as is an adequate transport system.
    The conditions for sustained growth outlined in the autumn statement appear to be based on the idea of a revival in consumer spending rather than an investment-led recovery. It is hard to envisage how that will happen. Much of the consumer spending boom of the 1980s was based on rising house prices and the enormous withdrawal of equity from housing that fuelled the inflation of that period. That will not happen now. House prices will not rise in the same way and consumers who have been through that experience have been hard bitten by it. In many cases, the victims of that period cannot engage in much consumer spending now. If they can, they are much more cautious as a result of the experience of the past few years than they have ever been.
    The autumn statement contains something that I have never seen in an autumn statement before—a chart designed to show not figures showing what might happen in the economy but estimates of consumer confidence based on Gallup poll evidence. The Treasury Select Committee will have fun discussing the precise significance of that measure, which is another attempt to talk up the economy and persuade consumers that it is all right to spend now. People will not be kidded that easily. They have seen what it is like to be unable to meet their mortgage repayments and be faced with redundancy and unemployment.
    The Gracious Speech also refers to
    "policies designed to reduce inflation further".
    I am in favour of such policies, but a little confused about the Government's current attitude. Only recently, the Prime Minister said that the Government had inflation "licked". I am sure that he is honest and believes that that is so. He must believe, then, that 3 or 4 per cent. inflation is a reasonable long-term rate for the United Kingdom economy. That view is not shared by many pensioners. Many hon. Members will have had the experience of constituents who say, "I don't understand how inflation can be coming down when prices are still going up." That may be expressed in simple terms, but it is the reality. As long as inflation exists, prices go up. Lower inflation may please economists and be an index of an improving trend, but it is not what most people want. They want price stability. We need an economy that is dedicated to price stability.
    The most effective proven mechanism to achieve price stability is an independent central bank dedicated to that objective. I still wonder what happened to the paper produced by the right hon. Member for Blaby (Mr.
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    Lawson), which the former Prime Minister, the right hon. Member for Finchley, threw into her waste paper basket with what oaths and cries we shall never know.
    The right hon. Member for Blaby may not like the idea of a European central bank, but he is clearly on record as saying that he believes that in this country's economy an independent central bank would be a guarantee against inflation. Indeed, it would have done some good to have one when he was Chancellor of the Exchequer, as it would have made a significant difference to some of the measures that he took, which stoked the fires of inflation. I am not yet convinced that the Government have the policies to counter inflation. They are in danger of becoming complacent now that we have reached welcome lower levels of inflation, and are lulling themselves into believing that the problem has been "licked".
    The Government make commitments in the Gracious Speech in which there is no substance. The commitments have been abandoned before they have been voted on. It is unusual to have an autumn statement in the middle of a debate on the Queen's Speech, but it has at least given us an opportunity to test the veracity of the promises that have been made.
    One of the promises is that the Government will promote enterprise and training. Before we have had the opportunity to vote on that policy, the autumn statement has informed us that the Government will not promote training or fill the training gap that has developed in recent years. It says that the money which it was prepared to commit to training will not meet the pleas of the training and enterprise councils, which are struggling to deliver the training guarantees which the Government have committed them to providing, and which cannot go beyond the delivery of that guarantee to extend training opportunities in a serious or significant way.
    The £470 million announced yesterday will be taken up in large part by programmes that have already been announced, such as the employment action programme, by money for job clubs and by funds for departmental redundancy payment schemes. The money left over is unlikely even to provide for the current training budget to keep pace with inflation.
    The Government say that they will promote enterprise. Why, then, do they not do more for small business and look again at legislation on the late payment of debt? Even the chairman of the National Westminster bank has conceded that they should look at that issue. It is a matter of deep concern to many small businesses—it is killing some of the most enterprising small firms—that they are not able to obtain proper payment of debt, often from larger and better-funded institutions than themselves.
    Another commitment in the Gracious Speech to which, I suspect, there is little substance is the commitment to introduce legislation to reinforce the regulation of privatised utilities. We shall look with interest to see what that legislation will be.
    We would support any moves to increase the powers of the regulators to give them stronger teeth. That is particularly necessary in the water industry, where there is no prospect of competition. The idea put about by Ministers at the time that there would be competition in the water industry—because people would compare one region of the country with another—is unrealistic. That is not how competition works. Competition works if one can buy an alternative product at a better price from

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    somebody else. That cannot happen in the water industry, so there must be much more effective regulation than has existed in the past.
    We must look also at other areas of privatised industry. The recent profit figures of British Telecom tell their own story. We must examine the Office of Fair Trading's recent comments on British Gas. We argued from this Bench that the regulatory machinery for British Gas was totally inadequate and that the basis of the privatisation was wrong. We shall also have to look at the electricity industry, where the Government produced two large generation companies solely to try to privatise nuclear power. They had to abandon the privatisation of nuclear power, leaving themselves with a highly monopolistic structure.
    I do not believe that, deep down, the Government are committed effectively to fighting monopoly and promoting competition. Some Conservative members may have a desire to do so, but there is no real strength of commitment to the promotion of competition and, for example, to the toughening up of the Monopolies and Mergers Commission and the greater detachment of that body from the powers of the Secretary of State for Trade and Industry, who seems more interested in the argument about French nationalised industries than in the promotion of competition in our domestic economy.
    There are significant and eloquent omissions from the Gracious Speech. For example, there is not a mention of the words "single currency", despite the fact that it is one of the most fundamental issues facing the country today. That is recognised by its supporters and opponents alike. Although it is the subject of a crucial conference which is about to take place, the Government do not have a real policy on it. Indeed, their policy is not to have a policy. Their policy is to try to avoid making a decision this side of the general election. That is precisely what the right hon. and learned Member for Surrey, East described a year ago. It is an attempt to find a form of words around which people of different views can unite.
    The Labour party has had similar problems and has gone a step further. Labour Front-Bench Members seem to have committed themselves to a single currency despite the fact that some of their Back-Bench supporters continue strongly to oppose it, although they are having difficulty with the question whether a European central bank would be independent. Their recent policy statement will cause some heart searching on the part of the hon. Member for Bolsover (Mr. Skinner) and some of his hon. Friends.
    Mr. Skinner: My position is quite clear.
    Mr. Beith: The Government are still trying to get away with having no policy. Imagine what would happen if Britain sought to remain outside a single currency and European monetary union. That is ultimately the issue facing Britain.
    Mr. Skinner: It would be a good day's work.
    Mr. Beith: I appreciate that the hon. Member for Bolsover and the right hon. Members for Bethnal Green and Stepney (Mr. Shore) and for Chingford (Mr. Tebbit) believe that that would be a good day's work. Neither of their respective leaderships agree with them. I do not think the Prime Minister imagines that this country's future would be secure if we remained outside.
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    A single currency and European monetary union are coming: there is no question about that. The issue is whether Britain is in or out. If we are outside, we shall not enjoy the advantages of a single currency or have the investment in this country of those companies—our own and overseas firms—which want to invest in the core of Europe and enjoy full access to all that goes on in Europe. We shall not be able to influence events that control our destiny. Anyone who imagines that a British Chancellor of the Exchequer could, wholly independently, determine interest rates here without considering what was going on in a Europe with a single currency, with all the other member countries belonging to it, is totally wrong.
    Mr. John Butcher: Is the hon. Gentleman aware that one estimate of the costs saved by industry by our joining EMU is 0·05 per cent., while other estimates show that there would be an unnecessarily high increase in unemployment from being locked into EMU under current trading conditions? Has his party analysed those comparative costs?
    Mr. Beith: The hon. Gentleman is talking about transaction costs. I believe that the saving in those costs would be higher. But that is only a small part of the single currency argument. The most crucial aspect is whether we want our currency to be locked into a stable currency in Europe or whether we want to be able to devalue our currency in the hope of averting unemployment. What we almost certainly would do by such a devaluation process—from which the Labour Front Bench is now trying to distance itself—is to postpone decisions which industry would have to take in the end, anyway. The benefit to competitiveness would be short-term, while the damage to our credibility as an economy would be massive.
    That is why there are only a few recalcitrants on the Back Benches on either side of the House—among whom the hon. Member for Coventry, South-West (Mr. Butcher) is an honoured member—who still advocate a devaluation-based policy and the maintenance of our ability to devalue.
    Mr. Skinner: Why does the hon. Gentleman's party believe that, because the Common Market has been in existence for a few decades, it will continue as though nothing is happening to stop it? Spanners are being put in the works of that gravy train. Through a thousand years of European history, nation states have come closer together. Every so often, they have become so close that they cannot stand the sight of one another. Then they begin to fall apart. That is happening in Russia, Yugoslavia and to some extent in Canada.
    I urge its adherents not to believe that philosophically the members of the Common Market will continue to get ever closer, even towards the end of this century. Eventually we shall see—I know that I shall see it—the breaking up of the Common Market.
    Mr. Beith: The hon. Gentleman should devote his time and energies to trying to convince his hon. Friends on the Labour Front Bench of that. They have rejected the view which he espouses, just as the Government have rejected it and as we have rejected it since the 1950s. We believe that there is a determination in Europe to create institutions through which Europe can be economically more successful.

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    That is not to say that we shall lose difference and divergence in Europe. Anyone who imagines that a single currency, or even the steps for political union that we advocate, means an end to divergence is imagining things. Differences in national view and culture will remain, just as they remain within the United Kingdom. Indeed, it comes ill from the Government to argue that power would become too centralised in a European system when they have centralised power in Britain, taking power away from the nations that make up the United Kingdom to bring them to the centre.
    The costs to Britain of staying out would be immense, as would be the costs of remaining in the slow lane. If we remain ambiguous about whether Britain should be fully in the European Community and in the single currency, the same adverse effects on investment will apply. The Gracious Speech should have made it clear that Britain is committed to the achievement of a single currency and monetary union, in which we shall be a full participant.
    5.38 pm
    Mr. Terence L. Higgins: The Treasury Select Committee will look forward to taking evidence from the Chief Secretary and from the Chancellor of the Exchequer on the autumn statement before reporting to the House, and it would be wrong of me to anticipate what that report might say.
    However, I think that I shall carry the Committee with me in welcoming the fact that the Chancellor has accepted the recommendation we made after the Budget this year when we said strongly that he should not inhibit the operation of the so-called automatic stabilisers which were likely to increase the deficit, and that he should take the opportunity to make some supplementary discretionary increases in public expenditure. Both those actions, while they increase the deficit, will be of great help in reducing the depth and duration of the recession.
    I welcome the increase in expenditure on the national health service announced in the autumn statement. It is significant that the shadow Chancellor made no reference to it in his speech, although I have noticed that in the press some Opposition Members have been saying that the increase in national health expenditure is in some sense an election bribe. If that is so, it is necessary to look at the massive increases in extra expenditure on the health service which took place last year, the year before and the year before that. If it is an election bribe, it has been going on for a long time, probably since the last election.
    The Gracious Speech says that the Government will
    "continue to play a constructive role in the two Inter-Governmental Conferences on Political Union and Economic and Monetary Union".
    I want to refer particularly to economic and monetary union, to which the hon. Member for Berwick-upon-Tweed (Mr. Beith) also referred. The single currency is not mentioned in specific terms, but the IGC is mentioned in the speech. I want to make some important points. I am neither a Euro-sceptic nor a Euro-maniac. I should form a group slap in the middle. I have always believed that it is right for Britain to be a member of the European Community.
    There has always been something of a trade-off between the costs and disadvantages of the common agricultural policy on the one hand and the potential advantages of the
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    single market on the other. What gives me grave cause for concern in present circumstances is the way in which the Commission seems to be extending its operations into other areas such as the environment and whether a bypass should go here or there. We get no quid pro quo, and the principle of subsidiarity, about which we used to hear a great deal but have heard very little recently, seems to have been forgotten.
    I hope that we shall have an opportunity to speak about economic and monetary union in the debates that are scheduled to take place shortly. However, some points in the negotiations need to be dealt with at this stage, and hon. Members should be able to express an opinion at this stage. It would be totally wrong to have a referendum in any shape or form on this issue. I am totally opposed to referendums on any issue. We operate in a representative parliamentary democracy. If there is any issue that should not be dealt with by a referendum but which should receive the considered opinion of people in the House, it must be the single currency. One has only to speak to members of the electorate to realise that the crucial distinction between a single currency and a common currency is not generally understood by members of the public. Therefore, the issue should be considered in the House.
    The basis of power of the House of Commons and this Parliament has always rested on the control of money—taxation and public expenditure. It rests on our supply procedure, ways and means resolutions, the argument that money should not be handed over to the Executive until grievances have been redressed, and so on. Therefore, I am profoundly concerned at the proposals in the Dutch draft treaty with regard to control of budget deficits of members of the EC.
    The proposals in the draft are unbelievably ludicrous. They are quantitative with regard to borrowing and the national debt, and propose to impose penalties and reports from the Commission for those who do not comply. Option clauses or not, that is totally unacceptable. I am not sure whether my right hon. Friend the Chancellor has fully taken this point, hut, even if one were in favour of a single currency, as a number of people in Europe are, it is still not necessary to control deficits in order to achieve it. The extension into fiscal policy is something else.
    Mr. Denzil Davies: Will the right hon. Gentleman give way?
    Mr. Higgins: I want to continue, because this is a complex argument.
    It is being shuffled in as a side wind, as if it is necessary for a single currency. That is not so. The evidence that the Treasury Select Committee has received on this issue shows that, even if one has multiple currencies, it is not possible to tell in which direction an exchange rate would move in response to an increase or decrease in the deficit. This is a complex issue, and no doubt one can pursue it elsewhere. However, that is the evidence that we have had from Treasury officials, and it is important to bear it in mind.
    Because of its complexity, I wondered how it could be explained in more simple terms. While talking to my right hon. Friend the Member for Guildford (Mr. Howell) this afternoon, it suddenly occurred to me how it could be done. A massive deficit in Illinois or Texas would in no way prevent the United States from having a single currency. If the deficit were of sufficient scale, it might alter

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    the relative position of the dollar against the deutschmark or sterling, but it would not mean that the deficits of individual states would have to be controlled. Therefore, the basic argument put forward by Delors and others that there must be control of deficits in order to have a single currency is totally invalid.
    Mr. Denzil Davies: There is a fallacy in the right hon. Gentleman's argument. There will be no united states of Europe. It is necessary for the Commission to control budgetary deficits because we will be transferring monetary policy to a supranational central bank. Therefore, there has to be some control over the national deficits. If we had a united states of Europe, the position would be different.
    Mr. Higgins: That is not the case, for the reasons that I have pointed out. There may be a wish to transfer greater authority from here to the Community, but the single currency does not require control of the deficits. It may be that the argument for economic union as against monetary union is put in those terms, but, as I have said, the House should not give such authority to the Community, because it is the basis of our power.
    The so-called opt-out clause has been given a great deal of publicity in the press. In the words of the draft treaty, one can be an "exempt" country. In fact, the opt-out clause opts out of only a very small part of the draft treaty. The Delors report put forward the argument for a single currency which would mean giving up for all time the main means of adjusting for differential movement in costs and prices over a wide geographical area. The argument at that time was that, if that causes distortions and so on and there is a variation in costs and prices in a particular part of the Community, there is no need to worry, because there could be a transfer of regional and structural funds from one part of the Community to another. One may think that doing that for Liverpool has not been terribly effective, and there is no guarantee that, if we accept a single currency, the Germans will he prepared to perpetually subsidise, for example, the Spaniards.
    Mr. Butcher: Quite the opposite.
    Mr. Higgins: Indeed.
    If the others go along with a single currency and we make use of the exemption clause, it is not likely that they will say that we are also exempt from the cost of the transfer funds that are necessary because they have a single currency. That will not be the case.
    My right hon. Friend the Chancellor has a slightly difficult task ahead of him. His attitude so far has been appropriate. I do not think that it is true that we do not have a policy. We have a policy to negotiate a deal that is appropriate for the United Kingdom. I hope also that, during the negotiations, we will consider not only our own interests. I profoundly hope that my right hon. Friends the Chancellor and the Prime Minister will seek to avoid the dangers for Europe as a whole that will arise if we rush prematurely along a particular direction with disastrous consequences.
    5.49 pm
    Mr. Robert Sheldon: The speech of the right hon. Member for Worthing (Mr. Higgins) was impressive. The House will accept that he devoted much time and thought to it. He began by saying that he was
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    neither a Euro-maniac nor a Euro-sceptic. I think that that precisely defines my position. I remain one of the few hon. Members who in 1971 voted against a three-line Whip to join the Community. I find myself outflanked by hon. Members who are more recent converts, but I still maintain my position roughly in the centre. We needed to enter Europe because the advantages and disadvantages weighed in our favour. That must be our position. There must be no Euro-mania and no Euro-scepticism—only, what can we negotiate and how is it to our advantage? If we can negotiate a deal that is to our advantage, I shall be delighted, but if not, we shall have to find some other way of proceeding.
    The autumn statement, perhaps because an election is approaching and spending is becoming more important politically, has received much more attention than previous ones. It is useful to hold this debate so soon after the autumn statement because we shall consider its detail in a public expenditure debate early in the new year, by which time we should have the most valuable comments of the Treasury and Civil Service Select Committee.
    The autumn statement is one of the few decisions taken when it is known that there will be an election before the next year is out. As in 1964, when there was a similar situation, spending is rising rapidly, partly for good reasons, partly because these matters have become more intensely political, and partly, too, because dogma and ideology tend to take second place to the realisation of the need to win an election. When the Labour party took office in 1964, we found the cupboard bare. In fact, it was more than bare—it was overdrawn. I suspect that we would find a similar situation today.
    Privatisation will be one of the main sources of finance for the extra expenditure. Previously it was thought that privatisation proceeds would amount to £5·5 billion a year. We now understand that those proceeds will rise to £8 billion a year in the years 1991–92 and 1992–93 before dropping again. That is a major change. Where will the Government get that money from? I suppose that it will come from privatising the Post Office, British Coal, British Rail and London Transport. But those are only thoughts—I assume that there are no plans yet—and what frightens me is that they will lead to the hurried reconsideration that we have experienced in the past. That money will not be made available to a Labour Government, which is one of the big problems that we shall face.
    I feel very strongly about the way in which we rush forward into privatisations. Of course I have political differences with the Government, but I also have differences about the way in which these matters are handled. Again and again, the Public Accounts Committee has stated that sales should be dealt with in tranches. The Government should not flog assets in one go but should try to establish the right price and to achieve that price.
    The Government sell gilts every month. They do not sell off the year's Government gilts but wait for the market to decide how much they are worth, and if they get that wrong they get it right in the next tranche of sales. Again and again, we have had hurried sales and have failed to get financial advantages that might accrue, at least in part. If the Government are going to sell the family silver, for heaven's sake let them get a proper price for it.
    The proposed privatisations are not based on ideology, as the first ones were, but, increasingly being used to provide money for expenditure, and there is a limit to how far the Government can go in that direction. I urgently

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    plead: for heaven's sake, let us have proper valuations on assets. In several sales the Government did not bother with a valuation of the component parts of the assets. Again and again, the Public Accounts Committee has asked for proper valuations before sale. It is the only way that one can be sure of getting a decent price.
    The rise in unemployment has had financial consequences. The extra 1 million unemployed people will cost between £3 billion and £4 billion. We would be delighted to see that money used for other public expenditure that has a more useful output. That will only be paid for by manufacturing industry. My right hon. and learned Friend the Member for Monklands, East (Mr. Smith) points out again and again—I am delighted that he has taken on board the importance of manufacturing industry—that only through manufacturing industry will we pay for the measures that we want. It is not so much the employment created in manufacturing industry, desirable though that is, as the exports and currency earned overseas.
    Manufacturing output is so important. The Chancellor frequently speaks of manufacturing exports, but fails to take into account the problems of manufacturing imports; and the two have to be taken together. It is just as bad for imports to close our factories as it is for us to fail to capture export markets.
    The forecasts show that at the time of the last Budget it was assumed that there would be a 3·75 per cent. increase in manufacturing output over the three years 1989 to 1991. The summary in the autumn statement shows figures of minus 0·5 per cent., minus 4·25 per cent. and 3·25 per cent.—a total of minus 1·5 per cent. A move from plus 3·75 per cent. to minus 1·5 per cent. is a loss of about 5 per cent.—a serious loss. The Chancellor mentioned the skills that we have in manufacturing industry, but he should travel around the country and talk to people who understand the problems of training for the skills that are needed.
    I should like briefly to mention European monetary union. When we consider convergence, we should be clear what we mean. To some people, it means interest rates and inflation. That is not too difficult to achieve. What I mean by convergence is convergence of enterprise, industrial performance and wealth creation. It is what it means to ordinary people when they see their living standards rise, and it is the convergence of economic effects that I really wish to see. That is much harder to achieve. No one knows precisely how to deal with growth rates. There are some indicators and some ways in which it is obviously sensible to proceed, but the outcome cannot be delivered in the same way as that on interest rates and inflation. The extent to which we can influence growth rates determines my attitude to economic and monetary union.
    I am aware that our control of the Bank of England is not as good as it should be. Often, control has not been exercised. There must be day-to-day independence in the running of the Bank of England, but that can lead to much wider independence and to the problems that every Chancellor of the Exchequer has had. That is why we nationalised the Bank of England; and many Tories agreed because of their direct experiences.
    In future, we will not just give the Bank of England independence; we will transfer that independence to others in other countries and rely on ECOFIN. What is that? The
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    Economic and Finance Council consists of 12 Finance Ministers. They will meet once a month. At least now we can just ring up the Governor and ask him to come along. In future, we shall have to rely on a Finance Minister going to the central bank—which, unfortunately, may not be situated in London—and he will have to argue with the other Ministers. There will be indecision, or perhaps no decisions.
    I hope that we find solutions of the kind that I want to see—and I am delighted to support my party's statement on this matter. Let us hope that we find regional aid solutions. I am willing to be convinced, but I am afraid that the argument is only just beginning. If we find the right solutions, obviously we can proceed a little further.
    The figures for Department of Trade and Industry expenditure have been £1·6 billion in 1989–90, £1·1 billion in 1990–91, £900 million in 1991–92 and £800 million the year after—the amounts are declining rapidly. Does that matter? Yes. I spoke to Lord King, the chairman of British Airways, earlier this week. I was worried about the treatment of Rolls-Royce over the purchase of Boeing aircraft. Boeing aircraft are being bought by British Airways, and in a parallel deal General Electric has been granted some form of entry into Cardiff to renovate engines. Rolls-Royce is being dealt a double blow: because its competitors are being brought into this country, and because of the failure to purchase Rolls-Royce engines.
    Rolls-Royce is one of the most important companies in Britain. Much was expected from it. I asked Lord King why those decisions were made. He pointed out that it was because of commercial considerations. I asked him what discussions he had had with the Department of Trade and Industry, and he had had none. I asked him whether he had approached the Department, and he said no. I asked him whether the Department had approached him, and he said no. I do not believe that any other country—first world, second world or third world—would conceivably have dealt with the matter in that way. It is totally absurd. Rolls-Royce did not think that it was worth thinking about the country's importance, and the country did not think that it was worth thinking about Rolls-Royce's importance. Japan, Germany or France would not have acted in that way.
    I am not a believer in total intervention or in totally free markets. We must look at the arguments on their merits and, in this case, the merits were outstanding. Instead of waffling on to the Confederation of British Industry, the Secretary of State for Trade and Industry should have been looking at Rolls-Royce and British Airways and trying to find a way to reconcile their differences in the interests of our country, of the people who work there, and of our science, technical and engineering efforts. What happened is scandalous, especially at a time when there is a need for the Department of Trade and Industry. Thank goodness my hon. Friend the Member for Dunfermline, East (Mr. Brown), who has the right ideas, is likely to be taking these matters further.
    We are in a recession, although the Government have denied it. I called it a slump, which was not an exaggeration. The way in which the Government have let the decline continue is scandalous. When a Parliament runs its full term, there is always a danger that the Government will spend without caring too much about the consequences. The balance of payments is in deficit—it is, they say, at the bottom of the trough. If we are at the bottom of the trough, what will happen when we start

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    rising out of it? How will we recover? The Government have not told us anything, but this is the most serious matter of all. We have had our second deepest recession, bringing unemployment up to 3 million. Even with our balance of payments figures, we have not been able to achieve the steady increase in growth which was predicted.
    This gloomy picture is made more gloomy by the fact that much of the money will be spent before the Labour party forms the Government. It will be a tough time for the Labour Government, but luckily we have the people and the means to deal with it.
    6.6 pm
    Sir John Farr: I congratulate my right hon. Friend the Chancellor on what he said yesterday and today. He dealt effectively with the two points that were made from the Opposition Front Bench. His comments yesterday were excellent. People in my part of the east midlands, in Leicestershire, believe that his statement was excellent.
    I congratulate my right hon. Friend the Chancellor not only on what he said and the manner in which he said it but on doing what many people want. How on earth can the Opposition fight, for instance, his plans to improve expenditure on health? Although I know that the NHS and hospital services should be improved even more, my right hon. Friend has struck the right note at the right time. People are determined to enjoy a better health service. Increasing expenditure by the amount planned—5 per cent. in real terms next year—is a feather in the Government's cap.
    Yesterday, in highlighting the Government's expenditure plans, my right hon. Friend the Chancellor also spoke about the transport industries. British Rail and London Transport will have £1·4 billion extra in 1992–93. I have heard much of the debate, but not much mention has been made of the fact that, during the past 10 years, our national trunk road network has been transformed. Ten years ago, there was a dreadful backlog. Bypasses were much needed and our motorway programme needed to be extended. One can never say that we have a modern road network and that that is sufficient.
    Wherever one goes, work is still being carried out, even in the remotest parts of Wales and elsewhere, and it is a delight to visit such places. Unfortunately, one cannot get to Northern Ireland in that way, but perhaps that is coming. One now takes for granted the many billions of pounds that the Government have spent on roads in the past 10 years, and I congratulate them on what they have done.
    My right hon. Friend also touched on the issue of extra expenditure for defence. I should like to take this opportunity, looking away from the European scene, to congratulate my right hon. Friend the Secretary of State for Defence on sticking to his planned defence cuts. It would have been so easy to give way to—one could say—the regimental pressure which was applied to many in another place.
    However, the world has been transformed. It is no longer divided into two blocs—the east and the west—glowering at each other and armed with nuclear weapons. Therefore, bearing in mind the continuing impact of the Gulf, it makes sense that defence spending is planned to fall between 1990–91 and 1994–95 by about 6 per cent. In
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    real terms. In view of the transformation of the international scene, that is the least that my right hon. Friend could have done.
    However, there is one issue that has not been dealt with to my satisfaction at least, and that is employment. One of the plans announced by my right hon. Friend yesterday takes account of the additional employment measures which were announced in June. Total provision for employment spending in Great Britain in 1992–93 has been increased by £0·5 billion. But is that enough? From the evidence of my daily post bag, I do not believe that it is anything like enough, and I shall tell the House why in a moment.
    Yesterday, all my right hon. and hon. Friends rejoiced at the continued decline in public expenditure. I remember that, a few years ago, public expenditure as a proportion of gross domestic product was more than 40 per cent. Ten years ago, the Government promised to reduce public expenditure and, as my right hon. Friend said yesterday, in the past 10 years the ratio of public expenditure to the national economy has declined by more than five percentage points.
    There is still a long way to go, but progress has been made, and in the next few years I hope that the proportion of public expenditure as a percentage of our national economy will continue to decline. It is still far too high, but a new Conservative Government after the general election can consider aiming for a target of about 20 per cent. as the maximum public expenditure element in our national economy. There will be many further candidates for privatisation—British Rail and British Coal to name but two—so it is clear that that figure can be reached in a few years, given a new Conservative Government.
    One would have been ridiculed if one had said even 10 years ago that we should seek to achieve a public expenditure percentage of only 20 per cent. of our national economy. That is no longer so because, apart from the effectiveness of our policies leading to the next century, Britain, led by my right hon. Friend the Member for Finchley (Mrs. Thatcher) and followed by my right hon. Friend the present Prime Minister, has pioneered a great shift from the policy of the state knowing best, of state intervention and of the individual counting for so little. We have pioneered a policy that the rest of the world is following, a policy of rejecting state controls and state interventions, of freeing the individual to do his own thing—good or bad—with self-respect and dignity and of being one's own master, as my right hon. Friend told the Commonwealth in Harare the other day.
    Unfortunately, the Commonwealth is still one of the worst offenders with regard to human rights. I was glad to see the other day that Kenneth Kaunda of Zambia put his repressive policies to the test and secured the correct democratic answer. I hope that what happened in Zambia will soon happen in the rest of Africa and the world.
    As I said, I want to refer to what I believe to be the too little that we have done for jobs. My right hon. Friend said that more would be given to the Department of Education and Science. He said that the number of university students, which is already high, would increase to the highest ever level by the end of the century. He rightly took pride in that, but I do not think that he has taken on board what I call ABE—adult basic education. Every day my post bag contains letters about ABE. I receive 15 or 20 letters a day about the failure—as the writers see it—not of the education of young people but of the training and

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    retraining of adults. As technology grows apace, as—I hope—the job situation begins to improve, and as the number of unemployed begins to fall, I trust that there will be more demand for expert retraining for adults.
    It is wonderful to have a pattern to which youngsters can look forward. One in three will go to university by the turn of the century, but there are still many people who may be at work today but who, by the turn of the century, could be out of a job because of modern technology and the use of modern machinery. The purpose of ABE is to retrain adults, but it also plays an important role—more of a social role—in persuading people who have a mental or physical defect that they are not finished and are not for the scrap heap.
    I could cite to the House numerous examples of people who, only through personal perseverance on an almost one-to-one basis and through devoted caring and teaching, have given tens of thousands of people hope and a purpose in life. Without ABE and without substantial funding of training, some people would be on the scrap heap of life. I want more money to be spent on retraining older people, particularly on the training in basic skills of those who are not physically equipped to do a job.
    The recession has not yet ended. According to a report today in The Times, some parts of the country are now doing better, but unemployment in the midlands is climbing alarmingly. It is all very well for my right hon. Friend to say that unemployment is not increasing so quickly now and that there will be an improvement shortly, but many small businesses, employing two or three people, are still going to the wall. They say that it is because of the cost of repaying loans for essential new machinery and other new equipment.
    The Chancellor should have reduced interest rates even further. He told the House that he has done as much as he can, but has he been entirely honest? Has he done as much as he could have done? Is not one of the bitter rewards of being in the exchange rate mechanism the fact that we are no longer free agents when it comes to interest rates? My right hon. Friend had to calculate whether a further 0·5 per cent. cut would cause us to bump along the bottom even more under the constraints of the exchange rate mechanism. We are already very close to doing that. However, unless my right hon. Friend cuts interest rates by a further 1 per cent. by Christmas, many companies will go to the wall, with the result that the economy may be beyond repair.
    The exchange rate mechanism has provided a discipline for many companies. It may be an unwelcome discipline for the Chancellor. In my view, it has prevented him from reducing interest rates still further. Nevertheless, as a member of the exchange rate mechanism, we have been provided with independence. I do not believe that the Labour party would do anyone a favour if it introduced a single currency forthwith, were it to form the next Government. The adoption of a single currency after the next election would be disastrous for Britain, and disastrous for British jobs.
    6.23 pm
    Mr. James Molyneaux: I am delighted to follow the hon. Member for Harborough (Sir J. Farr). In particular, we appreciate his comments on the improved
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    road network throughout the United Kingdom that has been brought about during the last 10 years. We on this Bench have good cause for feeling grateful to him for his support in times past in our modest request that communications between the constituent parts of the United Kingdom should be improved, yet avoiding falling into the trap of demanding exorbitant expenditure, thereby wasting national resources. The hon. Gentleman may be interested to know that a debate is raging elsewhere about the improvement of cross-channel routes being continued. My hon. Friend the Member for Antrim, East (Mr. Beggs) would be glad to speak in due course to the hon. Member for Harborough.
    I paid close attention to the competent and impressive speech of the right hon. and learned Member for Monklands, East (Mr. Smith), but it was not clear, at the end, whether he had finished his speech or whether he was merely giving way to certain Conservative Members. I am thinking of a phrase that we used when the Labour party was in power: it sounded as though he had terminated prematurely. I had hoped that he would utter literally one word—Maastricht—with all that would flow from that and all that we should associate with it, but we were disappointed.
    To be fair, the Chancellor of the Exchequer did not linger on the question put to him: why was it necessary to raise interest rates in the first place, and what was the root cause of inflation? I shall not press that question on either Chancellor of the Exchequer or the Leader of the House, but at some stage I hope that the Chancellor will risk embarrassing former colleagues and lift a corner of the veil, for the benefit of us all.
    We are indebted to the right hon. Member for Worthing (Mr. Higgins) for what he said. He told us that it was important that European matters should be touched upon in the context of this most important debate of the parliamentary year. On the first day of the debate on the Gracious Speech, my hon. Friend the Member for Londonderry, East (Mr. Ross) supported the Prime Minister's earlier assertion:
    "What this country needs is sound money".—[Official Report, 31 October 1991; Vol. 1, c. 39.]
    That ought to be the objective of any Government in their right mind. We have always supported that objective.
    My hon. Friend the Member for Londonderry, East was justified yesterday in inquiring gently whether there had been a decisive shift away from that doctrine in the autumn statement. After a careful study overnight of the statement, I am bound to say that I share my hon. Friend's unease. We have travelled a long way away from the sound financial policies of the early 1980s when we—in particular, Enoch Powell—supported firm control of the money supply during the reign of the right hon. and learned Member for Surrey, East (Sir G. Howe).
    In the mid-1980s, that control began to slip. The cause was a loss of nerve on the part of some—if not in the Government, certainly among those who sit on the Government Benches—in the face of criticism of the alleged cuts. I say "alleged". The Government contrived to get the worst of both worlds in the last 10 years. They appeared to extol and even to boast of the virtue of cuts when no real cuts were made. That is the view of the hon. Member for Harborough.
    We have begun the 1990s with a budget deficit. I should like to share the Chancellor's optimism that this dip is a one-off feature in a cycle of years. I hope that it is a cycle,

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    not a centipede. However, I am haunted by the fear that yesterday's autumn statement will give a degree of permanence to that deficit. unless the grip on expenditure is tightened.
    I should also like to share the Chancellor's projection for economic growth. I hope, for all our sakes, that he is correct, but there can be no guarantee, no assurance, that will restore confidence. As the right hon. Member for Cirencester and Tewkesbury (Mr. Ridley) said today in The Times, if the expectations are not fulfilled, the £10·5 billion borrowing requirement may turn out to be an underestimate. The right hon. Gentleman was correct to warn of borrowing difficulties which would have an adverse effect on interest rates, inflation and capital investment.
    Yesterday, the right hon. Member for Bethnal Green and Stepney (Mr. Shore) was right to confront the Chancellor—and, for that matter, those on the Opposition Front Bench—with one brutal reality. If the public sector borrowing requirement rises above 3 per cent. of gross domestic product, the Chancellor would, indeed will, be caught in a trap if Her Majesty's Government signed the present draft of the treaty of economic and monetary union.
    I must not neglect Her Majesty's Opposition. This morning, I wondered whether their amendment to the Loyal Address was drafted before yesterday's autumn statement. If so, that was a great mistake. Today, it reads as though they were urging the Chancellor to go further and faster down the road to financial damnation. The Official Opposition are no help to Members on both sides of the House who are doing their best to save Britain from a suicide leap into a Jaques Delors-style superstate, with a growing roll of absurdities.
    Both sides of the House would do well to heed the bugles sounding retreat from bodies ranging from the CBI to the National Farmers Union. Even in the City, many people are beginning to spot the traps, and they have not yet realised that the single currency referred to is merely a cover name for single economic authority.
    It was all very well to give a nod of approval in 1972. I was then a member of the Conservative party, and the House was told that this was merely a body to promote economic co-operation in Europe. I was not certain whether I believed that, and one or two Conservative Members agreed with me and voted accordingly. Now, however, we have moved from general approval to consent to particulars. That is a different story, as the distinguished bodies that I have mentioned confirm.
    The proverbial man in the street will, indeed does, increasingly resent Community intrusion into the nooks and crannies. The crucial test will come later, over the issue of control of supply. That issue was touched upon earlier. Control of supply has been the mainspring of our system of parliamentary democracy for hundreds of years. Whether we like it or not, and whether other people like it or not, that test will come at Maastricht next month, when the Government, pressurised no doubt by the Labour Front Bench, may be tempted to "sign up in principle". A form of words will be cobbled together by the Foreign Office in the vain hope that we as a nation can somehow escape the consequences of our commitment to a principle.
    The two main parties in the realm cannot get away with that on the eve of a general election. What will their candidates say on the doorsteps? Will they be honest and confess that they represent parties which have sold the
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    voters out? Will they admit that they will continue the process of reducing the House of Commons to the status of a county council? Will they assure the voters that they will not go through the pretence of redressing grievances, "Because, dear elector, you will have to approach Brussels, not Westminster."
    Will the Labour and Conservative parties send a joint eve-of-poll message to the nation, exhorting the electors to make the most of the morrow's opportunity to vote in the final meaningful general election after 700 years of British democracy?
    6.34 pm
    Mr. David Howell: As the right hon. Member for Lagan Valley (Mr. Molyneaux) observed, with his usual perception, the shadow Chancellor's speech was remarkable for what it did not say—for what was left out. Indeed, the House quite expected a second half after the interval, but that did not come.
    Notably, the right hon. and learned Member for Monklands, East (Mr. Smith) left out an exposition of the Labour party's official stance so far on taxation, with its official commitment to swingeing increases in the taxation of the incomes both of higher rate taxpayers and of standard rate taxpayers. [HON. MEMBERS: "Rubbish."] It is not rubbish, because the Labour party is officially committed to uncapping the national insurance contribution. I am surprised that Labour Members should say, "Rubbish." The official Opposition position—I use my words carefully here—is that they would increase the rate at which taxation is paid by higher rate taxpayers by about 22 per cent. and by many standard rate taxpayers by about 27 per cent. That is quite aside from any increases in income tax planned for later—those, too, have been threatened.
    When one hears the right hon. and learned Gentleman speak about confidence, one stands amazed that he is not aware of the major torpedo effect that any such proposals for massive increases in personal taxation would have on confidence and on the British economy.
    Bizarrely, the right hon. Gentleman also omitted any reference to European monetary union. That issue is important, and my right hon. Friend the Chancellor, in a splendidly robust speech, dilated on it at some length. I do not want to speak too much about that matter; I simply marvel at one aspect of the Opposition stance. I understand the traditional position of the Labour party and the Labour movement—that the idea of a central bank, the Bank of England, being totally independent is anathema to them. For reasons dating back to their folk memory of the 1930s, they strongly believe that the Bank should remain under tight political control. For reasons related to their Keynsian love affair, they believe that they should have great freedom to operate ample budget deficits. Whatever the deficit may be, they would like the freedom to make it larger.
    The Labour party holds those views sincerely, and has done so for most of the 20th century. Yet those two views are removed and totally undermined by its commitment to European monetary union and the draft Dutch treaty, which demands not only that the European central bank be totally independent, but that it includes central bank governors from completely independent banks and lays

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    down all sorts of ferocious penalties for any deviation in budget deficits. Such are the wonders of the Opposition stance.
    Let us leave the debate there until we return to it in a week's time, but it rather sounds as though the Labour party's attitude to the Dutch draft proposal is that it is yet another scrap of paper treaty—"Sign it and disregard it."
    My right hon. Friend the Chancellor, in his projections, shows that he hopes for a steady non-inflationary recovery. He believes that it will come, and I hope that he is right. I think that the recovery will come, but it will develop in hostile surroundings. Conditions outside this island will be unfavourable.
    The United States economy was not much mentioned either in the autumn statement or in today's debate. At the moment, it is faltering disastrously. One has only to look at the daily headlines in the Wall Street Journal to see the most catastrophic figures—plummeting house sales and retail sales, faltering confidence and weakening investment. Sadly, we see in the United States the classic double dip shape—the W shape of recovery. The line went up a bit in the summer, but now it has gone rapidly down again. That is very serious for us—perhaps not as serious as in the 1930s, but the United States still represents 28 per cent. of the world's GNP.
    If the United States economy will not move—clearly, it is not moving yet, despite the further cut in interest rates there—that will have a depressing effect on the entire world economy, including the economies of Europe, and on our own economy. We might as well be realistic about that. Certainly, the present situation is sending President Bush into something of a spin as he realises that his political popularity and position may not be quite as impregnable as he thought. That is a difficulty that he must now face. The question is to what extent he can correct and overcome the debt-sodden, debt-deflated state of the United States economy by lowering interest rates further or urging Mr. Greenspan to do so. His efforts may have some effect, but it may be a very slow process and we must make that a factor in our equation.
    After America, with 28 per cent. of the world's GNP, the next greatest economy in the world is Japan, with 14 per cent. The Japanese economy has been slowing down markedly, with the corporate earnings returns of the major Japanese companies now looking utterly miserable. What the Japanese call "slowing" may still be quite fast by European standards, but, as a motor of economic growth in the early 1990s—in 1992 and 1993—Japan will not be as powerful as it has been, and we must take that, too, into account.
    If we look further through the gloomy catalogue, we may note in passing that the Scandinavian financial system seems to have collapsed and that the whole of Scandinavia is ridden with bankruptcies. We may also note that, as the former Soviet Union disintegrates, it is dipping into the abyss of hyperinflation, already running at 200 per cent. The most serious deficiency of all is that the former Soviet Union is not too clear what its currency should be—let alone how it should be stabilised.
    As yet, there is no agreement on whether to have a single currency—echoes of western Europe, here—or on whether that single currency should be the rule and, if so, how it should be stabilised. The former Soviet Union may
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    go for several different currencies—a Ukrainian rouble or dollar or whatever, for instance—in which case, no agreement has been reached on how they should be stabilised. That issue has not begun to be resolved and, until it is, the effects on the rest of us will not be negligible. The process will have a destabilising influence on the rest of the world economy.
    I come to the final factor in my catalogue of gloom. We must remember that, despite the promise of at least getting some of the participants who contribute to the instability of the middle east to talk to each other in Madrid and elsewhere, that deeply dangerous man, Saddam Hussein, is still alive and well and living in Baghdad. He is beginning to wait for the time when he can use renewed oil revenues to build up his arms once more and so increase instability, and when he can again threaten his neighbours in the middle east—as he will do as long as he is there. All that adds to our difficulties and to the weakening of confidence at a time when we want confidence strengthened to produce a good world recovery.
    It may be said that I have painted too gloomy a picture. I have done so deliberately, to set out the context in which we must struggle to move out of our recession—which we are undoubtedly doing. It will be very tough going indeed, and we should have no illusions about that. I draw hope, nevertheless, from some of the things that are happening—sufficient hope to lead me to agree with my right hon. Friend the Chancellor that we are on the path to a recovery.
    This island's exports are strong; we are performing remarkably well on that front.
    We have heard a great deal about the state of our manufacturing industry. In fact, the manufacturing position is not nearly as miserable as Opposition Members keep insisting it is. As my right hon. Friend the Chancellor said, our manufacturing output is 25 per cent. higher than it was in 1979. Moreover, in its latest document on manufacturing, the CBI says specifically that it has deliberately understated the size of the manufacturing sector because—as my right hon. Friend the Chancellor rightly pointed out this afternoon—throughout the 1980s, and as the information revolution has taken place, increasingly large numbers of the activities previously designated as manufacturing activities have been contracted out to other firms.
    I beg the Opposition to understand that, in the past 15 years, the essence of the manufacturing process has changed. The trend has been to increase the knowledge content—the software content—in the manufacturing process, and to reduce the hardware content. That makes for smarter, better, more efficient manufactured goods.
    In reality, the word "manufacturing" itself is a bit out of date. The "manu" element is no longer the main element. We are now talking more about the brain and, if anything, the word ought to be "mentefacturing" or just "facturing". The essence of the process by which the key exports that will drive the economy forward are produced is the very high degree of knowledge content—much of it contracted out from the traditional manufacturing sector. By harping constantly on the old traditional manufacturing process, Opposition Members betray their lack of understanding of the fast-changing nature of the industrial process and of where we should really be putting our muscle.
    There is another cheerful conclusion to be drawn from the British scene—despite the world gloom that I have

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    described—based on the enormous inflow of foreign investment, notably from Japan, which has now invested no less than £13 billion in the United Kingdom. As the CBI again pointed out, in 1990 the Japanese invested more in the United Kingdom than in the whole of the rest of Europe. Those investments are accompanied by Japanese assertions—which we must take at face value—that the Japanese now regard Britain as the best European country and the one in which they will enjoy the best and most favourable welcome.
    Above all—I hope Opposition Members will share my pride about this—the United Kingdom is the country in which the Japanese find work practices and co-operation at the workplace by representatives of the trade union movement by far the most satisfactory. The Japanese know that, whereas 12 years ago this country was cursed by perhaps the most counter-productive, difficult and destructive trade union movement on the planet, today—partly as a result of the many trade union reforms, partly as a result of the enlightened views of modern trade union leaders and partly as a result of changed work practices induced precisely by that heavy investment from Japan—we have one of the best trade union movements and some of the best work practices in the world. That is something in which we can all take pride.
    Mr. Frank Dobson: That is not what the Chancellor would say.
    Mr. Howell: I am glad that the Opposition like that.
    I draw cheer also from the German performance. Of course, the huge onward rush of the German economy is set to slow down a bit as the Germans run into a vast deficit to finance what was formerly east Germany, but a sort of German miracle is rolling along none the less. Many people may have doubted that this would happen, but there is now no doubt that the economy of east Germany—in sharp contrast, I am afraid, to those of Poland, Hungary and Czechoslovakia—is being turned round at a colossal speed.
    It is also being turned round at a colossal cost, and the former west German taxpayer is having to put his hand deep into his pocket in order to finance the process. The net effect, however, is that east Germany will be operating in the way in which west Germany used to operate, not in five or 10 years but in two or three. That will provide a vast additional motor, as well as a vast additional competitive force, in the world market. Given that our exports to Germany are doing very well, they should do better still.
    Finally, I suggest that we raise our eyes and look outside Europe. We may think that the structure of Europe is changing, but so is the structure of Asia, and there too, there are real prospects that might help increase our exports, provided that we get our policy and posture right. Around the southern edge of China, in Guandong and Fujian—the area of which Hong Kong is the pivot—the most fantastic growth is taking place, and a new miracle is unfolding even as we speak. The economy of an area of roughly the same size and population as Japan is beginning to grow at rates that make all our percentages in Europe look minuscule.
    In the past year, Hong Kong has increased its exports to the surrounding areas by 29 per cent., and I am told by those who have travelled up the Pearl river recently that one can hardly tell where the Manhattan-like outline of Hong Kong ends and the Manhattan of the Pearl river, in
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    the People's Republic, begins—so fast is the growth there of great new cities, skyscrapers and industries, all of which will produce a vast amount of wealth and products that will be highly competitive and all of which will offer opportunities for British investment, exports and markets in due course. That reinforces our need to get our management of the Hong Kong situation and its politics right so that we can benefit as mightily in Asia as we can in Europe.
    Set against the gloomy tone in which I began my speech, those reasons show that we have opportunities. We have secured low inflation and that is very good. Interest rates need not rise, although there is much talk about upward pressure on interest rates. As dollar interest rates have gone down, the Germans have found that the pressure on them to raise their rates is drifting away. We will not be troubled by such problems. However, it will be very hard to seize the opportunities that are now opening out.
    I have four brief propositions for my colleagues on the Treasury Bench to consider as they ponder how best to seize the opportunities that have been created by their policies as we come out of the recession. I will make the four points in question form, but of course we obviously want answers.
    First, how do we mobilise more private sector funds for the infrastructure of this country? On the first day of the debate on the Queen's Speech, the Leader of the Opposition referred to private funds in public transport and said that the Government would not do that. The day before he said that—I know that 24 hours is a long time for the Leader of the Opposition—the Dartford bridge was opened. That enormous project involved private money mobilised in public transport. I hasten to declare an interest, as I am director of Trafalgar House, the company which designed, built, owns, operates and will eventually transfer back to the public sector, that enormous structure. I hope that that is one of many such projects to come.
    I hope that my colleagues in the Treasury will learn lessons from that project. They will know that the restraints and constraints on the project were considerable and at one point threatened to sink the whole affair. If we are to develop such techniques, we must overcome some of the shibboleths and delays and difficulties that were embodied in the Ryrie rules back in the 1980s. They declared the mobilisation of private sector funds in infrastructure to be virtually out of bounds.
    Secondly, how are we to build on the amazing capital-owning democracy that we have constructed which has brought millions of people into share-holding? Those shareholdings are shallow and passive. The dream of those of us who considered the capital-owning democracy a decade ago was of turning earners into owners in millions. We believed that that should give the capital-owning democracy real depth and involvement and that it should not simply be a matter of millions of people owning only a few shares. We must develop our ideas on that most aggressively.
    Thirdly, how are we to create much stronger links between business and local administration and local government? I regret the fact that the uniform business rate has broken that link. There is a missing element in the regeneration and new dynamism in this country. We must recreate effective links between local administration and local business development around the country.

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    Finally, given that, like the United States, we have deep Anglo-Saxon liquid capital markets—which is fine, as they have mobilised capital very well—how do we combine them with more involved ownership and backing for long-term investment? The trouble with deep capital markets is that there is an easy availability of capital and a rapid transfer of capital and assets, but people are not prepared to hang on to those assets in equity long enough for long-term investments, particularly in research and development, to be mobilised and held.
    I hope that my Treasury colleagues will address those four issues. They have set a good scene and there are many opportunities for us to pull ourselves out of the recession despite the unfavourable world circumstances that I have described. I congratulate them on the point that they have reached, but there is much more work to be done.
    Several Hon. Members rose——
    Mr. Deputy Speaker (Sir Paul Dean): Order. Mr. Speaker announced at the beginning of the debate that it may be necessary to impose a 10-minute limit on speeches. In view of the current state of play, I am glad to inform the House that that will not now be necessary. However, if everyone is to be called, I appeal most strongly for speeches to last not longer than 15 minutes.
    6.54 pm
    Mr. Denzil Davies (Lianelli): The trouble with the right hon. Member for Guildford (Mr. Howell)—I say this without malice—is that when he says that he is being cheerful, he still sounds gloomy. He was right to be gloomy, and he should have remained gloomy to the end. There is probably more gloom about the British economy than about several of the economies that he mentioned in the gloomy passage at the beginning of his speech.
    This debate is unusual because it comes against the background of the autumn statement, which is often debated separately, and the meeting in Maastricht at the end of the year, which may decide on economic and monetary union. No doubt we will have another debate before then on economic and monetary union. However, while the views of my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) on Europe have not always been similar to mine, I was pleased to hear him say that he could not see how it was possible for 12 Finance Ministers in ECOFIN—about which we hear a great deal these days—to control a European central bank established on the model set out in the present draft treaty prepared by the Dutch Government.
    If we sign that treaty or accept its principle, that European central bank will be totally independent. It will be more independent than the Bundesbank, because no Government will be able to control it. If we pursue that path, we must realise that we will be transferring basic fundamental power over our economy to a supranational body of unelected, well-heeled bankers who will be able to take economic decisions that affect the livelihoods of millions of people. We should not allow that, because that would be a contempt of democracy.
    The spirit of the age, and of Europe in particular, is for more, better and wider democracy. However, some people want to entrench canons and principles of economics into an absolute treaty. Devaluation, monetary control and
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    inflation are important issues, but some people believe that they are absolute rights which should be enshrined in a treaty. I hope that we will debate those matters again.
    Over the past six or 12 months, public discussion about the British economy has been more sterile than usual. The only questions that seem to have excited the commentators are: is the recession over? When will it end? Why is it not over? So far as I can see, unless there are fundamental changes in the British economy, the recession ain't going to be over for a considerable time because the economy is in such a state.
    I disagree with the right hon. Member for Guildford. He does not like to talk about manufacturing. All right, let us talk about the production of goods that people buy in shops and the production of machine tools that industry wants to buy. Unless we can raise our production of goods, unless we can become more efficient and unless our manufacturing sector can become larger, there will be fundamental defects in the British economy and we will never get out of the recession.
    Mr. David Howell: I am sure that that is a very good definition. However, the right hon. and learned Member for Monklands, East (Mr. Smith) asserted that we were at the bottom of the league. The CBI report on manufacturing, even in its narrow understated way, shows that we are not at the bottom. Some countries are above us and some below. In terms of manufacturing value added, we are doing reasonably well. It is not the miserable story that the right hon. Gentleman and his colleagues keep recounting.
    Mr. Davies: The problem is that our manufacturing sector is shrinking. Perhaps certain parts of it are more efficient than they were 10 or 15 years ago, but the sector is shrinking. It now accounts for only 20 to 25 per cent. of the total gross domestic product of Britain. If we are to come out of the recession without increasing inflation, we need to sell more goods abroad and at home in competition with imports, but we will not be able to do that.
    One has only to look at the economic forecasts. The forecast for next year is for a £9·5 billion balance of payments deficit. That is described in the Treasury's paper as a modest increase. It is an increase from about £6 billion to about £9 billion. On my mathematics, that is a 50 per cent. increase, against a background of, probably, rising unemployment, growth not exceeding 2 per cent., and, if not a recession, certainly no expansion in the economy. Our problem is that, however efficient it might be, our manufacturing sector is just too small to enable us to rely upon it. Its expansion could take us out of the recession without further inflation and increasing unemployment.
    Sadly, whether we like it or not, Britain is now a service economy. Large sections of Britain, especially in the south of England, have opted out of the production of goods. In many parts of the south of England, only about 7 or 8 per cent. of the total employed population are employed in production—in making goods that can be sold and bought. Our service sector is now so large that it is an obstacle. It is concentrated in one part of the country, and it is an obstacle to economic growth and to our coming out of the recession without increasing inflation.
    The service sector does not help the balance of payments. Only about 20 per cent. of what is produced in the service sector can be traded internationally. Everything

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    else is consumed within the national economy. If the economy were boosted, most of the extra revenue and income would go into the service sector, money would be spent on our imports, and the balance of payments would get worse.
    Also, the service sector is inflationary. In most countries, a service sector is inflationary. For instance, Japan's service sector is very inflationary, but Japan is able to keep down its general rate of inflation because its manufacturing sector is so large and efficient. That is not the case in Britain. Until last October, the RPI showed that the service sector component in terms of inflation was 9 per cent. The ability to be more productive is more limited in the service sector. By its nature, the service sector of any economy is bound to be an inflationary part of that economy. Of course, unless we have a large efficient manufacturing sector, inflation will always be higher than it otherwise should be.
    During the debate on the exchange rate mechanism, we were told that entry of the ERM would exert discipline and that inflation would come down as a result. That will happen in respect of manufacturing industry, but entry into the ERM has very little effect upon the service sector. The service sector is not affected by the ERM, because the services are not internationally competitive. A large service sector and a small manufacturing sector inhibit growth in the economy.
    Ironically, we have a problem with unemployment in the service sector in the south of England. One reason for that is that most of the thousands of people who travel on those wretched trains to come to London to work are either unskilled or semi-skilled, to use the terms of the manufacturing industry. They work in shops, offices, building societies and banks. They sit in front of little screens and press little buttons, but no skill is involved. It is no condemnation of those people, but that is semi-skilled or unskilled work.
    When there is a contraction in the economy, when the money supply has to be cut, there are no other jobs for them, because they have no skills. When the people who buy and sell shares in the City lose their jobs, they have nowhere to go, either, because they have no skills. Indeed, in many parts of the south of England, there are no other jobs to go to because the manufacturing sector—the productive sector—has been almost wiped out.
    Another irony is that the service sector needs inflation. The Government seem to think, "If we can keep inflation down, everything will be fine and we will be electorally popular." Not at all. There will be inflation, an increase in the money supply and, especially, house price inflation. I was going to ask the Chancellor whether his views about defeating inflation apply to house price inflation. I am not sure whether they do. Of course, with house prices stagnant or falling, there are not many votes for the Government—certainly not in the south of England.
    The service sector—the financial sector which produces nothing—needs inflation. It needs an increase in the money supply and high house prices to fuel conveyancers, estate agents, building societies and lending institutions. The Government wanted to create a property-owning democracy, and they did so, but that property-owning democracy needs inflation to maintain itself.
    If we are to move to an era of low or nil inflation and to the European way of doing things, whereby house prices will not increase, I do not know what will happen to the economy of the south of England or to unemployment.
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    Perhaps the Government have not considered those matters. The size of the service sector is an impediment to economic growth because it depends upon inflation to a considerable extent.
    Another way of getting out of the recession is by increasing public expenditure. The Chancellor did his best in the autumn statement. His statement implies that we are not yet out of the recession, so let us borrow some more, increase the PSBR, and do the Keynesian thing which, a few years ago, we did not think we should do, and perhaps that will get us out of the recession by the time of the election. That will not work. Interest rates will go up.
    The PSBR is also back. The PSBR was supposed to disappear—that terrible thing that Labour Governments had. Under the sound money party, it is back with a vengeance—£20 billion next year. If we take privatisation receipts out of the fiddle which is contained in the heart of the forecast, the figure will be £20 billion or £25 billion. Of course interest rates will go up. I do not believe that the PSBR can be financed. The Government are hoping that the election will have come and gone and that interest rates will go up to try to finance that PSBR.
    My right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) said that, if the PSBR exceeds 3·5 per cent. or whatever, the ghost of Jacques Delors will descend upon Great George street. He will be there all the time. When the IMF people came to us, they stayed in Brown's hotel for about two months and then they went. They filled in their forms and off they went. But Jacques Delors's ghost will be here all the time. He will not move. He will watch the PSBR every year.
    The right hon. Member for Worthing (Mr. Higgins) seemed to think that somehow—I take issue with him, despite his great knowledge—it is because of a common currency that we need controls over public sector borrowing. If we transfer monetary authority and control of our interest rates to a European central bank and still retain 12 national Governments, there must be control over the amount of money that those 12 national Governments borrow, because that borrowing will affect the interest rates which the central bank will lay down.
    A consequence of monetary union is control over our public borrowing. It must happen. If we are to accept the transfer of monetary authority, we must accept control over the public deficit or the public sector borrowing requirement, or whatever it is called. Therefore, there is no salvation in increasing public expenditure unless we deal with the fundamental problems of the British economy. Nor will there be any salvation through cutting interest rates, unless we deal with inflation and its associated problems.
    The Government are in a hole, as, unfortunately, is the British economy. The trouble is that the British establishment—we have heard from some of its members tonight—do not really believe in production or in manufacturing industry. They do not want to know about manufacturing; nor do the so-called "chattering classes", who like to think of themselves as outside the establishment but who are really part of it.
    They are prepared to march for all sorts of worthy causes. They will march against the bomb and for the ozone layer. They will write constitutions and entrench a Bill of Rights, but they will not march for manufacturing industry. They will not meet in Manchester, Birmingham, London or anywhere else to discuss the problems of wealth creation and of manufacturing, because such matters are

    629
    too difficult. Instead, they chatter away about all sorts of things. The pressure groups are the same. They come along with their begging bowls, not caring about the other pressure groups, because all they want is more money. Again, however, there are no pressure groups for manufacturing industry,.
    As I have said, British society is not interested in manufacturing industry, but if we continue to take no interest in manufacturing and if we do not do anything to help it in the 1990s, our public expenditure will have to be restricted. Our public services will be run down and we will not have the trains, the roads or the health service that people want.
    Our first priority must be the production of goods. In the 1980s, the Government lost a marvellous opportunity to try to do something about producing goods. They threw away that opportunity, and with it a chance that no other Government have had since the war. Although that opportunity has gone, my right hon. Friends know what has to be done and they understand the difficulties of doing it, but only a Labour Government can do it.
    7.11 pm
    Mr. Malcolm Thornton: The right hon. Member for Lianelli (Mr. Davies) tempts me, as someone who comes from Merseyside, to say that I will not be lectured by him about the problems of manufacturing industry. The policies of the Government whom he served left a bitter legacy on Merseyside. Job after job was destroyed because of Government intervention and because of pandering to trade union practices which were a disgrace. That legacy is still with us today, not only on Merseyside but in many other parts of the country. That is a matter of fact which we must all accept.
    The right hon. Gentleman began by saying that this is a rather unusual debate on the Queen's Speech. He referred to the forthcoming summit in Maastricht. None of us would disagree with him about its importance. One of the reasons for its importance is that it marks the start of a general election campaign. Let us be honest about it—it marks the last Session of this Parliament: some time, within the next six months or so, we will be going to the electorate. The electorate have the right to expect the political parties to set out their stalls and to say what they stand for and what they will do.
    Today's debate on the economy is central to any political party's presentation of its future policies. That is why I spent some time this morning looking at some of the things that have been said about this matter. I read some of the comments of the Chancellor of the Exchequer who said that the latest forecast showed a PSBR of £10·5 billion this year and of £11·5 billion for the following year. That does not quite square with what we have heard, but those were not the words of my right hon. Friend the Chancellor of the Exchequer, but of the right hon. Member for Leeds, East (Mr. Healey) on 15 December 1976, when he came to the House for the ninth time since the Labour Government had been elected with yet another series of measures designed to try to restore the fortunes of the economy that his Government had so signally destroyed.
    The right hon. Gentleman said that he wanted to reduce the PSBR and that its level of £10·5 billion comprised about 9 per cent. of the gross domestic product. He added:
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    "To achieve these objectives, the Government are proposing adjustments to current plans amounting to £1½billion in 1977–78 and £2 billion in 1978–79…
    The fiscal adjustment in both years will come mainly from savings in public expenditure rather than increases in taxation. This is for two reasons. First, although the level of our public expenditure, as a proportion of GDP, is no higher than in some other industrialised countries, it has grown much more rapidly in recent years than has our industrial output, and our industrial output itself is relatively low."
    The House should remember that that was said by a Labour Government in 1976.
    The right hon. Gentleman continued:
    "Secondly—and perhaps this is not unconnected with our low level of industrial output—people at work are already highly taxed on their incomes, and face a further drop in their living standards in the coming year…Inadequate financial incentives to work and to invest could put our economic recovery at risk."
    Who could possibly disagree with that? Is not that exactly what we have been saying—that if a Government overtax people, they destroy the incentive to work?
    However, much more was revealed that day, when the right hon. Member for Leeds, East reduced local authority expenditure and said:
    "There will be a reduction in housing capital programmes…New construction will be suspended or curtailed in several other central and local government programmes, including roads, other environmental services, school building…and capital spending by the water authorities."
    That was the start of the legacy that we inherited when we took office in 1979.
    However, that was not all. Let us consider education, a subject in which the House knows that I take a keen interest. The right hon. Member for Leeds, East said:
    "Besides reductions in school building…the programme for current expenditure on education will be reduced by economies in the administration of school meals, by deferring the operation of Section 9 of the Education Act 1976 dealing with school milk, and by other minor savings".
    That is the real effect of socialism, but there was still more. The right hon. Gentleman also reduced the defence budget, saying:
    "Despite the big cuts which we have already made in defence expenditure…We are looking to defence for further savings of £100 million in 1977–78 and £200 million in 1978–79."
    Even overseas aid was cut, when the right hon.Gentleman said:
    "There will be reductions in the provision for overseas aid."—[Official Report, 15 December 1986; Vol. 922, c. 1525–29.]
    That was the speech made by the Labour Chancellor in 1976. It was an appalling indictment of the inability of a party that was elected, having made very much the same sort of promises that the Labour party is making today, to deliver its promises to the British people. What a contrast to my right hon. Friend's statement yesterday.
    Strangely enough, the figures tie in. My right hon. Friend is expecting a PSBR of £10·5 billion, but instead of that accounting for 9 per cent. of GDP, it constitutes only 1·75 per cent. of GDP. Instead of cutting the public sector programmes, we are increasing them. We are increasing expenditure on health, housing and education. I was delighted to note that the Government have adopted the recommendations of the Select Committee on Education, Science and Arts that we should increase expenditure to improve the standards in our schools. The House has heard me recommend that course many times. We have also seen increases for defence, transport and, yes, for overseas aid. What a contrast.

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    It would be foolish for any Conservative Member to pretend that mistakes have not been made. No Government have not made mistakes in their career. Sometimes those mistakes can be rectified and, indeed, we have gone a long way towards rectifying the mistakes that I believe were made about two years ago.
    We have also shown that it is possible to expand services and maintain strong control of public expenditure. We have shown beyond peradventure that only with a strong economy can we expand the services that people want expanded.
    We are seeing a new agenda being set for the 1990s. We have transformed the economy of Britain and done much to undo the damage done by the disastrous policies pursued in the 1970s, which led us into the position that we faced in 1979. We are seeing the benefits of that transformation flow through. Improved services are required, but they can be provided only with a strong economy and a Government who are determined to provide a strong economy. That means a Government who are not afraid to take tough and sometimes unpopular decisions.
    We have taken those decisions many times. My right hon. Friend the Chancellor and his colleagues have shown their determination not to indulge in some cynical pre-election giveaway but to keep the economy firmly on track. A change in philosophy has brought about the transformation in the economy. My right hon. Friends show every sign of continuing to apply that philosophy with great benefits to the British people and the economy of Britain.
    We cannot return to failed policies. They failed in the past and are doomed to fail again. When is a priority not a priority? I suggest that it is when everything is a priority. By definition, priorities stand out from other items. However, Opposition spokesman after Opposition spokesman says that every spending area is a priority. They do not seem to have learnt anything whatever from the past.
    A study by Liverpool university's economic model shows that if Labour's policies were pursued they would result in declining growth, growing inflation, unemployment and worsening incentives. It estimates the cost to be at least £29 billion per year. It says:
    "it hardly seems possible that they can so comprehensively ignore the lessons of the past decades…these lessons are:

    1. that high borrowing and its accompanying money supply growth lead to inflation.

    2. that worsening incentives, whether by taxation or regulation, reduce economic growth".

    We are already seeing, in industry, the City and many other areas, shudders of horror at what it would mean if the Labour party were elected to government and pursued one half of the wild spending plans that it has put before us so far. However, Labour's Treasury spokesmen signally refuse to admit to the cost of those plans. They will not say what their proposals would cost. We have tried to cost the proposals. We have tackled Opposition Treasury spokesmen on whether they would back up the spending pledges. They have failed to do so.
    In his speech yesterday, my right hon. Friend the Chancellor showed that the economy is firmly on track. I listened this morning, as I am sure that many hon. Members did, to the "Today" programme on the BBC. In the usual way, it had to scour the corners of the country to find Oliver Twists asking for yet more. As my right hon. Friend the Chancellor said this afternoon, it does not
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    really matter whether we have given enough or whether we should give more or less. The fact is we have increased our spending programmes. When the Government do things which they are constantly urged to do, not only by the Oppposition but by other people, they receive little credit. I get tired of that.
    I welcome yesterday's statement, because it sets out firmly the Conservative party's intentions not only for the general election year but for future years. It shows how we see the economy going and that prudent policies which are working will continue to work. The Conservative party puts that firmly before the British people.
    We must expose the prospectus—if, indeed, it is a prospectus—that the Labour party put before the British people. We must show clearly that it is not costed and will not be costed. The only yardstick by which we can measure it is past performance. On past performance, the Labour party fails on every single count. My message to my colleagues on the Treasury Bench and all my right hon. and hon. Friends is that, during the next months, we must expose this sham. There is no quick and easy way to economic recovery, as the Labour party pretends, whether in manufacturing industry or elsewhere.
    The Labour party must come clean and tell the electorate how it would create an economic recovery. It must cost its programmes so that the electorate can make a judgment. If the Labour party does not come clean and cost its programmes and continues to be unwilling to do so, the electorate will make their judgment. They will judge the party on its record, and that will mean that the Labour party will lose at the next general election.
    7.26 pm
    Mr. Richard Caborn: I do not know whether the hon. Member for Crosby (Mr. Thornton) has read the amendment tabled by my right hon. Friend the Leader of the Opposition. The amendment sets out a framework for manufacturing. It is interesting to see several Conservative Members now reading the amendment. The Gracious Speech offered nothing to the 7,500 unemployed people, or 21·7 per cent. of the population, in my constituency. The Gracious Speech does nothing for manufacturing industry in Sheffield. The hon. Member for Crosby referred to manufacturing industry.
    The manufacturing base in Sheffield was just recovering from the first recession in the early 1980s only to be hit by the second recession. I do not know where some Conservative Members obtain their advice or whom they consult, but if they spoke to some of the industrialists in Sheffield and south Yorkshire, which was a major manufacturing area and a centre of excellence in engineering and steel, they would find that people are extremely disgruntled. They believe that the Government have abandoned manufacturing industry and allowed it to be opened up to competition from companies in European countries and elsewhere which had support from their Governments.
    That was graphically illustrated by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), the shadow Chancellor. He set out clearly where the Government had abrogated their responsibility to manufacturing and for wealth creation. The social consequences of that decline in manufacturing have been

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    picked up not only in my area but in many industrial areas by the local authorities. They have had to do so with reduced budgets. For example, Sheffield has to cope with a substantial reduction of £30 million in its budget, yet it must deal with all the social problems that have arisen from the decline of the manufacturing base.
    Mr. Gregory: Why does the hon. Gentleman continue the Labour party's obsession with manufacturing? If he truly represented the people of Sheffield and south Yorkshire, he would give at least a cursory glance at the service sector. He has a major part of the Midland bank in the area and the area is a major centre for tourism. Yet we never hear from him or the Labour party about that. Instead, Labour Members constantly run down that part of the country and the electorate who work in the service sector.
    Mr. Caborn: I am pleased with that intervention. I hope that the hon. Gentleman will take great care to listen to my speech because I shall cover many of the matters to which he refers. I think that he will agree that the Government have not supported industry in those sectors either.
    As the amendment outlines, we need to create a framework within which commerce and the service sector as well as industry can flourish. That was once again graphically outlined by documentation on manufacturing industry put before the country by the CBI just before its conference. Yet again, the Government have ignored the advice. Yesterday, in the autumn statement, and today, they have walked away from the solutions that the CBI was asking to be implemented.
    Like many other cities, Sheffield has tried in the face of adversity to develop a partnership not only between local commerce and industry but also including local authorities, the academic institutions, representation from the community, the development corporation and the TECs. That partnership has been operating for about six years, and it embarked upon a programme to find the highest common factor in the city rather than aiming for the lowest common denominator.
    In the past three or four years, it has developed the infrastructure of the area—the airport and the supertram. Technology transfer has been developed. There is a new technology centre and science park, which is a partnership between the university, the polytechnic, the chamber of commerce and the local authority. Cable is another development, and Sheffield has developed an investment trust—the Hallamshire Trust—and Meadow Hall, a major service sector development. The partnership covered all those areas.
    The development was an attempt to diversify away from a purely manufacturing base, to try to develop service industries, to introduce technology transfer into the structure and to ensure a transport system that was adequate to carry people and goods in and out of the area. There has been a combined effort, even in the face of all the obstacles that have been put in the way by the Government.
    After a fairly meticulous survey throughout the country, about five years ago Sheffield decided to develop a centre of excellence for sport. We spent £150 million to
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    develop some of the best sporting facilities in the world—the swimming complex in Sheffield is ranked as the best in the world—and we ran the world student games.
    What was the Government's attitude? At first the Secretary of State for the Environment wrote to say that he would support the development but that there would be no financial commitment to it. After embarking on the project, we got little support from the media or from central Government. On 14 July 1991, we staged the largest sporting event that has taken place in the world this year. There were 6,000 participants and 100 countries were represented. When Princess Anne opened the games on 14 July 1991, seven Sports Ministers from around the world were present and more than 100 embassies were represented in Sheffield on that day. The International Olympic Committee was represented, and there were experts from around the world representing most of the 11 sporting disciplines to be performed in the following 10 days.
    Those games were the first multi-sport event in the world to include athletes from the new nation of Namibia. That event on British soil was the first time that 200 young people marched under the flag of the new Germany. However, no senior Minister from the British Government was present—not even the Minister for Sport. When the Canadian Sports Minister asked, "Where is the Prime Minister for the biggest sporting event in the world this year?", we said, "We have not even got a senior Minister here."
    I am telling the hon. Member for York (Mr. Gregory) what Sheffield, South Yorkshire and the north of England did—gave a window of opportunity to the world and left a legacy in Sheffield, and we shall reap the fortunes of it in years to come. The Government could not even acknowledge that type of development among the public and private sector, the academic institutions and 6,000 volunteers who made the event happen. Had it not been for the presence of my right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell), the shadow Minister for Sport, the attitude of many sporting organisations from around the world would have been much worse. He at least smoothed over some troubled waters and said that, even if the Government did not support the event, at least the majority of the British people did.
    I raise the subject because, as the amendment says, there needs to be a new structure within the regions to carry out the regeneration that the Labour party stands for and has been advocating for the past two or three years. A delivery mechanism is necessary. Many projects in the north of England such as the world student games are being stifled by centralisation of power. That applies not merely to central Government but to the media and to major decision-makers because they are domiciled in London or in the south-east.
    A branch line of the civil service exists—a few puppets are put in an area and they feed back to central Government. All the decision-making is here. It is not influenced by what is happening in reality in the regions where wealth creation exists whether in the service sector or the manufacturing sector. The amendment challenges the structures that govern us, the structure of how decisions are made, decisions that impinge on industry and commerce in the regions.
    The centralisation of power has once again been graphically underlined because hon. Members have been

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    talking about public expenditure—where will we get money from and where will it be spent? The North of England Regional Consortium studied the distribution of public expenditure. I shall not bore the House with all the figures, but some should be given and probably the most graphic are the figures for expenditure per head of population.
    In the north of England in 1989–90 total public expenditure per head of population was £1,707. In the south-east it was £1,876. If one takes investment-led expenditure by the Departments of Defence, Trade and Industry and Transport, more devastating figures emerge. The 1989 figure for the north of England is £248 per head, whereas it is £546 in the south-east. There is a major disparity in the distribution of public expenditure and, moreover, between 1981 and 1990 the trend was worsening.
    The overheating in the south-east has been aided and abetted by the Government's decision to continue that trend. That is in stark contrast to what is happening in the rest of western Europe. Every country outside the United Kingdom has gone for some form of devolution or regional government. The West German experience has been mentioned many times, and it has been suggested that that is the way that we should proceed. If one studies the West German experience closely, one finds that the lander structure has asisted the development of wealth creation and of manufacturing industry far better than the centralised structure that we have in the United Kingdom.
    The amendment begins to tackle the north-south divide and to make proposals that may start to regenerate the under-utilisation of the north of England. We have to stop this debacle. We have to stop the Secretary of State for the Environment going round the country like a modern-day Haile Selassie, dropping crumbs from the master's table in the form of city grants. We are a modern industrial nation, but authorities are having to bid for a small pot of money. It is like a Dutch auction. We are trying to regenerate our industrial base in the north of England. Surely civil servants and those in London are not the fount of all wisdom. There are industrialists and people in commerce, local authorities and the trade unions in the regions who know what is required for the regeneration of their area. Yet the Government pay them scant regard.
    The amendment is constructive. It lays the framework that the CBI and British chambers of commerce have asked for—not to pick winners and losers, but a structure in which industry can operate. It would give industry a fighting chance. Industry is asking for no more and no less than what is happening across western Europe.
    In support of that argument, Howard Davies, the controller of the Audit Commission, in his article in the Financial Times of 28 October, said:
    "Yet the European Commission is open about its desire to create a Europe des regions. There's a European Assembly of Regions and regional and social policy are oriented towards regional needs.
    It's certainly arguable that without some sort of regional structure, the UK will be increasingly disadvantaged with no way of influencing Community regional policy."
    Clearly there is support for the type of structure described in the amendment of my right hon. Friend the Leader of the Opposition. What Tory Members have said does not hold with industrialists, chambers of commerce or, indeed, the British people.
    Several Hon. Members rose——
    Mr. Deputy Speaker: I call Mr. Gregory.
    Mrs. Audrey Wise: On a point of order, Mr. Deputy Speaker. As there is now a special report from the Select Committee on Health about the breach of privilege, may I ask you to confirm two points of procedure? First, am I correct in thinking that the matter will go automatically to the Select Committee on Privileges? Secondly, what is the position of the hon. Member for Esher (Mr. Taylor), parliamentary private secretary to the Secretary of State for Health, who has disclosed only this week that he was in possession of confidential information as far back as July, pending the reference to the Select Committee on Privileges?
    Mr. Deputy Speaker: As I understand it, the hon. Lady is saying that there may have been a breach of privilege. If that is so, I recommend her to follow the normal course: to write to Mr. Speaker and inform him of the matter so that he can consider it.
    Mrs. Alice Mahon: Further to that point of order, Mr. Deputy Speaker. What is the position of the Secretary of State for Health, who acknowledged that the report was in the wrong hands and ordered its destruction, with reference to the Select Committee on Privileges?
    Mr. Deputy Speaker: That would be a matter for the House to consider, if the Committee reported to the House. If there is an allegation of a breach of privilege, the correct procedure is to write to Mr. Speaker.
    Mr. Bob Cryer: Further to those points of order, Mr. Deputy Speaker. I have not fully understood them, but is it true that they are about a leak from the Select Committee on Health, involving a Tory Member who is linked to the Department of Health, to weaken a report that was critical of hospital trusts? If that is the case, it is more than simply an individual breach of privilege; it undermines the whole Select Committee system that the House set up for the purpose of scrutinising and examining Departments.
    It seems from my hon. Friends' remarks that a Tory Member has conspired with civil servants to leak information and even to arrange for amendments to he tabled to the report, which were then backed by Tory Members. I should be grateful for your guidance, Mr. Deputy Speaker, but it seems that all hon. Members who voted for those amendments in the knowledge that they were part of a shabby conspiracy should also be dealt with by the Select Committee.
    Mr. Malcolm Thornton: Further to that point of order, Mr. Deputy Speaker. As the Chairman of a Select Committee that has suffered from the effects of a leak, I should like to ask for your advice. Is it not the case that there is a procedure which this House has laid down and which should be followed in this case? When the procedure is followed, the appropriate Committee investigates the matter and then makes appropriate recommendations. The matter raised is not a point of order that should be pursued in this way at this time.
    Mr. David Hinchliffe rose——
    Mr. Deputy Speaker: Is this on the same point?
    Mr. Hinchliffe: On a different point of order, Mr. Deputy Speaker. As a member of the Select Committee on Health, my central concern is that we may well have witnessed——
    Mr. Ian Bruce: What is the point of order?
    Mr. Hinchliffe: I shall come to the point of order. It seems that the Department of Health may well have drafted amendments that were moved in July by a Tory member of the Committee—[HON. MEMBERS: "What is the point of order?"] My point of order is this: will the Secretary of State for Health make a statement on this matter? The House has a right to know whether his senior officials and his parliamentary private secretary were directly involved in this shabby affair.
    Mr. David Winnick: Further to that point of order, Mr. Deputy Speaker. You gave the advice to my hon. Friend the Member for Preston (Mrs. Wise) that the matter could be taken to the appropriate Committee and that she should write to Mr. Speaker. This is more serious than that. Surely it is a matter for the House to decide as early as possible.
    In view of the serious allegation that civil servants were involved in framing amendments which were then put to the Select Committee in the name of a member of that Committee, and if the Secretary of State was in any way involved, may I suggest that he should make a statement? Even if he was not directly involved, he is responsible for his Department. A request should be made to the Secretary of State that he should make a statement tonight. We should not wait until next week.
    The Select Committee system was established in 1979 on the basis that the Committees would be separate from the Ministries. If, however, they have become merely a forum in which the Secretary of State can use some Members for his own party's purposes, it is a serious matter. The Secretary of State should come here tonight to explain what has happened.
    Ms. Harriet Harman rose——
    Mr. Deputy Speaker: Order. I will hear the hon. Lady, but I remind hon. Members that they are interrupting an important debate on the Loyal Address.
    Ms. Harman: Further to that point of order, Mr. Deputy Speaker. We are facing an unprecedented situation. Would it not be right for the Minister to come to the House? It seems that the Government, having lost the arguments on the health service with their own Back Benchers, sought to interfere with the Select Committee to block its report on opting out. Should not the Minister be here to explain the complicity of his parliamentary private secretary in the activities surrounding this report?
    Mr. Deputy Speaker: All I can say to the House is that, if it is alleged that there has been a leak from a Committee, there are well-established procedures for either the Committee or the House to deal with it, depending on the circumstances of the case. There is nothing more that I can say now.
    Mr. Roger King: Further to that point of order, Mr. Deputy Speaker. Is it in order for copies of the report to be widely circulated on the Opposition Benches? Even the hon. Member for Peckham
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    (Ms. Harman), the Opposition spokesman on health, seems to have a copy of the document. Is it on general release for all colleagues?
    Mr. Deputy Speaker: Order. We have had a very good run on this. From what has just been said, the matter may be automatically referred to the Privileges Committee. We cannot take the matter further now.
    Several Hon. Members rose——
    Ms. Dawn Primarolo: On a point of order, Mr. Deputy Speaker.
    Mr. Deputy Speaker: Order. I said that I shall take no more points of order. An important debate has been interrupted——
    Ms. Primarolo: On a point of order, Mr. Deputy Speaker.
    Mr. Deputy Speaker: Order. I have done all I can to assist the House and explain the automatic procedures in such cases.
    7.50 pm
    Mr. Conal Gregory: I return to the important matter of the Gracious Speech. I am sure that the House welcomes the opportunity to discuss the economy in detail.
    The Government's approach to the economy is in stark contrast with that of the other political parties represented in the House. The Government are clearly committed to reducing inflation. Since we joined the exchange rate mechanism, interest rates have fallen from 15 to 10·5 per cent. and inflation has fallen from 10·9 to 4·1 per cent.—close to the level in Germany. Although the Opposition do not want to hear these words of wisdom, that means that in the past year, Britain recorded the largest fall in inflation in the European Community, which is no mean achievement. Manufacturers and those leading the service sector in insurance, banking, tourism and legal services, rightly fear that a forthcoming Labour Government would immediately opt for devaluation, and the rest of Europe recognises that genuine worry.
    The Gracious Speech was heard against the background of encouraging reports from the Confederation of British Industry, the Association of British Chambers of Commerce and the Institute of Directors. Their combined view was that the end of the recession was in sight. Indeed, exports have risen to the point where the trade deficit with Europe has been eliminated.
    The amendment in the name of the Leader of the Opposition refers erroneously to the Government pursuing policies that would damage investment. Quite the contrary: only the Conservative programme will ensure investment and reinvestment. It is in stark contrast to the Labour party's policy, because the Labour party is pledged by clause 4 of its constitution to renationalise companies such as British Airways, BAA, British Steel, British Gas, Rolls-Royce and even British Telecom.
    Such socialist policies would be disastrous for Britain. They would mean stealing shares from employees, who had owned them perhaps for the first time, reversing companies' efficiency, putting union barons in control in place of competent managers, and raising taxes to record levels to pay for the dogma of greater socialist control. Not

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    content with that, Labour's policies would reduce the scope for individuals to invest in the British economy, which is the envy of the western world.
    One recalls with a shudder the view held by travel agents of British Airways before denationalisation. They rated it even lower than Ethiopian Airways. Today, the denationalised BA is a flag carrier which is envied throughout the world. Similarly, the chance of finding a clean working public telephone was slim under Labour. Today, consumers find British Telecom's services vastly improved. In the days under Labour, who would have thought that they would find a British Telecom that would compensate for delays in receiving telephonic messages? Competition and denationalisation together have achieved that.
    However, it is not only in large companies that Labour would aim to reverse our recovery. Yesterday, the hon. Member for Dagenham (Mr. Gould) made the extraordinary comment:
    "There will be no provision for capping in any legislation"—[Official Report, 6 November 1991; Vol. 198, c. 472.]
    that Labour introduces. That was not a throwaway remark but obviously a considered one. When my right hon. Friend winds up the debate, will he say whet her he agrees that such a spendthrift policy would mean no control over the loony left? We could expect the excesses of Camden in cities such as York. Just imagine studies by Karl Marx becoming the subject of a council presentation. Such are the heroes of the far left that they could even invade local government working.
    For far too long, public services have not been adequately accountable. The citizens charter should reverse that, because it will ensure that the individual counts. My right hon. Friend the Prime Minister's initiative will certainly be attacked by the trade unions, which foresee their cosy world being put under the spotlight. Sadly, I predict confrontation between the Government and trade union barons like the newly elected Transport and General Workers Union chief, who is an avowed communist. Instead of seeing the benefits of the charter, union activists in York simply carp. One despairs that they will ever act constructively and champion the cause of the individual, rather than big brother.
    The Gracious speech referred to plans to denationalise British Rail. Such a move is long overdue. It would benefit users—passengers and freight operaters—rail employees and taxpayers. We have already seen the success of those parts of British Rail that have become independent. I refer to British Rail Engineering—BREL—Golden Rail, Sealink, the former BR hotels, and on-station catering.
    My right hon. and learned Friend the Secretary of State for Transport suggested last month that British Rail need not wait for the enabling Bill to accept competition. British Rail already accepts limited links with the private sector. In its publication, "Future Rail", it calculated private sector investment in freight as some £3 billion and has joint ventures in, for example, parcels, property development, station retail and catering outlets. Such collaborative arrangements are welcome, but do not ensure full competition, participation by employees in greater productivity or fair value for taxpayers.
    Let the House consider a key part of British Rail that has been denationalised—BREL. In contrast to the days of the old socialist era, when BREL was under their control, its order books in York, for instance, are now full. There is today a spirit of confidence and export orders are
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    being won. Let the House compare the figures for the basic weekly pay of BREL shop floor employees with the basic rate for staf at British Rail's maintenance division. Staff in the denationalised part of the company enjoy between 24 and 31 per cent. higher pay, although they do comparable jobs in comparable pay bands for the same 39-hour week.
    In addition, when BREL was released from the shackles of the state sector and was privatised, most employees were awarded free shares which, according to their most recent valuation, were worth more than £450. Yet the Labour party threatens to renationalise such parts of British Rail, forcing staff in York and elsewhere to take a substantial drop in their earnings.
    Although Conservative Members are disappointed that British Rail has not used its resources efficiently, we are not prepared to see its poor performance continue. That is why the Government announced yesterday that they have added almost £1 billion extra to their plans for British Rail for 1992–93. That means that British Rail's total external finance—borrowing and grant—will amount to more than £2 billion next year, which is substantial support. Indeed, it is greater investment in British Rail than in the days of steam. The high increase in taxpayers' support announced yesterday will allow British Rail to proceed with investment despite lower forecasts for revenue and asset sales. This will include the new passenger rolling stock through the channel tunnel from London and the north as well as freight wagons and infrastructure works.
    Let us now see British Rail place its orders for better rolling stock—which can be built at its carriage works in York—and organise better on-train services, with catering in evidence on every train. I travel on trains frequently and I have yet to come across a train journey on which, throughout its length—unlike American and French trains—catering is available all the time.
    Let us see more developments at railway stations. British Rail is one of the largest property owners in the United Kingdom, but its lack of imagination is deplorable. In the whole of Britain, there is only one railway station at which one can cash a cheque. Compare comparable cities—for example, York with Utrecht. At the railway station in Utrecht, one can find perhaps 250 shops, offices and restaurants to which people want to go. Is there a railway station anywhere in the United Kingdom to which one would take one's partner for a special lunch or evening out? There is not, and that will not be conceivable so long as British Rail stays shackled in the state sector.
    Despite British Rail's lack of progress, the Conservatives are committed to the railway industry. We have given it the taxpayers' support it deserves and have not starved it of the working capital and investment in the way the socialists did. The paymasters of the Labour party—in this context, the NUR and ASLEF—deplore such success, deplore the idea of the staff having shares and deplore the export achievement and lack of dependence on the closed shop.
    Looking introspectively and backwards, Labour refuses to say how far it will borrow, how much it will borrow and by how much it will increase taxes. Labour's policies could never achieve the Conservative success in terms of higher living standards. It is right to consider the Gracious Speech in that context.
    Under Conservative rule, the real take-home pay of the average family man with a wife and two children has risen by over a third, compared with less than 1 per cent. under Labour. The Gracious Speech builds on that success,

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    ensuring a stable, non-inflationary recovery, a form of success which allows the individual to take some responsibility. That should be heartily welcomed.
    8.2 pm
    Mr. Peter Shore: The hon. Member for York (Mr. Gregory) began by referring to membership of the ERM and attributed to our joining a number of beneficial results, which he cited. I shall comment on our experience in the ERM, an aspect of our economic situation which has not received the degree of attention it deserves. I shall also refer to certain developments in the economy in the period since we joined the ERM and make certain deductions from them.
    The hon. Gentleman referred to what he called our current account deficit having been effectively eliminated during the last two years. As he knows, the figures show that for this year we shall have a deficit on current account of £6·5 billion, that for next year we have a forecast deficit of £9·5 billion, that in 1990 we had a deficit of £14 billion and that in 1989 we had a deficit of £20 billion.
    In other words, in a four-year period we have loaded ourselves with debt on external account, in our current account transactions, of no less than £50 billion. That is, for the most part, short-term money because it has been attracted in to cover those monumental trade deficits. In no period of British history—under Labour, Liberal or Conservative rule—have we fallen so grievously into deficit in our overseas current account and trading account. It gives me no pleasure to recite those facts because they are extremely serious, not only for the present but for the future.
    Mr. Quentin Davies rose——
    Mr. Shore: No, I will not give way.
    The problem is not reflected simply in that appalling accumulated trade current account deficit.
    The hon. Member for York went on to cite the falls in MLR or interest rates since we joined the ERM. He rightly said that from 15 per cent. in October 1990 it has now fallen to the considerably lower level of 10·5 per cent. But he omitted to set alongside that another highly relevant figure, which is that, when we had an MLR of 15 per cent., we had an inflation rate of 10·9 or, for ease of reference, 11 per cent., whereas today we have an MLR of 10·5 per cent. and an inflation rate of just over 4 per cent.
    It is the difference between the rate of inflation and interest rates that gives the real effect of interest rates. The gap between the rate of inflation and interest rates of just over a year ago, when we joined the exchange rate mechanism, was a 4 per cent., as it were, real interest rate charge on borrowers. Today, 13 months later, the gap is 6·5 per cent. That is the real burden of interest rates on borrowers. In other words, far from the pressure of high interest rates easing, they have increased their squeeze, not only on domestic but on business borrowers, too. That has been a most unwelcome development.
    We must take account of the fact that since October 1990, when we joined the ERM, our unemployment rate has risen by 50 per cent. Month after month there has been an appalling sequence of figures, from 1·6 million in October 1990 to 2·4 million today, and it will undoubtedly rise further.
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    I am not attributing the whole of the recession of the last 18 months or so simply to our membership of the ERM. But I am saying deliberately that it has accentuated and deepened the recession. Our membership of the ERM denies us one of the most important instruments of policy, and that is control over our exchange rate and interest rate policy by which we could have hoped to ease the recovery of our industry, growth rate and so on.
    I believed at the time, and I still believe, that we joined at the wrong rate in October 1990, at DM2.95 to the pound, and that we joined, in a sense, against inadequate criteria for membership. The missing criterion in the series of criteria which the right hon. Member for Finchley (Mrs. Thatcher) laid down in Madrid was basically about inflation. Our inflation rate had to narrow to the rates in the Community before we could join, and she added some other criteria. The most important missing element was that we should have taken account of our trade and payments current account.
    If we had deferred joining the exchange rate mechanism until we had reached an approximate balance in our current account, we would have been much better served, and a much better judgment about the rate would have emerged. A fixed rate in the ERM which is apparently consistent only with an unemployment level of 2·5 million—roughly the current level—a period of nil growth in GDP and falling investment is hardly the rate at which we should have joined.
    Let us suppose that, when we joined the ERM in October 1990, the rate had been perfect. What could we say about that rate as the months and years go by? We are very much concerned with our relative progress against the dominant German economy and currency inside the ERM. If we take 1989—not a bad year—as the base of 100, industrial development in Germany hit 110 in that year. It is certain to reach over 120 this year, and the IMF forecast for year three is 126·9. In other words, in three years the Germans will have increased their industrial investment by just on 30 per cent. By the same IMF calculations, the British figures are modestly down from 100 in 1989 to 99·3 in 1990, 87·4 in 1991 and the forecast for 1992 is 85·6. Therefore, the Germans will have increased industrial investment by 30 per cent. in three years, but we will have suffered a decline of 15 per cent.
    What would the effect of that be, particularly if it were to continue for some time? Our competitiveness will be deleteriously affected by the relative performance of the two nations in terms of industrial investment, which is one of the crucial elements for efficiency and competitiveness.
    Mr. Quentin Davies: I have been listening with great interest to the figures for investment in this country and Germany. Does not the right hon. Gentleman realise that the pattern that he is describing is a reflection of the fact that Germany and Britain are at different stages in the economic cycle? Had he chosen the three years previous to 1989, he would have found that a reverse picture emerged, in which we had a much faster rate of growth and investment than Germany.
    Mr. Shore: I chose those three years not to give a distorted impression but because they are the three years since we joined the exchange rate mechanism. I could not take 1990 as the base because that was the year in which

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    we joined. Regardless of the different stages of the cycle, those are the facts that will have crucial effects on our competitiveness and costs.
    At the heart of the argument about fixed exchange rates is the fact that different parts of an economic area or different countries in the trading world progress at different levels and achieve different levels of efficiency and competitiveness. If one country locks itself in for a period with another economy that is more efficient, as the German economy is and is continuing to be, it is bound to suffer closure of firms in its own domain, the growth of unemployment and, ultimately, the migration of labour to areas of new investment and higher competitiveness.
    I fear that we shall find ourselves in that position. That is the argument against permanently fixed interest rates. The experience that I have related can be replicated all over the world. Nobody in their right senses thinks that the Americans should permanently fix the exchange rate of the dollar against the yen. Any such proposal would be greeted with hilarity. Japan's economic efficiency, based upon a huge industrial base and decades of high investment, is going ahead much faster than that of the United States. United States industry under those conditions would be progressively eliminated by the pressures of competition from the yen. The Americans are sensible enough to keep their currency in their own hands and adjust the dollar against the yen and any other currency.
    I would have thought that we should be thinking hard about the experience of the past year and of how we are to deal with the problem in the time ahead. I believe that it would be excellent for not only Britain but probably most European countries if the German mark revalued and we all gained a certain benefit from that. I do not think that that will happen and we must take action if we conclude that it is necessary to do so. I fear that no action is being contemplated for the period ahead. We are imprisoned within the ERM at the present rate and within the first stage of EMU and the commitment to make a fixed exchange rate a permanent feature. We are facing the prospect of a single currency where there is no chance of any change in the rate of exchange. That is the major part of the treaty on economic and monetary union, and it has serious consequences for us.
    I regret that we have not heard more from either Front Bench spokesman about the serious problems that will have to be faced in the next few weeks leading up to Maastricht on 7 December. Yesterday, I drew the Chancellor's attention to clause 109(b) in the draft treaty and the related protocol dealing with what is called "Excessive Government Deficits". The relevant articles describe what excessive budget deficits are. A budget deficit that is more than 3 per cent. of GDP will not be tolerated.
    Not only that, but the Commission is giving itself power to take penal action against any offending country. Article 10 of the relevant protocol lists the measures that are being proposed. For example, an offending member should be made ineligible for European investment bank borrowing. An offending member should be required—this is interesting—to make a non-interest-bearing deposit of an appropriate size with the European bank in the same way as the Bank of England used to call up deposits from the commercial banks when we thought that that was a good way of correcting over-generous activities. The
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    Commission will impose fines of an appropriate size and suspend new commitments by the structural funds, including the regional fund, until the
    "excessive deficit has, in the view of the Council, been corrected."
    I am sure that I carry the House with me in asking whether we are really going to subject ourselves—this country, this Parliament and this people—to instructions and rules as though we were a rebellious, irresponsible council? Are we really to say that we are not fit to govern ourselves and that these disciplines must be imposed on us? My right hon. Friend the Member for Lianelli (Mr. Davies) referred to the International Monetary Fund, which came to Britain to get agreement and stayed away after only a few weeks. This proposal imports the European Commission, with all its bureaucracy and authority, into our country permanently. It will be sitting at the Cabinet table dictating to the Chancellor what he should do.
    What is the Budget judgment other than the fiscal stance or the extent of the public sector borrowing requirement? I pointed out to the Chancellor yesterday that next year's borrowing requirement will certainly be 3 per cent. of GDP, and I am pretty certain that it will be higher. It may even hit 3·5 per cent. or 4 per cent. That is no sin. The country is in a state of deep gloom and depression and needs stimulus. Anyone who has the slightest knowledge of how economies move and to what extent they go into cyclical periods of slump and boom knows perfectly well that to regulate the economy effectively and make it serve human and national purposes, there must be the power to deal not only with booms and to slow them down but with slumps and to lift people and industry.
    That is only one of the constraints. The other is the establishment of a central bank. The Bank of England will become a branch of the European central bank, no longer capable of deciding interest rate policy or exchange rate policy. We shall even pool our reserves. Under the rules that are being prepared, and under the treaty provisions, we will not exist as an economic entity. Some people say, "Perhaps we could bring the European bank under collective ministerial control." My right hon. Friend the Member for Lianelli and the right hon. Member for Worthing (Mr. Higgins) properly referred to such rather vain hopes. We know that it is difficult for the Treasury sufficiently to control the Bank of England, but it will be much more difficult to control as one of 12 finance Ministers in an ECOFIN council. How absurd it is.
    In addition, the European central bank is forbidden to take instructions from any organisation. The Community or the national states sign a pledge that they will not seek to instruct, to govern or to erode the independence of the European central bank. What does that leave? They can talk to each other and express opinions, but that is not good enough. That is the danger in merely these two provisions.
    I have one or two points to make—these matters are of much importance not only to every hon. Member but to the country—not only to the Government but to my own Front Bench. Labour produced a document called "Labour in Europe" on 31 October. It clearly was meant to be more accommodating to Europe and to its development than the Labour party has been in the past. It seems to labour under certain misapprehensions about what is in store. It says:

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    "The establishment of a monetary union would not require a uniform economic policy throughout the whole Community. The Commission has conceded that there should be no binding rules dictating the fiscal position of member states."
    Those binding rules are contained in the treaty, yet the authors of the document have misled themselves into believing that there would be no binding rules.
    The document refers to the importance of ECOFIN and how it will be a necessary and important political counterpart to Eurofed. It says that it is heartening to see that Labour's proposals have been taken up by the French Government and belatedly by the British Government. Is that part of the Government's proposals? I am not aware of any French pressure to subordinate the European federal bank to the ECOFIN Committee. If that is true, it has failed to emerge in the draft treaty that is due to be signed in four weeks' time at Maastricht.
    I take it as inconceivable for any British Government to accept such draconian, alien authority over such intimate and important matters governing our national affairs. I take it to be doubly inconceivable that any Labour Government, who believe most strongly in intervening in the economy and using powers of economic management, would find it other than terrible and tremendously difficult to accept any such restraints. I am sure that the document was prepared before the draft treaty appeared, and I very much hope that I shall receive a reassurance from both Front-Bench spokesmen before the end of the debate.
    8.26 pm
    Mr. Kenneth Warren: It is an honour to follow the right hon. Member for Bethnal Green and Stepney (Mr. Shore). I may not agree with many parts of his speech, but it was in the finest traditions of the House. The Conservative party is lucky that he is not displaying his intellect on Labour's Front Bench. The Labour party needs him badly, even if we do not agree with him. I hope to be able to deal with some of his comments because, as Chairman of the Select Committee on Trade and Industry, I share his grave concern about the future of manufacturing and trade in this country. My business interests are declared, but, contrary to some popular media suppositions, I am not connected with the Lonrho organisation.
    The Gracious Speech offers a vision of the future that Conservative Members, and I believe the country, will welcome. Inflation is coming down; trade is going up and confidence is apparent. As Chairman of the Select Committee, I find that many people offer me their views and I am delighted to be able to report to the House that in the past several months those views have become not only more positive but aggressive in terms of the opportunity that Britain has to develop its trade and industry.
    I should like to deal with three matters in the Gracious Speech, which I thoroughly support, where we can develop our ability to be more efficient, more constructive and more capable in the world of trade and industry. The first is where a company and the Government have a constructor-customer relationship, such as in the information technology industry, where annually the Government purchase £4 billion-worth of goods and
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    services, half of which goes to the Ministry of Defence. Obviously, the Government's purchasing power is very important.
    Secondly, the Government are a catalyst on which the efficiency of enterprise depends. Although I welcome yesterday's announcement in the autumn statement about increased investment in transport, greater consideration should be given to the value of efficient transport and to the efficiency of enterprises in general. Thirdly, the Government and enterprise are sponsors of economic development, as in research.
    Whatever the political to-ing and fro-ing on manufacturing industry, we must remember that we have been suffering from a problem which has developed throughout the 20th century. At the beginning of the century, this country enjoyed 33 per cent. of world trade, but the level is down to 5 per cent.—the good news is that it is growing again. The Germans started at 22 per cent. and are now at about 12 per cent.; the Japanese started at 2 per cent. and are now at 15 per cent.; and the Americans started at 12 per cent. and are now still at 12 per cent. Most countries have managed to keep up their share. Unfortunately, we have suffered decreases. It is interesting that, in the post-second world war era, the main falls occurred at precisely those times when the Labour Governments devalued.
    In looking at the Gracious Speech and the autumn statement, I welcome the increased receipts for the Department of Trade and Industry from the launch aid levy on airbus deliveries—the airbus is a magnificent aircraft, selling worldwide. I am pleased that the innovation budget will be increased from £100 million to £120 million, and that brings me to my second point about the relationship of the Government and those who supply them.
    The top technologies in the United Kingdom could be listed as pharmaceuticals, chemicals and aerospace, and in those respects this country has an enormous, unchallenged capability in the world. There is some stiff competition, but no one doubts our capability. The tragedy lies in the second-order technologies—white goods, cars and so on. We have lost markets to companies that have shipped their goods across the world to take advantage of what, at one time, were our well-preserved domestic markets.
    There is no doubt that, well led, the British worker and British management are unchallenged. They are not just blips on a screen—major achievements have been recorded. There is British Steel at Llanwern and Port Talbot. There is Nissan at Sunderland. There is also my old company, GEC Avionics at Rochester, which I left many years ago and which has managed to achieve far more without me than it did when I was there. We have many capabilities which are well worth acknowledging and we should not talk ourselves down when thinking about what we can do.
    I should like to offer the House two maxims: good suppliers listen to their customers, and good customers listen to their suppliers. I hope that the Government will always take account of the problems that have beset us during this century and are still with us. We have had a declining share of the world market. Throughout the period of our membership of the European Community, imports have steadily grown in relation to exports. We must now consider the reasons.
    The past 15 years are important in terms of the growth of industrial power in the world. That power is

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    increasingly shifting towards the western Pacific rim. Jobs in manufacturing industry in the United Kingdom have steadily been lost and we now have only about two thirds the number 15 years ago. The Japanese have retained about the same level of employment in manufacturing industry. Japan and other countries such as Germany—which has retained its manufacturing capability—have managed to achieve a substantial positive balance of payments.
    I am in favour of doing all that we can in the service industries. We in this country are successful, particularly in terms of financial services in the City, in ensuring that we capture and hold world markets. We must consider why our manufacturing capability appears to be dropping away, bearing in mind the quality of the management and workers, whom I have cited as examples. Manufacturing does not deserve that decline.
    I should like to direct the House to one approach which was suggested to me. I seek information all over the place in industry. This approach comes from a group which I know well, the Society of British Aerospace Companies. I worked in that industry for many years. I asked the society what its relationship with the Government was like. It is particularly important for an industry involved in leading-edge technology to understand what should be, what can be and what is the relationship with its largest single customer, the Government.
    The group expressed some concerns which I wish to pass on to my right hon. Friend the Chancellor and his colleagues in the Treasury, the Department of Trade and Industry and the Ministry of Defence as a customer. The group has already put those concerns to the Government, but they are worth retelling. The people involved are not looking for handouts or subsidies; they keep on saying that they want a dialogue—a dialogue of benefit to them and to the Government. The Government are both customer and, in the case of the civil aircraft industry—I referred earlier to the airbus—sponsor. They want a dialogue with the Government to find out what they can do to be even more successful and to work to the customer's advantage.
    During the summer, there was a defence review. Ministers assured the trade association through the Defence Industries Council that industrialists could discuss matters relating to the economic, technological and defence implications of possible changes to the defence equipment programme. Unfortunately, that did not happen, which is sad. Some 200,000 people are employed by that business and probably another 200,000 depend on it.
    We should not just say that we will do something. We should ensure that there is a dialogue so that those who want to sell know what they can do. While we are all enjoying the decline in defence requirements, it is particularly important for the highly skilled and highly qualified scientists and engineers to say how they would be better employed as we take advantage of the changes in "Options for Change".
    Aerospace employs 10 per cent. of the national manufacturing work force. It has a turnover of £12·5 billion. In the past year, more than £8 billion of goods was exported—in other words, two thirds of the industry's capability. As in France, Russia and the United States, we have an industry that is self-sustaining. The Department of
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    Trade and Industry should listen closely to industry representatives, and I hope that the Department will pass their views on to the Treasury.
    My right hon. Friend the Secretary of State for Trade and Industry is in St. Petersburg today. I hope that he can also go to the Strand and Stanhope Gate, if a little alliteration may be allowed. British Aerospace and GEC are two examples. They would like to have a closer dialogue with the Government, and I hope to have the opportunity to talk about that matter with my right hon. Friend when he returns.
    I said that I wished to refer also to the interface of business with government. It is not just a matter of the number of Ministries. I hope that, when I have my chance to stand down at the end of this Parliament, the Conservative party manifesto will call for the removal of all sorts of Ministries, such as the Department of Energy, that it will take training out of the Department of Employment and that it will get rid of the industry component of the Department of Trade and Industry and let trade stand on its own.
    There are many jobs that do not need to be done in the Government nowadays. However, there is much more work to be done by the Government on the quality of communications, and that was touched on in the statement yesterday. I welcome the investment in railways, but there are so many people on the roads, at least when I am there. I should like a more innovative approach between the Ministry of Transport and other Departments to discover what the Government can do to facilitate transportation. It is not as if the roads are not there. One has only to look around Westminster to see masses of bus lanes, most of which are empty at all times. Perhaps a traffic authority for London would be welcome.
    Let us consider an area to the east of Westminster. Today, I went on a tour of docklands. One would think that that area was designed as if no one understood that the motor car had been invented. There is a need for co-ordination among Departments—the Treasury and the Departments of the Environment, of Trade and Industry and of Transport—of an order that has not yet been achieved.
    Another area in which the Government are a catalyst is the Export Credits Guarantee Department. I hoped that the Treasury would understand the necessity for British companies to be able to export successfully to the new markets of eastern Europe, including the Union of Soviet Sovereign States and Mongolia which said, "We have got rid of the communists, but you seem to have forgotten us. We have China on our border." Those places do not have the cover necessary for us to be able to export to them, but there are some major opportunities there. The Germans and the French know that.
    Mr. Quentin Davies: Does my hon. Friend agree that it is very demoralising and demotivating for industrialists if they feel that their Government are not prepared to back them in, for example, export credits at least to the extent to which their competitors in the other major western countries are being backed by their Governments?
    Mr. Warren: I endorse my hon. Friend's remark. We are in a very competitive world, and where the Government are a catalyst, they must play the part that only Government can. I am not an interventionist, but there is no question but that there will be a problem with

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    ECGD and Iraq. I am certain that terrible losses will suddenly be revealed in trading with that country. However, the ECGD with its best endeavours believed that it should back companies that regarded Iraq as a good country to which to sell. I should not blame ECGD or the Government if major losses were announced suddenly. The point is that it was done, and the Government must support industry without qualification.
    Another issue to consider is research, in which the Government are a sponsor in part if not in whole—certainly not in whole. Yesterday, the Chancellor announced a 3 per cent. increase in the research budget, which I welcome. However, it is worth mentioning the problem we face with the research base to ensure that industry—with the Government as catalyst through the ECGD and through the companies that I described earlier—achieves success during the next five to 15 years.
    We have approximately the same population as Germany. The population of Japan is approximately double that of ours or Germany's and that of the United States is approximately double that of Japan. Let us consider the amount spent on research and development and acknowledge the fact that development usually accounts for 90 per cent. of all that is spent on research and development. There are some interesting figures which are worth retaining.
    In the United Kingdom, we spend £212 a year per capita on research and development; the Germans spend £381, the Japanese £370 and the Americans £390. If we subtract from that the military component, the net amount spent on research and development in this country is £170 a year. In Germany the figure is £363, in Japan £368 and in the United States £379. In other words, we spend only 50 per cent. of the per capita spending of our major competitors.
    If we add up the figures and take account of the volume of their populations, we discover that Germany is spending four times as much as we spend, Japan eight times as much and the United States 16 times as much. Of course, one cannot cover everything in one's research, but if we compare ourselves with, for instance, Germany, we realise that we must make greater efforts.
    I hope that my right hon. and hon. Friends at the Treasury will consider what incentives they can generate in collaboration with trade and industry to encourage the further investment in research which we lack at the moment. We know that the research payback over 10 years is about three times that required from Japan, but the problem can be solved and I should like the next Government to tackle it. I have no doubt that a Conservative Government will be in office after the next election. I say that in apolitical terms, as I have heard the right hon. and learned Member for Monklands, East (Mr. Smith) today—it is inadequate for what is required for trade and industry.
    The Government must understand that they are the largest single customer and they must therefore consider the way in which they purchase goods and services to make themselves a quality customer. What endears suppliers to Marks and Spencer and to Boeing and makes people queue up to sell to them is that they know that they are selling to quality customers and will be better off for that. That aim can be achieved. It would not be intervention but
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    an acknowledgement of the Government as a catalyst and an acknowledgement of the fact that there are things that only the Government can do.
    I support the proposals in the Queen's Speech, and I believe that the amendment is as ridiculous as one would expect.
    8.46 pm
    Mr. Geoffrey Robinson: It is always interesting to follow the hon. Member for Hastings and Rye (Mr. Warren). It is a pity that he will not continue to offer his services in Select Committee or in the Chamber. I feel that it must be something to do with his frustration with the Government over the past 10, 11 or 12 years, because his speech is in marked contradistinction to everything that they have said for most of that period. The Government have been singularly out of tune with the feelings and aspirations of manufacturing industry, which, as he says, wants not handouts but dialogue. It would perhaps go further and say that it wants above all an even playing field. We cannot allow the continuing exposure of our industry to unfair competitive practices which, as he knows from his experience as Chairman of the Select Committee on Trade and Industry, is very much par for the course in much of the industrial in-fighting.
    The debate takes place against the background of the second deepest recession that the country has endured since the second world war. It is the second recession engendered by this Government. There has been immense social and industrial damage. Let us consider the social aspect. There have been 85,000 repossessions and 45,000 businesses have gone to the wall. Those of us who are close to our constituencies know what that means to the individuals with whom we deal at our surgeries and to our other contacts in industry. I shall not follow other hon. Members who have discussed the personal and social difficulties.
    In the west midlands, we remain rooted in our conviction and commitment to the manufacturing sector. I emphasise the fact that, when we talk about manufacturing, it is not to denigrate the importance of the service industries such as tourism or banking. Indeed, Coventry city council—I have the honour to represent that area—has done an enormous amount to diversify and spread the manufacturing base with great success. I am sure that even my right hon. Friend the Member for Lianelli (Mr. Davies), who made a remarkable critique of the service sector and who tended by comparison rightly to emphasise the relatively greater importance of manufacturing, did not seek to downgrade the importance of the service sector. The most remarkable single achievement by this Government has been the creation of a recession on an unprecedented scale in both the servicing and manufacturing industries.
    Our greatest charge against the Government is their malign neglect of manufacturing over the years. There has been no strategy to harness national resources along the lines suggested by the hon. Member for Hastings and Rye. There has been no attempt to have a dialogue with industry, or to use constructively the Government's purchasing power and interface with industry. All that is beyond them. We do not want them to do things that are almost intentionally designed to hurt the manufacturing sector. The hon. Member for Hastings and Rye referred to the attack, on the Export Credits Guarantee Department.

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    That was a Treasury-inspired attack which hurt one of the organisations that was still helping our exporters. Why does there have to be such an unnecessary, wanton attack upon a highly expert, professional and efficient organisation?
    We know that the United Kingdom car industry is 22 per cent. down. I declare an interest in the Jaguar car company, which is located in my constituency. I am also the chairman of a company that is heavily involved in manufacturing. What a time to persevere with a 10 per cent. car tax. What a time to mount another attack on the benefits of having a company car. The attack has been mounted at a time when the industry is at rock bottom and when one of our prestige companies, privatised only a few years ago, is reeling under the collapse of its market in the United States. What a time to take on that industry and try to destroy it. It is a well-known statistic—I am sorry to have to mention it—that Jaguar sold only 64 vehicles in July of this year. Silly things like that inevitably lead to damaging consequences, from which Coventry and other industrial areas are still suffering.
    If time permitted, I should have read from the excellent report that has been sent to all hon. Members by the Society of Motor Manufacturers and Traders. It points out that one of the highest levels of car tax in the world is levied on the British consumer. No wonder that car manufacturers were 22 per cent. down at home and that those which survive are suffering from enormous cash flow difficulties and have had to make many people redundant.
    Another example is the privatisation of British Airways. I refer to the interface between Rolls-Royce and British Airways. Would any other country have allowed a whole new generation of large, 90,000-plus thrust turbine engines to be placed with a United States company? I cannot believe that any other country would have allowed that to happen. The Government washed their hands of it and said that it was no concern of theirs. The consequences for Rolls-Royce will be dire—they may even turn out to be terminal.
    At one time, we had a market in machine tools, but there has been a 50 per cent. drop in orders and the industry is in dire straits. Again, almost indifferent, malign and neglectful policies are at work. Why abolish 100 per cent. capital allowances? They have good effects. They provide money much more quickly, therefore easing cash flow and profitability problems and the financial deficit of the corporate sector from which manufacturing industry is suffering. If the money comes back more quickly, there is every incentive to invest. We are still living with the consequences of the Government's abolition of 100 per cent. capital allowances.
    The west midlands welcomes overseas investment. The Labour Government laid many of the foundations upon which successful investment here by the Japanese has been built. However, Japanese investment can never be a substitute for our own domestically owned manufacturing companies. We do not have control over research and development, or manufacturing technology, or product development. At the end of the day, we do not have control. We welcome Japanese investment. I have to declare an interest, in that I am trying to promote a joint venture in the United Kingdom with a Japanese company. We want that to happen, but that can be no substitute for having our own nationally owned industries.
    This Government have managed to engineer the second deepest recession in the post-war period. The first was
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    between 1981 and 1983. If one took a view of that performance would as a manager, the Government's managerial performance have to be condemned as a dismal failure. The consequences should be dismissal. That is the sure and certain fate that awaits the Government whenever they have the courage to put their case to the electorate.
    8.55 pm
    Mr. Roger King: I welcome the reference in the Gracious Speech to the fact that the Government intend to privatise some of the railway services. I look forward to the publication of the White Paper. The autumn statement reveals that the Government are determined to ensure that investment in rail and roads takes place. I am happy about both. We need a balanced investment programme for our transport infrastructure. However, road development has not been given sufficient priority. There should be adequate investment in our roads programme. Manufacturers in the west midlands and elsewhere in the country are increasingly adopting lean manufacturing techniques which require the arrival of goods as they are needed on the production line. No longer are there large amounts of stock from which to draw. If the product is not there at the right time, production stops. Investment must continue, if not accelerate, in our roads system. I shall look closely at the Department of Transport and make sure that investment in the roads goes ahead.
    My hon. Friend the Member for Bromsgrove (Sir H. Miller) has been vociferous in previous debates in his defence of the motor car industry. I pay tribute to him for his work. He has become the chief executive of the Society of Motor Manufacturers and Traders. He will make an outstanding leader of the organisation and bring to it the benefit of his political knowledge, as well as an ability to speak on behalf of the industry.
    The car industry has been mentioned by several speakers, but no hon. Member has referred to it in complimentary terms. The industry has performed outstandingly well over the past few years and has stepped up its exports. Without such a performance, the Chancellor's statement yesterday about exports having improved dramatically over the past few years would not have been possible. The industry has been able to expand its production tremendously because it is more productive and more competitive than ever before, and we are gaining the advantage of inward investment and the introduction to this country of Japanese manufacturing techniques. That advantage lies not only in the Japanese car factories setting up here, but in the transfer of manufacturing techniques to other United Kingdom car manufacturing companies—Rover is an outstanding example.
    The kind of manufacturing techniques that the Japanese adopt are no secret. In some respects, we have refined them further. It is a vital part of our investment programme that Japanese manufacturing companies come to the United Kingdom. We have seen the continuing development of the Nissan plant in the north-east, and rising up on the borders between the west midlands and the east midlands is the massive Toyota factory near Derby. There is also the development of Honda's manufacturing facility at Swindon. By the year 2000, those three Japanese companies will produce nearly 1 million vehicles between them.

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    I give my hon. Friend the Minister of State a word of warning. One of the problems of manufacturing industry is not the need for greater acceptability in the export market, but a decline in domestic demand. That decline, which has gone on far too long, is attributable partly to the recent economic position of the country, which is now progressing quite satisfactorily, and partly to the high taxation on the British car. There is the special car tax and VAT, now amounting to 27·3 per cent., which is higher than in any other European country except one, and twice as high as the German level. It is significant that German car manufacturers produce almost 3 million cars a year. Because of their dynamic home market, they can produce cars for the world market, too.
    I ask my hon. Friend the Minister—and my right hon. Friend the Chancellor of the Exchequer, when he prepares his Budget in March, or whenever—to ensure that the tax burden on the British car industry is reduced. When the companies dependent on inward investment—Nissan, Toyota and Honda—become established and their manufacturing plants are up and running, it will not profit us much if United Kingdom plants are in difficulty because of the lack of demand in the home market. We have to get the two activities in phase. I am looking for some reductions in tax in the next Budget. That will be vital for the progress of the British car industry, especially in the west midlands.
    Alas, the truck industry is in a bad position at the moment—again, possibly because of the effects of the recession in British industry and in the rest of Europe. The problems are common and the truck manufacturing position is the worst since 1954. As the economy picks up, that is bound to improve.
    Some significant threats hang over the British car industry. We have heard rumours that petrol tax may be increased to persuade both business people and ordinary users to choose more fuel-efficient cars. I give one warning about that, especially in the light of what was said by the hon. Member for Coventry, North-West (Mr. Robinson) about Jaguar. If petrol prices go up, there will be an even more reduced market for the cars made by Rolls-Royce, Jaguar, Aston Martin and other specialist car manufacturers.
    We must be careful about embracing extra taxes on fuel. They may have a significant and disastrous knock-on effect, to the disadvantage of large sections of the British car industry. By all means let us use the 10 per cent. special car tax. Let us reduce taxation, not increase it. If we wanted to encourage customers to buy more fuel-efficient cars, we could reduce that tax or abolish it altogether for such cars. There is a great opportunity there.
    The United Kingdom motor industry is our biggest manufacturing industry, and it is still in good health, but it needs help in the United Kingdom market. The retail sector is feeling the effects of a prolonged recession. Unless we re-establish demand and start building it up, we are likely to jeopardise the tremendous growth in exports that we have achieved.
    9.3 pm
    Mr. Keith Vaz: Some things never change. Exactly a year ago, I was the last Back-Bench speaker in the six-day debate on the Queen's Speech, and
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    I was followed by my hon. Friend the Member for Copeland (Dr. Cunningham). I spoke at 9.6 pm. This year I have done a little better, in that I am speaking at 9.3 pm.
    I am often told that, as the youngest Opposition Beck-Bench Member, I should know my place, so I have decided to keep my words of wisdom until the very end. When my hon. Friend the Member for Copeland speaks, he will be able to sum up most ably.
    I reviewed my speech of last year, which is always dangerous because one finds oneself wanting to repeat so much of what one said the previous year. So much should have changed and so much has not changed. A year ago, we were in the middle of a Conservative party leadership election, and I predicted that, no matter whether the present Secretary of State for the Environment or the present Prime Minister won it, the result would be the same—the devastation of our basic industries would continue over the ensuing 12 months. That is precisely what has happened.
    I want to speak briefly about the footwear and textile industries, because I believe that the measure of the success—or lack of it—of our economy is reflected in the way in which those two vital industries are run. Representing a Leicester constituency, I know just how important those two industries are to Leicester, Leicestershire and the east midlands. The east midlands accounts for almost 30 per cent. of all the textile jobs and about 40 per cent. of all the footwear jobs in this country.
    The hon. Member for Harborough (Sir J. Farr) and I have spoken about these two industries in many debates. The hon. Gentleman is chairman of the all-party textile committee. He knows very well what has happened over the past months and years, because he and I constantly have to react at local level to the devastating cuts in jobs in those industries. I was present to hear the hon. Gentleman's speech, and I must say that I agree with his view that there should be immediate cuts in the level of interest that industry pays on the money that it borrows from the banks. Those in footwear and textiles believe that only in that way can they cling to what is left of their industries.
    Since 1979, footwear and textile employment nationally has fallen by some 46 per cent. That represents the loss of 203,000 employees—15,000 per year, nearly 1,500 per month, 75 per working day or around 10 every hour. By the time the debate on the Gracious Speech is over, still more jobs will have been lost in those two basic industries.
    My plea today is that the Government should look favourably on the industries because a favourable climate and favourable conditions are necessary to generate business for the kind of enterprise of which they are made up. The manufacturers' plea is that they simply cannot cope with the large number of imports that are coming into Britain.
    I recently obtained a list of aid given by the Turkish Government to the Turkish textile industry. A maximum of 40 to 50 per cent. is available in grant aid, depending on the geographical location. In respect of customs duty or VAT, exemptions are granted for the importation of fixed assets where those assets are used in the textile industry. In terms of investment incentives, up to 100 per cent. of corporate tax relief is available in the year of investment, and 40 per cent. thereafter. In terms of subsidised finance, 11-year loans are normally granted at subsidised interest

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    rates and with four-year periods of grace. That is the kind of support that other countries give these two very important industries.
    In Leicester and the east midlands, the industries do not want special treatment. They realise that they are private companies that need to compete, but they want to be able to compete fairly, and the way in which the Government have managed—or mismanaged—the economy has meant that they have suffered especially severely.
    The knock-on effect is devastating. The closure of factories such as Corahs and Kemptons, in my constituency and in the constituency of the hon. Member for Harborough, have left whole families devastated. The history of the city of Leicester—and, indeed, the history of Nottingham and other east midlands cities—is enmeshed in the history of the footwear and textile industries. If the present trend, and the present rate of job loss, continue, in a decade and a half, there will be no footwear and textile industries left in Leicester. That is our serious message for the Government and the Leader of the House.
    I know that my hon. Friend the Member for Copeland is eager to give us a summary of what has happened over the past six days, but I wish, none the less, to make a short plea about the banking system. It would be strange, after all, if I did not mention the Bank of Credit and Commerce International. The closure of the bank on 2 December and its liquidation will result in billions of pounds of lost export orders and will have the knock-on effect of causing more job losses and affecting a large number of depositors.
    There are 40,000 BCCI depositors in this country. Some of them are sterling depositors, but the majority are non-sterling depositors. Nine hundred members of staff have lost their jobs over the past four months.
    The depositors protection association has produced a Bill today, and it has sent copies to several hon. Members. Indeed, I understand that a copy has been sent to the Chancellor of the Exchequer. If the Government adopt that Bill as part of their legislative programme, that will benefit our economy.
    In a modest way, that Bill would amend the Banking Act 1987 to raise the amount of money to be given to depositors when the deposit protection fund is triggered. The current limit of 75 per cent. of £20,000 is not sufficient. The Bill suggests that the figure should be raised to 75 per cent. of £75,000. The Bill's other main thrust is to ensure that non-sterling deposits are covered. That would be a direct benefit to the reputation to the City of London, because we have been very worried about the number of overseas investors who have threatened to withdraw their money from Britain because of the mean protection provided under the deposit protection legislation.
    As I said, some things never change. I have spoken for a minute longer than I spoke last year. My one comfort is that next year I will be speaking not from the Opposition Back Benches, but from the Government Back Benches. Instead of making the last but one speech, my hon. Friend the Member for Copeland will be the Leader of the House and he will make the final speech. By this time next year, we will have a Labour Government.
    9.11 pm
    Mr. Quentin Davies: I n my brief political life, I have experienced few things more unedifying than the sight and sound over the past few weeks of Labour Members hoping desperately that,
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    despite everything, somehow the recovery of the economy can be postponed, and scratching around frantically trying to find a nugget of bad news about the British economy. That will do them little good. When the general election comes, the recovery in the economy will be palpable and incontrovertible and the British electorate, as before, will take a view of the Government's record as a whole over the past 12 or 13 years. As has been recognised internationally, that record has been remarkable by international standards.
    The British people will also look for policies that give them confidence in the future. There are some striking contrasts between our policies and those of the Labour party in economic and other areas. For example, the Labour party remains as it has been throughout its history—the party of high and higher taxation. We are committed over time to a reduction in the tax burden on the economy.
    With regard to industrial relations, the Labour party appears to have learnt so little from its unhappy experiences of the 1970s. Labour is once again committed to reversing several crucial aspects of our trade union reforms, including the banning of secondary picketing.
    We have already examined the minimum wage on many occasions in the House. There can be few policies so utterly perverse as the minimum wage. It is certain to bring substantial economic damage to the country, and it will not benefit those whom it is designed to help because since those people are, by definition, on the lowest incomes, they are beneficiaries of family credit and that would simply be reduced pound for pound in line with the minimum wage.
    Above all, one great contrast between ourselves and the Labour party concerns inflation. That contrast has been made clear this evening. The Labour party never even mentions inflation. That is the most revealing point of all. Once again today, my right hon. Friend the Chancellor made an absolutely explicit commitment to achieve and to maintain price stability. My right hon. Friend, in his first speech as Prime Minister, made it absolutely clear that the central priority was to defeat inflation.
    We never hear about inflation from the Opposition. All we hear about are policies that they have devised without taking account of the risks of inflation which inevitably would ensue if their policies were adopted—that is, their policies of higher borrowing, higher spending, and deliberately increasing the cost of industry, for example through the minimum wage proposals. The British people simply will not fall for that.
    Inflation is a terrible scourge. It has a terrible human cost—a cost to those on fixed incomes and to those on private sector pensions which are not index linked. Inflation is a very cruel scourge for those most defenceless sections of the population. It also has a major social cost. Inflation inevitably causes everyone to panic because their real incomes are being eroded with every day, week and month that goes by. In a desperate attempt somehow to defend their real income, people find themselves almost forced into militancy and strife and into competitive strikes and competitive demands for increases in nominal wages to keep up with the terrible inflation that they are suffering. Socially, inflation is an extremely divisive and destructive disease.
    Of course, inflation has fundamental economic costs. The fundamental economic costs that are referred to generally in text books concern the fact that inflation erodes the effectiveness of the price mechanism. Beyond that, it fundamentally changes the savings pattern of

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    people in the private and household sector. It means that no longer are people induced to invest in productive assets. They are looking for stores of value that will somehow hold their real value despite inflation. We suddenly find people investing in residential property, real estate of various kinds, gold, works of art and antiques—anything—but not in productive assets. Also, of course, inflation increases uncertainty in the economy.
    Labour Front-Bench Members are not enjoying this, because they are rightly embarrassed by what I am saying. They have not even begun to address the dangers of inflation. They realise that that is an Achilles' heel of their policies, which will mean that they will be completely incredible during the general election.
    Hon. Members are apparently agreed on the need for investment. We all talk about investment. I say "apparently" because the Opposition's policies would not generate a climate that is favourable to investment. Inflation is highly destructive, because investment depends on relative certainty or on a reduction in uncertainty within which investment decisions are taken. Anything that increases risk reduces the inducement to invest. Inflation creates a climate of uncertainty. It means that anybody who proposes to invest must look for even higher prospective returns to justify the enhanced risk.
    The Government have recently taken two vital measures to reduce the risk surrounding investment decisions. The decision to join the exchange rate mechanism has effectively fixed the parity and has reduced the uncertainty of one of the major variables in investment decisions—the exchange rate. Anything that produces the danger of a revival of the hyperinflation that we saw under previous Labour Governments would, as automatically as night follows day, lead people not to invest who might otherwise do so. Hyperinflation would undermine the confidence of industry upon which this country's prosperity ultimately depends.
    Nothing has been more revealing throughout the debate than the fact that the Opposition have not said anything to give the slightest sign that they have any understanding of the dangers of inflation. That lesson will be learned by those outside the House who listen to our debates and it will be taken into account when they come to take their important electoral decision next year.
    9.20 pm
    Dr. John Cunningham: It is my duty to review the past six days of debate, which is a considerable challenge, but it is nice to begin with a point of agreement between the hon. Member for Stamford and Spalding (Mr. Davies) and myself. He was right—we did not enjoy his speech.
    It is conventional to begin by referring to the speeches of the mover and seconder of the Loyal Address, and I do so with some pleasure. The right hon. Member for Worcester (Mr. Walker) has, on any test, enjoyed an outstanding parliamentary career, which may well continue in another place after the general election. His speech amused and engaged the House. His recent role in the Cabinet of the right hon. Member for Finchley (Mrs. Thatcher) must have seemed rather like walking with great care over the fine porcelain for which the city of Worcester
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    is famous. I suspect that occasionally the right hon. Gentleman deliberately cracked a few pieces just to remind the right hon. Lady that he was around.
    The hon. Member for Thanet, South (Mr. Aitken) has always been an independent-minded Conservative. His speech again demonstrated his consistent commitment to the views that he holds. I thought, however, that as an old Etonian he was a somewhat unlikely herald of the classless society.
    I should also like to pay my own tribute to those Members who are no longer with us. Alick Buchanan-Smith and I were neighbours in London. Early most mornings we would bump into each other when he was on his way for his regular morning swim, and I shall miss him. Alick was a most courageous and admirable man, and we shall all miss him here.
    I also salute the courage and commitment of George Buckley throughout his life as a socialist who was taken from his family and from us much too soon.
    No one, least of all you, Madam Deputy Speaker, could fail to miss the pugnacious Richard Holt. We always knew when he was in the Chamber, but I believe that even the sometimes irascible Richard would not have condoned the contemptible tactics of gratuitous abuse, innuendo and vilification that are being deployed against Ashok Kumar in the Langbaurgh by-election by both Conservatives and Liberals alike. It demeaned the Leader of the House to launch into such personal, abusive and unsubstantiated attacks on a Labour candidate. The Conservatives' losing campaigns have taken a very nasty turn, with undertones of racism that have no place in any decent political party. I believe, however, that Ashok Kumar will make history tonight and that his election victory will be to the great credit of the electors of Langbaurgh.
    This is the 13th consecutive Gracious Speech from a Conservative Government. It is longer than most of its predecessors and more shallow. It is the first Gracious Speech from the Prime Minister and, in all honesty, it cannot be described as a blueprint for the classless society; nor is it a pathway for the more effective advancement of women. It completely fails to match the Prime Minister's fine words.
    Of course, that should not surprise us, because the candour of the Secretary of State for Energy was disarming when he said recently on "Panorama" that the only difference between the right hon. Member for Huntingdon (Mr. Major) and the right hon. Member for Finchley was one of style, not substance—there has been a change in style, yes, but a change in substance, no. After almost one year in office, the Prime Minister is failing even his own tests. He has no mandate. He has twice run away from his premeditated attempts to plan opportunities to secure one.
    The real issue for Britain is not what is included in the Gracious Speech or what is left out. The real issue is that a Gracious Speech was made at all when the whole country really wanted and expected a general election. The real issue is the need for a new programme and a new agenda for Britain from a Government with the authority of a fresh mandate from the people.
    Mr. Winnick: Will my hon. Friend give way?
    Dr. Cunningham: I am sorry, but I cannot give way. I have already given up 10 minutes of my time in the debate and it is incumbent on me to move on.

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    The Government are a deadbeat Government whose authority has been undermined by every recent test of public opinion, in local elections and in parliamentary elections. The Prime Minister and his party have failed to win a single one of the eight by-elections since the last Gracious Speech in November last year, and they will lose three more tonight.
    Nothing betrayed the lack of courage in the Government more than the manner in which the electors learned that they were to be denied a choice of Government today at the ballot box. The news was sneaked out by telephone calls to sycophantic editors by the Secretary of State for Energy. Apparently, even that task could not be trusted to the chairman of the Conservative party.
    The Gracious Speech attempts to wipe the slate clean of the record of the past 12 years. Ministers and their Back Benchers pretend that all that has gone before, everything that they got wrong, everything that they supported and everything that they drove through this House can be obliterated by a change of Prime Minister. They will fail in that attempt at deception. Even though the Tory party made history last year as the first group of politicians to make a monkey of the organ grinder, it simply will not get away with it.
    So apparently we are to be treated to an orgy of de-Thatcherisation. Or are we? Poll tax, the right hon. Lady's flagship, certainly is a rotting hulk—that is true. Then and at other times Opposition Members said some pretty hard things about the right hon. Lady when she was Prime Minister. But they are not half as hard as the things that Tory Back Benchers are saying about her now.
    The present Prime Minister's U-turn on poll tax is interesting. He was an unswerving supporter of poll tax in every vote in the House, including when he opposed the so-called Mates amendment on banding. He said of poll tax:
    "I believe the new system will prove enduring and a vast improvement on the status quo."
    He said that at the Association of District Councils conference in 1988. He described the poll tax as
    "a very much fairer and more acceptable system"
    in a letter to one of his constituents in April 1990.
    But later, when the right hon. Member for Huntingdon (Mr. Major) was running for the leadership of the Tory party his tone was different. He said:
    "I'll tell you about poll tax. We were bounced into it quickly because there was such a fuss about the rates in Scotland and we were bounced without thinking because of all the political fuss."
    That is what he told the Daily Mail in November last year during the leadership election. He was also candid with the BBC "News at One" that same month. He said:
    "One of the reasons we got into difficulties with the community charge was being bounced into decisions before they were fully thought through and before we knew precisely how it would affect people and what it meant."
    That was the Prime Minister of our country talking about how, as a Cabinet Minister, he allowed himself to be bounced into decisions. Honest John? That is what he said.
    The Government guillotined poll tax in and they guillotined it out. Now they expect us and the country to accept that they intend to guillotine in the next Tory tax as well and to make the same mistakes all over again. In 12 years they have made local government finance a nightmare for taxpayers, for service providers, for voluntary organisations and for councillors—even their own councillors.
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    The Tories epitomised Santayana's definition of fanatics:
    "Those who redouble their efforts even when they have forgotten their aim."
    No doubt those hon. Members who rushed into the Lobby to rush in the poll tax, those who proclaimed it around Britain with ringing declarations of undying support—[Interruption.]—and the right hon. Member for Croydon, South (Sir W. Clark), who is protesting from a sedentary position, was one of the leaders—are preparing to rush once more, uninformed, unprepared and underhand into the Lobby for its confused, capricious replacement. Their constituents will not forget their records.
    The plain truth is that the windy rhetoric of the Tories on such issues cannot disguise their lack of any coherent philosophy for local government. Their proposals are devoid of sound principles and of any intellectual foundation. The poll tax fiasco expresses the weakness and the incompetence of the Tory Cabinet. They supported it to a man—and they are all men.
    The Asylum Bill displays the sinister cynicism of the Government on issues of race and ethnic origin. No one wants the entry of bogus asylum seekers into Britain and the fraudulent applicant must clearly be rejected, but the genuine applicant fleeing persecution has historically been offered protection by our country and the Government's proposals contain the real danger that that will no longer be the case.
    It is the height of hypocrisy for the Gracious Speech to state that the aim of legislation is simply to enable
    "applications for asylum in the United Kingdom to be dealt with quickly and effectively."
    The game is given away by the tabloid newspapers, which are such sycophantic supporters of the Government and deliberately choose to confuse asylum with immigration. If that is the Government's intention, why do they not take up the offer from the General Council of the Bar to enter into discussions on devising a speedy and just system of appeals?
    The Government are engaging in scaremongering of the most squalid nature simply because a general election is approaching.
    Throughout the past 12 years, Conservative Government have regularly pledged to the House and the country solutions to problems. In six of their 12 Queen's Speeches, they said that they would provide an efficient economy—they have failed. On six occasions they said that they would solve the problem of unemployment—it is worse than ever before. In six of their Queen's Speeches they said that it was their intention to improve the quality of our children's education—it is in decline. They said that they would improve the national health service on six occasions and they have finally admitted that they have been underfunding it. They said that they would tackle crime more effectively in eight of the past 12 years—crime is at all-time record levels after 12 years of the incompetent failure of the Conservative party. In 12 out of 12 years they have given firm commitments to their party for the
    Their failures in each of those areas have been abysmal and are far too numerous to elaborate upon in this debate, but I shall examine one or two of them.
    This year, for the seventh time, the Government tell us that they want to improve the quality of our children's education—that is our children, because their children do

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    not go into the state system. I choose my words with care. They do not send their children to the schools that they have been meddling with all these years.
    Why do the Government persist in the policy of spending millions of pounds of our money—taxpayers' money—on their discredited city technology colleges when our schools suffer from a grave lack of resources? They are spending 50 times more on each child in the CTC than they do on each child in a school in Cumbria in my constituency. How can they defend that? They have allowed Cumbria to spend only £150 per pupil, while CTCs have received £7,450 per pupil from the taxpayer. That is a sign of the Tory party's priorities.
    Is it that Cumbria's children lack talent or initiative? Of course not. Pupils at Wyndham school in Egremont in my constituency have won awards for science and technology. One group of young women has been given a national award for the design of an incubator unit for use in the third world. The truth is that state schools throughout the country, not just in Cumbria, are full of talented, able children who are being denied opportunities because of the Government's policies.
    One small rural primary school in Lamplugh in my constituency has won several national awards and other school children could win more, given the opportunity. Cumbria is facing millions of pounds worth of cuts in its education spending as a direct result of the Government's policies, as are education authorities the length and breadth of the country. It is a scandalous waste of talent.
    Education is not the only example of the Government's neglect. In the 12 months since the last Queen's Speech, unemployment has risen by 780,000-plus—a 50 per cent. rise. The Government, doubtless feeling that the increase, in the words of the Chancellor of the Exchequer, is "a price well worth paying", could not even bring themselves to mention unemployment in the text of one of the longest Queen's Speeches we have seen in recent times. There was not a mention of the plight of the unemployed.
    The pattern of the Queen's Speeches over 12 years on unemployment is instructive. In the early 1980s, during the first recession, the Government expressed "concern" at rising unemployment and pledged to tackle it. In the past four years, they have had to fall back on saying that they will increase employment. This year, they obviously feel that there is nothing credible that remains for them to say on their record of rising unemployment. I fear that they are right.
    On the eve of 1992, this year of all years, the Queen's Speech should have had at its heart measures to reduce the unemployment which now afflicts every region of the country and every sector of employment.
    What is even more worrying is the acute rise in youth unemployment. Almost 300,000 more young people have become unemployed since this recession began. This Queen's Speech offers nothing for the young jobless in my constituency in Cumbria or in the country as a whole. I can assure you, Mr. Speaker, that young people will not forget what the Government have done to them, their job opportunities and their career prospects.
    Britain's credibility in Europe is, not surprisingly, again in question. Far from being at the heart of Europe, Britain is once again being left behind—the Bruges group on one side and the Chichester group on the other, pulling the
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    Prime Minister first this way and then that. The Foreign Secretary dances to one tune one day and to another the next, while our country's best interests are pushed aside. As the crucial Maastricht conference approaches, neither at home nor abroad is there a clear, consistent view of where the Tory Government stand. Last year at this time on Europe the Tory party was the prisoner of its Prime Minister. This year its Prime Minister is a prisoner of his own party.
    The Gracious Speech is dominated by attempts to clear up the Tory economic incompetence and the manic ideology of the past 12 years. It has been contradicted on public expenditure within a week by yesterday's political opportunism in the autumn statement. On the question of financing public expenditure, why is it that, in the past 24 hours, on three occasions the Chancellor of the Exchequer and on three occasions the Leader of the House have been asked to spell out the Government's plans on VAT and on six occasions they have not had the courage to answer once either my right hon. and learned Friend the shadow Chancellor of the Exchequer or my right hon. Friend the leader of the Labour party?
    All that is the work of a Prime Minister who, after a year in office is—to use one of his favourite cricketing metaphors—a nightwatchman. He is a caretaker who will not last. He says that he wants women in his Cabinet—but not yet. He says that he wants Britain at the heart of Europe—but not yet. He says that he wants to abolish poll tax—but not yet. He says that he wants to reform the DTI and put the right hon. Member for Henley (Mr. Heseltine) in charge—but not yet. He says that he wants a mandate of his own—[HON. MEMBERS: "But not yet."] As a cricketing friend said to me:
    "I wouldn't have him in my team—he has a terrible propensity to no balls".
    Under the right hon. Gentleman, the Tory party's bogus claims are on auto-destruct. House sales have become repossessions and business starts have become insolvencies. The state intervenes in every school, hospital and town hall.
    Britain needs a new hope for the 1990s and a new agenda that will give people opportunities. They will never achieve those advances and opportunities with a tired and discredited Tory party in power. We look forward to the next Gracious Speech, because we shall write it.
    9.41 pm
    The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor): I join the hon. Member for Copeland (Dr. Cunningham) in paying tribute to my right hon. Friend the Member for Worcester (Mr. Walker) and my hon. Friend the Member for Thanet, South (Mr. Aitken), who proposed and seconded the Loyal Address. I also join him in paying tribute to Alick Buchanan-Smith who was a personal friend of mine, as he was of so many, and who was an outstanding parliamentarian and Minister, and to the courage of George Buckley. We were all sorry to hear of the death of Richard Holt, who made a big mark in this House and put Langbaurgh on the map.
    I reject absolutely any charges of racism on the part of anyone in the Tory party in the Langbaurgh campaign. We have been drawing attention to the defects of the Labour party campaign, and I shall give just one example. The Labour candidate, quite fairly and reasonably, bought shares in British Telecom. The Leader of the Opposition

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    defended his freedom to do so. The point that we were making in drawing attention to it was that, if the Labour party had been in power, he would not have had the freedom to buy shares in BT. That is a perfectly fair point to make.
    I begin, as I did last time, with brief but important references to one of the matters that comes within my sphere of responsibility—parliamentary reform. The Government are committed to sustaining the momentum of parliamentary reform. We place the emphasis on practical reforms that deliver real improvements in the management of the House, conditions for Members and working practices. This Session will see the new House management committees introduced, and, following the report by Sir Robin Ibbs, in operation for the first time.
    We are now at phase one of the new parliamentary buildings—the first stage of a long-overdue improvement in accommodation facilities for Members. Much more needs to be done, but I shall always endeavour to turn a sympathetic ear to changes that will enable us to serve our constituents more effectively.
    The pace of reforms to working practices is also hotting up. The Government's emphasis is on practical measures, on changes that will work to improve the hours that we sit and the effectiveness of parliamentary procedure. I expect to be able to report to the House soon the results of the review of the first year of the new European Standing Committees after the Select Committee on Procedure has reported. However, it is already clear that they are a real success, with enhanced scrutiny, better debate and, perhaps most noticeable, a reduction in the number of late-night debates on the Floor of the House. We have had seven in 1991, compared with 27 in 1990 and 37 in 1989.
    The Transport and Works Bill will be a major step forward in the reform of antiquated, obscure private Bill procedures and should reduce by about half the number of private Bills that come before the House, while improving procedures in the area that deal with them.
    The Select Committee on the Hours of Sitting, chaired by my right hon. Friend the Member for Westmorland and Lonsdale (Mr. Jopling), is carrying forward its work with vigour and enthusiasm. [HON. MEMBERS: "Slow down."] I have a great deal to say. I gave evidence to that Committee this week, and we all await conclusions with interest. I still believe that reforms in working practices and hours of sitting are essential to improve our ability to serve our constituents and our effectiveness as a legislature. I promise the House a full opportunity to debate the report from the Committee. I also promise that the Government will look seriously at all proposals for sensible reform.
    Mr. Rhodri Morgan rose——
    Mr. MacGregor: Like the hon. Member for Copeland, I have reduced my time considerably, so I will not give way.
    I wish at the outset to concentrate on three astonishing features of the debate, the first being the speech of the right hon. and learned Member for Monklands, East (Mr. Smith). The right hon. Member for Lagan Valley (Mr. Molyneaux) and my right hon. Friend the Member for Guildford (Mr. Howell) got it absolutely right. The right hon. Member for Lagan Valley said that he was not clear whether the right hon. and learned Gentleman had
    664
    finished or was still giving way, and my right hon. Friend referred to what looked like only the first half of his speech.
    It was clear that the right hon. and learned Gentleman had astonishingly little to say, and nothing at all to say about Labour policies. Indeed, he failed totally to answer the two questions that were asked of him, and I know why. He does not want to be probed on questions of public expenditure relating to the Labour party and its tax proposals. That has been a big feature of today's debate, so I want to take the matter a bit further.
    Mr. Morgan rose——
    Mr. MacGregor: No, I will not give way. [Interruption.] I will deal with VAT. It was not necessary to spell it out, because the existing public expenditure plans are based on existing tax rates, with the allowances and excise duties indexed in the normal way. That is spelled out clearly.
    Mr. Morgan rose——
    Mr. MacGregor: I am not giving way.
    I understand why the right hon. and learned Gentleman could not wait to resume his seat—in case he was asked again about expenditure. So let us try again. We know that the Labour party is committed to an increase in child benefit and pensions, covered by its eight new or increased taxes, a point that has featured in the debate.
    We have heard throughout the past year from one Labour Member after another about how their areas of spending have a high priority. The Leader of the Opposition said:
    "Top place will go to the health services."
    The hon. Member for Copeland promises:
    "Education is our first priority."
    We had none of those commitments from the right hon. and learned Member for Monklands, East, although he said that education and training would be key priorities.
    In one policy document, the Labour party says:
    "A hugely increased programme encouraging energy conservation and efficiency is given priority."
    In another, Labour says:
    "First priority will be substantial extra investment in London on extra buses, tubes and trains."
    In yet another, Labour says:
    "Returning water to the public sector is a priority."
    That would not be cheap. For the hon. Member for Dagenham (Mr. Gould), thousands of millions of extra pounds spent on housing would be an immediate solution to the homeless problem. He has also said that the Labour party was already committed to
    "the rapid development of regional development agencies."
    The hon. Member for Cynon Valley (Mrs. Clywd) said:
    "Reaching the United Nation's aid target is a top priority."
    I have left out the biggest spender of the lot, the hon. Member for Oldham, West (Mr. Meacher), who, every time he gets to his feet in the House, commits the Labour party to further increased spending on the social services.
    Mr. Jeff Rooker: Nothing of the kind.
    Mr. MacGregor: It is all very well for the hon. Gentleman to say that. He should read what his hon. Friend has said. The Leader of the Opposition said the other day, talking about education:

    665
    "We will continue with the scale of commitment at least at the level of 1979. That means, year on year, sustaining the commitment instead of letting it be eroded."
    We know that that would cost an extra £2·6 billion. The right hon. and learned Member for Monklands, East immediately tried to suppress that, and that is indicative of the battle that is going on in the Labour party—[Interruption.] It was said by the Leader of the Opposition himself.
    Mr. Morgan rose——
    Mr. MacGregor: I will not give way.
    That is why we have costed the Labour party programme in the document which I have with me. It amounts to an extra £35 billion. They are all spending pledges given by Labour Members. They are all listed, and not one of them has been denied.
    Nor can the right hon. and learned Member for Monklands, East claim that it would come from growth, because growth is already assumed in our plans. He knows that it would be a real-terms increase on top of inflation. That is why, on the costing basis, we are right to say that it represents another 10p in the pound on basic income tax. [Interruption.] I want to hear from the right hon. and learned Member for Monklands, East, because the Opposition must now come clean.
    Which is it—massive increases in normal basic income tax, or does the Labour party intend to reject all the spending plans with which it has conned the electorate by saying that it will engage in them? It is a massive con trick—[Interruption.] Or will Labour go back to very large Government borrowing, on the scale that occurred in one year under the last Labour Government, of 9·5 per cent. of GDP and a PSBR of £55 billion?
    Yesterday, we heard another commitment from the Labour party. We heard that it does not intend to cap any local authority. That was a clear commitment. So, in addition to the high increases in taxation that the Labour party would impose if it was ever given a chance, the community charge payer, or the council tax payer, would be ripped apart by high-spending Labour authorities, because there would be no capping. The Labour party has failed to answer those questions. Clearly their measures would be hugely inflationary.
    Another astonishing feature of the debate was pointed out by my hon. Friend the Member for Stamford and Spalding (Mr. Davies). None of the speeches of Opposition Front-Bench spokesmen has mentioned the importance of achieving, as we have done, and sustaining, as we are determined to do, a low rate of inflation. I am not surprised. Labour's record in office and its current policies would be hugely inflationary.
    On Europe, the Leader of the Opposition gave a long answer during the Queen's Speech debate on 31 October. It was not as long as his previous answer on economic and monetary union, but it was close. In that answer, he said absolutely nothing until my right hon. Friend the Chancellor pinned him down and asked what positive extra policies the Labour party would commit itself to. He said:
    "When I say that the Government are not positive, that is because they have sought no undertakings on regional policy, growth policy or employment policy."—[Official Report, 31 October 1991; Vol. 198, c. 22.]
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    By talking about those three areas, the right hon. Gentleman clearly underlines the fact that the Labour party has nothing to say about economic and monetary union.
    Surprisingly, the Labour party document on Europe says:
    "The completion of the single market contains the potential for great opportunities."
    However, in November 1986, the Leader of the Opposition said that the single market would be
    "a political failure of such magnitude that it may well endanger the future development and cohesion of the Community."
    That shows his understanding of European matters. He was wrong then, he is wrong now, and he will be wrong in the future.
    The only clearly distinctive point that the Opposition have made about convergence is:
    "Labour's supply-side policies are the policies necessary for real convergence."
    It was the Labour party's supply-side policies, including its industrial relations policies—all of which we had to reverse—which did such damage in the 1970s. Our supply-side policies achieved the growth of the 1980s.
    On employment, the Labour party would sign up for a massive extension of Community competence and majority voting in the name of the social charter. Those ill thought out policies would add massively to the burden on employers and reduce profitability and employment.
    On growth, the Labour party ignores the evidence of independent forecasters that, on top of the substantial growth rates that we have achieved in the 1980s, our growth rate will be just as good as the G7 average and faster than Germany's in the second half of next year. That is not just our forecast; it is the IMF's forecast.
    The third element of European policy that the Leader of the Opposition accused us of ignoring was regional policy. As one of my hon. Friends pointed out today, it is typical that, when finally pushed into a corner and forced to be specific, the Leader of the Opposition picked for unqualified Labour party support the one area of European Community policy that would cost this country. An increase in regional aid would benefit other countries far more than us and would drive up our net contribution to the budget. In other words, we would be paying for it. That is why, although the Labour party is changing its stance on Europe and is still deeply divided, it still has nothing constructive to say about the future of economic and monetary union.
    The right hon. and learned Member for Monklands, East talked about our record. He used some statistics about what has been happening to jobs and businesses recently. I remind the House and the country that, over our 12 years of office, every day 800 more households have become home owners, nearly 100 extra new businesses have been established—they are all net increases—and nearly 200 new jobs have been created. Our policies will extend that fine record throughout the 1990s.
    The shadow Chancellor criticised the investment performance of British industry. Again, he was wrong. Despite the recession, which my right hon. Friend the Chancellor made clear is coming to an end, our national wealth is 23 per cent. up on 1979, and business investment is up 27 per cent. As my right hon. Friend the Chancellor said, there was a massive increase in business investment in the three years up to 1989. Currently, business investment accounts for a higher proportion of GDP than at any time

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    in the 1970s and early 1980s. Business investment remains high, and the latest CBI survey reported a sharp improvement in manufacturers' investment intentions.
    United Kingdom manufacturing output is 25 per cent. higher than it was 10 years ago. United Kingdom manufactured exports have been increasing faster than world trade. After decades of decline, the United Kingdom's share of manufactured exports of developed nations has increased from 7·5 per cent. to almost 9 per cent. in the past five years. Those are the facts about the state of manufacturing industry, and industrial disputes are at the lowest for half a century. To answer the shadow Chancellor, this summer, the director general of the CBI said:
    "Virtually everything associated with our manufacturing base is better than it was in the era of Government interference, lost orders, strikes and roaring inflation."
    No prizes for guessing when that was. It was when the industrial policies of the Labour party were being pursued, to our damage, in the 1970s.
    Government spending of more than £2·6 billion in 1992–93 on enterprise and vocational education is two and a half times more in real terms than in 1978–79. Companies are spending record sums of some £20 billion on training per year, and the CBI survey shows an increase in the year ahead, with more than 80 per cent. of manufacturers expecting to spend as much or more on training in the next 12 months. That is what the right hon. and learned Member for Monklands, East means by cuts.
    Almost 1 million people will be helped back to work in the coming year by employment and training programmes. We need to take no lectures from Labour Members. I remind them that we are spending two and a half times as much on training and enterprise as they did. When they left office, they were training 6,000 young people. This year, we shall train more than 250,000. If the right hon. and learned Member for Monk lands, East were concerned about employment and training, he would be prepared to condemn the TUC boycott of the employment action, youth training and TEC programmes. He has been asked before: will he now do so?
    It is no wonder that the right hon. and learned Member for Monklands, East does not want to hear the facts about Government spending on science and technology. The autumn statement shows that spending on science and technology in 1992–93 will be almost £6 billion. That is substantial investment in science and technology.
    I shall take no lessons from the right hon. and learned Gentleman on education, because the Government's record has been extremely good. In the past 12 years, there has been a record increase in spending per pupil—up 42 per cent. in schools. His comparisons with the city technology colleges did not bear water. More young people are staying on after 16 than ever before. More and more are getting good grades in GCSE and A-levels. Above all, our record on the numbers entering higher education, universities and polytechnics is outstandingly good—one out of eight of the relevant age group in 1979, one out of four now. Not only are numbers increasing every year but most students qualify in universities and polytechnics, whereas in other countries that have similar numbers entering higher education there is a much higher wastage rate.
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    The results of our education reforms and improvements in the 1980s are being shown by the way in which our young people are leaving higher education with qualifications. One in four is very much better than before.
    The Opposition cannot add up. They make promises that they have no way of sustaining. They have no commitment to the control of inflation. Their approach to European matters involves policies that are not at all in the interests of British industry. The Government's record is outstandingly good. The Queen's Speech will carry it forward and, when the time comes, I am certain that the electorate will choose our policies.
    Question put, That the amendment be made:
    The House divided: Ayes 193, Noes 323.

    Division No. 2]

    [10 pm

    AYES

    Abbott, Ms Diane

    Foulkes, George

    Adams, Mrs Irene (Paisley, N.)

    Fraser, John

    Allen, Graham

    Galloway, George

    Alton, David

    Garrett, John (Norwich South)

    Archer, Rt Hon Peter

    Garrett, Ted (Wallsend)

    Ashdown, Rt Hon Paddy

    Gilbert, Rt Hon Dr John

    Ashley, Rt Hon Jack

    Godman, Dr Norman A.

    Ashton, Joe

    Golding, Mrs Llin

    Banks, Tony (Newham NW)

    Gordon, Mildred

    Barnes, Harry (Derbyshire NE)

    Gould, Bryan

    Barnes, Mrs Rosie (Greenwich)

    Graham, Thomas

    Beckett, Margaret

    Grant, Bernie (Tottenham)

    Beith, A. J.

    Griffiths, Nigel (Edinburgh S)

    Bellotti, David

    Griffiths, Win (Bridgend)

    Benn, Rt Hon Tony

    Grocott, Bruce

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

    Hain, Peter

    Bermingham, Gerald

    Harman, Ms Harriet

    Bidwell, Sydney

    Haynes, Frank

    Blair, Tony

    Heal, Mrs Sylvia

    Boateng, Paul

    Healey, Rt Hon Denis

    Bradley, Keith

    Henderson, Doug

    Brown, Gordon (D'mline E)

    Hinchliffe, David

    Brown, Ron (Edinburgh Leith)

    Hoey, Kate (Vauxhall)

    Caborn, Richard

    Hogg, N. (C'nauld & Kilsyth)

    Callaghan, Jim

    Home Robertson, John

    Campbell, Menzies (Fife NE)

    Howell, Rt Hon D. (S'heath)

    Campbell-Savours, D. N.

    Howells, Geraint

    Canavan, Dennis

    Howells, Dr. Kim (Pontypridd)

    Carr, Michael

    Hoyle, Doug

    Cartwright, John

    Hughes, John (Coventry NE)

    Clarke, Tom (Monklands W)

    Hughes, Roy (Newport E)

    Cohen, Harry

    Hughes, Simon (Southwark)

    Corbett, Robin

    Hume, John

    Corbyn, Jeremy

    Ingram, Adam

    Cox, Tom

    Johnston, Sir Russell

    Crowther, Stan

    Jones, Barry (Alyn & Deeside)

    Cryer, Bob

    Jones, Martyn (Clwyd S W)

    Cunningham, Dr John

    Kaufman, Rt Hon Gerald

    Darling, Alistair

    Kennedy, Charles

    Davies, Rt Hon Denzil (Lianelli)

    Kilfoyle, Peter

    Davies, Ron (Caerphilly)

    Kinnock, Rt Hon Neil

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

    Kirkwood, Archy

    Dixon, Don

    Lamond, James

    Dobson, Frank

    Leadbitter, Ted

    Duffy, Sir A. E. P.

    Leighton, Ron

    Dunnachie, Jimmy

    Lestor, Joan (Eccles)

    Dunwoody, Hon Mrs Gwyneth

    Lewis, Terry

    Eadie, Alexander

    Litherland, Robert

    Edwards, Huw

    Livingstone, Ken

    Evans, John (St Helens N)

    Livsey, Richard

    Ewing, Mrs Margaret (Moray)

    Lloyd, Tony (Stretford)

    Faulds, Andrew

    Loyden, Eddie

    Fearn, Ronald

    McAllion, John

    Field, Frank (Birkenhead)

    McAvoy, Thomas

    Fields, Terry (L'pool B G'n)

    McGrady, Eddie

    Fisher, Mark

    McKay, Allen (Barnsley West)

    Flannery, Martin

    McKelvey, William

    Flynn, Paul

    McLeish, Henry

    Foot, Rt Hon Michael

    Maclennan, Robert

    Foster, Derek

    McMaster, Gordon

    669

    McWilliam, John

    Ross, Ernie (Dundee W)

    Madden, Max

    Rowlands, Ted

    Mahon, Mrs Alice

    Ruddock, Joan

    Marek, Dr John

    Salmond, Alex

    Marshall, David (Shettleston)

    Sedgemore, Brian

    Marshall, Jim (Leicester S)

    Sheerman, Barry

    Martin, Michael J. (Springburn)

    Sheldon, Rt Hon Robert

    Martlew, Eric

    Shore, Rt Hon Peter

    Meacher, Michael

    Skinner, Dennis

    Meale, Alan

    Smith, Andrew (Oxford E)

    Michael, Alun

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

    Michie, Bill (Sheffield Heeley)

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

    Michie, Mrs Ray (Arg'l & Bute)

    Snape, Peter

    Mitchell, Austin (G't Grimsby)

    Soley, Clive

    Morgan, Rhodri

    Spearing, Nigel

    Morley, Elliot

    Steel, Rt Hon Sir David

    Morris, Rt Hon A. (W'shawe)

    Steinberg, Gerry

    Morris, Rt Hon J. (Aberavon)

    Stott, Roger

    Murphy, Paul

    Straw, Jack

    Nellist, Dave

    Taylor, Mrs Ann (Dewsbury)

    Oakes, Rt Hon Gordon

    Vaz, Keith

    O'Hara, Edward

    Wallace, James

    O'Neill, Martin

    Walley, Joan

    Orme, Rt Hon Stanley

    Wardell, Gareth (Gower)

    Patchett, Terry

    Wareing, Robert N.

    Pike, Peter L.

    Watson, Mike (Glasgow, C)

    Powell, Ray (Ogmore)

    Williams, Rt Hon Alan

    Prescott, John

    Williams, Alan W. (Carm'then)

    Primarolo, Dawn

    Wilson, Brian

    Quin, Ms Joyce

    Winnick, David

    Randall, Stuart

    Wise, Mrs Audrey

    Redmond, Martin

    Worthington, Tony

    Rees, Rt Hon Merlyn

    Wray, Jimmy

    Richardson, Jo

    Young, David (Bolton SE)

    Robertson, George

    Robinson, Geoffrey

    Tellers for the Ayes:

    Robinson, Peter (Belfast E)

    Mr. Ken Eastham and Mr. Jack Thompson.

    Rogers, Allan

    Rooker, Jeff

    NOES

    Adley, Robert

    Browne, John (Winchester)

    Aitken, Jonathan

    Bruce, Ian (Dorset South)

    Alexander, Richard

    Buck, Sir Antony

    Alison, Rt Hon Michael

    Burns, Simon

    Amery, Rt Hon Julian

    Burt, Alistair

    Amess, David

    Butcher, John

    Amos, Alan

    Butler, Chris

    Arbuthnot, James

    Butterfill, John

    Arnold, Jacques (Gravesham)

    Carlisle, Kenneth (Lincoln)

    Arnold, Sir Thomas

    Carrington, Matthew

    Ashby, David

    Carttiss, Michael

    Aspinwall, Jack

    Cash, William

    Baker, Nicholas (Dorset N)

    Chalker, Rt Hon Mrs Lynda

    Baldry, Tony

    Channon, Rt Hon Paul

    Banks, Robert (Harrogate)

    Chapman, Sydney

    Batiste, Spencer

    Chope, Christopher

    Beggs, Roy

    Churchill, Mr

    Bellingham, Henry

    Clark, Dr Michael (Rochford)

    Bendall, Vivian

    Clark, Rt Hon Sir William

    Bennett, Nicholas (Pembroke)

    Conway, Derek

    Benyon, W.

    Coombs, Anthony (Wyre F'rest)

    Biffen, Rt Hon John

    Coombs, Simon (Swindon)

    Blackburn, Dr John G.

    Cope, Rt Hon Sir John

    Blaker, Rt Hon Sir Peter

    Cormack, Patrick

    Body, Sir Richard

    Couchman, James

    Bonsor, Sir Nicholas

    Cran, James

    Boscawen, Hon Robert

    Currie, Mrs Edwina

    Boswell, Tim

    Curry, David

    Bottomley, Peter

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

    Bottomley, Mrs Virginia

    Davis, David (Boothferry)

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

    Day, Stephen

    Bowden, Gerald (Dulwich)

    Dickens, Geoffrey

    Bowis, John

    Dicks, Terry

    Boyson, Rt Hon Dr Sir Rhodes

    Dorrell, Stephen

    Braine, Rt Hon Sir Bernard

    Douglas-Hamilton, Lord James

    Brandon-Bravo, Martin

    Dover, Den

    Brazier, Julian

    Dunn, Bob

    Bright, Graham

    Durant, Sir Anthony

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

    Dykes, Hugh

    670

    Emery, Sir Peter

    Kirkhope, Timothy

    Evans, David (Welwyn Hatf'd)

    Knapman, Roger

    Evennett, David

    Knight, Greg (Derby North)

    Fairbairn, Sir Nicholas

    Knight, Dame Jill (Edgbaston)

    Farr, Sir John

    Knowles, Michael

    Favell, Tony

    Knox, David

    Fenner, Dame Peggy

    Lamont, Rt Hon Norman

    Finsberg, Sir Geoffrey

    Latham, Michael

    Fishburn, John Dudley

    Lawrence, Ivan

    Fookes, Dame Janet

    Lawson, Rt Hon Nigel

    Forsyth, Michael (Stirling)

    Lee, John (Pendle)

    Forsythe, Clifford (Antrim S)

    Leigh, Edward (Gainsbor'gh)

    Forth, Eric

    Lennox-Boyd, Hon Mark

    Fowler, Rt Hon Sir Norman

    Lester, Jim (Broxtowe)

    Fox, Sir Marcus

    Lloyd, Peter (Fareham)

    Franks, Cecil

    Lord, Michael

    Freeman, Roger

    Luce, Rt Hon Sir Richard

    French, Douglas

    Lyell, Rt Hon Sir Nicholas

    Fry, Peter

    McCrindle, Sir Robert

    Gale, Roger

    Macfarlane, Sir Neil

    Gardiner, Sir George

    MacGregor, Rt Hon John

    Gill, Christopher

    MacKay, Andrew (E Berkshire)

    Gilmour, Rt Hon Sir Ian

    Maclean, David

    Glyn, Dr Sir Alan

    McLoughlin, Patrick

    Goodhart, Sir Philip

    McNair-Wilson, Sir Michael

    Goodlad, Alastair

    McNair-Wilson, Sir Patrick

    Goodson-Wickes, Dr Charles

    Madel, David

    Gorman, Mrs Teresa

    Malins, Humfrey

    Gorst, John

    Mans, Keith

    Grant, Sir Anthony (CambsSW)

    Maples, John

    Greenway, Harry (Ealing N)

    Marland, Paul

    Greenway, John (Ryedale)

    Marlow, Tony

    Gregory, Conal

    Marshall, John (Hendon S)

    Griffiths, Sir Eldon (Bury St E')

    Marshall, Sir Michael (Arundel)

    Griffiths, Peter (Portsmouth N)

    Martin, David (Portsmouth S)

    Grist, Ian

    Mates, Michael

    Ground, Patrick

    Maude, Hon Francis

    Hamilton, Rt Hon Archie

    Mawhinney, Dr Brian

    Hamilton, Neil (Tatton)

    Maxwell-Hyslop, Robin

    Hampson, Dr Keith

    Mayhew, Rt Hon Sir Patrick

    Hannam, John

    Mellor, Rt Hon David

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

    Meyer, Sir Anthony

    Hargreaves, Ken (Hyndburn)

    Miller, Sir Hal

    Harris, David

    Mills, Iain

    Haselhurst, Alan

    Miscampbell, Norman

    Hawkins, Christopher

    Mitchell, Andrew (Gedling)

    Hayes, Jerry

    Mitchell, Sir David

    Hayhoe, Rt Hon Sir Barney

    Moate, Roger

    Hayward, Robert

    Molyneaux, Rt Hon James

    Heath, Rt Hon Edward

    Monro, Sir Hector

    Heathcoat-Amory, David

    Montgomery, Sir Fergus

    Heseltine, Rt Hon Michael

    Moore, Rt Hon John

    Hicks, Mrs Maureen (Wolv' NE)

    Morris, M (N'hampton S)

    Hicks, Robert (Cornwall SE)

    Morrison, Sir Charles

    Higgins, Rt Hon Terence L.

    Moss, Malcolm

    Hill, James

    Moynihan, Hon Colin

    Hind, Kenneth

    Mudd, David

    Hogg, Hon Douglas (Gr'th'm)

    Neale, Sir Gerrard

    Hordern, Sir Peter

    Nelson, Anthony

    Howarth, G. (Cannock & B'wd)

    Neubert, Sir Michael

    Howe, Rt Hon Sir Geoffrey

    Newton, Rt Hon Tony

    Howell, Rt Hon David (G'dford)

    Nicholls, Patrick

    Howell, Ralph (North Norfolk)

    Nicholson, David (Taunton)

    Hughes, Robert G. (Harrow W)

    Norris, Steve

    Hunt, Rt Hon David

    Onslow, Rt Hon Cranley

    Hunt, Sir John (Ravensbourne)

    Oppenheim, Phillip

    Hunter, Andrew

    Page, Richard

    Irvine, Michael

    Paice, James

    Jack, Michael

    Parkinson, Rt Hon Cecil

    Janman, Tim

    Patnick, Irvine

    Jessel, Toby

    Patten, Rt Hon Chris (Bath)

    Johnson Smith, Sir Geoffrey

    Patten, Rt Hon John

    Jones, Gwilym (Cardiff N)

    Pattie, Rt Hon Sir Geoffrey

    Jones, Robert B (Herts W)

    Pawsey, James

    Jopling, Rt Hon Michael

    Peacock, Mrs Elizabeth

    Kellett-Bowman, Dame Elaine

    Porter, Barry (Wirral S)

    Key, Robert

    Porter, David (Waveney)

    Kilfedder, James

    Portillo, Michael

    King, Roger (B'ham N'thfield)

    Powell, William (Corby)

    King, Rt Hon Tom (Bridgwater)

    Price, Sir David

    671

    Raffan, Keith

    Taylor, Ian (Esher)

    Raison, Rt Hon Sir Timothy

    Taylor, Sir Teddy

    Rathbone, Tim

    Tebbit, Rt Hon Norman

    Redwood, John

    Temple-Morris, Peter

    Renton, Rt Hon Tim

    Thatcher, Rt Hon Margaret

    Rhodes James, Sir Robert

    Thompson, Patrick (Norwich N)

    Riddick, Graham

    Thorne, Neil

    Ridley, Rt Hon Nicholas

    Thornton, Malcolm

    Ridsdale, Sir Julian

    Thurnham, Peter

    Roe, Mrs Marion

    Townend, John (Bridlington)

    Ross, William (Londonderry E)

    Townsend, Cyril D. (B'heath)

    Rost, Peter

    Tracey, Richard

    Rowe, Andrew

    Tredinnick, David

    Rumbold, Rt Hon Mrs Angela

    Trippier, David

    Ryder, Rt Hon Richard

    Twinn, Dr Ian

    Sackville, Hon Tom

    Vaughan, Sir Gerard

    Sainsbury, Hon Tim

    Viggers, Peter

    Sayeed, Jonathan

    Waldegrave, Rt Hon William

    Shaw, David (Dover)

    Walden, George

    Shaw, Sir Giles (Pudsey)

    Walker, Bill (T'side North)

    Shaw, Sir Michael (Scarb')

    Walters, Sir Dennis

    Shelton, Sir William

    Ward, John

    Shephard, Mrs G. (Norfolk SW)

    Wardle, Charles (Bexhill)

    Shepherd, Colin (Hereford)

    Warren, Kenneth

    Shepherd, Richard (Aldridge)

    Watts, John

    Shersby, Michael

    Wells, Bowen

    Sims, Roger

    Wheeler, Sir John

    Skeet, Sir Trevor

    Whitney, Ray

    Smith, Tim (Beaconsfield)

    Widdecombe, Ann

    Soames, Hon Nicholas

    Wiggin, Jerry

    Speed, Keith

    Wilkinson, John

    Speller, Tony

    Wilshire, David

    Spicer, Sir Jim (Dorset W)

    Winterton, Mrs Ann

    Spicer, Michael (S Worcs)

    Winterton, Nicholas

    Stanbrook, Ivor

    Wolfson, Mark

    Stanley, Rt Hon Sir John

    Wood, Timothy

    Steen, Anthony

    Woodcock, Dr. Mike

    Stern, Michael

    Yeo, Tim

    Stevens, Lewis

    Young, Sir George (Acton)

    Stewart, Allan (Eastwood)

    Younger, Rt Hon George

    Stewart, Rt Hon Sir Ian

    Stokes, Sir John

    Tellers for the Noes:

    Summerson, Hugo

    Mr. David Lightbown and Mr. John M. Taylor.

    Tapsell, Sir Peter

    Question accordingly negatived.
    Amendment proposed, pursuant to Standing Order No. 32 ( Calling of amendments at end of debate), at the end of the Question to add:
    'but humbly regret that the Gracious Speech failed to present any coherent policy to secure for the people of the United Kingdom the full benefits of the economic, monetary and political union of the European Community and furthermore fails to contain any constructive proposal to combat environmental pollution; regret the inadequacy of the educational reforms proposed in the Gracious Speech to provide for higher standards and wider opportunity in the educational system; further regret the inclusion in the Speech of a measure to replace the unjust poll tax with a regressive and administratively cumbersome council tax rather than a more equitable local income tax; and finally regret the absence of any commitment to comprehensive reform of the institutions of government including Parliaments for Scotland and Wales, a Bill of rights and, in particular, in the last Gracious Speech before the general election any proposal to reform the electoral system for local, Westminster and European elections despite the deficiencies in the current system, which distorts the wishes of the people and produces divisive governments supported by only a minority of the electorate.'—[Mr. Beith]
    Question put, That the amendment be made:—
    The House divided: Ayes 19, Noes 320.

    Division No. 3]

    [10.14 pm

    AYES

    Alton, David

    Bellotti, David

    Ashdown, Rt Hon Paddy

    Campbell, Menzies (Fife NE)

    Barnes, Mrs Rosie (Greenwich)

    Carr, Michael

    Beith, A. J.

    Cartwright, John

    672

    Ewing, Mrs Margaret (Moray)

    Michie, Mrs Ray (Arg'I & Bute)

    Fearn, Ronald

    Salmond, Alex

    Howells, Geraint

    Steel, Rt Hon Sir David

    Hughes, Simon (Southwark)

    Johnston, Sir Russell

    Tellers for the Ayes:

    Kennedy, Charles

    Mr. James Wallace and Mr. Archy Kirkwood.

    Livsey, Richard

    Maclennan, Robert

    NOES

    Adley, Robert

    Dicks, Terry

    Aitken, Jonathan

    Dorrell, Stephen

    Alexander, Richard

    Douglas-Hamilton, Lord James

    Alison, Rt Hon Michael

    Dover, Den

    Amery, Rt Hon Julian

    Dunn, Bob

    Amess, David

    Durant, Sir Anthony

    Amos, Alan

    Dykes, Hugh

    Arbuthnot, James

    Emery, Sir Peter

    Arnold, Jacques (Gravesham)

    Evans, David (Welwyn Hatf'd)

    Arnold, Sir Thomas

    Evennett, David

    Ashby, David

    Fairbairn, Sir Nicholas

    Aspinwall, Jack

    Farr, Sir John

    Baker, Nicholas (Dorset N)

    Favell, Tony

    Baldry, Tony

    Fenner, Dame Peggy

    Banks, Robert (Harrogate)

    Finsberg, Sir Geoffrey

    Batiste, Spencer

    Fishburn, John Dudley

    Beggs, Roy

    Fookes, Dame Janet

    Bellingham, Henry

    Forsyth, Michael (Stirling)

    Bendall, Vivian

    Forsythe, Clifford (Antrim S)

    Bennett, Nicholas (Pembroke)

    Forth, Eric

    Benyon, W.

    Fowler, Rt Hon Sir Norman

    Biffen, Rt Hon John

    Fox, Sir Marcus

    Blackburn, Dr John G.

    Franks, Cecil

    Blaker, Rt Hon Sir Peter

    Freeman, Roger

    Body, Sir Richard

    French, Douglas

    Bonsor, Sir Nicholas

    Fry, Peter

    Boscawen, Hon Robert

    Gale, Roger

    Boswell, Tim

    Gardiner, Sir George

    Bottomley, Peter

    Gill, Christopher

    Bottomley, Mrs Virginia

    Gilmour, Rt Hon Sir Ian

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

    Glyn, Dr Sir Alan

    Bowden, Gerald (Dulwich)

    Goodhart, Sir Philip

    Bowis, John

    Goodlad, Alastair

    Boyson, Rt Hon Dr Sir Rhodes

    Goodson-Wickes, Dr Charles

    Braine, Rt Hon Sir Bernard

    Gorman, Mrs Teresa

    Brandon-Bravo, Martin

    Gorst, John

    Brazier, Julian

    Grant, Sir Anthony (CambsSW)

    Bright, Graham

    Greenway, Harry (Ealing N)

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

    Greenway, John (Ryedale)

    Browne, John (Winchester)

    Gregory, Conal

    Bruce, Ian (Dorset South)

    Griffiths, Sir Eldon (Bury St E')

    Buck, Sir Antony

    Griffiths, Peter (Portsmouth N)

    Burns, Simon

    Grist, Ian

    Burt, Alistair

    Ground, Patrick

    Butler, Chris

    Hamilton, Rt Hon Archie

    Butterfill, John

    Hamilton, Neil (Tatton)

    Carlisle, Kenneth (Lincoln)

    Hampson, Dr Keith

    Carrington, Matthew

    Hannam, John

    Carttiss, Michael

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

    Cash, William

    Hargreaves, Ken (Hyndburn)

    Chalker, Rt Hon Mrs Lynda

    Harris, David

    Channon, Rt Hon Paul

    Haselhurst, Alan

    Chapman, Sydney

    Hawkins, Christopher

    Chope, Christopher

    Hayes, Jerry

    Clark, Dr Michael (Rochford)

    Hayhoe, Rt Hon Sir Barney

    Clark, Rt Hon Sir William

    Hayward, Robert

    Conway, Derek

    Heath, Rt Hon Edward

    Coombs, Anthony (Wyre F'rest)

    Heathcoat-Amory, David

    Coombs, Simon (Swindon)

    Heseltine, Rt Hon Michael

    Cope, Rt Hon Sir John

    Hicks, Mrs Maureen (Wolv' NE)

    Cormack, Patrick

    Hicks, Robert (Cornwall SE)

    Couchman, James

    Higgins, Rt Hon Terence L.

    Cran, James

    Hill, James

    Cryer, Bob

    Hind, Kenneth

    Currie, Mrs Edwina

    Hogg, Hon Douglas (Gr'th'm)

    Curry, David

    Hordern, Sir Peter

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

    Howarth, G. (Cannock & B'wd)

    Davis, David (Boothferry)

    Howe, Rt Hon Sir Geoffrey

    Day, Stephen

    Howell, Rt Hon David (G'dford)

    Dickens, Geoffrey

    Howell, Ralph (North Norfolk)

    673

    Hughes, Robert G. (Harrow W)

    Page, Richard

    Hunt, Rt Hon David

    Paice, James

    Hunt, Sir John (Ravensbourne)

    Parkinson, Rt Hon Cecil

    Hunter, Andrew

    Patnick, Irvine

    Irvine, Michael

    Patten, Rt Hon Chris (Bath)

    Jack, Michael

    Patten, Rt Hon John

    Janman, Tim

    Pattie, Rt Hon Sir Geoffrey

    Jessel, Toby

    Pawsey, James

    Jones, Gwilym (Cardiff N)

    Peacock, Mrs Elizabeth

    Jones, Robert B (Herts W)

    Porter, Barry (Wirral S)

    Jopling, Rt Hon Michael

    Porter, David (Waveney)

    Kellett-Bowman, Dame Elaine

    Portillo, Michael

    Key, Robert

    Powell, William (Corby)

    Kilfedder, James

    Price, Sir David

    King, Roger (B'ham N'thfield)

    Raffan, Keith

    King, Rt Hon Tom (Bridgwater)

    Raison, Rt Hon Sir Timothy

    Kirkhope, Timothy

    Rathbone, Tim

    Knapman, Roger

    Redwood, John

    Knight, Greg (Derby North)

    Renton, Rt Hon Tim

    Knight, Dame Jill (Edgbaston)

    Rhodes James, Sir Robert

    Knowles, Michael

    Riddick, Graham

    Knox, David

    Ridley, Rt Hon Nicholas

    Lamont, Rt Hon Norman

    Ridsdale, Sir Julian

    Latham, Michael

    Robinson, Peter (Belfast E)

    Lawrence, Ivan

    Roe, Mrs Marion

    Lawson, Rt Hon Nigel

    Ross, William (Londonderry E)

    Lee, John (Pendle)

    Rost, Peter

    Leigh, Edward (Gainsbor'gh)

    Rowe, Andrew

    Lennox-Boyd, Hon Mark

    Rumbold, Rt Hon Mrs Angela

    Lester, Jim (Broxtowe)

    Ryder, Rt Hon Richard

    Lloyd, Peter (Fareham)

    Sackville, Hon Tom

    Lord, Michael

    Sainsbury, Hon Tim

    Luce, Rt Hon Sir Richard

    Sayeed, Jonathan

    Lyell, Rt Hon Sir Nicholas

    Shaw, David (Dover)

    Macfarlane, Sir Neil

    Shaw, Sir Giles (Pudsey)

    MacGregor, Rt Hon John

    Shaw, Sir Michael (Scarb')

    MacKay, Andrew (E Berkshire)

    Shelton, Sir William

    Maclean, David

    Shephard, Mrs G. (Norfolk SW)

    McLoughlin, Patrick

    Shepherd, Colin (Hereford)

    McNair-Wilson, Sir Michael

    Shepherd, Richard (Aldridge)

    McNair-Wilson, Sir Patrick

    Shersby, Michael

    Madel, David

    Sims, Roger

    Malins, Humfrey

    Skeet, Sir Trevor

    Mans, Keith

    Skinner, Dennis

    Maples, John

    Smith, Tim (Beaconsfield)

    Marland, Paul

    Soames, Hon Nicholas

    Marlow, Tony

    Speed, Keith

    Marshall, John (Hendon S)

    Speller, Tony

    Marshall, Sir Michael (Arundel)

    Spicer, Sir Jim (Dorset W)

    Martin, David (Portsmouth S)

    Spicer, Michael (S Worcs)

    Maude, Hon Francis

    Stanbrook, Ivor

    Mawhinney, Dr Brian

    Stanley, Rt Hon Sir John

    Maxwell-Hyslop, Robin

    Steen, Anthony

    Mayhew, Rt Hon Sir Patrick

    Stern, Michael

    Mellor, Rt Hon David

    Stevens, Lewis

    Meyer, Sir Anthony

    Stewart, Allan (Eastwood)

    Miller, Sir Hal

    Stewart, Andy (Sherwood)

    Mills, Iain

    Stewart, Rt Hon Sir Ian

    Miscampbell, Norman

    Stokes, Sir John

    Mitchell, Andrew (Gedling)

    Summerson, Hugo

    Mitchell, Sir David

    Tapsell, Sir Peter

    Moate, Roger

    Taylor, Ian (Esher)

    Molyneaux, Rt Hon James

    Taylor, Sir Teddy

    Monro, Sir Hector

    Tebbit, Rt Hon Norman

    Montgomery, Sir Fergus

    Temple-Morris, Peter

    Morris, M (N'hampton S)

    Thatcher, Rt Hon Margaret

    Morrison, Sir Charles

    Thompson, Patrick (Norwich N)

    Moss, Malcolm

    Thorne, Neil

    Moynihan, Hon Colin

    Thornton, Malcolm

    Mudd, David

    Thurnham, Peter

    Neale, Sir Gerrard

    Townend, John (Bridlington)

    Nelson, Anthony

    Townsend, Cyril D. (B'heath)

    Neubert, Sir Michael

    Tracey, Richard

    Newton, Rt Hon Tony

    Tredinnick, David

    Nicholls, Patrick

    Trippier, David

    Nicholson, David (Taunton)

    Twinn, Dr Ian

    Norris, Steve

    Vaughan, Sir Gerard

    Onslow, Rt Hon Cranley

    Viggers, Peter

    Oppenheim, Phillip

    Waldegrave, Rt Hon William

    674

    Walden, George

    Wilshire, David

    Walker, Bill (T'side North)

    Winterton, Mrs Ann

    Walters, Sir Dennis

    Winterton, Nicholas

    Ward, John

    Wolfson, Mark

    Wardle, Charles (Bexhill)

    Wood, Timothy

    Warren, Kenneth

    Woodcock, Dr. Mike

    Watts, John

    Yeo, Tim

    Wells, Bowen

    Younger, Rt Hon George

    Wheeler, Sir John

    Whitney, Ray

    Tellers for the Noes:

    Widdecombe, Ann

    Mr. David Lightbown and Mr. John M. Taylor.

    Wiggin, Jerry

    Wilkinson, John

    Question accordingly negatived.
    Main Question put and agreed to.
    Resolved,
    That an humble Address be presented to Her Majesty, as follows:
    Most Gracious Sovereign,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.
    To be presented by Privy Councillors or Members of Her Majesty's Household.
    Mrs. Wise: On a point of order, Mr. Speaker. You will be aware of the special report from the Select Committee on Health which I believe will be automatically referred to the Privileges Committee but which, at the moment, is the property of this House. I am sure that the House, with its customary generosity, would be prepared to listen to a personal statement from the hon. Member for Esher (Mr. Taylor) if he cares to explain how he came to keep quiet about his possession at a crucial time of a confidential Committee paper. I would like——
    Mr. Speaker: Order. Let me make the position absolutely clear to the House. Following a decision of the House in 1986, whenever a Select Committee makes a special report to the effect that its work has been substantially interfered with as a result of premature disclosure of its proceedings, that report automatically stands referred, as the hon. Member for Preston (Mrs. Wise) has said, to the Privileges Committee. The special report from the Select Committee on Health is now therefore in the hands of the Privileges Committee, and it cannot be discussed.
    Mrs. Wise: Further to the point of order, Mr. Speaker.
    Mr. Speaker: Order. No points of order arise from that. That is a ruling.
    Mrs. Wise: With respect, Mr. Speaker, and on a point of order. I was not asking for a debate and I want to make that quite clear. I am asking——
    Mr. Speaker: Order. We cannot discuss it, because the matter is in the hands of the Privileges Committee. We must not prejudice in any way what that Committee is going to do about this matter. Depending on the Privileges Committee's decision, there may well be a debate, and that will be the moment to discuss it.

  Thames Flood Alleviation Scheme
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Wood.]
  10.29 pm
  Mr. Tim Smith rose——
  Several Hon. Members rose——
  Mr. Speaker: Order. We are now on the Adjournment debate. I cannot take any points of order on the previous matter. I have ruled upon it.
  Mr. Smith: I am grateful to have the opportunity to raise the subject of the Maidenhead, Windsor and Eton flood alleviation scheme. I am particularly pleased to see present my hon. Friend the Member for Windsor and Maidenhead (Sir A. Glyn), who obviously has a major interest in this matter.
  The National Rivers Authority has applied for planning permission to build a seven-mile flood alleviation channel to the east of the River Thames. The channel would start just upstream from Bolter's Lock at Maidenhead. It would run through Taplow, crossing the main A4 road between Slough and Maidenhead and the main London to Bristol railway line, through Dorney, crossing the M4 motorway to Eaton Wick. It would run to the north of Eton Wick and the south of Chalvey along the south side of the M4, crossing the main A355 Slough to Windsor road. It would rejoin the River Thames some distance downstream from Eton and Windsor.
  According to the planning application, which is dated January 1991, the estimated overall cost of the scheme is £51 million. I understand that that estimate has now risen to £58 million. I am sure that you will agree, Mr. Speaker, that, by any yardstick, that is a very large amount of taxpayers' money. The NRA should be required to justify that expenditure in a public forum where its arguments can be fully considered and its proponents cross examined. I have great faith in locally-elected planning committees, but I do not believe that they are in a position to scrutinise the NRA's proposals in the comprehensive way that that proposed expenditure clearly warrants. That is why I am today requesting the Secretary of State to call in that planning application so that there can he a full public inquiry at which all the issues can be properly considered.
  According to the NRA, the net present value of the damage that would be caused by flooding, and hence the benefit accruing, has been calculated using a number of variables, and generally lies between £41 million and £69 million. A comparison of the benefit with the cost produces an average benefit-cost ratio of 1·2:1. That figure is recognised as satisfactory by the NRA and is within the limits required by the Ministry of Agriculture, Fisheries and Food. The ratio is produced by comparing the implementation costs of £45 million with the average benefit figure of £55 million.
  A public inquiry would be able to examine those figures in detail. Questions could be asked about the failure of the NRA to include in its cost estimate the sum of £6 million of taxpayers' money that it has already spent promoting the scheme, or it could consider any of the indirect costs arising from the construction of the channel. Neither cost element has been included in the estimate. The NRA simply says that it is not the practice in the industry to assign to any scheme the costs of economic disruption
  676
  during its construction. There will, however, be substantial costs of that kind. All the affected roads which are already very busy at peak times are to be diverted. It is inconceivable that those diversions will not cause traffic delays.
  Then there are the environmental costs. According to the director of planning services of South Buckinghamshire district council, the environmental impact could be severe. He has expressed extreme concern about the nuisance which would be caused during the construction of the bridges to take the channel under the A4, the M4 and the London to Bristol railway line. By the NRA's own admission, noise levels around those areas would be in excess of 75 dB(A).
  Although the NRA has not included indirect costs whether economic or environmental, it has included indirect benefits in its estimate of the total benefits of the scheme. That apparent lack of symmetry could also be challenged at a public inquiry. Questions could be asked about the so-called Maidenhead factor, which relates to the apparently higher level of affluence of the population that is likely to be affected by a flood than elsewhere in the United Kingdom.
  The Maidenhead factor was exemplified by claims that were made after the flood in February 1990. At one property, an indoor swimming pool collapsed because its floor level was below the flood level. The cost was £12,000. At another property, the ground floor swimming pool and a jacuzzi were badly damaged. The cost was £14,000. The residential damages have been multipled by a suitable factor in recognition of the so-called Maidenhead factor. The question for a public inquiry is whether that is a sensible way of calculating the direct benefit.
  Indirect benefit includes matters such as the loss of trading profit incurred by businesses in the area and the effects of traffic disruption and diversions. The cost of traffic delays on the M4 and major roads has been estimated at £1·3 million. More controversially, the NRA claims that the channel will be an environmental asset and will have value in terms of recreation and amenity. A value of £3 million has been used for that purpose. The latest figures presented to the regional flood defence committee on 26 July show a total scheme cost of £58 million and a total net present value of benefits of £56 million, producing a benefit-cost ratio of 0·97. However, the first benefits from the scheme are not attainable for sometime after the start of expenditure. When this phasing is taken into consideration, the benefit-cost ratio falls further to 0·85.
  The National Rivers Authority is, in theory, accountable to Parliament through the Secretary of State for the Environment, but the financial accountability for a scheme such as this falls elsewhere. First, there is the Ministry of Agriculture. If the scheme is to qualify for grant aid, the benefit-cost assessment must show that the present value of all the benefits derived from the scheme exceed the present value of all the costs. This procedure is fine as far as it goes, but it precludes the consideration of alternative schemes which may be more cost-effective and cannot, by definition, provide a public forum in which the cost and benefit figures can be challenged.
  Secondly, there is the regional flood defence committee, whose members will be expected to come up with the lion's share of the cash. That committee has already rubber-stamped the scheme but, to be fair, it is in no position to challenge it. Buckinghamshire county council has to stump up 3·8 per cent. of the cash, but jointly

  677
  appoints a representative to the committee with Bedfordshire and Essex. So Buckinghamshire is in no position to challenge the mighty NRA. Who is? That is the question.
  I know that the National Audit Office has been carrying out a value-for-money study of NRA coast protection schemes. In that connection, it has employed independent consultants to assess the NRA's work, but there has been no independent assessment of this scheme. The NAO did, however, look at it at my request. It concluded:
  "The scheme will probably be marginal on the basis of tangible costs and benefits"
  and
  "Intangible benefits will be critical to the justification of the scheme."
  The NAO also said:
  "The assessment of intangibles is an inexact science and we are sure the Ministry will look closely at these aspects."
  Mr. Peter Bowl was navigation inspector in charge of No. 3 district—Marlow bridge to Staines bridge—from March 1960 to November 1984. He says that there is an alternative to the flood relief scheme, and that is to improve the drainage capacity of the Thames itself by removing obstructions and restrictions to flow which tend to increase river levels, especially when the watercourse is bank full and the weirs fully open.
  Then there is a channel called the "York stream", which runs through Maidenhead. I have some pictures of it here, which I want to show to my hon. Friend. He will see that there is no flow. The York stream is either stagnant or it has dried up completely. Why? If the obstructions and restrictions to flow had been removed and if the York stream had been flowing, I doubt whether any part of Maidenhead would have been flooded in 1990. Yet it is on that flood and the damage to swimming pools and jacuzzis caused by it that the NRA relies so heavily to demonstrate the existence of a so-called Maidenhead factor.
  All these—and many more—are questions for a public inquiry. The planning sub-committee of Buckinghamshire county council, which meets on Monday to consider the scheme, must inevitably confine itself to the planning application before it, and the planning issues arising from it. I should, however, make it clear that the matters to which I have referred are more than sufficient on their own to justify outright rejection. That is also the view of the Dorney and Taplow parish councils and the South Buckinghamshire district council.
  The district council objects to the proposed channel because it involves development in the green belt and within a local landscape area. It would affect the character of the green belt. Its construction would be likely to result in excessive noise emissions, vibrations and generation of dust to the detriment of amenity, and the winning and working of minerals in this location would be contrary to the Buckinghamshire replacement minerals local plan.
  The Dorney and Taplow parish councils naturally share those concerns. In addition, the Dorney council agrees with me that the fundamental question is whether the channel is needed. The council observes that the estimated total cost, including preliminary expenses, has now risen to in excess of £63 million, and that that does not include the costs of disruption during the construction period. The council has also noted the lack of water in the York stream in Maidenhead and questions the adequacy
  678
  of flow in the flood relief channel. On the NRA's own admission, there will be an inadequate flow in one in three years, and no flow at all in one in 10.
  The Taplow council has expressed particular concern about the disruption of the A4 Slough to Maidenhead road that construction of the channel will cause. It points out that, while the planning application lays great emphasis on the disruptive effects of a flood, it attaches less importance to the disruptive effects of building a new river. The parishes of Taplow, Dorney and Burnham, which will also be affected, form a green lung between the suburban sprawl of Slough and Maidenhead. This is fragile landscape to which the threat is one of continuous urban development between the two towns.
  On Monday the scheme will be considered by the planning sub-committee of Buckinghamshire county council. A panel appointed to consider the scheme will recommend to that committee that the planning application should be referred to the Secretary of State. According to the panel, a key piece of information sought is the need for the project. The panel is minded to agree that the application is for a project of immense scale and impact and should be determined only after a far-reaching public inquiry.
  The panel could support such a project contrary to the county structure plan and the south Buckinghamshire local plan only if satisfied on three counts: first, that the need is abundantly clear; secondly, that the way of tackling the flooding problem as set out in the application is undoubtedly the best of all possible alternatives; and thirdly, that a wide variety of outstanding issues are each resolved in the best possible way. These would include access, environmental disturbance and noise, water levels and assured flow for water sweetening and so on.
  In summary, this is a massive infrastructure project on which it is proposed to spend £58 million of taxpayers' money. While there is clearly a potential flooding problem which needs to be addressed, the case for this relief channel has not been made. It is doubtful whether the claimed benefits justify the substantial costs. These are matters which can be determined only by a public inquiry and I hope, therefore, that the Secretary of State will agree to call the planning application in.
  10.43 pm
  Sir Alan Glyn: I agree that all the facts which my hon. Friend the Member for Beaconsfield (Mr. Smith) has said are contained in the 1991 paper are true. However, he and I differ in a fundamental way. In 1947, 1954, 1959, 1974 and 1990—particularly in 1947—the flooding in Maidenhead was extensive. We had to have waders and tractors to go through the streets. The damage done was considerable. We must look for a scheme that will ensure that that does not happen again.
  I agree with my hon. Friend that, if the Berkshire and Buckinghamshire county councils disagreed, the Minister could call the application in if he wished. If the councils did not disagree, he could call it in anyway.
  I agree with my hon. Friend to this extent—a public inquiry may be necessary. It is a large sum of money and it is especially favourable to Maidenhead and not to his constituents, I will give him that.
  My hon. Friend the Member for Beaconsfield has already enlarged upon the facts in the fine document which

  679
  was produced in 1991 and I can only assume that they are correct. The crux of the matter is, how do we prevent a 1947 or 1990 flood occurring again? It is a question of which side of the river you take—the Maidenhead or the Buckinghamshire side. On the Maidenhead side, it would mean considerable expense and demolition of properties—it would be much more expensive. Again I agree with my hon. Friend, if that money is to be expended it might be a good thing if there were a public inquiry.
  I humbly suggest that the two counties should get together. If they cannot agree, there will have to be a public inquiry. If they agree and the Minister thinks that matters should be re-examined, I think that he has the power—correct me if I am wrong—to call them in.
  I suggest that we proceed along those lines and look for the most economic way to alleviate my constituents' problems while not doing too much damage to my hon. Friend's constituents. Unfortunately, Maidenhead has suffered greater damage than Buckinghamshire, and obviously we take the matter much more seriously. If we can proceed along a sensible line and if Buckinghamshire and Berkshire county councils lock their heads together and produce a worthwhile scheme, that is fine. If they cannot agree it will have to go to a public inquiry. In any case it is always up to the Minister.
  As my hon. Friend says, the scheme is expensive. It costs £59 million—it is not tuppence—but I think that it is worthwhile. If the Minister does not consider it worth while, all he has to do is call it in and either have a public inquiry or decide for himself whether it is a good scheme. A public inquiry might be more beneficial because, as my hon. Friend said, it would bring out the details of the scheme.
  We have suffered grave and terrible damage. I can remember going about in waders, with tractors trying to get houses dry. I can remember the damage to furniture and carpets, which was immense in 1974. In 1947, it was even worse. It will happen again, whatever anybody says. It happens roughly every ten years.
  Are we entitled to spend such a sum of money or not? The right thing is for the two counties to get together and to make a joint decision and, if necessary, to have a public inquiry or to leave it to the Minister to call the scheme in if he is not satisfied. I realise that there are several faults in it, which affect my hon. Friend, but on balance it is a good scheme and should be adopted.
  10.49 pm
  Mr. Nigel Spearing: I am grateful to the hon. Member for Beaconsfield (Mr. Smith) for allowing me to intervene briefly in this debate.
  I am a vice-president of the River Thames Society, which is the administrative society for the whole river. Such a scheme would not only affect the constituents of the hon. Member for Beaconsfield and the hon. Member for Windsor and Maidenhead (Sir A. Glyn). If the planning application is persisted with, I support the plea for calling it in, for the reasons given by the hon. Member for Beaconsfield.
  I also declare another non-commercial interest as one of the members of the Thames Traditional Boat Society, which is concerned with the maintenance, preservation and use of the traditional hand-propelled craft of the Thames—dinghies, skiffs, canoes and punts.
  680
  Both hon. Gentlemen explained the balance of public consideration to be taken into account. Two other matters weigh in the direction of a public inquiry. The scheme is one for an imaginatively landscaped, artificial but natural-looking, additional channel to parallel the Thames. That brings in the matter of recreational use—angling or, perhaps, boating. The present scheme excludes boats propelled by oar, pole and paddle. There is the matter of future planning and the effect on structural plans for the area. Most important, although hitherto unmentioned, are the possible effects of flooding or otherwise downstream of the flood relief area. If water is moved more quickly from one area, what are the effects downstream?
  Those are wide-ranging and sometimes technical matters. Even if the two counties agree, this should be a matter for a call-in. Therefore, I am pleased to support this plea.
  10.50 pm
  The Parliamentary Under-Secretary of State for the Environment (Mr. Tim Yeo): I pay tribute to my hon. Friend the Member for Beaconsfield (Mr. Smith), who is always an eloquent champion of his constituents' interests. He is also a noted expert on financial matters, and tonight he has given the House a clear explanation of complex proposals. I have no doubt that his opinion will carry great weight.
  We have also heard from my hon. Friend the Member for Windsor and Maidenhead (Sir A. Glyn), who has unparalleled knowledge of the history of the area and the occasions when floods have affected it. I am grateful, too, for the comments of the hon. Member for Newham, South (Mr. Spearing).
  The Maidenhead, Windsor and Eton areas have been subject to flooding from the River Thames for generations. The floods of 1947 were the worst on record, when 2,000 homes were flooded. Since then, considerable development has taken place, and a similar flood today would affect no fewer than 5,500 houses.
  The scheme proposed by the National Rivers Authority is designed to prevent flooding caused by a repeat of the 1947 event. A flood on that scale is probable once every 56 years. If it happened again today, 5,500 properties would be affected, of which 260 are in Buckinghamshire, in the parishes of Dorney and Taplow. There are also about 180 properties in the flood plain in Buckinghamshire, and others in Berkshire with either floor levels above the flood level or even on dry land islands that would be completely surrounded by flood water. It is also likely that power and water supplies would be disrupted. A repeat of the 1947 flood across a wide area on the River Thames would cause chaos to those properties and to all communications. Roads in and out of Buckinghamshire would be flooded and telephone lines severely disrupted.
  The National Rivers Authority has been preparing proposals to deal with this for six years. The solution involves the construction of a flood relief channel seven miles in length between Taplow and Eton on the border between Buckinghamshire and Berkshire. The NRA is paying particular attention to the environmental aspects. It has made an environment assessment, and its proposals are designed to enhance the environmental interest of the area.

  681
  The width of the channel to be provided would normally be 30 m, but in places would exceed 100 m. The construction of that channel will require the excavation of a very large quantity of sand and gravel. It will take about four years to complete, and is expected to coincide closely with the widening of the M4 and M25 motorways. It is clear that there will be considerable disruption locally during construction.
  The planning applications were initially made to the three district councils directly affected. Because of the scale of the proposals, and because they would result in the excavation of large quantities of gravel, it has been agreed that the application would be dealt with by the two county councils. They are supported by a very detailed environmental assessment.
  In preparing the scheme, the NRA consulted extensively with the local authorities and other bodies, local residents and landowners. About 25 requests for a public inquiry have been received, and Buckinghamshire county council has received about 200 letters objecting to it. Consultations on the scheme have been carried out by Berkshire county council. South Buckinghamshire district council has objected on a number of grounds. The proposals for constructing the channel have also been found to conflict with proposals being prepared for widening the M4. Discussions are taking place among the Department of Transport, the NRA and the two county councils to reconcile the two proposals. In the meantime, the two county councils have deferred consideration of the proposals, and the Department of Transport has lodged a formal objection to the National Rivers Authority's compulsory purchase order.
  The compulsory purchase order falls to MAFF to confirm under section 151 of the Water Act 1989. There have been 43 objections to the compulsory purchase order and although a number have been resolved, a substantial number are still outstanding. If the NRA cannot resolve them, it will be for MAFF to hold an inquiry under section 13 of the Acquisition of Land Act 1981. However, any final decision on holding an inquiry for the compulsory purchase order can be made only if planning consent for the scheme is given. This is initially a matter for the two county councils. At present, they are not in accord over whether the proposals are a departure from the development plan, and I understand that Buckinghamshire expects to refer the application to the Secretary of State.
  As my hon. Friend the Member for Beaconsfield pointed out, the scheme is a major one, expected to cost about £60 million and to take four years to construct. The options for it are limited by the geography of the Thames valley, where the flood risk occurs, and existing development. Most of the problem being addressed is in Berkshire, but a large part of the solution is proposed in Buckinghamshire, in my hon. Friend's constituency. There would undoubtedly be major disruption for people living in that area during the construction period. My hon. Friend is right to raise those issues and to seek to be satisfied that the proposals are properly examined and fully justified.
  It is open to my right hon. Friend the Secretary of State for the Environment to call in these applications for his own decision. He has not yet come to a conclusion on that.
  682
  My hon. Friend will appreciate that, as the proposals could come before my right hon. Friend either through the exercise of that power or, should the county councils refuse the application the National Rivers Authority, it would not be appropriate to comment on the merits of the proposals.
  In coming to a conclusion on whether these proposals should be called in for his determination, my right hon. Friend will consider the proposals in terms of whether they raise issues of national or regional significance or give rise to substantial controversy. He will need to decide whether the planning issues raised by the proposals are of a sufficient scale to warrant the cost and delays which a public inquiry would entail.
  The county councils are concerned with whether the proposals are consistent with their structure plans, which provide the framework for development in the area. They must also take into account any other material considerations. A very large amount of gravel would be excavated to form the channel. They need to be assured that the options for flood relief have been fully explored and that this is the most effective means and produces the minimum amount of damage to the environment.
  It is not the task of the county councils to assess the cost benefit of the scheme in detail. The National Rivers Authority is accountable to my right hon. Friend the Minister of Agriculture, Fisheries and Food in respect of its flood relief functions. The costs and benefits of the scheme are being looked at closely by the regional flood defence committee and the Ministry of Agriculture, Fisheries and Food. My hon. Friend will know that the National Audit Office has in its programme for the current financial year an examination of flood and coast protection programmes. There can be no more thorough scrutiny than that of the National Audit Office, save of course that of the Public Accounts Committee, of which my hon. Friend is a distinguished member.
  I understand that 15 per cent. of the cost of the scheme may be eligible for grant by my right hon. Friend the Minister of Agriculture, Fisheries and Food. The remainder would be found by the NRA. The cost of the flood defence activity of the Thames region of the NRA is funded by a levy on the county councils and London boroughs in the whole of that region. The cost of flood defence in the current financial year works out at just over £5 per community charge payer in the Thames region. Out of a total levy income of £43 million for flood defence, the levy on Buckinghamshire comes to £1·67 million—about 4 per cent. of the total. Buckinghamshire would be expected to contribute a similar proportion to the relevant costs of the scheme.
  The benefits would accrue to everyone who would suffer the effects of flooding. There are those whose properties would be directly affected, others who might be isolated by the floods, and others who could be affected indirectly through disruption to transport and communications.
  Most of the benefits would go to people and properties in Berkshire. The local residents of Buckinghamshire would suffer disruption from construction for about four years. I appreciate the point of view of those who argue that the development in Berkshire, which has exacerbated the scale of the problem, should not have been allowed. It is open to the local planning authorities to include in their development plans such policies as they consider appropriate. I understand that both county structure plans

  683
  and the local plans for Slough borough council, the royal borough of Windsor and Maidenhead and South Bucks district all contain policies that restrict or presume against development in areas liable to flooding.
  These are very large proposals, addressing a difficult problem. The issues that they raise are complex, and procedurally they affect the responsibilities of a large number of bodies, both in Government and outside it. I assure my hon. Friend that we are looking carefully at how best to take this forward. It could be that the best way forward, taking into account all the interests, including those of the residents, would be a joint public inquiry. We need to be satisfied that the cost and delays that would be
  684
  involved in such a course are justified both to resolve this matter and to provide the assurance that all the issues have been fully examined.
  We expect to come to a conclusion on that in the next few weeks. In the interim, as an earnest of the importance that we attach to this matter, my Department has today issued article 14 directions to prevent the county councils from granting permission for the applications for the time being. I will let my hon. Friend know the decision when we have made it.
  Question put and agreed to.
  Adjourned accordingly at one minute to Eleven o'clock.

ENVIRONMENT

  Drought Orders
  Mr. Simon Hughes
  To ask the Secretary of State for the Environment how many drought orders his Department has granted in each year since 1979; and how many of these involved varying the conditions of abstraction.

  Mr. Baldry
  The Secretary of State for the Environment has made the following numbers of drought orders:

  Numbers

  1980

  2

  1981

  nil

  1982

  13

  1983

  5

  1984

  92

  1985

  nil

  1986

  nil

  1987

  nil

  1988

  1

  1989

  74

  1990

  65

  11991

  24

  1 To date.

  Most of these involve a temporary variation in the conditions governing the abstraction of water, but only a detailed review of all 276 statutory instruments could give a precise figure: this would involve disproportionate effort.

  Refugees
  Mr. Harry Greenway
  To ask the Secretary of State for the Environment if he has any plans to assist local authorities with the cost of housing refugees; and if he will make a statement.

  Sir George Young
  The cost of housing refugees and other commitments are taken into account in authorities' housing investment programme allocations.

  The Asylum Bill, which was published on 1 November, contains measures which will modify the duties on local authorities and ease housing pressures.

  Council Housing (Unauthorised Occupation)
  Mr. Cartwright
  To ask the Secretary of State for the Environment what evidence he has received about the extent of unauthorised occupation of local authority housing in Greater London; and what action he plans to take.

  Mr. Yeo
  Investigations into levels of unauthorised occupation are being undertaken by a number of London authorities, and my Department is taking a close interest in the findings as they emerge. The Government have taken a number of steps which encourage the reduction of unauthorised occupation. These include the financial 186
  discipline of the ring-fenced housing revenue account, t he incentive in HRA subsidy rules to minimise voids, and the requirement to publish performance indicators. My Department is also funding research which will provide authorities with models of good practice to prevent such activity in the first place. The primary responsibility for tackling the problem must rest, however, with the owners and managers of the housing—the local authorities themselves.

  Council Housing
  Mr. Speller
  To ask the Secretary of State for the Environment if he will authorise district councils to use funds accumulated from the sale of property to build houses and flats for sale or rent to the local community.

  Mr. Yeo
  Our general policy is to encourage the private sector, including housing associations, rather than local authorities to be the providers of new houses and flats. Local authorities are free to use 25 per cent. of the receipts from the sale of council dwellings to assist this process in various ways, including sponsoring housing association developments.

  Animals and Birds (Imports)
  Mr. Gale
  To ask the Secretary of State for the Environment (1) what action he intends to take, following the advice of the Joint Nature Conservation Committee, to reduce the number of ports of entry through which live animals and birds may enter the United Kingdom;

  (2) what action he intends to take in the light of recent advice from the Joint Nature Conservation Committee to introduce a levy on the import of wild birds and animals.

  Mr. Baldry
  The Joint Nature Conservation Committee's report on the wildlife trade makes a number of wide-ranging recommendations, including those concerning a levy and further restrictions on ports of entry. Because these are not issues which affect the United Kingdom alone, we have drawn the report to the attention of the European Commission and urged it to propose stricter controls throughout the European Community. We expect the Commission to publish proposals for a new regulation on the wildlife trade very soon. In subsequent discussions we shall take full account of the committee's advice.

  Water Quality
  Mr. Squire
  To ask the Secretary of State for the Environment when he expects to issue guidance to local authorities on the planning considerations associated with the water companies' investment to improve the quality of bathing and drinking water; and if he will make a statement.

  Mr. Yeo
  My right hon. Friends the Secretary of State and the Secretary of State for Wales have today published Circular 17/91—Department of the Environment—and Circular 62/91—Welsh Office. This gives guidance on the planning implications for local authorities of substantial investment by the water industry to improve the quality of bathing waters, to find alternative disposal means for sewage sludge at present disposed of at sea, and to improve the quality of drinking water.

  The circular stresses the strict deadlines for improving the quality of bathing and drinking waters, and emphasises

  187
  local planning authorities' responsibility to work with the water industry to find suitable sites for sewage treatment works and to handle planning applications without delay. It also reminds authorities of the need to allocate sites for sewage treatment works, where appropriate, when preparing or reviewing development plans. And it advises water companies to consider the need for environmental assessment of their proposals at the earliest possible stage.

  Homelessness
  Mr. Fearn
  To ask the Secretary of State for the Environment what initiatives his Department has taken over the last six months to reduce the number of homeless people.

  Sir George Young
  [holding answer 6 November 1991]: On 5 June I announced that selected housing associations would be invited to bid for grants to run pilot schemes as managing agents for private owners, to encourage landlords to let their empty properties to homeless people. The first homes made available through this initiative were let in October. Also in October I announced a new scheme to bring empty flats over shops back into use. Local authorities will shortly be invited to bid for a share of the £25 million to be made available. Accommodation created through this initiative will help to relieve homelessness pressures in many hard-pressed urban areas.

  Under the Department's new initiative with the Council of Mortgage Lenders, announced on 5 November, repossessed properties will be passed to housing associations for temporary letting to homeless families nominated by local authorities. This will bring empty properties back into use, provide homes for families, restore confidence in the market and help mortgage lenders.

  These initiatives are additional to our £300 million homelessness allocation to local authorities and housing associations in London and the south-east, which will provide 16,000 permanent homes for homeless families. Work is also progressing on the Department's £96 million initiative to combat rough sleeping in central London. A total of 489 additional hostel places, 530 places in housing leased from private owners and 250 places in permanent housing have been made available this year for rough sleepers. By the end of 1993–94, the total of additional permanent housing generated by this initiative will reach 1,800 places.

  West Country (Development Restrictions)
  Mr. Steen
  To ask the Secretary of State for the Environment if he will list the towns and villages in Somerset, Dorset, Devon and Cornwall, at which the National Rivers Authority has asked for development restrictions; and if he will make a statement as to the reason for those restrictions.

  Mr. Trippier
  [holding answer 6 November 1991]: This detailed information is not held by the Department. We shall be in touch with the National Rivers Authority and I shall write to my hon. Friend.

TRANSPORT

  Antares
  Mrs. Ray Michie
  To ask the Secretary of State for Transport whether the inspector's inquiry into the sinking of the Antares from Carradale has been completed; how much time is required under the Merchant Shipping (Accident Investigation) Regulations for consideration of the report; when the Secretary of State expects to publish the report; and if he will make a statement.

  Mr. McLoughlin
  The marine accident investigation branch inquiry is complete; the inspector has submitted his findings and recommendations to the chief inspector of marine accidents who is now preparing his report for submission to the Secretary of State for Transport. Before the chief inspector's report can be published, he is required by regulation 9 of the Merchant Shipping (Accident Investigation) Regulations 1989 to give persons whose reputations are likely to be adversely affected, time to consider the text and further time to provide alternative text if agreement cannot be reached. The duration of both prescribed periods are 28 days but experience has shown that the whole consultation period is likely to take a minimum of three months.

  In the light of these facts, and with the additional period being required for the printing of the final report, publication is not expected before April 1992.

  Transport Police, Scotland
  Mr. Wilson
  To ask the Secretary of State for Transport what was the total number of British Transport Police officers on Scotland's railways for each of the last five years.

  Mr. McLoughlin
  The information is as follows:

  Year

  Number of BTP officers

  1986

  177

  1987

  176

  1988

  172

  1989

  175

  1990

  191

  Mr. Wilson
  To ask the Secretary of State for Transport what was the cost to British Rail of funding the British Transport police in Scotland for each of the last five years, expressed in constant terms.

  Mr. McLoughlin
  I do not have the information in the form requested but the British Transport police have been able to supply costs at 1989–90 prices for the following years:

  Year

  Cost

  (£000s)

  1990–91

  5,192

  1989–90

  5,241

  Disused Railway Lines
  Mr. Wilson
  To ask the Secretary of State for Transport of which disused railway lines in Scotland, British Rail still owns,(a) the land and (b) the track bed.

  Mr. McLoughlin
  I do not have the information in the form requested. British Rail owns some 155 miles of
  189
  disused railway in Scotland which in general comprise a large number of short isolated stretches of which only a very small proportion contains the trackbed.

  Rail Line, Cowlairs
  Mr. Wilson
  To ask the Secretary of State for Transport if the railway inspectorate has given approval to the proposed single-line chord at Cowlairs to join the main Glasgow Queen street line with the line to Cumbernauld; and if he will make a statement.

  Mr. McLoughlin
  The Health and Safety Executive's railway inspectorate gave provisional approval to the single line chord on 29 August 1991. This would enable British Rail to install and bring the new line into use pending an inspection. The works started in September on a new bridge, but work cannot commence on the track and signalling alterations until the bridge is finished, in February 1992. The inspectorate will discuss with BR what amendments may be needed to the scheme in the light of this forthcoming inquiry into the Newton accident.

  Buses, Wakefield
  Mr. Hinchliffe
  To ask the Secretary of State for Transport how many bus companies operate within the Wakefield district; and what is the proportion of tendered bus routes within the district operated by each of these companies.

  Mr. McLoughlin
  Information about the number of bus companies operating within the Wakefield district could be produced only at disproportionate cost. Information about tendered bus routes within the district is a matter for the West Yorkshire passenger transport executive.

  Rail Electrification
  Mr. Wilson
  To ask the Secretary of State for Transport what is the proportion of(a) Scotland's and (b) the whole of Britain's network which is electrified.

  Mr. Freeman
  As at 31 March 1991, British Rail had some 1,705 route miles in Scotland, of which some 23 per cent. were electrified or in the process of being electrified by projects approved or under construction. BR had 10,305 route miles in Great Britain, 30 per cent of which were or will be electrified.

  Tendered Bus Services
  Mr. Hinchliffe
  To ask the Secretary of State for Transport what is the total public subsidy granted to private companies operating tendered services within west Yorkshire.

  Mr. McLoughlin
  Subsidies for tendered bus services are a matter for the West Yorkshire passenger transport authority and executive. The executive has budgeted for expenditure of £15·1 million on tendered bus services including school services in 1991–92.

  Harbour Revision Orders
  Ms. Walley
  To ask the Secretary of State for Transport how many harbour revision orders have been applied for since 3 August 1988; and if he will give details of the environmental assessment.
  190
  Mr. McLoughlin
  The Department has received 35 applications for harbour revision orders since 3 August 1988, two of which were subsequently withdrawn. Of the remainder, only three involved the authorisationof specific works projects and all three fell within annex II to Council directive 85/337/EEC. In one of these cases—Harwich, Parkeston Quay—the Secretary of State decided after consultation that an environmental assessment was required. The environmental impact statement prepared by the applicant is still being considered, together with representations on the order.

  Motor Vehicles
  Ms. Walley
  To ask the Secretary of State for Transport (1) whether he supports the CO standards proposed in the draft EC directive on technical inspection of motor vehicles;

  (2) whether he intends the 3·5 per cent. CO standard in the draft EC directive to be extended to roadside spot checks;

  (3) what steps he proposes to take to encourage agreement on the draft EC directive on technical inspection of motor vehicles;

  (4) what information he has regarding the exhaust emission standards proposed in the draft EC directive on technical inspection of motor vehicles.

  Mr. Chope
  I refer the hon. Member to the explanatory memorandum on the Commission proposal (7753/91, COM(91) 244), dated 23 September. The in-service CO testing standard proposed by the Commission is 3·5 per cent. for modern conventional petrol-engined cars and light goods vehicles, which is also the current EC prescribed design limit for new engines.

  The 4·5 per cent. CO standard which has just been introduced into the MOT test is based on the EC type approval limit, including the 1 per cent. manufacturing tolerance allowed for engines coming off the production line. That standard is realistic for vehicles in service, and brings about a significant reduction in pollution caused by excessive emissions from badly tuned engines. We shall be monitoring the results of emission-checking very closely to help us to make a more informed judgment on the merits of the proposal from the Commission, on which discussion in the EC has not yet started.

  The 4·5 per cent. standard applies to petrol-engined cars and light goods vehicles first used after 1 August 1983, and compliance can be enforced at roadside spot checks. There are no immediate plans to apply different standards, but the longer-term intention is to tighten standards further.

  Smokemeters
  Ms. Walley
  To ask the Secretary of State for Transport what steps he is taking to develop accurate smoke testing protocols for vehicle testing; if this will apply to roadside spot checks; what assessment he has made of the Bosch smokemeter and Lucas Hartridge diesel exhaust smokemeter for this purpose; and if he will make a statement.

  Mr. Chope
  The Government are planning to introduce an instrumented smoke check into the annual roadworthiness test of heavy vehicles next summer. This will replace the current visual check for excessive smoke. Research is currently in progress to help determine the best form of
  191
  instrumentation and the best method of testing which can also be used for roadside checking. The two instruments to which the hon. Member refers are among those being considered.

  Heathrow Airport
  Mr. Pawsey
  To ask the Secretary of State for Transport what plans he has to improve directional signing at Heathrow airport particularly to the motorways.

  Mr. McLoughlin
  Directional signing within the airport boundary is the responsibility of Heathrow Airport Limited, and is kept under review by the airport. If my hon. Friend has specific comments on signing at Heathrow, he might want to put them to the airport.

  South London Line
  Mr. Gerald Bowden
  To ask the Secretary of State for Transport what information he has from British Rail on the safety implications of the cab design fault on the class 456 two-coach trains which do not meet operational requirements for service on the south London line; what action British Rail is taking to rectify the problems; and when the new trains are expected to enter service.

  Mr. Freeman
  It is imperative that drivers of driver-only-operated trains have a clear and unobstructed view of the TV monitors, or other visual aids, on station platforms. The driver's cab window on class 456 trains was too small for this equipment to be seen clearly from the driving position. The driver's seat was therefore modified to slide sideways to give an acceptable view of the platform equipment. Class 456 trains entered service on 30 September.

  Mr. Gerald Bowden
  To ask the Secretary of State for Transport what temporary speed restrictions there are in force on the south London line to the west of Brixton for safety reasons; and when restrictions are expected to be lifted.

  Mr. Freeman
  Due to the installation of a new junction, a temporary speed restriction has been imposed in the Voltaire road area pending the completion of further track relaying work. The usual line speed of 45 mph has been reduced to 20 mph for a distance of approximately 220 yards. The restriction is expected to be in place until next spring. Also in the vicinity, there is a speed limit of 10 mph in connection with bridge renewal which will operate until 22 November.

  A1079 (Market Weighton Exit)
  Mr. Hinchliffe
  To ask the Secretary of State for Transport for what reason his Department has authorised the reopening of the direct exit from Market Weighton on to the Beverley stretch of the A 1079; and what representations he has received concerning this matter.

  Mr. Chope
  The authorisation for a junction with the A1079 at the eastern end of the Market Weighton bypass is contained in the original orders for the scheme. Before the junction is open to traffic its layout will be improved. Written representations have been received from two members of the public in support of the opening of the junction.

  M1 (Lane Closures)
  Mr. Hinchliffe
  To ask the Secretary of State for Transport if he will review the closure of lanes in the MI between junctions 41 and 43 to allow better traffic flow during the current resurfacing works.

  Mr. Chope
  No. The arrangements were carefully designed to maintain traffic flow in the area and allow work to proceed and, generally, have worked well.

  Mr. Hinchliffe
  To ask the Secretary of State for Transport what arrangements have been made to allow continued traffic flow during the current resurfacing work on the M1 motorway in West Yorkshire between junctions 41 and 43; and if he will make a statement.

  Mr. Chope
  The work on the M1 between junctions 41 and 43 is being carried out in three separate lengths to minimise delays and disruption overall and especially the effect on the important M1/M62 interchange at Lofthouse.

  Tidal flow traffic management is in operation on the M1 to provide a minimum of two lanes for the dominant peak hour flows. In the morning this is northbound towards Leeds and in the afternoon southbound towards Wakefield.

  Closed-circuit television and recovery vehicles on permanent duty ensure that incidents are indentified and cleared quickly to keep traffic moving.

  Road and Rail Investment
  Mr. Sumberg
  To ask the Secretary of State for Transport when he intends to publish the technical report

  by his Department on the methodology for appraising investments in road and rail schemes.

  Mr. Freeman
  I am pleased to say that the report is being published today and I am placing copies in the Library. Further copies are available from the Department's publications sales unit, Building 1, Victoria road, South Ruislip, HA4 ON2, at a price including postage of £2·75.

ATTORNEY-GENERAL

  Mortgage Foreclosures
  Mr. Harry Barnes
  To ask the Attorney-General what is the latest available annual figure for mortgage foreclosures in Northern Ireland.

  The Attorney-General
  In 1990, a total of 2,599 originating summonses for the collection of mortgage arrears were issued in the Chancery Division of the High Court for Northern Ireland. The total figure for all mortgage foreclosures in Northern Ireland is not collected centrally. It is not therefore possible to give figures for possession orders granted, cases where suspended possession orders were made, and those cases which did not proceed after the originating summons was issued.

  Commonhold
  Mr. Soley
  To ask the Attorney-General when he intends to bring forward legislation on commonhold.

  The Attorney-General
  The Government will introduce legislation on commonhold and related matters as soon as parliamentary time for it can be found.

ENERGY

  Coal Industry Bill
  Mr. Dobson
  To ask the Secretary of State for Energy what consultations he had with representatives of(a) miners and (b) underground supervisory staff when preparing the Coal Industry Bill.

  Mr. Wakeham
  My Department consulted British Coal.

  Mines Safety
  Mr. Dobson
  To ask the Secretary of State for Energy when he last consulted representatives of miners or underground supervisory staff on mines safety.

  Mr. Wakeham
  Safety in mines is the responsibility of the Health and Safety Commission and Executive which regularly consult representative organisations.

  Mr. Dobson
  To ask the Secretary of State for Energy to what factors he attributes the safety record of mines owned by the British Coal Corporation.

  Mr. Wakeham
  I pay tribute to the management and work force of the corporation for their impressive achievements in improving safety in recent years.

  Mr. Dobson
  To ask the Secretary of State for Energy when he last discussed mines safety with the Health and Safety Commission and Health and Safety Executive respectively.

  Mr. Wakeham
  My Department maintains close contact with the Health and Safety Executive.

  Mr. Dobson
  To ask the Secretary of State for Energy what representations he has received over the last three years about the number of hours which can be worked underground in coal mines.

  Mr. Wakeham
  There have been discussions between my officials and British Coal about the number of hours worked by mineworkers.

  Electricity Supply
  Mr. Dobson
  To ask the Secretary of State for Energy how many representations he has received about the charges being levied by electricity companies to connect electricity from(a) renewable sources or (b) combined heat and power projects to the electricity distribution system.

  Mr. Wakeham
  Connection charges are a matter for the parties concerned. Any dispute on the provision of a supply of electricity, including connection charges, may be referred by either party to the Director General of Electricity Supply for determination.

  Publicity
  Mr. Dobson
  To ask the Secretary of State for Energy whether he will place an up-to-date copy of the note for guidance on Government publicity and advertising in the Library.

  Mr. Wakeham
  I assume that the hon. Gentleman is referring to the conventions on Government publicity and advertising.
  194
  As I said in my reply to my hon. Friend, the Member for Wanstead and Woodford (Mr. Arbuthnot), on 28 June 1990, at column 311, a copy has already been placed in the Libraries of both Houses.

  Mr. Dobson
  To ask the Secretary of State for Energy which company has been retained for the energy and environment publicity campaign.

  Mr. Wakeham
  I refer the hon. Member to the answer I gave him on 5 November, at column 67.

  Mr. Dobson
  To ask the Secretary of State for Energy how many copies of the annual report of the ministerial group on energy efficiency have been distributed; and what percentage of them were distributed to the news media.

  Mr. Wakeham
  Virtually 2,000 copies of the report have been distributed to date. Further copies will be distributed at exhibitions in coming months. Just over 4 per cent. are being distributed to news media.

  Mr. Dobson
  To ask the Secretary of State for Energy which companies were invited to tender for the energy and environment publicity campaign; and how many submitted tenders.

  Mr. Wakeham
  A number of qualified organisations were invited to tender for the advertising element of the publicity campaign, and a separate group of qualified organisations to tender for the promotional element. All the companies invited made presentations in response, and the appointments were made on the basis of competitive tendering.

  Mr. Dobson
  To ask the Secretary of State for Energy what is the reason for the rise in the estimated cost of the energy and environment publicity campaign.

  Mr. Wakeham
  Further resources are being made available for this new campaign in order to increase still further its effectiveness and impact. The scale of the resources now available demonstrates the Government's commitment to the campaign.

  British Coal
  Mr. Dobson
  To ask the Secretary of State for Energy (1) which organisations submitted tenders for the appointment as accounting advisers on the privatisation of British Coal;

  (2) which organisations submitted tenders for the appointment as financial advisers on the privatisation of British Coal;

  (3) which organisations were invited to tender for the appointment as accounting advisers on the privatisation of British Coal;

  (4) which organisations were invited to tender for the appointment as financial advisers on the privatisation of British Coal.

  Mr. Wakeham
  A number of qualified organisations were invited to tender for the positions of accounting and financial advisers in respect of the privatisation of British Coal. The appointments were made on the basis of competitive tendering.

  Mr. Dobson
  To ask the Secretary of State for Energy if he will place in the Library the first and second interim reports on coal privatisation prepared for him by Rothschilds.
  195
  Mr. Wakeham
  No. The Government will come forward with detailed proposals on coal privatisation in due course.

  Power Companies (Shareholdings)
  Mr. Dobson
  To ask the Secretary of State for Energy what proportion of shares in National Power and PowerGen, respectively, are owned by foreign shareholders.

  Mr. Wakeham
  Details of the current share registers are a matter for the companies and their registrars. I am advised, however, that it is not possible to identify shareholdings registered here and overseas according to the nationality of their beneficial owners.

  Mining
  Mr. Dobson
  To ask the Secretary of State for Energy (1) what is the total of underground workers in coal mines owned(a) by British Coal and (b) others, in the current year and at the end of the two preceding years;

  (2) what is the total underground work force in private licensed mines.

  Mr. Wakeham
  I refer the hon. Member to British Coal's annual report and accounts and its annual reports on the licensed sector, copies of which are in the Library of the House.

  Mr. Dobson
  To ask the Secretary of State for Energy what is the total work force involved in opencast mining.

  Mr. Wakeham
  The Department does not keep details of the number of people involved in opencast mining.

  "The Government Information Officer"
  Mr. Dobson
  To ask the Secretary of State for Energy if he will place in the Library the current edition of the official booklet "The Government Information Officer".

  Mr. Wakeham
  I have today placed in the Library the current edition of the official booklet "The Government Information Officer" which has been in use since 1980.

  Trade Figures
  Mr. Dobson
  To ask the Secretary of State for Energy if he will list the changes made since October 1989 in the way fuel trade figures have been(a) collected, (b) analysed or (c) presented.

  Mr. Wakeham
  Fuel trade data are collected by Her Majesty's Customs and Excise and there have been no changes in the method of collection since October 1989. The data are published each month in "Overseas Trade Statistics".

  The Central Statistical Office—CSO—uses the trade data collected by Customs and Excise to compile the balance of payments. The CSO make various adjustments to "Overseas Trade Statistics". From 1989 onwards these have included an estimate for any direct exports of crude oil from offshore fields reported late to Customs and Excise.

  The trade data collected by Customs and Excise record import values on a "c.i.f basis"—including insurance and freight—and export values on an "f.o.b basis"—free on
  196
  board. This is a standard convention used both in the United Kingdom and internationally. The CSO, in compiling the balance of payments, put imports and exports on a comparable basis—that is, both imports and exports are recorded on an f.o.b basis. Again this is an internationally accepted convention. Import data are therefore available on both a c.i.f basis and f.o.b basis and this has not been changed since October 1989. The data are published by the CSO each month in the balance of payments press notice.

  The Department of Energy reproduces fuel trade data in the annual "Digest of United Kingdom Energy Statistics" and the monthly statistical bulletin "Energy Trends". Prior to 1991 data on imports and exports of fuels by quantity were expressed in tonnes of coal, from 1991 onwards data are expressed in tonnes of oil. Also prior to 1991 these two publications included data on imports only on a c.i.f basis; they now, in addition, include imports data on an f.o.b basis. This follows the convention used by the CSO and means that data on the values of imports and exports are available on a similar basis.

  EC Energy Council
  Mr. Andy Stewart
  To ask the Secretary of State for Energy if he will make a statement about the meeting of the Energy Council of the European Community Ministers on 29 October.

  Mr. Wakeham
  The Council, which was attended by the Parliamentary Under-Secretary of State for Energy, my hon. Friend the Member for Wells (Mr. Heathcoat-Amory), adopted the SAVE decision, which provides for improved co-ordination of work on promoting energy efficiency in the Community. A draft directive to harmonise energy efficiency requirements for new gas or liquid fired central heating boilers was agreed in principle; the United Kingdom secured the inclusion of cost-effective standards appropriate to the particular circumstances of its domestic heating market.

  The Commission explained the approach it proposed to take towards opening up, and increasing competition in, the gas and electricity markets. The Commission's objectives are supported in principle by the United Kingdom, which is in the lead on progress towards liberalising these markets. No decision was reached by the Council, but the way was paved for the Commission to enter into bilateral discussions with the member states.

  The Commission was invited to present revised proposals on oil crisis measures and to adjust its mandate for Community accession to the International Energy Agency.

  The Council held a detailed discussion on the Commission's communication on energy and the environment. There was widespread scepticism about unilateral Community action and most member states raised serious practical difficulties which remain to be addressed in connection with a carbon-energy tax.

  The Commission presented a report on the progress of the European Energy Charter for the creation of market-based energy co-operation in western, central and eastern Europe, the USSR and beyond.

WALES

  Gower Peninsula (Beaches)
  Mr. Barry Jones
  To ask the Secretary of State for Wales what initiatives he will take to ensure that beaches on the Gower peninsula will meet minimum bathing water quality standards; and if he will make a statement.

  Mr. Nicholas Bennett
  In 1990 all seven of the Gower peninsula's identified bathing waters met the mandatory standards for total and faecal coliforms set in the EC bathing waters directive—the standards by which the United Kingdom Government, and the EC, assesses compliance. As part of the investment programme agreed with Dwr Cymru to improve Welsh bathing waters, a sewage treatment works and a long sea outfall are to be built to serve Swansea. This £50 million investment will further improve the quality of all the waters in the area.

  River Quality
  Mr. Barry Jones
  To ask the Secretary of State for Wales what action he will take to ensure that current river stretches in Wales found to be of bad quality are improved; and if he will make a statement.

  Mr. Nicholas Bennett
  The 1985 river quality survey indicated that only 0·6 per cent.—about 17 miles—of rivers in the National Rivers Authority Welsh region's area were placed in class 4—bad quality. The investment programmes agreed with Dwr Cymru; recent initiatives such as those to reduce pollution from farms; and the planned setting of statutory water quality objectives under the Water Act 1989 will result in further improvements to river quality.

  Conwy Road Tunnel
  Mr. Wigley
  To ask the Secretary of State for Wales if he will make a statement on the problems experienced with the Conwy road tunnel on the A55 road since its opening; what is the estimated cost of overcoming the problems; and what guarantee the contractors have given that there will be no recurrence of this problem.

  Mr. David Hunt
  The tunnel is equipped with failsafe safety systems and TV surveillance cameras which monitor all aspects of its operation.

  All systems are linked to the control computers and video display screens in the nearby tunnel monitoring building which is manned 24 hours a day.

  On 1 November a safety system installed to warn of a possible fire hazard or fuel spillage resulting from a traffic accident in the tunnel activated.

  The video screens clearly showed tunnel maintenance staff that an accident had not occurred. In order to ascertain the cause of the false alarm entry to the westbound bore was necessary The investigation which required the closure of this bore for about two hours established that a heat/gas detection sensor was defective.

  Systems were tested during the commissioning period prior to the tunnel being opened to traffic, but it Is not unusual for minor problems to develop during the early period of operation once equipment is in permanent use.

  The cost of replacing any defective electrical components will be met by the contractor responsible for their installation.
  198
  There can, of course, be no guarantee that individual electrical components will never fail, which is why the systems installed to ensure the safety of the travelling public are failsafe.

  Empty Industrial Premises
  Mr. Barry Jones
  To ask the Secretary of State for Wales what measures he proposes to enable empty industrial premises to be occupied.

  Mr. David Hunt
  The Welsh Development Agency, the Development Board for Rural Wales and the Welsh Office continue to work actively to attract the maximum amount possible of inward investment and to encourage indigenous Welsh companies to grow and prosper.

  Mr. Barry Jones
  To ask the Secretary of State for Wales how many industrial units stand empty in each of the industrial estate locations in each county in Wales.

  Mr. David Hunt
  This information is not collected centrally by the Welsh Office. Information is, however, available on those units owned by the Welsh Development Agency and the Development Board for Rural Wales. The number of units vacant at the end of October 1991 were 438 and 120 respectively, representing vacancy rates of 12·5 per cent. and 17·4 per cent.

  Mr. Barry Jones
  To ask the Secretary of State for Wales what discussions he proposes to hold with(a) the Welsh Development Agency and (b) Mid-Wales Development to take measures to attract occupants for empty industrial premises; and if he will make a statement.

  Mr. David Hunt
  I have regular discussions with the chairmen of the Welsh Development Agency and the Development Board for Rural Wales about a wide range of issues concerning the development of the Welsh economy.

  Local Government Finance
  Mr. Gwilym Jones
  To ask the Secretary of State for Wales if he has any plans to commute specific loan charge grants to local authorities.

  Mr. David Hunt
  We will commute specific loan charge grants for housing and urban programme expenditure in Wales on 1 October 1992. My Department will pay a lump sum equivalent to the present value of future grants for each local authority to the Public Works Loan Board or to the local authority itself if any authorities have insufficient Public Works Loan Board debt, though such payments are expected to be small. Annual loan charge grants will then cease. As the commuted sums will repay local authority debt, cancelling out the loss of annual grant, the effect on local authority resources will be neutral. The effect on general Government expenditure will be negligible, because virtually all the transfer payments involved are within general Government spending. Similarly, the effect on the central Government borrowing requirement, the public sector borrowing requirement and monetary aggregates will be negligible, since virtually all the commuted sums will return to the Public Works Loan Board. Within the public sector borrowing requirement, central Government borrowing on its own account will be increased and the local authority borrowing requirement will be reduced by the amount of debt repayment. There is
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  no effect on the planning total. The various transfer payments involved have been taken into account in my right hon. Friend the Chancellor of the Exchequer's autumn statement.

TRADE AND INDUSTRY

  Car Prices
  Mr. Warren
  To ask the Secretary of State for Trade and Industry what action he is proposing to take in relation to the findings of the Monopolies and Mergers Commission's review of United Kingdom car prices; and if he will make a statement.

  Mr. Redwood
  The MMC's report on the supply of new cars is currently being considered by my right hon. Friend the Secretary of State for Trade and Industry. The report will be published as soon as is practicable.

  The contents of all MMC reports remain confidential until publication. If the MMC finds no adverse effects the Secretary of State has no power to act. If the MMC has reached any adverse findings he will decide what steps, if any, should be taken to remedy the situation. He will also consider whether to announce a period of consultation before reaching his conclusions.

  BA Engine Maintenance Plant
  Mr. Morgan
  To ask the Secretary of State for Trade and Industry on what date the reference was made to the Office of Fair Trading concerning the sale of British Airways engine maintenance plant at Nantgarw, South Wales to General Electric of America; and on what date he expects to receive the report from the Director General of Fair Trading.

  Mr. Redwood
  The Office of Fair Trading was first informed of the proposed acquisition by General Electric of the British Airways engine overhaul business on 3 September. I understand that the office's inquiries are nearing completion. We therefore expect to receive the advice of the Director General of Fair Trading in the near future.

  Apparel, Knitting and Textiles Alliance
  Mrs. Ann Winterton
  To ask the Secretary of State for Trade and Industry what representations he has received from the Apparel, Knitting and Textiles Alliance about current EC negotiations with Poland, Hungary and Czechoslovakia; and if he will make a statement.

  Mr. Sainsbury
  My Department has kept in close touch with the Apparel, Knitting and Textiles Alliance as these negotiations have proceeded. The AKT last wrote to me about them on 21 September.

  Office of Telecommunications
  Mr. David Porter
  To ask the Secretary of State for Trade and Industry whether any changes will be made to the Office of Telecommunications' cash limit and running cost limit for 1991–92.

  Mr. Lilley
  Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for class IV vote 9, Office of Telecommunications, will be increased 200
  by £618,000 from £6,757,000 to £7,375,000. The running cost limit for the Office of Telecommunications will be increased by £254,000 from £6,037,000 to £6,291,000.

  End-year flexibility entitlement of £341,000 on capital expenditure announced by the Chief Secretary to the Treasury on 17 July at columns 186–90, has been fully taken up. A £254,000 additional running cost provision is required for increased pay and associated other running costs mainly for 11 extra staff for new work stemming from the duopoly review. A £24,000 extra provision is required for the associated accruing superannuation liability charge. These increases are partly offset by an increase in appropriations in aid of £1,000.

  The increase is within the forecast outturn for the planning total included in the Chancellor's autumn statement yesterday.

  ECGD
  Mr. David Porter
  To ask the Secretary of State for Trade and Industry whether any changes will be made to the Export Credits Guarantee Department's cash limit and running cost limit for 1991–92.

  Mr. Lilley
  Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for class IV vote 4—Export Credits Guarantee Department: administration—will be increased by £2,880,000 from £37,200,000 to £40,080,000 and the running cost limit by £4,257,000 from £30,221,000 to £34,478,000.

  The ECGD's running costs are not included in the planning total.

  The increase is necessary to meet additional costs which have arisen because of the later than expected date for the privatisation of the short-term credit insurance operation. The necessary legislation in the form of the Export and Investment Guarantees Act received Royal Assent on 22 October 1991.

  House of Fraser
  Mr. Alex Carlile
  To ask the Secretary of State for Trade and Industry when he expects the takeover panel to conclude its inquiries into possible breaches of the takeover code in relation to the takeover of House of Fraser; and if he will make a statement.

  Mr. Redwood
  [holding answer 6 November 1991]: This is a matter for the takeover panel. I am not responsible for the manner or duration of any inquiry which it carries out as the competent authority for takeover regulation.

PRIME MINISTER

  Correspondence
  Mr. Winnick
  To ask the Prime Minister if he will list the Departments which no longer ensure that a ministerial reply is sent to letters from hon. Members; and if he will ensure that letters from hon. Members receive a ministerial reply.

  Mr. MacGregor
  I have been asked to reply.
  There has been no change in the existing practice.

  Cabinet Office (Costs)
  Mr. Robert G. Hughes
  To ask the Prime Minister if there are any proposals to change the 1991–92 cash limit or running costs limit for the Cabinet Office: other services vote.

  Mr. Dunn
  To ask the Prime Minister if there are any proposals to change the 1991–92 cash limit or running costs limit for the Cabinet Office: other services vote.

  Mr. MacGregor
  I have been asked to reply. Subject to parliamentary approval of the necessary supplementary estimate, the cash limit for the Cabinet Office: other services—class XIX, vote 2—will be increased by £850,000 from £24,814,000 to £25,664,000. At the same time the running costs limit will be increased by £806,000 from £21,656,000 to £22,462,000. This reflects the setting up of the citizens charter unit within the Cabinet Office which will be responsible for seeing that the citizens charter programme of initiatives, which my right hon. Friend announced to the House on 22 July 1991 at column 765, is implemented and developed. The increase is within the forecast outturn for the planning total included in the Chancellor's autumn statement yesterday.

  Engagements
  Mr. Harry Greenway
  To ask the Prime Minister if he will list his official engagements for 7 November.

  Mr. MacGregor
  I have been asked to reply. This morning my right hon. Friend the Prime Minister had a bilateral with President Bush in Rome. He is currently attending the NATO summit now under way there. That summit will set the future course for NATO to ensure that it remains, as it has been, a bedrock of stability in a still uncertain world.

EDUCATION AND SCIENCE

  University Students
  Mr. John D. Taylor
  To ask the Secretary of State for Education and Science how many undergraduates from non-EC countries were attending universities in each of the past five years.

  Mr. Alan Howarth
  The information is given in the table.

  Great Britain—Full-time undergraduate students—All years

  Year

  Total Non-EC students

  1986

  17,277

  1987

  18,301

  1988

  19,098

  1989

  20,370

  1990

  21,174

  Source: Universities Statistical Record

  Science Budget
  Mr. Wigley
  To ask the Secretary of State for Education and Science what proportion of his science budget is spent in Wales, Scotland and England, respectively.

  Mr. Alan Howarth
  In 1989–90, the latest year for which figures are available, the proportions were 2·9, 7·9 and 77·9 per cent. respectively.
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  Mr. Bowis
  To ask the Secretary of State for Education and Science what guidance he has given the advisory board for the research councils in seeking its advice on the allocation of the science budget in 1992–93 to 1994–95; and if he will make a statement.

  Mr. Kenneth Clarke
  I have written to Sir David Phillips inviting the board's advice. The following is the text of my letter:

  Sir David Phillips KBE FRS

  Chairman of the Advisory Board for the Research Councils

  PROVISION FOR SCIENCE: 1992–93 TO 1994–95

  I was grateful for the Board's advice for this year's Public Expenditure Survey on the resource needs of the Research Councils, the Royal Society and the Fellowship of Engineering.

  I am pleased to tell you that the Government has decided that it is right to make a significant increase in the provision for Science, and that it is desirable to provide a planning framework for future years which provides a rising profile. In reaching these conclusions the Government has been heavily influenced by the array of evidence presented by the ABRC in the preparation for this year's survey.

  DES provision for science comprises receipts from European Community programmes which go direct to the Research Councils, and the balance which is the sum I distribute on the advice of the ABRC, known as the "science budget". The latter (net of the dual support transfer) has been increased by £29 million to £1,002·0 million in 1992–93, by £50 million to £1,056·1 million in 1993–94, and by £85 million to £1,116·3 million in 1994–95. I have summarised in the annexed table the additions and adjustments made to the total provision for science at the start of the Survey from which I arrive at these science budget figures.

  Next year's science budget is 2·5 per cent. higher in real terms than this year's. The figures for 1993–94 and 1994–95 are, respectively, 4 per cent. and 7 per cent. higher in real terms than in 1991–92. I am particularly pleased that the settlement produces this rising expenditure profile which gives the Board and the bodies funded from the science budget a sound basis for the forward planning and management of their basic and strategic research programmes.

  I would like to give some fuller explanations of the adjustments shown in the annexed table.

  Supercomputing

  You will see that the science budget for the next three years includes further adjustments of £0·185 million in 1992–93, £0·165 million in 1993–94, and £0·180 million in 1994–95 to support 80 per cent. of the supercomputing service.

  Dual Support

  At this time last year I announced my decision that there should be a change in the dual support boundary from 1 August 1992. Our public expenditure plans were adjusted to take account of the best estimate we could then make of the associated costs. I made clear in my letter of 8 November 1990 that these figures would be revised if that was proved necessary by the further work I was commissioning.

  In my further letter to you of 29 July, I accepted that further adjustments had indeed been shown to be necessary by the joint study undertaken by the Research Councils and the CVCP. I also announced the transitional arrangements which would apply to grants already in payment on 1 August 1992. I said that we would take account of the further adjustment and of the transitional arrangements in our public expenditure plans for 1992–93 and later years.

  The following sums have now been added to the science budget to provide for the full costs to the Research Councils and the Royal Society of the responsibilities to be transferred:

  £ million

  1992–93

  48

  1993–94

  125

  1994–95

  154

  203
  These figures represent the total additions to the Science Budget on this account, ie they replace the adjustments announced at this time last year. They take account of the transitional arrangements announced in my July letter.

  I have also made clear that the shift in the boundary of responsibilities should not lead to any change in the volume of research which Research Councils sponsor in higher education institutions. I will be looking for clear evidence that the sums transferred are being used by the Councils for the purpose for which they are intended. I should be grateful for the Board's assistance in achieving this objective.

  I should now be grateful for the Board's advice on the appropriate distribution of these sums between the funded bodies.

  Computing costs

  The further work undertaken earlier in the year did not resolve the question of how central computing costs should be treated. The CVCP have since conducted some further analysis, in consultation with the Research Councils, indentifying options for handling these costs. The CVCP argued that these costs should remain with the institutions because the move towards distributed computing systems means that they would be most appropriately treated with other forms of communications systems as part of general

  Des Science Provision 1991–92 to 1994–95

  £ million

  1991–92

  1992–93

  1993–94

  1994–95

  Previous plans

  Science provision

  927·1

  1,030·2

  1,122·8

  plus increase announced in June 1991

  +7·0

  less revised EC receipts estimates

  -2·6

  -3·0

  transfer to IPSR1

  -0·6

  -0·6

  Survey baseline

  934·1

  1,027·1

  1,109·1

  1,136·9

  New plans

  Survey increase

  +29·0

  +50·0

  +85·0

  Supercomputing adjustment

  +0·2

  +0·2

  +0·2

  Dual support transfers:

  from higher education

  -2·6

  +23·5

  +49·6

  from Dept. of Education, Northern Ireland

  +0·6

  +1·5

  +1·9

  New science provision

  1,054·3

  1,184·3

  1,273·5

  Science budget

  New science provision

  1,054·3

  1,184·3

  1,273·5

  Less EC receipts

  -4·2

  -3·2

  -3·3

  Science budget (ie sums distributed on advice of ABRC)

  1,050·0

  1,181·1

  1,270·3

  of which: dual support transfer from higher education funding

  -48·0

  -125·0

  -154·0

  Science budget net of dual support

  1,002·0

  1,056·1

  1,116·3

  Notes:

  Totals are based on unrounded figures and may not always equal the sum of the components.

  1 The funding of the Institute of Plant Science Research (IPSR) is now provided from the receipts from the sale for the Plant Breeding Institute.

  Mature Students
  Mr. Bowls
  To ask the Secretary of State for Education and Science what is the basis for assessing maintenance needs of mature students(a) on higher education courses and (b) on further education courses, when such students are eligible for grants; and if he will consider extending the student loan system to mature students in the further education sector.

  Mr. Alan Howarth
  Mandatory grants are payable for full-time and sandwich courses leading to a first degree or
  204
  premises costs. Your letter of 8 October preferred a further transfer to the Research Councils to allow them to cover these costs as part of the percentage addition to the direct staffing costs of research projects.

  I have considered this issue carefully, and have decided that for the time being these costs should remain with the institutions. I noted the evidence that there is considerable diversity in the provision of computing services, with a tendency away from the main frame computing towards distributed systems. I would, however, like this particular issue to be looked at again in two years time as part of the first review of the percentage addition for indirect costs.

  Next Steps

  Although I am making no earmarked allocations this year, and will be grateful to receive the Board's advice on the allocation of the increased resources, I shall be looking to the scientific community to use the resources generally in accordance with the priorities that were identified in the evidence put to me earlier in the public spending round.

  Since science funding is a matter of considerable Parliamentary and public interest, I propose to follow precedent by publishing the text of this letter in the form of a Parliamentary Answer.

  a comparable qualification, to the HND and DipHE, and for courses of initial teacher training including part-time courses. Under the Education (Mandatory Awards) Regulations a student who is at least 25 before his course begins is treated as "independent" and no parental contribution is expected towards his maintenance. A student who is at least 26 at the beginning of his course and who, in the three immediately preceding years, had income of at least £12,000 is eligible to receive the older student's allowance of up to £935 a year. Various other allowances in respect of spouses and dependants are available to all students depending upon their personal circumstances.
  205
  The resources of the student, and, where applicable, of his spouse and dependants are taken into account in the calculation of the maintenance grant payable.

  For most courses not attracting a mandatory award, including further education courses, local education authorities have the power to make discretionary awards. It is for each authority to decide its own policies on the courses for which it will offer awards and on the amounts payable. Arrangements for mature students differ among the various postgraduate award schemes.

  We have no plans to extend the student loans scheme to further education students.

  Further Education
  Mr. Bowis
  To ask the Secretary of State for Education and Science when he intends to establish a further education council to prepare for the funding and guidance of further education colleges as they move to corporate status; when and how he intends to appoint the chief officers of such a council; and what timetable he proposes for its early operation.

  Mr. Alan Howarth
  Subject to the passage of the Further and Higher Education Bill introduced on 4 November, my right hon. and learned Friend intends to establish the Further Education Funding Council as soon as possible. The Bill provides for the appointment of the chairman and the chief executive by my right hon. and learned Friend. The Department will be preparing the ground for the Council by collecting information it will need, and carrying out programmes to help ensure that the colleges are ready for their new role.

  Student Grants
  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science what monitoring he undertakes of the time taken to make mandatory award payments to students.

  Mr. Alan Howarth
  My Department does not directly monitor the time taken by individual local education authorities to assess and pay mandatory awards to more than 500,000 students. We are investigating reports of delays in certain authorities, to ensure that they are taking whatever action is necessary to comply with their statutory duties in the interests of students.

  Mr. Andrew Smith
  To ask the Secretary of State for Education and Science if he will meet representatives of the local authority associations to discuss how the payment of student grants may be expedited.

  Mr. Alan Howarth
  My Department is in regular contact with the local authority associations on student grant matters. Improvements have already been made in 1990 and 1991 in the grant arrangements to help expedite payments. We have taken actions with individual authorities reported to be facing delays. All authorities have power to make provisional payments to students, pending completion of grant assessments. We will continue to keep the position under review.

  GCSE
  Mr. Chris Smith
  To ask the Secretary of State for Education and Science if he will list the consultations entered into with(a) parents, (b) teachers and (c) local
  206
  education authorities prior to his announcement of a reduction in the percentage of coursework in GCSE assessment.

  Mr. Fallon
  I would refer the hon. Member to the answer given to the hon. Member for Leeds, Central (Mr. Fatchett) on 21 October,Official Report, column 362.

  Schools Assessment Results
  Mr. Pawsey
  To ask the Secretary of State for Education and Science when he intends to publish the national results of the 1991 assessments of seven-year-olds; and whether he will also publish the results in each local education authority in England.

  Mr. Kenneth Clarke
  I intend to publish both the aggregate national results and the aggregate results in each local education authority in England, as soon as outstanding information has been sent to the Department by local education authorities. The public is entitled to accurate national and local information about the 1991 assessments of seven-year-olds under the national curriculum. The results will provide for the first time both a national picture of the attainments of this age group in the core subjects of English, mathematics and science and a baseline against which to measure progress.

  Cot Deaths
  Mr. Austin Mitchell
  To ask the Secretary of State for Health how much money the Government have put into cot death research in the last 20 years.

  Mr. Alan Howarth
  I have been asked to reply.

  The Medical Research Council, which receives its grant in aid through the Department of Education and Science, is the main Government agency for the funding of medical research. The MRC generally decides the research to support with the funds available to it. The table gives its expenditure on research into sudden infant death syndrome and respiratory distress syndrome for the financial years since 1979–80. Data on earlier years are not available, nor is there central information on relevant publicly funded research which may be undertaken by medical schools, university departments, the health Departments and the health authorities. We also welcome the contribution made in this field by medical research charities.

  £ thousands

  1979–80

  79

  1980–81

  134

  1981–82

  208

  1982–83

  207

  1983–84

  244

  1984–85

  242

  1985–86

  283

  1986–87

  476

  1987–88

  405

  1988–89

  434

  1989–90

  297

  1990–91

  798

NATIONAL FINANCE

  Income Tax
  Mr. Grylls
  To ask the Chancellor of the Exchequer if he will estimate what the reduction in the income tax revenue would be for 1992–93 on a full-year basis and assuming no behavioural changes(a) if there were no higher rate of income tax for individuals and (b) if there were no additional rate for trusts.

  Mr. Maude
  The costs in a full year at 1992–93 levels of income are estimated to be(a) £5·1 billion and (b) £30 million. These estimates are based on a comparison with 1991–92 tax rates and an illustrative indexation of personal allowances and the basic rate limit by 4 per cent.

  No account is taken of possible behavioural changes or of any effect on receipts of capital gains tax.

  Government Deficits
  Mr. Siliars
  To ask the Chancellor of the Exchequer if he will list those member states of the European Community whose actual government deficit exceeded 3 per cent. of gross domestic product in each of the past five years; and how many in the current financial year plan a deficit of a higher level.

  Mr. Maples
  Data and forecasts of Government deficits of member states are published by the European Commission in "European Economy", supplement A,May 1991.

  House Prices
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer whether he will publish a table showing the real increase in (i) house prices and (ii) average earnings in the United Kingdom: and in each of the six founder members of the EC between 1961 and 1973; 1973 and 1987 and 1987 to date: and if he will include an estimate of the amount of consumer debt in each case divided between housing and other goods and services.

  Mr. Maples
  Data for real average earnings growth are published by the OECD in "Historical Statistics 1960–1990". There is no central source of regularly collected data for house prices, or for consumer debt divided between housing and other goods and services.

  Import Penetration
  Mr. Austin Mitchell
  To ask the Chancellor of the Exchequer why no figures for import penetration overall and by industry have been published in the "Monthly Digest" since June 1989; and if he will publish a provisional estimate of the figures for December 1989 and December 1990.

  Mr. Maples
  Import penetration figures published in the latest "Monthly Digest of Statistics", September 1991, table 15.10, are the most up to date available. As a result of recommendations in the 1989 review of Department of Trade and Industry statistics, which considered the arrangements for collection of economic statistics by DTI and the burdens placed on businesses, quarterly sales data for most manufacturing industries, which are used in the calculation of this ratio, are no longer collected. Data for 208
  1989 and 1990 are therefore not available. A footnote was added to the table earlier this year, to inform readers of the reason for the absence of new data.

  Fraudulent Tax Claims
  Mr. Allen
  To ask the Chancellor of the Exchequer how many individuals were the subject of(a) civil penalties as provided in the Taxes Act and (b) other prosecutions for fraudulent tax claims over the last five years.

  Mr. Maude
  The numbers of individuals taxpayers and partnerships subject to civil penalties as provided in the Taxes Acts during the last two years were as follows:

  Number

  1989–90

  36,642

  1990–91

  34,327

  Comparable figures for earlier years are not available.

  The numbers of successful prosecutions for false accounts or returns of income, and false claims to personal allowances, deductions for expenses or repayments, during the last five years, were as follows:

  Number

  1986–87

  20

  1987–88

  15

  1988–89

  12

  1989–90

  14

  1990–91

  14

  Vocational Training (Tax Relief)
  Mr. Bowis
  To ask the Chancellor of the Exchequer how he intends to ensure that further education colleges will not lose financially as a result of the administration and cash flow costs of operating the system of tax relief for vocational training on behalf of the Inland Revenue.

  Mr. Maude
  The Government's aim in providing that the new tax relief for vocational training should be given at source is to ensure that it will be available to trainees as quickly and as widely as possible. The Government accept that administering the relief will mean some extra work for training organisations. Additional costs will be offset to the extent that the relief encourages more people to train, hence generating more income.

  The intention is, however, that the additional cost should be kept to a minimum and to that end the Inland Revenue is currently considering a number of important improvements to the original proposals in the light of responses to their recent consultative paper. The arrangements will be published in regulations later this year.

  Mr. Bowls
  To ask the Chancellor of the Exchequer whether tax relief for vocational training applies(a) to payments made by an individual for his or her training, (b) to payments made by a parent or other person or organisation on behalf of an individual for his or her training and (c) to payments made by an individual for his or her training but paid to the individual by a parent or other person or organisation.

  Mr. Maude
  Tax relief for vocational training will apply to payments made by individuals in connection with their
  209
  own training. This will include the situation where an individual pays for the training out of funds provided by another person or organisation, but not where that other person or organisation makes the payment directly on behalf of the individual.

  Non-North Sea GDP
  Mrs. Beckett
  To ask the Chancellor of the Exchequer if he will publish(a) the index number for non-North sea GDP, both annually and quarterly, back to 1970, and (b) an explanation of the methodology and component series which go to make up the series; and if he will ensure that the index on non-North sea, gross domestic product is included in the CSO database.

  Mr. Maples
  [holding answer 5 November 1991]: The information requested is given in the table. The series is derived by removing from the output estimate of gross domestic product—GDP(O)—the appropriately weighted contribution from "Extraction of mineral oil and natural gas"—class 13 of the 1980 Standard Industrial Classification. The weights reflect the importance of class 13 activity during various periods for which data are assembled on a given price base. On the final part of the question, the CSO is arranging for the quarterly seasonally adjusted series of GDP(O) less extraction of mineral oil and natural gas to be included on their database.

  GDP(O) less oil and gas extraction1

  Index 1985 = 100, seasonally adjusted

  Quarterly

  1970 Q1

  80·1

  1970 Q2

  80·8

  1970 Q3

  81·2

  1970 Q4

  81·3

  1971 Q1

  81·5

  1971 Q2

  82·2

  1971 Q3

  82·5

  1971 Q4

  83·3

  1972 Q1

  82·4

  1972 Q2

  85·4

  1972 Q3

  85·9

  1972 Q4

  87·7

  1973 Q1

  90·6

  1973 Q2

  90·4

  1973 Q3

  90·9

  1973 Q4

  90·8

  1974 Q1

  88·1

  1974 Q2

  90·8

  1974 Q3

  91·0

  1974 Q4

  89·6

  1975 Q1

  89·7

  1975 Q2

  88·8

  1975 Q3

  88·1

  1975 Q4

  87·7

  1976 Q1

  89·8

  1976 Q2

  89·6

  1976 Q3

  89·4

  1976 Q4

  91·3

  1977 Q1

  91·6

  1977 Q2

  91·0

  1977 Q3

  91·6

  1977 Q4

  92·1

  1978 Q1

  92·8

  1978 Q2

  94·4

  1978 Q3

  95·1

  210

  Quarterly

  1978 Q4

  94·9

  1979 Q1

  94·0

  1979 Q2

  97·4

  1979 Q3

  95·9

  1979 Q4

  96·7

  1980 Ql

  95·7

  1980 Q2

  94·0

  1980 Q3

  92·4

  1980 Q4

  90·4

  1981 Q1

  90·8

  1981 Q2

  90·6

  1981 Q3

  91·4

  1981 Q4

  91·3

  1982 Q1

  91·6

  1982 Q2

  91·7

  1982 Q3

  92·1

  1982 Q4

  92·3

  1983 Q1

  93·4

  1983 Q2

  93·7

  1983 Q3

  94·5

  1983 Q4

  95·6

  1984 Q1

  96·6

  1984 Q2

  96·2

  1984 Q3

  96·4

  1984 Q4

  97·2

  1985 Q1

  98·7

  1985 Q2

  100·3

  1985 Q3

  100·4

  1985 Q4

  100·6

  1986 Q1

  101·3

  1986 Q2

  102·9

  1986 Q3

  104·1

  1986 Q4

  105·5

  1987 Q1

  106·0

  1987 Q2

  107·9

  1987 Q3

  110·0

  1987 Q4

  110·9

  1988 Q1

  112·2

  1988 Q2

  113·2

  1988 Q3

  115·2

  1988 Q4

  116·3

  1989 Q1

  117·6

  1989 Q2

  118·0

  1989 Q3

  118·2

  1989 Q4

  118·6

  1990 Q1

  119·5

  1990 Q2

  120·0

  1990 Q3

  119·4

  1990 Q4

  117·9

  1991 Q1

  116·6

  1991 Q2

  116·2

  Annual

  1970

  80·9

  1971

  82·4

  1972

  85·4

  1973

  90·7

  1974

  89·9

  1975

  88·6

  1976

  90·0

  1977

  91·6

  1978

  94·3

  1979

  96·0

  1980

  93·1

  211

  Annual

  1981

  91·0

  1982

  91·9

  1983

  94·3

  1984

  96·6

  1985

  100·0

  1986

  103·5

  1987

  108·7

  1988

  114·2

  1989

  118·1

  1990

  119·2

  1Class 13 of the 1980 SIC.

  Publicity
  Mr. Dobson
  To ask the Chancellor of the Exchequer if he will give separate figures for the spending by(a) the Central Office of Information, (b) Her Majesty's Treasury, (c) the Department of National Savings, (d) Customs and Excise, (e) the Inland Revenue and (f) Her Majesty's Stationery Office on (i) television advertising, (ii) radio advertising, (iii) newspaper advertising and (iv) other promotional material in 1979–80 and in each following year; and what are his latest estimates for 1991–92 and budgets for 1992–93.

  Mrs. Gillian Shephard
  [holding answer on 5 November 1991]: The expenditure by these departments on advertising and other promotional material is as follows:

  For expenditure by the Central Office of Information, I would refer the hon. Gentleman to the reply given by the Economic Secretary on 30 April 1991 at columns 144–45. The actual costs for 1990–91 were as follows: £51,360,000 on television advertising; £1,640,000 on radio advertising; £38,170,000 on press advertising; and £33,500,000 on other promotional material. The forecast for 1991–92 is as follows: £34,500,000 on television advertising; £1,000,000 on radio advertising; £32,600,000 on press advertising; and £34,200,000 on other promotional material.

  Detailed decisions on estimated expenditure on advertising through the COI on behalf of other Government Departments for 1992–93 are for departmental Ministers.

  For Her Majesty's Treasury, the expenditure for 1988–89 was £49,310, that for 1989–90 was £52,486, and that for 1990–91 was £43,581, none of which was on television or radio advertising. The latest estimate for 1991–92 is £84,193 none of which is likely to be spent on television or radio advertising. The advertising budget for 1992–93 has not yet been set. Comparable figures for earlier years are unavailable because of machinery of government changes and could be given only at disproportionate cost.

  Her Majesty's Treasury is also running the advertising campaign in connection with the BT share offer, which began on 1 October 1991. This includes television, press and poster advertising. It is planned to end just before the close of the offer, which is on 4 December. The costs of the BT sale, including total marketing costs, will be reported to Parliament after the sale, in the normal way.

  For expenditure by the Department of National Savings I would refer the hon. Gentleman to the reply given by the Economic Secretary on 8 May 1991, at column 458. The forecast for 1991–92 is now £6·1 million for television advertising and £2·9 million for press advertising, with the other figures unchanged. The advertising budget for 1992–93 has not yet been set.
  212
  Her Majesty's Customs and Excise have not used television, radio or newspaper advertising for promotional purposes. The available information on other promotional material is as follows: £21,000 in 1984–85; £29,000 in 1985–86; £28,000 in 1986–87; £29,000 in 1987–88; £47,000 in 1988–89; £31,000 in 1989–90; and £44,000 in 1990–91. The forecast for 1991–92 is £54,000. The advertising budgets for 1992–93 have not yet been set. These figures do not include recruitment advertising. Comparable figures for earlier years are unavailable.

  Expenditure by Inland Revenue is as follows: £15,000 for newspaper advertising and £300,000 for other advertising in 1986–87; £15,000 for newspaper advertising and £350,000 for other advertising in 1987–88; £20,000 for newspaper advertising and £250,000 for other advertising in 1988–89; £30,000 for newspaper advertising and £400,000 for other advertising in 1989–90; £4,376,000 for television advertising, £2,155,000 for newspaper advertising and £679,000 for other advertising in 1990–91; and £20,000 for newspaper advertising and £300,000 for other advertising in 1991–92. The figures for 1990–91 include expenditure of £6·95 million on an advertising campaign to increase public awareness of the new arrangements for non-taxpayers to register for payment of bank and building society interest without deduction of income tax. The advertising budget for 1992–93 has not yet been set. Comparable figures for earlier years are not readily available and could be given only at disproportionate cost.

  For expenditure by HMSO, I would refer the hon. Gentleman to the reply given by the Economic Secretaryon 8 May 1991, at column 460. The forecast for 1991–92 is £539,000 for advertising in newspapers and journals and £589,000 for other promotional material. The budgets for 1992–93 have not yet been set.

  Mr. Dobson
  To ask the Chancellor of the Exchequer what was the total expenditure by(a) Her Majesty's Treasury, (b) the Central Office of Information, (c) Customs and Excise, (d) the Department of National Savings and (e) Her Majesty's Stationery Office on press and public relations in 1979–80 and in each following year; and what is his estimate for 1991–92 and budget for 1992–93.

  Mrs. Gillian Shephard
  [holding answer 5 November 1991]: Expenditure on press and public relations is as follows:

  The expenditure for HM Treasury in 1988–89 was £548,264, that in 1989–90 was £564,691 and that in 1990–91 was £510,489. The forecast for 1991–92 is £547,104. The budgets for 1992–93 have not yet been set. Comparable figures from 1979–80 to 1987–88 are unavailable due to machinery of Government changes and could be produced only at disproportionate cost.

  For details of the expenditure by the Central Office of Information, I would refer the hon. Gentleman to the reply given by the Economic Secretary on 29 April 1991, at columns 5–6. The actual costs for 1990–91 were £57,365; the forecast for 1991–92 is £66,919. The budgets for 1992–93 have not yet been set.

  The expenditure by Customs and Excise is as follows: £63,000 in 1984–85; £87,000 in 1985–86; £85,000 in 1986–87; £89,000 in 1987–88; £126,000 in 1988–89; £92,000 in 1989–90; £102,000 in 1990–91; and £86,000 in 1991–92. The budgets for 1992–93 have not yet been set. The figures for 1979 to 1984 are not available.
  213
  For details of the expenditure by the Department of National Savings I would refer the hon. Gentleman to the reply given by the Economic Secretary on 3 May, at column 354. The budget for 1992–93 has not yet been set.

  HMSO has not recorded any expenditure on press and public relations.

  Mr. Dobson
  To ask the Chancellor of the Exchequer whether the Treasury has sent unsolicited direct mail as part of the distribution of publicity material.

  Mrs. Gillian Shephard
  [holding answer 5 November 1991]: Yes. On both the 1987 BP secondary sale and the current BT secondary sale, unsolicited direct mail was sent to potential investors inviting anyone considering applying for shares in the offer to register with the share information office.

  Tax Exemption
  Dr. David Clark
  To ask the Chancellor of the Exchequer if he will list all the exemptions available from taxation for the agricultural industry; and if he will make a statement.

  Mr. Maude
  [holding answer 6 November 1991]: The following reliefs and allowances are available to the agricultural industry:
  The same general rules apply to the calculation of a farmer's business profits as apply to other traders. But in addition, a farmer may claim to average his business profits over two consecutive years of assessment where the difference between them is 30 per cent. or more.
  The Agricultural Buildings Allowance gives relief for capital expenditure on agricultural buildings and structures at a rate of 4 per cent. per annum straight-line.
  For inheritance tax provided certain conditions are met, agricultural property relief is available at two rates. The relief operates by reducing the value of the property bought into charge by 50 per cent. for land with vacant possession and 30 per cent. for let land.
  Working farmers can qualify for capital gains tax reliefs in the same way as other traders. These include rollover relief, retirement relief, and holdover relief on gifts of business assets or shares in unquoted trading companies. Holdover relief is also available on gifts of agricultural property which would attract 50 or 30 per cent. relief from inheritance tax.

  Independent Schools
  Mr. Worthington
  To ask the Chancellor of the Exchequer what is the financial value of the tax concessions given to independent schools by virtue of their charitable status.

  Mr. Maude
  [holding answer 6 November 1991]: This information is not available.

FOREIGN AND COMMONWEALTH AFFAIRS

  Drugs (Caribbean)
  Mr. John Marshall
  To ask the Secretary of State for Foreign and Commonwealth Affairs what measures are being taken to tackle the drugs trade in the Caribbean.

  Mr. Lennox-Boyd
  The United Kingdom is active in promoting effective measures to tackle the drugs trade in the Caribbean, especially in the dependent territories. We have provided practical help, training and technical advice 214
  to enable countries to address every aspect of the threat. We have also recently undertaken a survey of drug trafficking and abuse problems in the anglophone eastern Caribbean. The survey makes a number of recommendations including: the provision of specialist equipment to the Trinidad and Tobago drugs squad; the appointment of a regional customs adviser and training officer; and advisory visits by the United Kingdom demand reduction task force. The action we are taking to implement these recommendations is a demonstration of Her Majesty's Government's continuing commitment to help the countries of the region deal with the scourge of drugs.

  SCOTLAND Cot Deaths
  Mr. Austin Mitchell
  To ask the Secretary of State for Scotland (1) what research he has commissioned into the causes, epidemiology and cure of cot deaths in Scotland;

  (2) what research he has commissioned in Scotland on cot death syndrome.

  Mr. Michael Forsyth
  A variety of relevant research projects has been supported by the Scottish Office Home and Health Department throughout the 1980s at a cost of £230,000. In addition the Scottish Hospital Endowments Research trust has provided funding of £15,000 for one project.

  Mr. Austin Mitchell
  To ask the Secretary of State for Scotland what study he has made of New Zealand research into cot deaths and of the methods used in New Zealand to reduce the incidence of cot death.

  Mr. Michael Forsyth
  An expert group set up by the Chief Medical Officer for England and Wales has considered the New Zealand research along with other recent studies of cot death. Its recommendations were announced on 31 October 1991. The chief medical officer and the chief nursing officer in my Department will be writing to all doctors and other professionals in Scotland drawing attention to these recommendations.

  Mr. Austin Mitchell
  To ask the Secretary of State for Scotland what advice is issued by his Department on the way in which young babies should be laid to sleep to avoid cot death.

  Mr. Michael Forsyth
  No specific guidance on the sleeping position of infants has been issued in Scotland. However, I am aware of recent expert advice that avoiding the prone sleeping position when laying a baby to sleep reduces the risk of sudden infant death syndrome and will ensure that this information, and advice on other associated factors, is widely publicised.

  Geriatric Provision
  Dr. Reid
  To ask the Secretary of State for Scotland whether he has undertaken any study of the future demographic trends in Lanarkshire in the light of proposed changes to geriatric provision in the area.

  Mr. Michael Forsyth
  Demographic trends is one of many factors taken into acount in my consideration of proposals affecting the organisation of health care.

  Contraceptive Advice
  Mr. Worthington
  To ask the Secretary of State for Scotland whether the Scottish Office Home and Health Department maintains a register of centres providing specialist contraceptive advice for young people.

  Mr. Michael Forsyth
  Such a register is not maintained centrally. Current guidance from the Scottish Office Home and Health Department about the provision of family planning services draws health boards' attention to the need for counselling facilities for young people.

  Mr. Worthington
  To ask the Secretary of State for Scotland which Scottish health boards provide a specialist contraceptive advice service for young people.

  Mr. Michael Forsyth
  This information is not available centrally. It is for individual health boards to determine the pattern of provision of these services and the extent to which designated facilities are provided.

  Respite Care
  Mr. Dunnachie
  To ask the Secretary of State for Scotland if he will increase resources to allow health boards to increase respite care provision as an integral component of effective community care; and if he will make a statement.

  Mr. Michael Forsyth
  Although resources will not be separately identified for respite care, the Government recognise the importance of the development of respite care in the effective provision of community care, and health board allocations will reflect this.

  Eye Tests
  Mr. Dunnachie
  To ask the Secretary of State for Scotland if he will state the number of people in Scotland who received eye tests during the 12 months ending October 1991 and the numbers receiving eye tests in the 12 months prior to the abolition of free tests; and if he will make a statement.

  Mr. Michael Forsyth
  Information on the total number of sight tests carried out during the 12 months ending October 1991 is not available. In the 12 months prior to I April 1989 1,168,610 sight tests were conducted.

  Operations, Glasgow
  Mr. Dunnachie
  To ask the Secretary of State for Scotland what information he has on the numbers of patients in the Greater Glasgow health board area who, in the 12 months ending October 1991, have had to be admitted to NHS hospitals for similar operations to those which they have previously, within the same 12-month period, had performed at private hospitals; and if he will make a statement.

  Mr. Michael Forsyth
  This information is not held centrally.

  Parents Charter
  Mr. Worthington
  To ask the Secretary of State for Scotland what calculation has been made of the additional staffing needs for Her Majesty's inspectorate under the parents charter; and if he will make a statement.
  216
  Mr. Michael Forsyth
  [holding answer 6 November 1991]: The proposals of the parents charter have implications for the work of Her Majesty's inspectorate. I am considering how these proposals are to be met in the context of the inspectorate's functions and responsibilities overall.

HOME DEPARTMENT

  Custody Alternatives
  Mr. Macdonald
  To ask the Secretary of State for the Home Department what additional funding he intends to make available to the probation service and voluntary organisations for alternatives to custody projects for young people convicted of burglary and driving away a motor vehicle.

  Mr. John Patten
  The increase in probation service expenditure announced yesterday will enable the service to strengthen its work with these offenders. So too will the extra £1 million a year for the voluntary sector projects.

  Bail Offenders
  Mr. Butler
  To ask the Secretary of State for the Home Department what information he has on the offending patterns of persons on bail.

  Mr. John Patten
  Home Office researchers have been reviewing recent studies by the police and others of offending on bail. The findings will be made available soon.

  Political Asylum
  Mrs. Dunwoody
  To ask the Secretary of State for the Home Department what consultation with immigrant groups he has had in relation to his new rules on political asylum.

  Mr. Peter Lloyd
  We made available a draft of new asylum rules when the Asylum Bill was published last Friday. We are in regular contact with interested organisations and will take account of whatever comments they may have.

  Mr. Viggers
  To ask the Secretary of State for the Home Department if he will make a statement on any proposals he has to control immigration by those claiming political asylum.

  Mr. Peter Lloyd
  An Asylum Bill was published last Friday. At the same time we made available draft asylum rules. My noble and learned Friend the Lord Chancellor made available draft appeals procedure rules. These measures will allow us to reduce substantially the current misuse of asylum procedures, while protecting the position of genuine refugees.

  Dorset Police
  Mr. Ian Bruce
  To ask the Secretary of State for the Home Department if he will make a statement on the level of police manpower for Dorset; and how his Department takes account of the additional resources needed for a county with a large number of seasonal visitors.

  Mr. Peter Lloyd
  At the end of August, there were 1,302 police officers in the Dorset Police, an increase of 14 per
  217
  cent. since the Government first took office. In allocating increases in establishments to forces, my right hon. Friend takes account of a wide range of factors which influence demands on the police, with the professional advice of Her Majesty's inspectorate of constabulary on circumstances peculiar to each force, such as the volume of seasonal visits.

  Television Franchises
  Mr. Illsley
  To ask the Secretary of State for the Home Department whether he has made any assessment of the financial viability of the regional television companies following the acceptance of the new franchises.

  Mr. Peter Lloyd
  No. The Broadcasting Act 1990 requires the ITC to be satisfied that the winning applicant would be able to maintain the licensed service throughout the period for which the licence would be in force. In reaching its decisions, the commission had access to confidential business plans submitted by the bidders.

  Confessions
  Sir John Farr
  To ask the Secretary of State for the Home Department if he has any plans to introduce legislation to outlaw convictions based wholly or mainly on confessions in police custody.

  Mr. John Patten
  The use of uncorroborated confession evidence is within the remit of the Royal Commission on criminal justice announced to the House by my right hon. Friend on 14 March. We shall consider what changes may be needed in the light of the commission's findings.

  Industrial Estates (Security)
  Mr. Bellingham
  To ask the Secretary of State for the Home Department what representations he has received concerning schemes for improving security on industrial estates.

  Mr. John Patten
  We have received no representations concerning schemes for improving security on industrial estates. I understand, however, that an increasing number of businesses are now developing such schemes, often in consultation with the local police, following the example of the first such scheme developed on the North Lynn industrial estate in 1985.

  Drug Dealers
  Mr. Alton
  To ask the Secretary of State for the Home Department how many drug dealers have been convicted in the past 12 months.

  Mr. John Patten
  A total of 2,001 people were convicted of the unlawful supply of controlled drugs in the United Kingdom during 1990 and 2,699 people were convicted of being unlawfully in possession of a controlled drug with intent to supply it to another.

  Asylum
  Mr. Canavan
  To ask the Secretary of State for the Home Department how many representations he has received about proposed changes in the methods of dealing with people who apply for asylum; and if he will make a statement.
  218
  Mr. Peter Lloyd
  I refer the hon. Member to the reply I gave earlier to the hon. Member for Islington, North (Mr. Corbyn).

  Police Cells
  Mr. John Greenway
  To ask the Secretary of State for the Home Department how many prisoners are currently being held in police cells.

  Mrs. Rumbold
  There were 1,787 prisoners in police cells last night who should properly have been detained in prisons.

  Security Forces (Murders)
  Mr. Trimble
  To ask the Secretary of State for the Home Department whether he will make a statement on his policy concerning the guideline sentences for persons convicted of the murder of members of the security forces.

  Mr. John Patten
  Life imprisonment is the mandatory sentence when a person has been convicted of murder.

  Channel Tunnel
  Sir Teddy Taylor
  To ask the Secretary of State for the Home Department what advice he has received from the European Commission about the exercise of immigration control and passport checking procedures for channel tunnel journeys; and if he will make a statement.

  Mr. Peter Lloyd
  The European Commission has sent my right hon. Friend no advice of the kind to which my hon. Friend refers. Immigration controls and passport checking procedures will be applied to the channel tunnel in ways similar to those applied at the other major points of entry to the United Kingdom.

  Bail
  Mr. Shersby
  To ask the Secretary of State for the Home Department what conclusions he has reached following his Department's research into the working of the Bail Act 1976; and if he will make a r j 5–1statement.

  Mr. John Patten
  We shall consider urgently the results of the Home Office review of the recent studies of offending on bail and announce our conclusions as soon as we can.

  West Mercia Constabulary
  Mr. Colin Shepherd
  To ask the Secretary of State for the Home Department what is the current strength of the West Mercia constabulary.

  Mr. Peter Lloyd
  At the end of August 1991 West Mercia constabulary was up to its establishment, with 2,029 officers, an increase of 277 officers, or 16 per cent., since the Government took office.

  Prisons (Education)
  Mr. Sheerman
  To ask the Secretary of State for the Home Department what proportion of the prison population had gained formal educational qualifications before entering prison.

  Mrs. Rumbold
  A national prison survey was conducted earlier this year, based on a 10 per cent. sample of the male
  219
  and a 20 per cent. sample of the female prison population. Preliminary results indicate that 57 per cent. of the prisoners sampled had some education qualifications when they came into prison. Of these, 8 per cent. had a vocational qualification, 36 per cent. had the equivalent of what was a GCE O-level as their highest qualification, and 8 per cent. had a higher qualification.

  Population1 in Prison Service establishments in England and Wales on 30 June 1990: by ethnic origin and age.

  Number of Persons

  Age in years

  White

  West Indian Guyanese African

  Indian Pakistani Bangladeshi

  Chinese Arab Mixed origin

  Other, not recorded2

  All persons

  14–16

  326

  24

  9

  11

  12

  382

  17–20

  6,855

  636

  222

  225

  220

  8,158

  21–24

  8,215

  1,105

  198

  195

  199

  9,912

  25–29

  7,602

  1,465

  205

  182

  179

  9,633

  30–39

  7,726

  1,323

  368

  183

  223

  9,823

  40–49

  3,930

  304

  172

  75

  85

  4,566

  50–59

  1,378

  123

  83

  22

  26

  1,632

  60 and over

  368

  22

  18

  4

  5

  417

  All ages

  36,400

  5,002

  1,275

  897

  949

  44,523

  1 Provisional Figures

  2 Including refusals.

  Conservative Party Conference
  Mr. Pike
  To ask the Secretary of State for the Home Department if he will request a report from the Chief Constable of Lancashire on the policing implications for Lancashire arising from the policing provision required at the 1991 Conservative party conference at Blackpool; and if he will make a statement.

  Mr. Peter Lloyd
  No. It is for the chief officer of the force concerned to decide how a party conference should be policed, as with any other police operation.

  Styal Prison
  Mr. Sheerman
  To ask the Secretary of State for the Home Department what changes to the regime in the mother and baby unit at Her Majesty's prison Styal have been made following the transfer of two mothers whose babies are aged over nine months.

  Mrs. Rumbold
  The following changes have been made:

  (i) Daily routines have been adjusted to ensure fewer household chores for the women in the unit thus allowing mothers more time with their babies.

  (ii) Accommodation has been temporarily adapted to increase creche space.

  (iii) Alternative accommodation has been found for pregnant women and this has increased space for the mothers and babies.

  (iv) Toys appropriate for babies in the nine months to 18 months age range have been purchased. A larger playpen is being introduced in the education department to cater for the older babies of mothers who decide to undertake classes.

  These are initial improvements. A steering committee, chaired by the area manager, will plan further developments ranging from regime enhancement to the expansion of accommodation.

  National Transcommunications Ltd
  Mr. Corbett
  To ask the Secretary of State for the Home Department by how many staff, by grade, the total complement at the former Independent Broadcasting Authority engineering division, has been reduced in the past two years; what has been the total cost of voluntary

  Prisons (Ethnic Groups)
  Mr. Sheerman
  To ask the Secretary of State for the Home Department what is the age profile of the prison population for each major ethnic group.

  Mrs. Rumbold
  The latest readily available information is given in the table.

  redundancies and early retirements; and by how much these changes are expected to reduce the total annual wages and salary bill.

  Mr. Peter Lloyd
  The IBA carried out a reorganisation programme during 1990 and reduced its staff by about 170. When NTL was sold on 24 October, its overall staffing complement, including contract staff, was 779, the same as it had been on 1 January 1991, when the company was vested in the Crown. In that period, 42 staff, including contract staff, left and the same number joined. NTL has assumed the IBA's liabilities for retirement and death benefits for those employees who transferred to NTL from the IBA. Information on the costs is not readily available in the form requested.

  Mr. Corbett
  To ask the Secretary of State for the Home Department for what price it has been agreed, subject to contract, to sell National Transcommunications Ltd. to Mercury Asset Management; how many other bids were received; and what assurances he has sought or been given about plans to float off the company.

  Mr. Peter Lloyd
  The sale of National Transcommunications Ltd., which was completed on 24 October 1991, raised immediate proceeds of £70 million, with the possibility of further proceeds of up to £20 million under specified circumstances in the event of a successful flotation of the company after 1993. The sale and purchase agreement also includes comprehensive clawback provisions intended to ensure that the Government receive a share of unexpectedly large profits made from sales of the company's property and intellectual property. National Transcommunications Ltd. was purchased by Mercury Asset Management plc on behalf of its fund management clients. In its bid, Mercury Asset Management stated its intention to prepare the company for flotation when it has sufficient track record in the private sector.

  Following the sale launch in May this year, there were over 50 serious expressions of interest in the company, from a wide range of backgrounds, including manufacturers, banks, broadcasters, utilities and telecommunications companies. We shortlisted three indicative bidders who then had access to detailed information about

  221
  National Transcommunications Ltd.'s business. Two bidders, GEC and MAM, continued their preparations for bidding up until the final deadline. MAM's bid was made in the knowledge of that competition and we were entirely satisfied with it.

  Mr. Corbett
  To ask the Secretary of State for the Home Department what amounts of money over what periods have been paid to Price Waterhouse and Deloittes in connection with the sale and restructuring of the former engineering division of the Independent Broadcasting Authority; and if he will detail by name and amount payments made to any other outside consultants with whom contracts were placed during this process.

  Mr. Peter Lloyd
  The Home Office placed contracts with the following outside consultants during the sale of NTL and preparations for the company to be sold:

  Price Waterhouse

  Norton Rose

  Ernst and Young

  Debenham, Tewson and Chinnocks

  Mercer Fraser

  Charles Barker

  My right hon. Friend will report to the House on the final cost of the sale as soon as possible, but information about individual contracts and amounts paid is commercially confidential.

  Prison Population
  Mr. Sheerman
  To ask the Secretary of State For the Home Department how many(a) remand and (b) convicted prisoners were unemployed before entering prison.

  Mrs. Rumbold
  In response to questions in the national prison survey, which was carried out at the beginning of this year,(a) 44 per cent. of remand and (b) 31 per cent. of convicted prisoners said that they were unemployed prior to imprisonment.

  Mr. Sheerman
  To ask the Secretary of State For the Home Department how many prisoners are related to people who have also served a prison sentence.

  Mrs. Rumbold
  In response to questions in the national prison survey, which was carried out at the beginning of this year, 35 per cent. of convicted prisoners said that someone in their family had also served a prison sentence.

  Mr. Sheerman
  To ask the Secretary of State For the Home Department how many(a) male and (b) female prisoners have dependent children; and what is known about who presently looks after them.

  Mrs. Rumbold
  In response to questions in the national prison survey, which was carried out at the beginning of this year,(a) 32 per cent. of male prisoners and (b) 47 per cent. of female prisoners said that they had dependent children living with them just before they came into prison.

  Ninety one per cent. of male prisoners with dependent children said that it was either their current or ex-wives or partners who were looking after them, while only 2 per cent. reported a dependent child with foster parents or in care. By contrast, just 23 per cent. of female prisoners said that at least one of their children was being looked after by current or ex-husbands or partners. Most female prisoners (52 per cent.) said that at least one of their children was being looked after by other relations. Twelve per cent. said that a dependent child was with foster parents or in care.
  222
  Mr. Sheerman
  To ask the Secretary of State For the Home Department how many prisoners are married or were living with a partner before entering prison.

  Mrs. Rumbold
  In response to questions in the national prison survey, which was carried out at the beginning of this year, 50 per cent. of prisoners said that just prior to their imprisonment they were married or living with a partner.

  Mr. Sheerman
  To ask the Secretary of State for the Home Department how many(a) remand and (b) convicted prisoners were homeless before entering prison.

  Mrs. Rumbold
  In response to questions in the national prison survey, which was carried out at the beginning of this year, 17 per cent. of remand prisoners and 12 per cent. of convicted prisoners said that they had no permanent accommodation at the time they were imprisoned.

  Mr. Sheerman
  To ask the Secretary of State for the Home Department what proportion of(a) young offenders and (b) adults in prison have previously been in the care of the local authority.

  Mrs. Rumbold
  In response to questions in the national prison suvey, which was carried out at the beginning of this year,(a) 38 per cent. of young prisoners and (b) 23 per cent. of adult prisoners said that they had had experience of local authority care before the age of 16.

  Court Hearings
  Mr. Butcher
  To ask the Secretary of State for the Home Department (1) if he will ensure that in the period between making a statement and going into court a witness need not have his name declared to the defendant;

  (2) if he will ensure that in the period between making a statement and going into court a witness need not have his address declared to the defendant.

  Mr. John Patten
  Under the Magistrates' Courts (Advance Information) Rules 1985 the prosecution may withold information, including statements giving the names of witnesses, to which the defence would otherwise be entitled where there is considered to be a risk of intimidation of the witnesses concerned. Last year we amended the Magistrates' Courts Rules 1981 to prevent the routine disclosure of witnesses' addresses in advance of trial or full committal proceedings.

  Missing Persons
  Miss Lestor
  To ask the Secretary of State for the Home Department when the computerised national register for missing persons will start operating; what its staff complement will be; and what financial resources will be allocated to it.

  Mr. Peter Lloyd
  The database which the missing persons bureau will use will be from part of the new police national computer. It is not possible at the moment to give a definite date for its introduction. The staffing and resources of the bureau are still under consideration.

  West Midlands Serious Crimes Squad
  Mr. Corbett
  To ask the Secretary of State for the Home Department whether he will now publish in full the report on the general practices of the former West
  223
  Midlands serious crimes squad submitted to him by the Police Complaints Authority under section 97(2) of the Police and Criminal Evidence Act 1984.

  Mr. Peter Lloyd
  This report was laid before both Houses of Parliament on 31 October and was published on 1 November.

  Anti-racist Organisations
  Mrs. Gorman
  To ask the Secretary of State for the Home Department what conditions are attached to grants from his Department to anti-racist organisations.

  Mrs. Rumbold
  The Home Office runs a number of grant programmes which aim to improve community relations by seeking to reduce racial discrimination and racial disadvantage. Section 11 grant and the new ethnic minority grant seek to assist the access of ethnic minorities to mainstream services. Grants made from the reduction of racial disadvantage grant budget mainly help business support agencies under the ethnic minority business initiative and projects working to build the capacity of the ethnic minority voluntary sector. Some funding for anti-harassment and anti-racial attack schemes is also provided under the safer cities programme. In addition, the Commission for Racial Equality, which is grant aided by the Home Office, is empowered under section 44 of the Race Relations Act 1976 to give financial or other assistance to any organisation that it deems to be concerned with the promotion of equality of opportunity and good relations between persons of different racial groups. Most race equality councils and a number of projects in various parts of the country are funded in this way.

  Funding under these programmes is subject to a range of conditions, some of which relate specifically to a particular project or scheme and others which are common to many grant regimes. These include conditions on progress towards targets and objectives, the provision of reports and financial information, and requirements that grants must not be used for party political purposes or for purposes for which they were not intended.

  Female Prisoners
  Mr. Sheerman
  To ask the Secretary of State for the Home Department what is the average length of time spent in custody by female life sentence prisoners released on licence in each of the last 10 years.

  Mrs. Rumbold
  The information requested is given in the table. The calculated averages exclude persons who have died in custody or have been discharged for other reasons. The information for all persons released on life licence is published annually in "Prison Statistics, England and Wales"—table 8.5 of the issue for 1989, Cm. 1221.

  Death of prisoners under 21 in Her Majesty's Prison Service establishments 1978–19911

  Name

  Age

  Sex

  Establishment

  Inquest Verdict

  2Status

  1978

  Anderson M. J.

  16

  M

  Hindley

  Suicide

  —

  Evans D. C.

  17

  M

  Risley

  Unlawful killing

  —

  Clark C. L.

  19

  M

  Gaynes Hall

  Open

  —

  1979

  Ramsey A. W.

  18

  M

  Liverpool

  Suicide

  —

  Forbes D.

  20

  M

  Lewes

  Killed himself while balance of mind disturbed

  —

  Ridehalgh S.

  17

  M

  Wetherby

  Natural causes

  —

  Redmond M.

  20

  M

  Haverigg

  Misadventure

  —

  224

  Average time served1 under sentence in Prison Service establishments in England and Wales by females first released on life licence 1980–90

  Year of release

  Average time served (years)

  Number of females released

  1980

  6·5

  1

  1981

  8·1

  3

  1982

  8·7

  1

  1983

  8·6

  2

  1984

  8·3

  5

  1985

  9·2

  5

  1986

  10·5

  2

  1987

  10·1

  3

  1988

  10·0

  4

  1989

  8·0

  4

  21990

  9·6

  3

  1 Excluding any time spent on remand in custody, in non-Prison Service establishments or following any subsequent recall.

  2 Provisional figure.

  Mature Women (Health Care)
  Mrs. Gorman
  To ask the Secretary of State for the Home Department when the ministerial group on women's issues last considered the issue of health care for mature women; what report was issued; and if he will make a statement.

  Mrs. Rumbold
  The ministerial group on women's issues examines issues of concern to women where they overlap more than one Government Department. The group has not considered the specific issue of health care for mature women separately, as this is the responsibility of the Department of Health, but it has addressed a number of wider health-related issues.

  Prison Deaths
  Mr. Sheerman
  To ask the Secretary of State for the Home Department if he will list the deaths of all boys and girls under 21 years detained in Prison Department establishments in the last 30 years, or as early as records have been kept, stating in each case the names, ages and sex of the young person, whether he/she was sentenced or on remand, the establishment where he/she was detained and the cause of death.

  Mrs. Rumbold
  The table lists the information requested for each year since 1978. Information for earlier years is not readily accessible and could not be given except at disproportionate costs.
  225

  Name

  Age

  Sex

  Establishment

  Inquest Verdict

  2Status

  Lehair P.

  20

  M

  Wormwood Scrubs

  Unlawful killing

  —

  Badger J. D.

  17

  M

  Brockhill

  Open

  —

  Tomkins M. S.

  20

  M

  Huntercombe

  Misadventure

  —

  Merry K.

  16

  M

  Latchmere House

  Natural causes

  —

  Powdrill V.

  16

  M

  Thorp Arch

  Natural causes

  —

  1980

  Grzybkowski R. Z.

  19

  M

  Brixton

  Suicide

  —

  Brown A. B.

  20

  M

  Ashford

  Self Neglect

  —

  Underwood R. J.

  18

  M

  Norwich

  Unlawful killing

  —

  Whittaker D. J.

  20

  M

  Buckley Hall

  Accidental death

  —

  Ratcliffe M. C.

  19

  M

  Swinfen Hall

  Suicide

  —

  1981

  Phillips L. M.

  18

  M

  Ashford

  Natural causes

  Remand

  Shackleton I. A.

  18

  M

  Medomsley

  Misadventure

  Sentenced

  Smith M. A.

  18

  M

  Aylesbury

  Misadventure

  Sentenced

  Wren G.

  16

  M

  Rochester

  Suicide

  Sentenced

  1982

  Caldwell D. V.

  17

  M

  Medomsley

  Natural causes

  Sentenced

  Heather-Hays J. P.

  18

  M

  Ashford

  Lack of care

  Sentenced

  Gallagher G.

  17

  M

  Thorp Arch

  Natural causes

  Remand

  Cooper M. R.

  17

  M

  Canterbury

  Natural causes

  Sentenced

  Walmsley S.

  19

  M

  Stoke Heath

  Suicide

  Remand

  Nagel J. S.

  20

  M

  Lowdham Grange

  No inquest held

  Sentenced

  Grosvenor C.

  18

  M

  Lewes

  Killed himself

  Sentenced

  Howells K.

  17

  M

  Usk

  Natural causes

  Sentenced

  Kurn, D. W.

  20

  M

  Canterbury

  Suicide

  Sentenced

  1983

  Markham D. T.

  19

  M

  Thorp Arch

  Misadventure

  Remand

  Bowley S. G.

  16

  M

  Manchester

  Suicide

  Sentenced

  Abbott M. G.

  20

  M

  Leeds

  Suicide

  Remand

  Overton R. C.

  20

  M

  Hull

  Natural causes aggravated by lack of care

  Sentenced

  1984

  Farrington K.

  18

  M

  Manchester

  Natural causes

  Sentenced

  Deck P. J.

  20

  M

  Winchester

  Misadventure

  Sentenced

  Cash P.

  17

  M

  Swansea

  Suicide

  Sentenced

  Chana S. S.

  19

  M

  Pentonville

  Suicide

  Sentenced

  McLauchlan

  19

  M

  Stoke Heath

  Natural causes

  Sentenced

  Sankey R. J.

  19

  M

  Swansea

  Misadventure

  Sentenced

  Khan L.

  17

  M

  Rochester

  Misadventure

  Sentenced

  Deacon A. K.

  20

  M

  Norwich

  Natural causes

  Sentenced

  Rapter P. C.

  19

  M

  Swansea

  Misadventure

  Sentenced

  1985

  Barrowcliffe I. P.

  18

  M

  Huntercombe

  Accidental

  Sentenced

  Jackson J.

  18

  M

  Wellingborough

  Natural causes

  Sentenced

  Joseph E.

  18

  M

  Hollesley Bay

  Natural causes

  Sentenced

  Ramsden R. J.

  20

  M

  Portland

  Open

  Sentenced

  Harrison F. J.

  18

  M

  Risley

  Suicide

  Remand

  1986

  Cumston A.

  19

  M

  Exeter

  Suicide

  Remand

  Ducatt P. M.

  19

  M

  Ashford

  Suicide

  Remand

  McCaffarey D. M.

  19

  M

  Liverpool

  Open

  Sentenced

  Evans K.

  19

  M

  Lewes

  Accidental

  Remand

  Thomas P. J.

  20

  M

  Risley

  Suicide

  Sentenced

  1987

  Baird A.

  20

  M

  Canterbury

  Suicide

  Remand

  Bailes R. J.

  20

  M

  Ashford

  Suicide

  Remand

  Taylor S. D.

  20

  M

  Stoke Heath

  Suicide

  Sentenced

  Jones G. S.

  17

  M

  Rochester

  Suicide

  Sentenced

  Armstrong J. S.

  18

  M

  Risley

  Suicide

  Sentenced

  Denny K. J.

  18

  M

  Onley

  Natural causes

  Sentenced

  Sturgess N. S.

  19

  M

  Stoke Heath

  Suicide

  Sentenced

  Smith A. I.

  19

  M

  Brockhill

  Natural causes

  Remand

  Marchelak P.

  20

  M

  Camp Hill

  Suicide

  Sentenced

  1988

  McMahon F. B.

  18

  M

  Rochester

  Open

  Remand

  Wood D. P.

  20

  M

  Risley

  Suicide

  Remand

  Skey A.

  17

  M

  Leeds

  Suicide

  Remand

  Elliott M. G.

  18

  M

  Leeds

  Suicide

  Remand

  226 227

  Name

  Age

  Sex

  Establishment

  Inquest Verdict

  2Status

  Ward M. P.

  20

  M

  Manchester

  Open

  Sentenced

  Marfleet D. T.

  20

  M

  Finnamore Wood

  Natural causes

  Sentenced

  Bromley C.

  19

  M

  Shrewsbury

  Suicide

  Remand

  Littlewood D. A.

  19

  M

  Leeds

  Suicide

  Remand

  Burt T. D.

  17

  M

  Glen Parva

  Suicide

  Sentenced

  Greechan C. K.

  19

  M

  Leeds

  Suicide

  Remand

  1989

  Greasby A.

  19

  M

  Castington

  Accidental

  Sentenced

  Barber W.

  19

  M

  Wellingborough

  Accidental

  Sentenced

  Beckett P.

  18

  M

  Leeds

  Suicide

  Remand

  Kewley L. J.

  19

  M

  Risley

  Open

  Remand

  Ellis R. J.

  19

  M

  Lewes

  Suicide

  Sentenced

  Dixon S. D.

  18

  M

  Manchester

  Suicide

  Remand

  Johal P.

  18

  M

  Rochester

  Suicide

  Remand

  McGowan J. P.

  19

  M

  Hindley

  Suicide

  Remand

  Larkman N. A.

  18

  M

  Swansea

  Suicide

  Remand

  Broome T.

  19

  M

  Manchester

  Suicide

  Sentenced

  Mason P. K.

  19

  M

  Glen Parva

  Suicide

  Sentenced

  1990

  Brook J.

  20

  M

  Durham

  Unlawful killing

  Sentenced

  Sullivan M.

  19

  M

  Winchester

  Open

  Remand

  Curry M.

  18

  M

  Hindley

  Suicide

  Remand

  McKinlay I. D.

  18

  M

  Hindley

  Suicide

  Remand

  Hook A. W.

  18

  M

  Hindley

  Suicide

  Remand

  Knight P. H.

  15

  M

  Swansea

  Open

  Remand

  Willerton S.

  17

  M

  Leeds

  Open

  Remand

  Simmonds L.

  20

  M

  Hull

  Suicide

  Remand

  Walsh C.

  15

  M

  Glen Parva

  Open

  Sentenced

  Smith L.

  18

  M

  Brixton

  Killed himself in circumstances brought about by lack of care

  Remand

  1991 (to 4 November)

  Clancy D. B.

  19

  M

  Portland

  Open

  Sentenced

  White L. M.

  19

  M

  Feltham

  Not yet held

  Remand

  Wright A.

  20

  M

  Glen Parva

  Not yet held

  Remand

  Horler J. L.

  15

  M

  Feltham

  Not yet held

  Sentenced

  1 The table lists deaths from all causes.

  2 Information on the status of prisoners who died before 1981 is not readily accessible. Prisoners described as on remand include those who were convicted but awaiting sentence.

  Football
  Mr. Bellotti
  To ask the Secretary of State for the Home Department if he will list the average costs of policing each English Football League club per spectator for the past three football seasons in order from the highest to the lowest.

  Mr. Peter Lloyd
  The information requested is not available.

  Correspondence
  Mr. Michael Spicer
  To ask the Secretary of State for the Home Department whether he will arrange for a reply to be sent as soon as possible to the letter of the hon. Member for Worcestershire, South of 23 September concerning Statutory Instrument No. 1531.

  Mr. Peter Lloyd
  A reply was sent to my hon. Friend on 5 November 1991.

  Merseyside Fire Authority
  Mr. Alton
  To ask the Secretary of State for the Home Department whether, following the Merseyside fire risk review of 1990, he has given the Merseyside fire and civil defence authority permission to vary the approved establishment scheme; what assessment he has made of 228
  whether the Home Office minimum standards of fire cover can be met by the Merseyside fire authority; and if he will make a statement.

  Mr. John Patten
  No proposals have so far been submitted by the Merseyside fire and civil defence authority. Any which entailed the closure of fire stations or reduction in the number of operational firefighters or appliances would require our approval to ensure that nationally recommended minimum standards of fire cover continued to be met.

  Extradition
  Mr. Stanbrook
  To ask the Secretary of State for the Home Department if he will make a statement on the progress made to date in bringing into effect the Extradition Act 1989, and in the revised arrangements with other states which are parties to the European convention on extradition and its protocols.

  Mr. John Patten
  The Extradition Act 1989 came into effect on 27 September 1989 and the United Kingdom ratified the European convention on extradition on 13 February 1991. It came into effect in the United Kingdom on 14 May 1991. The protocols to the convention have not been ratified.

  Schools (Fire Standards)
  Mr. Cartwright
  To ask the Secretary of State for the Home Department what steps his Department is taking to bring fire safety standards in schools and colleges up to those required under the EC framework directive on the safety and health of workers at work; which organisations are to be consulted about the new draft regulations; when these are expected to come into force; and who will be responsible for enforcing them.

  Mr. John Patten
  We propose to implement the fire safety requirements of European Community directive 89/391/EEC on the introduction of measures to encourage improvements in the safety and health of workers at work—known as the framework directive—and the related directive 89/654/EEC, known as the workplace directive, by making new regulations under section 12 of the Fire Precautions Act 1971. The new regulations will apply to places of work, including schools and colleges, to which the Fire Precautions Act applies. The regulations will come into force on 1 January 1993, and there will be a staged application in accordance with the directives.

  The regulations are being drafted in consultation with other Government Departments, which will include the Department of Education and Science; and with representatives of local authorities' associations and other interested bodies.

  In accordance with the directives, the regulations will place the primary responsibility for ensuring fire safety on employers. Regulations under the Fire Precautions Act are enforced by fire authorities and for crown premises by HM inspectorates of fire services. Detailed consideration is being given to how the regulations will be applied to places of work, including schools and colleges.

  It is expected that a consultative document will be available in the spring for an extensive public consultation exercise.

  Joyriding
  Mr. Parry
  To ask the Secretary of State for the Home Department if he will publish the number of deaths in(a) Liverpool and (b) Merseyside caused by joyriders in each of the past five years; and if he will make a statement.

  Mr. Peter Lloyd
  The number of deaths of drivers or passengers of stolen vehicles was as follows:

  Year

  Liverpool

  Rest of Merseyside

  1986

  —

  4

  1987

  1

  2

  1988

  1

  —

  1989

  3

  1

  1990

  —(2)2

  —

  19911

  2 (3)2

  1

  1To date.

  2The figures in brackets show the numbers of pedestrians killed in incidents involving stolen vehicles.

  Mr. Parry
  To ask the Secretary of State for the Home Department if he has plans to take action against joyriders in the present Session of Parliament.

  Mr. John Patten
  We will be bringing forward a Bill in the present Session to introduce a new offence of aggravated taking.

  Essex Constabulary
  Mr. Burns
  To ask the Secretary of State for the Home Department how many police officers there were in the Essex constabulary in 1979 and at the last available date.

  Mr. Peter Lloyd
  At the end of August Essex police were within eight posts of their authorised establishment, with 2,881 police officers compared with 2,490 in December 1979—an increase of 16 per cent. As from I October, we have further increased the authorised establishment to 2,892.

  Concessionary Television Licences
  Mr. Winnick
  To ask the Secretary of State for the Home Department what representations he has received concerning pensioners paying the full television licence fee while living in the same block of flats as others paying the concessionary fee; and if he will make a statement.

  Mr. Peter Lloyd
  In the last 12 months we have received correspondence on this subject from two councils and one firm of solicitors. Since 1 April 1991 it has been the statutory responsibility of the BBC to determine eligibility for the concessionary licence.

  Immigration
  Mr. Nellist
  To ask the Secretary of State for the Home Department what consideration his Department has given to re-opening the possibility of applications from Commonwealth citizens who wish to seek British citizenship; and if he will make a statement.

  Mr. Peter Lloyd
  Commonwealth citizens may acquire British citizenship by naturalisation. I assume that the hon. Member has in mind the entitlements to registration as a British citizen that came to an end on 31 December 1987, in accordance with provisions of the British Nationality Act 1981. We see no reason to review those provisions.

  Metropolitan Police
  Sir Michael Neubert
  To ask the Secretary of State for the Home Department how many uniformed officers are in posts in the Metropolitan police at the latest available date.

  Mr. Peter Lloyd
  On 4 November 1991 there were 23,873 uniformed officers in the Metropolitan police.

  Race Relations
  Mr. Dunnachie
  To ask the Secretary of State for the Home Department if he will publish details regarding the progress of race equality legislation within the EC; and if he will make a statement.

  Mrs. Rumbold
  The Government are absolutely opposed to discrimination on grounds of race; and this position is reflected in all our discussions with our European partners on these matters.

  The Government do not, however, regard EC legislation as the appropriate means for taking action to enhance racial equality. The exact legislative position in member states varies, and is a matter for them, taking account of their particular circumstances.

  Magistrates Courts
  Ms. Quin
  To ask the Secretary of State for the Home Department what is the total number of magistrates courts that magistrates courts committees have decided to close in the last six months.

  Mr. John Patten
  Information about individual magistrates' courthouse closures has not been routinely collected by the Home Office which, under the Justices of the Peace Act 1979, has a responsibility in relation to closure proposals only if there is an appeal by the relevant paying local authority.

  Prisoners (Suicides)
  Mr. Alex Carlile
  To ask the Secretary of State for the Home Department how many prisoners under 21 years old have committed suicide in custody in each year since 1979; and if he will make a statement.

  Mrs. Rumbold:
  [holding answer 6 November 1991]: The information requested is set out in the table:

  Deaths of prisoners aged under 21 at their own hand in Her Majesty's prison service establishment 1979–912

  Number

  1979

  5

  1980

  3

  1981

  3

  1982

  4

  1983

  3

  1984

  6

  1985

  3

  1986

  5

  1987

  7

  1988

  9

  1989

  11

  1990

  9

  19911

  31

  1 (to 4 November).

  2 Includes all deaths which appear to have been deliberately self-inflicted, whether or not a verdict of suicide was recorded at the inquest.

  3 Inquests have yet to be held on 3 other prisoners under 21 who have died in 1991.

NORTHERN IRELAND

  Concessionary Fares
  Mr. Kilfedder
  To ask the Secretary of State for Northern Ireland if he would provide financial support for concessionary fares on buses and trains for every pensioner when he or she reaches retirement age.

  Mr. Needham
  The Department of the Environment for Northern Ireland is precluded by the provisions of the Sex Discrimination (NI) Order 1976 from making a distinction on age grounds between men and women. The qualifying age for concessionary half-fare travel by bus and rail in Northern Ireland is age 65 years for men and women and there are no plans to alter it.

  Civil Defence
  Mr. Kilfedder
  To ask the Secretary of State for Northern Ireland what is the maximum level of radiation which the 3,000 Radiac meters used in civil defence in Northern Ireland can quantify; what protection is 232
  available at the sites where these meters will be operated; and what steps he has taken to ensure there is sufficient protection for civil defence staff against radiation.

  Dr. Mawhinney
  Radiac meters are capable of measuring up to 300 centigrays per hour. In the event of their use appropriate safety instructions are available for issue to personnel operating in the field.

  Mr. Kilfedder
  To ask the Secretary of State for Northern Ireland if the Northern Ireland civil defence regional Government headquarters has a fully trained staff; whether the building is fully furnished with display equipment to enable the trained staff to process the information received regarding the situation in the Province and throughout Europe; and whether the staff are supplied with radiation graphs to record the situation at each sampling site in Northern Ireland.

  Dr. Mawhinney
  Staff have been designated and trained for the regional government headquarters building in Northern Ireland which is fully equipped with appropriate display and recording facilities for the purpose of monitoring information received from within the Province and elsewhere, including Europe.

  Bill of Rights
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland what consideration is being given to the introduction of a Bill of Rights for Northern Ireland.

  Mr. Brooke
  Human rights and civil liberties are already well protected by existing legislation in Northern Ireland. I am always willing to consider proposals for strengthening the existing safeguards and I am examining carefully the recommendations in the Standing Advisory Commission on Human Right's second report on religious and political discrimination and equality of opportunity (Cm. 1107). I am not, however, convinced that a Bill of Rights is required.

  Industrial Development Board
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland how many employees of the Industrial Development Board are based overseas; and what are the total wages and expenses bills for these employees over the last financial year for which figures are available.

  Mr. Needham
  A total of 38 employees are based overseas. The total wages and expenses bills in 1990–91 was £980,067.

  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland how many Industrial Development Board staff based in Northern Ireland travelled abroad on their duties during the last year for which figures are available; how many trips were involved; and what were the total costs and expenses involved.

  Mr. Needham
  The information does not exist in the precise form sought by the hon. Member. During 1990–91 however, 74 members of IDB staff based in Northern Ireland undertook 139 visits by air travel to destinations abroad at a cost of approximately £370,000.

  Debenham's, Belfast
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland what was the nature and extent of financial assistance given to Debenham's store to operate from Castle Court centre in Belfast.

  Mr. Needham
  No financial assistance has been given.

  Public Bodies
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland if he will list(a) the members and chief executives of non-departmental public bodies in Northern Ireland, (b) the period of their appointments, (c) their

  Organisation

  Date

  Volume

  Columns

  Northern Ireland Housing Executive

  16 January 1991

  183

  512–3

  Police Authority for Northern Ireland

  16 January 1991

  183

  513

  Northern Ireland Fire Authority

  17 January 1991

  183

  577–9

  Laganside Corporation

  17 January 1991

  183

  578

  Health and Social Services Boards

  17 January 1991

  183

  579–80

  Northern Ireland Sports Council

  18 January 1991

  183

  607–10

  General Consumer Council for Northern Ireland

  21 January 1991

  184

  30

  Drainage Council for Northern Ireland

  21 January 1991

  184

  30–31

  Education and Library Boards

  31 January 1991

  184

  586–88

  Nursery Education
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland what progress is being made towards the integration of nursery education.

  Dr. Mawhinney
  The Government are committed to encouraging and facilitating integrated education where there is sufficient demand for it from parents. In recent years, however, priority has been given to the needs of children of compulsory school age and only limited expansion of grant-aided nursery provision has been possible. A number of grant-aided nursery schools enrol both Protestant and Roman Catholic children and some grant-maintained integrated schools have non-grant-aided nursery classes. Statistics on the denominational breakdown of nursery pupils are not available.

  Personal Debt
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland what is the latest per capita figure for personal debt, excluding mortgages, in Northern Ireland; and what was the equivalent figure in 1979.

  Dr. Mawhinney
  This information is not available for Northern Ireland.

  New Homes
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland what is the latest available annual figure for new home starts in Northern Ireland; and what was the figure in 1979.

  Mr. Needham
  In 1990 the number of new home starts in Northern Ireland was 7,527. In 1979 the figure was 6,467.
  234
  current salaries where these are paid posts and (d) how many periods of appointment each such person has served, together with the names of their immediate predecessors.

  Dr. Mawhinney
  To provide the information in the form requested could be undertaken only at disproportionate cost.

  However, as I informed the hon. Member for Don Valley (Mr. Redmond) on 20 June, Official Report column 253, information concerning appointments to non-departmental public bodies in Northern Ireland is given in "Public Bodies" and "Public Appointments: A Handbook for Women's Organizations", copies of which are available in the Library. Details of the historic membership of nine such bodies have also appeared in the Official Report as follows:

  Homelessness
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland what is the latest available figure for homelessness in Northern Ireland; and what was the equivalent figure for 1979.

  Mr. Needham
  It is not possible to give a figure for the total number of homeless people in Northern Ireland at any specific point in time but I am advised by the chief executive of the Northern Ireland Housing Executive that at 1 November 1991 the number of households living in temporary accommodation secured for them under the homelessness provisions of the Housing (Northern Ireland) Order 1988 was 205.

  Comparable figures for 1979 are not available.

  Drug Addiction
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland what is the latest available figure for drug addiction in Northern Ireland; and what was the equivalent figure for 1979.

  Mr. Hanley
  At 31 October 1991, 51 people were registered as drug addicts in Northern Ireland. The equivalent figure at 31 December 1979 was 12.

  Benefits
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland if he will give the latest available figures for the number of people on(a) income support, (b) family credit and (c) disability benefit and the equivalent for 1979.

  Mr. Hanley
  Social Security operational matters are the responsibility of Mr. A. Wylie, chief executive of the Social Security Agency. He has written to the hon. Member and copies of his reply will be placed in the Library and the Public Information Office.

  Terrorist-related Offences
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland how many people have been sentenced to life imprisonment in Northern Ireland since 1970 on terrorist-related offences; and what were their paramilitary affiliations at the time of conviction.

  Dr. Mawhinney
  Since 1970, 580 persons have been sentenced to life imprisonment for terrorist offences. At the time of conviction their paramilitary affiliation was as follows:

  Number

  PIRA

  223

  OIRA

  11

  INLA

  85

  UVF

  140

  UDA/UFF

  106

  Other Loyalists

  15

  Bed-and-Breakfast Accommodation
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland what is the latest available figure for the number of people in bed-and-breakfast accommodation in Northern Ireland.

  Mr. Needham
  I understand from the chief executive of the Northern Ireland Housing Executive that at 1 November 1991, 92 households were living in bed-and-breakfast accommodation secured for them under the homelessness provisions of the Housing (Northern Ireland) Order 1988.

  Devolved Government
  Mr. Harry Barnes
  To ask the Secretary of State for Northern Ireland if he will make a statement on progress towards devolved government in Northern Ireland.

  Mr. Brooke
  The broad aim of Government policy is to seek to return greater responsibility for the affairs of Northern Ireland to locally elected representatives, on a widely acceptable basis and within a wider framework of stable relationships. With that aim in mind, I am at present engaged in discussions with the four main constitutional political parties in Northern Ireland and the Government of the Republic of Ireland, to establish whether a basis can be found for fresh political talks.

EMPLOYMENT

  Skilled Labour
  Mr. Austin Mitchell
  To ask the Secretary of State for Employment what is his assessment of the effect on the recruitment of skilled labour of the change in the real average earnings of manual workers in manufacturing industry compared with non-manuals employed in the rest of the private sector.

  Mr. Jackson
  The real average earnings of non-manual employees in the private sector outside manufacturing have risen relative to those of manual employees in manufacturing over several years. This may have assisted the transfer of labour to sectors of the economy in which employment is growing more rapidly. There is no evidence that it has led to difficulties in the recruitment of skilled labour.

  Open-plan Offices
  Mr. Allen
  To ask the Secretary of State for Employment what assessment his Department has conducted of the success of open-plan Employment Service offices and the response of the staff and public; and if he will make a statement.

  Mr. Jackson
  Questions on operational matters in the Employment Service executive agency are the responsibility of Mike Fogden, the agency's chief executive, to whom I have referred this question for reply.

  Meals and Drinks Allowances
  Mr. Allen
  To ask the Secretary of State for Employment what guidelines the wages inspectorate uses in determining what deductions are reasonable for meals and drinks; and what are the maximum amounts which employers can deduct for meals and drinks(a) when deductions for accommodation are also being made and (b) when no deductions for accommodation are being made.

  Mr. Jackson
  Wages inspectors aim to ensure that workers in wages council industries are paid at least minimum remuneration based on the hours they work, the minimum hourly rates determined by the councils and any limit on the amount which may be deducted for accommodation set by the council. They accept deductions for meals and drinks only if these are made by agreement. Workers are entitled to receive their minimum remuneration and not to take any meals or other goods provided by the employer unless they wish to do so. In any case, deductions will normally be accepted only if they do not exceed the cost to the employer of providing the meals and drinks in question.

  Working Hours
  Mr. Dobson
  To ask the Secretary of State for Employment if he will place in the Library the most up-to-date information held by his Department on the link between long working hours and accidents.

  Mr. Jackson
  The HSE has recently commissioned an update of the publication "Shift Work and Health—A critical review of the literature" by Professor J. M. Harrington. This update, by J. M. Waterhouse, S. Folkard and D. S. Minors and provisionally entitled "Shiftwork, Health and Safety—An overview of the scientific literature 1978–1990" will be published shortly. I will arrange for a copy to be placed in the Library as soon as it is available.

  Mr. Dobson
  To ask the Secretary of State for Employment what is the Government's policy on the European Community directive on working time; and if he will make a statement.

  Mr. Jackson
  I refer the hon. Gentleman to the reply given to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood),Official Report, 5 November 1991, columns 71–72.

  Mines Safety
  Mr. Dobson
  To ask the Secretary of State for Employment when he last discussed safety in mines with(a) the European Commission and (b) the Council of Ministers.
  237
  Mr. Jackson
  My right hon. and learned Friend the Secretary of State and my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) have regular discussions with the European Commission and the Council of Ministers on matters concerning health and safety in industry as a whole, including mining. A European directive detailing minimum health and safety requirements for mines is being prepared by the European Commission which will give an opportunity for more specific discussion on mining safety.

  Mr. Dobson
  To ask the Secretary of State for Employment what is the total of fatal accidents and major injuries, respectively, in coal mines owned(a) by British Coal and (b) others, in the current year and in each of the preceding five years.

  Mr. Jackson
  The latest available information on accidents and injuries in coal mines is for 1990–91. The table gives the information for the period 1986–87 to 1990–91.

  Fatal

  Major injuries

  BCC

  Other coal mines

  BCC

  Other coal mines

  1986–87

  15

  3

  952

  30

  1987–88

  9

  3

  729

  27

  1988–89

  18

  2

  685

  25

  1989–90

  18

  1

  587

  23

  1990–911

  11

  1

  501

  13

  1 Provisional

  Mr. Dobson
  To ask the Secretary of State for Employment how many safety investigations have been carried out in the current year and two preceding years into cases where people have been asleep underground.

  Mr. Jackson
  There is no record of a safety investigation being carried out by HM mines inspectorate in respect of a person being found asleep underground.

SOCIAL SECURITY

  Housing Benefit
  Mr. Alton
  To ask the Secretary of State for Social Security how many housing benefit claimants in Liverpool are awaiting payment of outstanding housing benefit; what is the total sum involved; and if he will make a statement.

  Miss Widdecombe
  The day-to-day administration of the housing benefit scheme is the responsibility of local authorities. The information requested is not therefore available.

  Homes (Repossessions)
  Mr. Meacher
  To ask the Secretary of State for Social Security how many unemployed persons claiming income support were dispossessed of their homes each year since 1979.

  Miss Widdecombe
  The information is not collected. However, income support help with mortgage interest may be paid direct to the lender where the claimant has arrears and it is in the family's interests to do so. Lenders do not normally repossess where direct payment arrangements 238
  are made. On 5 November at columns 94–95 my right hon. Friend the Minister of State announced that we shall be strengthening these arrangements to improve their effectiveness.

  Nebulisers
  Mr. Morgan
  To ask the Secretary of State for Social Security what is his most-up-to-date estimate of the number of cases and total cost of assistance by way of one-off payments for the purchase of nebulisers in the past five years.

  Mr. Scott
  The information requested is not available.

  Severe Weather Payments
  Mr. Allen
  To ask the Secretary of State for Social Security how many more pensioners will be eligible for severe weather payments arising from the ability to claim income support arising from the uprating statement.

  Mr. Scott
  I refer the hon. Member to the reply given to him by my hon. Friend the Parliamentary Under-Secretary of State on 5 November. All pensioners who receive income support are eligible for a cold weather payment.

  Mr. Allen
  To ask the Secretary of State for Social Security what was the total of severe weather payments paid by benefit offices covering Nottingham, North constituency for each of the last five years; if he will break down this figure by week or payment; and if he will estimate the number of claimants involved.

  Mr. Scott
  The information is not available in the form requested. Such information as is available is in the Library.

  Mr. Allen
  To ask the Secretary of State for Social Security if he will make a statement on the operation of he severe weather payments scheme proposed for the coming winter.

  Mr. Scott
  The cold weather payments scheme has been considerably improved for the coming winter. Payments of £6 for every period of cold weather will be paid automatically to eligible people as soon as a seven-day period of exceptionally cold weather is forecast by the Met Office or actually occurs. The capital rule has also been abolished, making approximately 400,000 more people eligible for payments.

  In addition some improvements have been made to weather station linkages.

  Mr. McKelvey
  To ask the Secretary of State for Social Security what is the current cost of the information received from the meteorological service for the purpose of calculating cold weather payments.

  Mr. Scott
  The Meteorological Office charged this Department £5,984·32 to provide the information necessary for the calculation of cold weather payments for the winter 1990–91.

  Income Support
  Mr. Meacher
  To ask the Secretary of State for Social Security how many income support claimants, according to the latest figures, are(a) single persons and (b) married

  239
  couples or living with partners, and in the case of (b), how many are childless, or where they have children, what is the average size of family.

  Miss Widdecombe
  There are 3·48 million single people in receipt of income support of which 810,000 have child dependents. There are 690,000 married couples or couples living together of which 330,000 have child dependents. The average number of children in couples' families is 2·22.

  Note:

  For the purposes of this reply, the term "child" is taken to include dependents aged 16–19.

  Source: ASE May 1990.

  Mr. Allen
  To ask the Secretary of State for Social Security if he will supply the numbers for each client group claiming income support for each of the years since its introduction in Nottingham, North constituency.

  Miss Widdecombe
  I understand from Mr. Michael Bichard, the chief executive of the Benefits Agency, that the information is not available and could be obtained only at disproportionate cost.

  Mr. Meacher
  To ask the Secretary of State for Social Security (1) what plans he has to monitor the effects of the Income Support (General Amendment) Regulations, S.I., 1991, No. 1559, on new claimants who are not covered by transitional protection and not entitled to family credit;

  (2) how many people he estimates will lose entitlement to income support and not be entitled to family credit as a result of the Income Support (General Amendment) Regulations, S.I., 1991, No. 1559;

  (3) how many claimants currently receiving income support will need transitional protection as a result of the Income Support (General Amendment) Regulations, S.I., 1991, No. 1559; and what he anticipates the total cost of that transitional protection will be;

  (4) how much his Department will save on payments of income support as a result of the reduction from 24 to 16 hours in the number of hours claimants can work.

  Miss Widdecombe
  [holding answer 5 November 1991]: The reduction in the remunerative work rule from 24 to 16 hours in the income-related benefits comes into effect from April 1992. It is part of a package of measures which will result in many working families with children being better-off through easier access to family credit. The estimated cost of the change across the benefits is expected to be around £50 million in the first year reducing to about £25 million in the longer term.

  Claimants who are working, or whose partners are working, between 16 and 24 hours a week and receiving income support at the point of change will not lose their entitlement to that benefit. Around 30,000 of them are likely to be families with children who will be entitled to more family credit than they would otherwise receive in income support. A similar number, about 30,000, will remain on income support under provisions giving them indefinite protection at an estimated cost of £30 million in the first year. It is expected that a further 35,000 parents, who are already working 16 hours or more and who are not yet on benefit, will come on to family credit in due course after April 1992, and that many more people will be attracted into work and on to family credit in the longer term and so become better off. However, because of likely behavioural changes it is not possible to forecast with any degree of accuracy what the net effect might be on claims
  240
  for income support made after April 1992. We will be carefully monitoring the effects of the change in the remunerative work rule in all the income-related benefits.

  Benefits
  Mr. Allen
  To ask the Secretary of State for Social Security what steps he is taking to reduce the time between his uprating announcement and the first payment of the uprated benefits.

  Miss Widdecombe
  The uprating date was moved to April in 1986 to align changes in social security benefits as closely as possible with the tax year and the local authority financial year. In order to ensure that the new benefit rates are implemented smoothly and efficiently to all beneficiaries in April, it is still necessary to announce them the previous autumn.

  Mortgage Interest
  Mr. Allen
  To ask the Secretary of State for Social Security what proposals he has for meeting mortgage interests costs through housing benefit.

  Miss Widdecombe
  Help with mortgage interest is currently given through income support. We have no plans to extend these arrangements.

  Parliamentary Questions
  Mr. Allen
  To ask the Secretary of State for Social Security how many questions he has not answered in the last year because of disproportionate costs.

  Miss Widdecombe
  In the last year 70 questions were not answered because of disproportionate cost.

  National Insurance
  Mr. Gerald Bowden
  To ask the Secretary of State for Social Security if he will investigate the case of Mr. Derek Merralls of 48 Worlingham road, London: and if he will review his Department's policy with regard to the payment of unemployment benefit to employees from whom national insurance payments have been deducted by an employer but not paid into the national insurance fund by an employer.

  Mr. Jack
  The case of Mr. Derek Merralls and the Department's policy on the effect on unemployment benefit of non-payment of national insurance contributions by employers is a matter for Miss Ann Chant, the chief executive of the Contributions Agency. She will write to my right hon. Friend and a copy will be placed in the Library and the Public Information Office.

  War Disability Pensions
  Mr. Steen
  To ask the Secretary of State for Social Security how much the Government spend anually on war disability pensions; and how many staff are employed in his Department on this.

  Miss Widdecombe
  Net expenditure on war disablement pensions in the financial year 1990–91 was about £570 million. About 1,050 staff are employed on all aspects of war pensions work, including the welfare service.

  Mr. Steen
  To ask the Secretary of State for Social Security what is the cost to his Department of the 90 per
  241
  cent. rebates paid to local authorities by central Government by way of the standard rebate scheme for those on war disability pensions.

  Miss Widdecombe
  The information requested is not available. Overall figures for the amount of subsidy for housing benefit and community charge benefit are held, but it is not possible to obtain a breakdown within that of subsidy paid in respect of particular groups.

  Mr. Steen
  To ask the Secretary of State for Social Security if he will list the local authorities in the south, south-east and south-west which use their discretionary powers to increase the rebates paid to those on war disability pension to above the 90 per cent. rebate refunded by central Government; and what is the total cost to the community charge payers of each local authority which uses its discretionary powers in this way.

  Miss Widdecombe
  In the year 1990–91, 277 of the 370 local authorities in England reported that they excercised their discretionary power to disregard more than the statutory £10 of a war disablement pension. These local authorities are listed in the table. The most up-to-date information held of the total cost to local authorities of operating local schemes in respect of war disablement and war widows' pensions is for the 1989–90 financial year. In that year the costs incurred in respect of rate rebates was in the order of £4·3 million and in the order of £10 million in respect of rent rebates and allowances. It is not possible to break down these figures between war disablement and war widows' pensions.

  Authorities in England operating a local scheme for war disablement pensions in 1990–91

  Adur

  Allerdale

  Amber Valley

  Arun

  Ashfield

  Ashford

  Aylesbury Vale

  Barking

  Barnet

  Basingstoke

  Bassetlaw

  Bath

  Beverley

  Birmingham

  Blaby

  Blackburn

  Blackpool

  Bolton

  Boston

  Bournemouth

  Bracknell

  Bradford

  Braintree

  Breckland

  Brent

  Brentwood

  Brighton

  Bromley

  Bromsgrove

  Broxbourne

  Broxtowe

  Burnley

  Bury

  Calderdale

  Cambridge

  Camden

  Canterbury

  Carlisle

  Carrick

  Castle Point

  Charnwood

  Chelmsford

  Cheltenham

  Cherwell

  Chesterfield

  Chichester

  Chiltern

  Chorley

  Christchurch

  Congleton

  Copeland

  Corby

  Cotswold

  Coventry

  Craven

  Crawley

  Crewe and Nantwich

  Dacorum

  Darlington

  Dartford

  Daventry

  Derby

  Derbyshire Dales

  Doncaster

  Dover

  Dudley

  Ealing

  East Cambridgeshire

  East Devon

  East Dorset

  East Hampshire

  East Hertfordshire

  Eastleigh

  East Staffordshire

  East Yorkshire

  Eden

  Ellesmere Port

  Elmbridge

  242

  Epping Forest

  Epsom and Ewell

  Erewash

  Exeter

  Fareham

  Fenland

  Forest Heath

  Forest of Dean

  Gedling

  Gillingham

  Glanford

  Gloucester

  Gosport

  Great Yarmouth

  Grimsby

  Guildford

  Hackney

  Halton

  Hambleton

  Hammersmith

  Harborough

  Harlow

  Harrow

  Hartlepool

  Hastings

  Havant

  Havering

  Hereford

  Hertsmere

  Hinckley and Bosworth

  Holderness

  Horsham

  Hounslow

  Hove

  Huntingdon

  Hyndburn

  Ipswich

  Isles of Scilly

  Islington

  Kennet

  Kensington and Chelsea

  Kingston upon Thames

  Kingswood

  Kirklees

  Knowsley

  Lambeth

  Lancaster

  Leicester

  Lewes

  Lewisham

  Lichfield

  Lincoln

  Liverpool

  Luton

  Macclesfield

  Maidstone

  Maldon

  Malvern Hills

  Mansfield

  Medina

  Melton

  Mendip

  Merton

  Mid Bedfordshire

  Middlesbrough

  Mid Suffolk

  Mid Sussex

  Milton Keynes

  Mole Valley

  Newark

  Newbury

  Newcastle under Lyme

  New Forest

  Northampton

  Northavon

  North Bedfordshire

  North Cornwall

  North Dorset

  North East Derby

  North Hertfordshire

  North Kesteven

  North Shropshire

  North Tyneside

  North Warwickshire

  North West Leicestershire

  North Wiltshire

  Nottingham

  Nuneaton

  Oldham

  Penwith

  Peterborough

  Poole

  Portsmouth

  Preston

  Purbeck

  Reading

  Redbridge

  Redditch

  Reigate Banstead

  Ribble Valley

  Richmondshire

  Richmond upon Thames

  Rochdale

  Rochester on Medway

  Rochford

  Rossendale

  Rother

  Rugby

  Rushcliffe

  Rushmoor

  Rutland

  Salford

  Salisbury

  Sandwell

  Scarborough

  Scunthorpe

  Sedgefield

  Sefton

  Sevenoaks

  Slough

  Solihull

  Southampton

  South Bedfordshire

  South Bucks

  South Cambridgeshire

  South Derbyshire

  Southend on Sea

  South Holland

  South Kesteven

  South Lakeland

  South Norfolk

  South Northants

  South Oxfordshire

  South Ribble

  South Shropshire

  South Somerset

  South Staffordshire

  South Tyneside

  Southwark

  South Wight

  Spelthorne

  Staffs Moorlands

  St Albans

  Stevenage

  St Helens

  Stockport

  Stockton on Tees

  Stoke on Trent

  Stratford on Avon

  Stroud

  Suffolk Coastal

  Sutton

  Swale

  Tameside

  Tamworth

  Tandridge

  Teignbridge

  Tendring

  Test Valley

  Tewesbury

  243

  Thamesdown

  Thanet

  The Wrekin

  Three Rivers

  Thurrock

  Tonbridge and Mailing

  Torbay

  Tower Hamlets

  Trafford

  Tunbridge Wells

  Vale of White Horse

  Vale Royal

  Wakefield

  Walsall

  Waltham Forest

  Wandsworth

  Wansbeck

  Wansdyke

  Watford

  Waverley

  Wealden

  Wellingborough

  West Devon

  Westminster

  West Norfolk

  West Oxfordshire

  West Wiltshire

  Wigan

  Winchester

  Windsor and Maidenhead

  Wirral

  Wokingham

  Wolverhampton

  Woodspring

  Worcester

  Worthing

  Wycombe

  Wyre Forest

  York

  Child Support
  Dr. Godman
  To ask the Secretary of State for Social Security if he will list the organisations which have been invited to comment upon his consultation document "The Proposed Contents of the Child Support Regulations" to be made under the Child Support Act 1991; and if he will make a statement.

  Mr. Jack
  The organisations which have so far been sent a copy of the consultation document are as follows:

  Action of Churches Together in Scotland (Law Department)

  Association for Payment & Clearing Services

  Association of British Chambers of Commerce

  Association of County Councils

  Association of Directors of Social Services

  Association of District Judges

  Association of District Councils

  Association of London Authorities

  Association of Magisterial Officers

  Association of Metropolitan Authorities

  Association of Scottish Chambers of Commerce

  Barnardos

  British Agencies for Adoption & Fostering

  British Bankers Association

  British Computer Society

  Building Societies Association

  Campaign for Justice in Divorce

  Campaign for Work

  Centre for Policy Studies

  Chief Adjudication Officer (Chief Child Support Officer Designate)

  Child Poverty Action Group

  Child Support Agency (Chief Executive Designate)

  Childrens Legal Centre

  Childrens Society

  Church Action on Poverty

  Citizens Advice, Scotland

  Commission for Racial Equality

  Committee of Scottish Clearing Bankers

  Confederation of British Industry

  Confederation of British Industry (Scottish Region)

  Convention of Scottish Local Authorities

  Council of Her Majesty's Circuit Judges

  Council on Tribunals

  Derbyshire County Council

  Disability Alliance

  Equal Opportunities Commission

  Faculty of Advocates

  Families Need Fathers

  Family Law Association of Scotland

  Family Law Bar Association

  Family Law Commission

  Family Policies Studies Centre

  Family Welfare Association

  General Bar Council of England and Wales

  Gingerbread

  Gingerbread Scotland

  244

  Independent Tribunal Service

  Inner London Magistrates' Courts Service

  Justices' Clerks' Society

  Law Society

  Law Society of Scotland

  Legal Action Group

  London Boroughs Association

  Lord President of the Court of Session

  Magistrates' Association

  Magistrates' Court Committee, Archway Road

  Magistrates' Court Committee, Ashton-under-Lyme

  Magistrates' Court Committee, Aylesbury

  Magistrates' Court Committee, Barking

  Magistrates' Court Committee, Barnet

  Magistrates' Court Committee, Barnsley

  Magistrates' Court Committee, Bedford

  Magistrates' Court Committee, Bexleyheath

  Magistrates' Court Committee, Birkenhead

  Magistrates' Court Committee, Birmingham

  Magistrates' Court Committee, Bishopsgate

  Magistrates' Court Committee, Blackpool

  Magistrates' Court Committee, Bolton

  Magistrates' Court Committee, Bootle

  Magistrates' Court Committee, Bradford

  Magistrates' Court Committee, Bridgend

  Magistrates' Court Committee, Bridgwater

  Magistrates' Court Committee, Bristol

  Magistrates' Court Committee, Bromley

  Magistrates' Court Committee, Bury

  Magistrates' Court Committee, Caernarvon

  Magistrates' Court Committee, Cambridge

  Magistrates' Court Committee, Cardiff

  Magistrates' Court Committee, Carlisle

  Magistrates' Court Committee, Chelmsford

  Magistrates' Court Committee, Cheshire

  Magistrates' Court Committee, Chesterfield

  Magistrates' Court Committee, Church End

  Magistrates' Court Committee, Coventry

  Magistrates' Court Committee, Croydon

  Magistrates' Court Committee, Doncaster

  Magistrates' Court Committee, Dudley

  Magistrates' Court Committee, Durham

  Magistrates' Court Committee, Ealing

  Magistrates' Court Committee, Esher

  Magistrates' Court Committee, Exeter

  Magistrates' Court Committee, Gateshead

  Magistrates' Court Committee, Gloucester

  Magistrates' Court Committee, Great Eastern Road

  Magistrates' Court Committee, Gwent

  Magistrates' Court Committee, Halifax

  Magistrates' Court Committee, Harrow

  Magistrates' Court Committee, Hastings

  Magistrates' Court Committee, Havant

  Magistrates' Court Committee, Haverford West

  Magistrates' Court Committee, Hebburn (Tyne & Wear)

  Magistrates' Court Committee, Herefordshire

  Magistrates' Court Committee, Hertford

  Magistrates' Court Committee, Huddersfield

  Magistrates' Court Committee, Huyton

  Magistrates' Court Committee, Ilford

  Magistrates' Court Committee, Isle of Wight

  Magistrates' Court Committee, Kingston upon Thames

  Magistrates' Court Committee, Leeds

  Magistrates' Court Committee, Leek

  Magistrates' Court Committee, Leicester

  Magistrates' Court Committee, Lincoln

  Magistrates' Court Committee, Liverpool

  Magistrates' Court Committee, Maidstone

  Magistrates' Court Committee, Manchester

  Magistrates' Court Committee, Middlesbrough

  Magistrates' Court Committee, Middlesex

  Magistrates' Court Committee, Mold

  Magistrates' Court Committee, Morpeth

  Magistrates' Court Committee, Newcastle upon Tyne

  Magistrates' Court Committee, Newtown (Powys)

  Magistrates' Court Committee, Northampton

  Magistrates' Court Committee, North Humberside

  Magistrates' Court Committee, North Shields

  Magistrates' Court Committee, Nottingham

  Magistrates' Court Committee, Oldham

  245

  Magistrates, Court Committee, Oxford

  Magistrates' Court Committee, Poole

  Magistrates' Court Committee, Preston

  Magistrates' Court Committee, Reading

  Magistrates' Court Committee, Richmond

  Magistrates' Court Committee, Rochdale

  Magistrates' Court Committee, Romford

  Magistrates' Court Committee, Rotherham

  Magistrates' Court Committee, St. Helens

  Magistrates' Court Committee, Sale

  Magistrates' Court Committee, Salford

  Magistrates' Court Committee, Sheffield

  Magistrates' Court Committee, Shrewsbury

  Magistrates' Court Committee, Skipton

  Magistrates' Court Committee, Solihull

  Magistrates' Court Committee, Stockport

  Magistrates' Court Committee, Suffolk

  Magistrates' Court Committee, Sunderland

  Magistrates' Court Committee, Swansea

  Magistrates' Court Committee, Tottenham

  Magistrates' Court Committee, Trowbridge

  Magistrates' Court Committee, Truro

  Magistrates' Court Committee, Uxbridge

  Magistrates' Court Committee, Wakefield

  Magistrates' Court Committee, Wallington

  Magistrates' Court Committee Walsall

  Magistrates' Court Committee, Walthamstow

  Magistrates' Court Committee, Warwick

  Magistrates' Court Committee, West Bromwich

  Magistrates' Court Committee, Wigan

  Magistrates' Court Committee, Wimbledon

  Magistrates' Court Committee, Worthing

  Magistrates' Court Committee, Wolverhampton

  Marriage Council in Scotland

  Mencap

  National Association of Citizens Advice Bureaux

  National Children's Bureau

  National Children's Homes

  National Council for One Parent Families

  National Council for the Divorced & Separated

  National Council of Voluntary Child Care Organisations

  National Council of Women of Great Britain

  National Family Trust

  National Society for the Prevention of Cruelty to Children

  National Stepfamily Association

  New Towns Association

  Office of Parliamentary Commissioner for Administration

  Office of the Social Fund Inspector

  Office of the Social Security Commissioners

  One Plus One (Strathclyde)

  Policy Studies Institute

  President of the Family Division

  Relate (Marriage Guidance)

  Save The Children

  Scottish Association of Family Conciliation Services

  Scottish Child and Family Alliance

  Scottish Child Law Centre

  Scottish Churches Committee

  Scottish Committee of Council on Tribunals

  Scottish Consumer Council

  Scottish Council for Single Parents

  Scottish Law Commission

  Scottish Trades Union Congress

  Scottish Women's Aid

  Sheriffdom of Glasgow and Strathkelvin

  Sheriffdom of Grampian, Highland and Islands

  Sheriffdom of Lothian and Borders

  Sheriffdom of North Strathclyde

  Sheriffdom of South Strathclyde

  Sheriffdom of Tayside, Central and Fife

  Sheriffs' Association

  Single Parents Under Attack

  Social Security Advisory Committee

  Society of Messengers-at-Arms and Sheriff Officers

  Solicitors Family Law Association

  Spastics Society

  Trades Union Congress

  Wages for Housework Campaign

  Women's National Commission

  246
  Womens Aid Federation

  Copies have also gone to a number of individual representatives of employers' and banking organisations.

  A copy has been placed in the Library. Further copies are available in the Vote Office and from the Department of Social Security.

  A separate consultation exercise is being held in Northern Ireland. Copies of the document have been sent to the following organisations.

  Barnardos (Northern Ireland)

  Belfast Law Centre

  Building Societies Association

  Catholic Family Care

  Child Care (Northern Ireland)

  Child Poverty Action Group (Northern Ireland)

  Citizens Advice Bureau (Northern Ireland)

  Confederation of British Industry (Northern Ireland)

  Equal Opportunities Commission (Northern Ireland)

  Enforcement of Judgements Office

  Family Law Association (Northern Ireland)

  Gingerbread (Northern Ireland)

  Law Society (Northern Ireland)

  Northern Ireland Bankers' Association

  Northern Ireland Chamber of Commerce and Industry

  Northern Ireland Court Service

  Northern Ireland Resident Maistrates Association

  Northern Ireland Office of Law Reform

  NSPCC (Northern Ireland)

  Relate (Northern Ireland)

  Save the Children (Northern Ireland)

AGRICULTURE, FISHERIES AND FOOD

  Water Protection
  Mr. Onslow
  To ask the Minister of Agriculture, Fisheries and Food what steps he is taking to assess the impact of the code of good agricultural practice for the protection of water.

  Mr. Curry
  The main indications to date of the success of this recently published document have been the high demand for it and the warm welcome that it has received from the NRA and other interested organisations. Our officials will be discussing with these organisations how best to monitor its impact.

  Wild-caught Birds
  Mr. Gale
  To ask the Minister of Agriculture, Fisheries and Food whether he will discuss the trade in wild-caught birds at the next meeting of the Council of Ministers.

  Mr. Curry
  A new Community directive on the protection of animals, including birds, during transport was agreed in the Agricultural Council on 21–22 October. Following pressure from the United Kingdom the directive requires additional rules to be established to address the welfare problems in the trade in wild birds. We will be pressing for an early decision on this matter. My right hon. Friend the Secretary of State for the Environment is also seeking to place the topic on the agenda for the Environment Council on 9 December 1991.

  Salmon
  Mr. Beith
  To ask the Minister of Agriculture, Fisheries and Food (1) whether he will list all the bodies and individuals from whom he received formal or informal representations about the east coast salmon fisheries between the date when the report on the fisheries was first
  247
  delivered to his Department and the date of its publication; and whether he will list any further bodies or individuals whom he consulted on the matter;

  (2) if he will list the changes made to the text of the report on east coast salmon fisheries between the day it was delivered to his Department and the day it was published.

  Mr. Curry
  We received very many representations on the matter of the statutory review of the east coast salmon net fisheries, dating from the undertaking to prepare a review which was given to Parliament during the passage of the Salmon Bill in 1986, until its presentation to Parliament in October 1991. There were, however, no consultations about the report or its contents which, as section 39 of the Act makes clear, are matters for my right hon. Friends the Minister of Agriculture, Fisheries and Food and the Secretary of State for Scotland to consider and present to Parliament. As the report itself describes, scientists from the Fisheries Department of MAFF and the Scottish Office prepared a very detailed background document for us. The only significant change made to it after its receipt involved revisions to the text to reflect the 1990 catch data which later became available for the review area. This updating was mentioned to the House by my right hon. Friend the Leader of the House on 22 July.

  Common Agricultural Policy Products
  Mr. Austin Mitchell
  To ask the Minister of Agriculture, Fisheries and Food whether he will bring up to date the information on sheepmeat and on common agricultural policy product sales in his written answers dated 28 April 1986,Official Report, columns 315–16.

  Mr. Curry
  The following figures show the amount by which the average market price of sheepmeat fell short of the guide price during the marketing years 1986 to 1990:

  Year

  Great Britain

  Northern Ireland

  p/kg

  P/kg

  1986

  42·2

  33·5

  1987

  43·1

  26·1

  1988

  69·7

  38·7

  1989

  62·2

  44·2

  1990

  83·7

  87·2

  The average market prices for sheepmeat for the week beginning 14 October are currently forecast as being below the seasonal guide price by 125p/kg for Great Britain and 89p/kg for Northern Ireland, but because of seasonal variations this is not an indication of the eventual figure for the marketing year.

  The following table gives updated details of exports of selected common agricultural policy commodities to non-EC countries in 1990. Expenditure on export refunds in 1990 was 7,722 million ecu.

  '000 tonnes

  EC12

  Wheat

  16,635

  Wheat flour

  2,907

  Barley

  9,655

  Malt

  1,350

  Rice

  370

  Sugar1

  5,035

  of which: raw sugar1

  35

  refined sugar

  5,000

  248

  '000 tonnes

  EC12

  Olive oil

  177

  Oilseeds

  59

  Whole milk powder

  502

  Skimmed milk powder

  324

  Condensed milk

  349

  Butter and buttermilk

  199

  Beef and veal

  647

  Sheepmeat

  6

  Pigmeat

  298

  Poultrymeat

  414

  Eggs

  100

  Wine

  1,168

  1 Includes raw sugar converted to white sugar equivalent: 1 tonne raw sugar=0·92 tonnes white sugar.

  Source: Eurostat.

  Mr. Austin Mitchell
  To ask the Minister of Agriculture, Fisheries and Food whether he will publish a table showing for the principal agricultural products regulated under the common agricultural policy the amount of levy payable on importation from non-EEC countries, the amount of the levy and any customs duties payable, the latest United Kingdom price, the intervention or threshold price, the target price and the world price.

  Mr. Curry
  Information on intervention, threshold and target prices was set out in the note deposited in the Library of the House giving details of the common agricultural policy prices settlement 1991–92. Details of customs duties are contained in the "Integrated Tariff of the United Kingdom", a copy of which is in the Library of the House. The remainder of the information requested is set out for the main commodities in tables 1 and 2. The world prices shown in table 1 are generally the lowest offer prices at the Community frontier underlying the Commission's calculation of variable import levies. I would remind the hon. Member that these are the lowest prices recorded and it is almost certain that higher prices on average would have to be paid for supplies if existing agricultural support policies were dismantled. The world prices shown do not necessarily relate to the same quality or presentation of products for which United Kingdom market prices are set out in table 2.

  Table 1

  Levy applicable in the United Kingdom and notional " World" price (a) on 26 October 1991 for the main traded agricultural commodities

  Levy (b) applicable in the UK

  Notional "world" price

  (£/tonne)

  (£/tonne)

  Common wheat

  119

  67

  Barley

  109

  61

  Maize

  95

  75

  Rice

  277

  157

  Sugar

  (c) 340

  170

  Olive oil

  468

  1,043

  Butter

  (d) 1,984

  637

  Skimmed milk powder

  920

  630

  Cheese (Cheddar)

  1,794

  956

  Beef and veal

  (e) 1,990

  1,079

  Pigmeat

  521

  754

  Sheepmeat

  (f) n/a

  n/a

  Poultrymeat

  281

  903

  Eggs

  274

  679

  Note:

  (a) "World" prices have been calculated by subtracting the levy applicable on 26 October from the threshold/guide price. The beef price is also adjusted for duty. In the case of pigmeat, poultrymeat

  249
  and eggs, the "world" price has been taken as the sluicegate price for the headings defined in (b) below. The resulting estimate has been converted from ECU/t at the appropriate market rate of exchange of £0·806057=1 ECU.

  (b) The rates of levy vary for different tariff headings. The rates quoted are: beef and veal—carcase; pigmeat—carcase; poultrymeat—70 per cent. chickens; rice—husked long grain; olive oil—virgin lampante: eggs—in shell.

  (c) In practice the United Kingdom's imports from third countries are normally covered by the Lome Convention and enter the Community levy-free.

  (d) A special lower rate of levy is applicable to imports of butter from New Zealand.

  (e) Most imports of beef from third countries are subject to special arrangements allowing entry at reduced levy rates.

  (f) Imports of lamb under voluntary restraint arrangements with principal suppliers and related agreements enter free of charge. Any imports outside these arrangements are subject to levies which cannot exceed the 20 per cent. tariff bound in the GATT.

  Table 2

  Selected average market/wholesale prices United Kingdom

  Prices are for week ending 26 October 1991 unless otherwise stated

  £/tonne

  Wheat (grower to merchant price, all purchases, England and Wales)

  1125

  Barley (grower to merchant price, all purchases, England and Wales)

  1117

  Maize (USA cif N. Europe)

  2117

  Rice (US long grain rice 10 per cent, maximum broken)

  3657

  Sugar (Refined bulk granulated)

  583

  Butter (Great Britain salted)

  2,123

  Skimmed Milk Powder

  41,450

  Cheddar Cheese (English mild white creamery)

  2,075

  Fat Cattle (Great Britain all clean cattle, liveweight)

  1,036

  Beef (Scotch killed sides, Smithfield)

  2,127

  Fat Sheep (Certified Great Britain, estimated dressed carcase weight)

  1,108

  Fat Pigs (All pigs, deadweight)

  963

  Poultry Meat (Broilers, liveweight)

  547

  Eggs (Size 3, packer to producer price)

  491

  Olive oil

  5—

  June 1990 England and Wales (excluding minor holdings)

  Table 1. Holdings by crops and grass size groups

  Hectares

  <50

  50–<100

  100–<200

  200 and over

  Total

  Holdings (thousands)

  115·4

  31·1

  17·1

  7·9

  171·5

  Crops and grass (thousands hectares)

  2,035·3

  2,197·9

  2,348·5

  2,707·6

  9,289·3

  Table 2. Holdings by beef cow size groups

  Head

  1–9

  10–39

  40–49

  50 and over

  Total

  Holdings (thousands)

  22·5

  £7·1

  2·0

  4·3

  45·8

  Beef cows (thousand head)

  87·7

  347·5

  86·8

  357·9

  879·9

  Table 3. Holdings by dairy cow size groups

  Head

  <50

  50–69

  70–99

  100 and over

  Total

  Holdings (thousand)

  15·8

  6·4

  6·3

  6·7

  35·1

  Dairy cows (thousand head)

  425·1

  373·1

  518·6

  1,007·6

  2,324·4

  Table 4. Holdings by total cereals (excluding maize) size groups

  Hectares

  <40

  40–<50

  50–<10

  100–<150

  150 and over

  Total

  Holdings (thousand)

  38·2

  3·9

  10·4

  4·3

  4·5

  61·3

  Total cereals (thousand ha.)

  571·1

  172·6

  739·8

  527·8

  1,116·5

  3,127·8

  250
  Note: A wide range of price quotations exists for individual commodities depending on quality, presentation, stage of marketing etc. Those shown are intended generally to be illustrative of prices paid by wholesalers or received by producers. Some prices are highly seasonal.

  1Week ending 24 October: prices are before deducting co-responsibility levy.

  2Prices unquoted since 14 September. Average price listed latest average levy as at 24 October.

  3Weeek ending 31 October.

  4Average price for month of October.

  5Prices range from £1,611–£3,683/tonne, with `Lampante' Spanish Origin at £2,141/tonne.

  Farms
  Mr. Austin Mitchell
  To ask the Minister of Agriculture, Fisheries and Food whether he will publish a table showing the concentration of agricultural land holdings and the decline in the number of farmers since 1961 in the United Kingdom and other EC countries.

  Mr. Curry
  This information is not available in the form requested.

  Mr. Austin Mitchell
  To ask the Minister of Agriculture, Fisheries and Food whether he will publish a table showing the number of(a) holdings and (b) owners accounting for 25 per cent. and 50 per cent. of (i) farm land, excluding woodland and rough grazing, (ii) beef cattle, (iii) dairy cattle, (iv) cereals, (v) rapeseed and (vi) sugar beet.

  Mr. Curry
  The information requested is not readily available in the form requested. However, the following tables show for England and Wales, for 1990, the distribution of holdings by size in respect of each of items requested. Information on ownership is not available.
  251

  Table 5. Holdings by oilseed rape size groups

  Hectares

  <10

  10–<20

  20–<50

  50 and over

  Total

  Holdings (thousand)

  2·8

  4·1

  4·7

  1·5

  13·1

  Oilseed rape (thousand ha.)

  18·9

  58·5

  144·3

  121·5

  343·2

  Table 6. Holdings by sugar beet size groups

  Hectares

  <5

  5–<20

  20–<40

  40 and over

  Total

  Holdings (thousand)

  2·1

  5·4

  1·9

  1·1

  10·5

  Sugar beet (thousand ha.)

  6·3

  57·8

  51·7

  78·3

  194·1

  Meat
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food how the new regulations under the Food Safety Act 1990, to control illegal drug residues in meat, will be enforced.

  Mr. Maclean
  The new regulations will be enforced at slaughterhouses and on farm by members of the state veterinary service carrying out checks on meat and animals. Similarly, local authorities will be responsible for meat sold at retail outlets.

  Environmentally Sensitive Areas
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food what is his estimate of the proportion of costs of implementing the environmentally sensitive areas policy constituted by(a) administration, (b) monitoring, (c) payments to farmers and (d) other costs.

  Mr. Curry
  Over the period 1986–87 to 1990–91, the payments to farmers in England have accounted for approximately 75 per cent. of the total costs of the ESA scheme, the balance being taken up by administration which includes conservation advice to participating farmers and monitoring to assess the economic and environmental impacts of the scheme. It is not possible to provide a precise breakdown between the administrative and monitoring costs, but they have been broadly equal.

  Sheep and Goat Milk
  Mr. Ron Davies
  To ask the Minister of Agriculture, Fisheries and Food when he expects to announce standards for the commercial production of sheep and goat milk; and if he will make a statement.

  Mr. Curry
  The European Commission has proposed a new Community-wide milk hygiene framework covering milk and milk products from cows, goats, sheep and buffaloes. This is intended to come into force on 1 January 1993. The Government are pressing for effective progress to be made in negotiations so that realistic standards can be introduced by this date or as soon as possible thereafter. In the meantime, the production and sale of goat and sheep milk continues to be subject to the general provisions of the Food Safety Act 1990, general food hygiene and labelling regulations and specific codes of practice.

DEFENCE

  Sea Training Facilities
  Mr. Home Robertson
  To ask the Secretary of State for Defence what sea training facilities are currently available at HMS Wessex, HMS Sussex and HMS Claverhouse; and what is their current usage rate.

  Mr. Archie Hamilton
  HMS Wessex, HMS Sussex and HMS Claverhouse have River class minesweepers; HMS Itchen, HMS Arun and HMS Spey respectively. The time spent at sea is approximately 20 per cent. of the time available when allowance is made for the ships to undergo essential maintenance and repair. In addition to training at sea other essential training activities are conducted alongside.

  Fishery Protection
  Mr. Home Robertson
  To ask the Secretary of State for Defence whether the Royal Navy has been able to meet the requirement for fishery protection in 1991–92; which ships are currently committed to the coastal division of the fishery protection squadron; and what plans he has to fulfil the fishery protection requirement in 1992–93.

  Mr. Archie Hamilton
  The Royal Navy fishery protection squadron is on target to meet the level of patrolling for 1991–92 agreed with the Ministry of Agriculture, Fisheries and Food and the Scottish Office Agriculture and Fisheries Department. HMS Blackwater, Soberton, Brinton, Kellington, Sheraton and Iveston are currently assigned to the coastal division of the fishery protection squadron. Plans for fishery protection in 1992–93 have not yet been decided.

  Minesweepers
  Mr. Home Robertson
  To ask the Secretary of State for Defence if he will list those River class minesweepers currently in service, together with their current squadron allocation and tasks.

  Mr. Archie Hamilton
  The following River class minesweepers are in service:

  HMS Blackwater, HMS Arun, HMS Carron,

  HMS Dovey, HMS Helford, HMS Humber, HMS Orwell,

  HMS Spey, HMS Waveney, HMS Itchen.

  HMS Blackwater is employed on fishery protection duties with the fishery protection squadron, HMS Itchen is in refit and the remainder are allocated to the 10th mine counter-measures squadron and are used for sea training by the Royal Naval Reserve.

  HMS Humber and Helmsdale
  Mr. Home Robertson
  To ask the Secretary of State for Defence when HMS Humber and HMS Helmsdale were commissioned; what was their planned length of service; and why they are to be placed in reserve.

  Mr. Archie Hamilton
  HMS Humber was commissioned on 7 June 1985; HMS Helmsdale was commissioned on 1 March 1986. It is not our practice to disclose the planned length of service for vessels. Placing HMS Helmsdale and HMS Ribble, but not HMS Humber, in reserve enables reductions in running costs to be made while retaining the ships, which can be prepared for operations at short notice, as part of our MCM capability.

  Correspondence
  Mr. Winnick
  To ask the Secretary of State for Defence (1) on what date he replied to the letter from the hon. Member for Walsall, North dated 5 August 1991 concerning a service medal for a constituent; on what date his Department wrote directly to the constituent; on what date a copy of his Department's letter to the constituent was sent to the hon. Member; and if he will make a statement;

  (2) if he will make it his practice to reply directly to the hon. Member when he receives a letter from an hon. Member dealing with a constituent's cases.

  Mr. Archie Hamilton
  My noble Friend the Under-Secretary of State for the Armed Forces will write to the hon. Member.

HEALTH

  Ealing Health Authority
  Mr. Harry Greenway
  To ask the Secretary of State for Health what was the expenditure in real and cash terms by(a) Ealing health authority and (b) Ealing hospital since the inception of each; and if he will make a statement.

  Mr. Dorrell
  Figures of total revenue expenditure recorded in the annual accounts of Ealing health authority since its establishment on 1 April 1982 are shown in the table. The information about Ealing hospital is not held centrally. My hon. Friend may wish to write to Lady Eccles of Moulton, the chairman of Ealing health authority, for details.

  £000 cash

  £000 at 1990–1991 prices

  1982–83

  34,522

  53,674

  1983–84

  36,235

  53,850

  1984–85

  39,602

  56,008

  1985–86

  40,265

  54,003

  1986–87

  44,131

  57,230

  1987–88

  46,772

  57,520

  1988–89

  53,102

  60,862

  1989–90

  58,157

  62,664

  1990–91

  62,729

  62,729

  Note: Figures for the earlier years have been expressed at 1990–91 prices by the use of the Gross Domestic Product (GDP) deflator.

  Road Accidents
  Ms. Ruddock
  To ask the Secretary of State for Health (1) how many hospitals imposed the charges for emergency treatment after road accidents, as laid down in sections 157 and 158 of the Road Traffic Act 1988 in each year since 1988; and what are the average charges;

  (2) when (a) Guy's and (b) Lewisham hospitals introduced the charges for emergency treatment after road accidents, as laid down in sections 157 and 158 of the Road Traffic Act 1988; and what are the average charges for (a) Guy's and (b) Lewisham hospitals in each year since their introduction.

  Mr. Dorrell
  All health authorities and NHS trusts may collect an emergency treatment fee, at a flat rate of £19·30, for immediate medical attention required following a road traffic accident and they may also collect charges for any subsequent in or out-patient treatment, up to ceilings of £2,667 and £267 respectively. Provision for these charges was made in the Road Traffic Acts 1930, 1933 and 1934 and has been carried forward in later legislation by successive Governments. Motorists are legally required to insure against these charges and those for subsequent in and out-patient treatment are collected direct from insurance companies.

  Bio Products Laboratory
  Mr. Bellotti
  To ask the Secretary of State for Health (1) what measures the Bio Products Laboratory has introduced to conform to fair trading and fair competition practices as currently apply to the commercial plasma industry in the United Kingdom since 1 April;

  (2) from what date the Bio Products Laboratory will start charging for whole blood and plasma derivative products such as Albumin and Factor VIII at prices that accurately reflect the total costs including blood and plasma collection, Factor VIII BSM royalty and product licence application fee costs;

  (3) what measures are being taken to ensure the maintenance of a free market and free competition between the public and private plasma industry; and how clinical choice, pricing, research and development, investment and patient safety will be maintained.

  Mrs. Virginia Bottomley
  It has been the policy of successive Governments that this country should be self-sufficient in blood products derived from plasma donated by our unpaid voluntary donors. This position is consistent with the more recent decision by the European Community to promote a policy of Community self-sufficiency based on voluntary blood donation.

  We also recognise that doctors should be free to prescribe the most appropriate product for their patients in the light of the available clinical information. NHS clinicians may, therefore, prescribe blood products from commercial suppliers and not just those from the Bio Products Laboratory.

  Within the overall policy we intend that BPL should compete fairly in terms of the service, quality, and price of its blood products.

  For this reason we introduced cross-charging in 1989 and reversed the previous arrangements whereby BPL products were supplied free of charge in return for plasma. The removal of Crown immunity from 1 April 1991 brought the BPL products within the scope of the formal licensing arrangements under the Medicines Act.

  Nottingham DHA
  Mr. Allen
  To ask the Secretary of State for Health by how much Nottingham district health authority overspent or underspent in each of the last five financial years; and what estimate he has of projected overspend in the current year.

  Mr. Dorrell
  District health authorities are financially accountable to their regional health authorities. The hon. Member may wish to contact Sir Michael Carlisle, the chairman of Trent regional health authority, for details.

  Health Benefits
  Mr. Allen
  To ask the Secretary of State for Health how many of the certificates issued under the low income scheme for health benefits in 1990–91 were for(a) full exemption and (b) partial exemption.

  Mrs. Virginia Bottomley
  During the 1990–91 financial year the number of certificates issued totalled 887,722. Of these, 398,429 were for full exemption and 489,293 partial exemption.

  Income Generation
  Mr. Harry Barnes
  To ask the Secretary of State for Health what assistance is given to the private health sector arising from the work of the income generation unit; and what fees are paid for such services.

  Mr. Dorrell
  The income generation unit promoted closer co-operation between the NHS and the private sector. This development contributed significantly to the estimated £50 million contribution to NHS resources which was made by the income generation initiative in 1990–91.

  Mr. Harry Barnes
  To ask the Secretary of State for Health how much income has been generated in the NHS for each of the financial years 1989–90 and 1990–91 both in total and in the following areas,(a) commercial concessions to retailers and other businesses, (b) advertising facilities, (c) catering services, (d) sale of services, including health screening, child minding, waste disposal and heating, (e) car parking facilities and (f) the sale of goods, equipment and materials.

  Mr. Dorrell
  Information is not collected centrally in the form requested. The net benefit to the NHS from income generation activity in 1989–90 was £25·8 million and reports for 1990–91 are expected to reveal a net benefit of around £50 million.

  Mr. Harry Barnes
  To ask the Secretary of State for Health if he will list the income generation projects undertaken by the Trent regional health authority which were developed and implemented with the help of the income generation unit, together with the amounts of income generated from each project.

  Mr. Dorrell
  The role of the income generation unit was to promulgate advice generally and Trent in common with other regions benefited from that advice. But as was the case with all regions, it was open to Trent to seek advice from the central unit at any time and on any matter as the need arose.

  Mr. Harry Barnes
  To ask the Secretary of State for Health what forms of advice the income generation unit provides to hospital trusts.
  256
  Mr. Dorrell
  The income generation unit gave advice to NHS trusts in the same way as it provided advice to all other authorities and units of the NHS.

  Mr. Harry Barnes
  To ask the Secretary of State for Health if he will give details of the national policy on income generation that has been formulated by the income generation unit.

  Mr. Dorrell
  The policy of the NHS is to promote the generation of secondary income from outside the NHS in any way feasible which is profitable, ethical and within the law, provided that the schemes are not in conflict with the broad aims of the NHS. The fundamental principle underpinning all income generation activity is that it should not adversely affect NHS patient care.

  Mr. Harry Barnes
  To ask the Secretary of State for Health if he will arrange for the production and publication of an annual report on the work of the income generation unit.

  Mr. Dorrell
  The unit no longer exists.

  Contraceptive Advice
  Mr. Worthington
  To ask the Secretary of State for Health whether the Department of Health maintains a register of centres providing specialist contraceptive advice for young people.

  Mrs. Virginia Bottomley
  No. It is for individual health authorities to determine and arrange provision of the family planning services appropriate to particular local needs. Health authorities have been asked to bear in mind the need for separate, less formal arrangements for young people.

  Hospital Trusts
  Mr. Winnick
  To ask the Secretary of State for Health if he will set out the starting salary for each chief executive of a hospital trust and the latest salary in each case.

  Mr. Dorrell
  NHS trust chief executives are employed by their trust board; their terms and conditions of service are a matter for them.

  Incontinence Pads
  Mr. Winnick
  To ask the Secretary of State for Health (1) what is the average number of incontinence pads supplied daily free by local health authorities;

  (2) if he will list the local health authorities which have been charging for incontinence pads; and if such payments continue.

  Mr. Dorrell
  This information is not held centrally.

  Liverpool Children's Hospital
  Mr. Wareing
  To ask the Secretary of State for Health when he last visited the Royal Liverpool Children's hospital, Alder Hey; whom he met; and what subjects were discussed.

  Mrs. Virginia Bottomley
  I visited the Royal Liverpool children's hospital, Alder Hey, on 21 June this year. During my visit I saw the recently upgraded oncology and haematology ward and the paediatric intensive care unit
  257
  and had the opportunity to meet many senior clinicians and members of the nursing staff, patients and parents to discuss the various methods of care and treatment.

  Hospital Trusts
  Mr. Winnick
  To ask the Secretary of State for Health if he will set out the names of those who have been appointed chief executives of hospital trusts and their previous position prior to being appointed chief executive.

  Mr. Dorrell
  The names of the chief executives of the NHS trusts which became operational on 1 April 1991 are given in the table. Second wave trusts, which will become operational on 1 April 1992, are now in the process of appointing chief executives. Matters relating to the appointment and employment of NHS trust chief executives are for NHS trust boards; information regarding chief executives' previous employment is not held centraly.

  NHS Trust

  Chief Executive

  The Freeman Group of Hospitals

  Mr. L. Fenwick

  Newcastle Mental Health Services

  Mr. L. Joyce

  Northumbria Ambulance

  Mr. L. Caple

  United Leeds Teaching Hospitals

  Mr. S. Ingham

  St. James's University Hospital

  Mr. I. Donnachie

  Bradford Hospitals

  Dr. M. Baker

  Northern General Hospital

  Mr. N. McKay

  Lincolnshire Ambulance and Health Transport Service

  Mr. M. Ruffles

  Doncaster Royal Infirmary and the Montagu Hospital

  Mr. D. Nicholson

  Norfolk Ambulance

  Mr. M. Willis

  Anglian Harbours

  Mr. P. Harrison

  Southend Health Care

  Mr. Stout (acting)

  Mr. Brackenbury (designate)

  Royal London Hospital

  Mr. M. Fairey

  Royal Free, Hampstead

  Mr. J. Cooper

  Royal National Throat, Nose and Ear

  Mr. A. Ranzetta

  Royal National Orthopaedic Hospital

  Mr. M. McGreevy

  North Middlesex Hospital

  Dr. K. Hirst

  North Hertfordshire

  Mr. R. Ewings

  Mount Vernon Hospital

  Mr. S. Ramsden

  Hillingdon Hospital

  Mr. P. Brown

  Central Middlesex Hospital

  Mr. A. Black

  Guy's and Lewisham

  Mr. P. Griffiths

  Lifecare

  Mr. I. Semple

  Kingston Hospital

  Mr. J. Langan

  Homewood

  Ms. E. Richardson

  St. Hellier's

  Mr. N. Sewell

  Croydon Community

  Ms. J. Hargadon

  Epsom Health Care

  Dr. T. Thomas

  Royal Surrey County and St. Lukes

  Mr. M. Forrer

  Weston Area

  Mr. R. Tucker

  East Somerset

  Mr. G. Mitchell

  East Gloucestershire

  Mr. J. Hammond

  Cornwall Community Healthcare

  Mr. D. Green

  Cornwall and Isles of Scily Mental Handicap

  Mr. A. Sandry

  United Bristol Healthcare

  Dr. J. Roy lance

  Northern Devon Healthcare

  Mrs. J. Acred

  South Devon Healthcare

  Mr. A. Parr

  Taunton and Somerset Hospital

  Mr. E. McNally

  Royal National Hospital for Rheumatic Diseases

  Mr. C. Quinell

  West Dorset Mental Health

  Mr. D. Griffiths

  West Dorset General Hospitals

  Mr. N. Chapman

  West Dorset Community Health

  Mrs. V. White

  Nuffield Orthopaedic Centre

  Mr. C. Jones

  First Community

  Mrs. P. Tomlinson

  Mental Health Foundation of Mid-Staffordshire

  Mr. M. Murray

  Rugby

  Mr. P. Farenden

  Walsall Hospitals

  Mr. J. Roskill

  Wirral Hospitals

  Mr. F. Burns

  258

  The Royal Liverpool University

  Mr. Fitzpatrick (acting)

  Hospital

  Mr. M. Stamp (designate)

  St. Helens and Knowsley Hospital Services

  Mr. K. Sanderson

  Chester and Halton Community

  Mr. C. Griffiths

  The Cardiotheroracic Centre

  Mr. J. Meade

  Broadgreen Hospital

  Mr. T. Cleator

  Royal Liverpool Children's Hospital and Community Services

  Mr. J. Butler

  Mid Cheshire Hospitals

  Mr. D. Young

  Manchester Central Hospitals and Community Care

  Mr. M. Ruane

  Christie Hospital

  Mr. M. Fry

  Care Homes
  Mr. Hinchliffe
  To ask the Secretary of State for Health what is his policy towards the three-tier care standards arrangement proposed by the Hertfordshire county council for care homes being leased to the private sector.

  Mrs. Virginia Bottomley
  I understand that Hertfordshire county council has made no such proposal. The council commissioned a study of options for the future management of its residential care homes and those options are currently under consideration by the council's social services committee.

  Local authority residential care homes should match the standards required of homes registered under the Residential Home Act. This standard should be available to all residents and is not linked to the ability of individual residents to meet the costs.

  Drugs Testing
  Mr. Hinchliffe
  To ask the Secretary of State for Health what independent monitoring or evaluation of the data submitted by general practitioners and hospital doctors concerning the testing of new drugs is carried out by his Department's Committee on Safety of Medicines prior to the licensing of such drugs.

  Mrs. Virginia Bottomley
  A company is required to certify the accuracy of all the results from clinical trial data, submitted in support of a product licence application for a new drug. The Committee on Safety of Medicines, comprising eminent experts in the fields of medicine, science and pharmacy, carefully evaluates these data and has to be satisfied as to the safety, quality and efficacy of the drug in question before advising the Licensing Authority on whether or not a product licence should be granted.

  Published guidelines require companies to establish procedures for the organisation, conduct, documentation and verification of clinical trials, and for the audit and archiving of clinical trial data.

  Health Service Staff
  Ms. Harman
  To ask the Secretary of State for Health if he will list for each national health service region(a) the number of female district general managers and (b) the district health authorities they manage.

  Mrs. Virginia Bottomley
  [holding answer 5 November 1991]: As at 6 November 1991 there were 10 female district general managers. The table shows the breakdown by region and what district they manage.
  259

  Region

  District

  North West Thames RHA

  North Bedfordshire

  North East Thames RHA

  West Essex

  Hampstead

  East Anglian RHA

  Cambridge

  North Western RHA

  North Manchester

  Rochdale

  South East Thames RHA

  Hastings

  South West Thames RHA

  Croydon

  South Western RHA

  Frenchay

  Trent RHA

  Central Notts

  Total number of female DGM's: 10

  General Practioner Earnings
  Mr. Butler
  To ask the Secretary of State for Health what information he has on the average current earning levels of general practitioners.

  Mr. Waldegrave
  [pursuant to the reply, 5 November c. 101]: In 1990–91, the first year of the new contract, estimated gross payments to general practitioners averaged some £5,951 per GP in excess of the intended level. We shall not know how much of this sum falls to be recovered under the normal balancing arrangements for dealing with over and underpayments until autumn 1992, when we have full information on GPs' practice expenses in 1990–91. I can well understand the profession's concern at the prospect of an overpayment of this order hanging over successive pay rounds. Nor would I want difficulties with the workings of the remuneration system to obscure the undoubted achievements of the new GP contract and the benefits that it is bringing to patients. So I believe it right to begin to address the issues now.

  As a first step, I have considered carefully the different elements of the 1990–91 overpayment. The General Medical Services Committee has drawn attention to two factors—both concerning the handling of target payments in this first year of the contract—which they have suggested merit special treatment.

  First, it is now clear that the Government's decision to bring higher target payments within average net income for nine months, as part of the staging of the award, interacted with the Doctors' and Dentists' Review Body's underestimate of the number of GPs who would achieve higher targets, to add a sum of £1,800 per GP to the overpayment. A separate decision to pay a "fifth target payment" to help maintain cash flow to individual GPs while the target payments system was being introduced added a further £300 to this. I have concluded that it would not be right for the Government to recover either of these sums. They result from special factors, unique to 1990–91, and can and should be excluded from the sum to be recovered, without prejudice to the normal principles of the balancing mechanism. So I have decided now to waive £2,100 of the 1990–91 overpayment as the profession has asked. This is equivalent to a sum of £63 million for Great Britain.

  We shall need to return to the handling of the outstanding sum in the autumn of 1992, when we have further information. But in the meantime there are other issues for Government and the profession to address together. The latest information suggests that the fee scale set for 1991–92 is continuing to deliver a higher level of
  260
  income than intended, although on a lesser scale than in 1990–91. Neither Government nor profession wishes to see the overpayment accumulate further, and we must therefore work together on evidence for the Doctors' and Dentists' Review Body to help them ensure that arrangements are brought properly into balance in 1992–93, when they determine the new level of income for that year.

  We shall also need to take account of the experience of the first two years of the contract as we work together to develop it further. In looking to the future I shall wish to explore particularly the scope for developing the contract and remuneration system in ways that are more sensitive to local needs and circumstances. I also have in mind the further development of the performance-related elements of the contract, in the light of the Government's policy set out in the citizens charter. The profession may want to add other issues arising from their wide-ranging consultation on their document, "Building Your Own Future".

  I therefore propose to invite the GMSC to work with Department of Health officials to agree proposals in time to put evidence to the DDRB for the 1992 pay round—when recovery of the 1990–91 overpayment falls due and all the necessary information will be available—covering:

  (a) the handling of the overpayments already incurred—including the possibilities of accelerated repayment of the remaining amounts and of waiving an additional sum as part of a wider package; and

  (b) the best way of developing incentive fee scales within the remuneration system, in pursuit of the policy objectives I have outlined.

  I believe this represents a substantive response to the profession's understandable concerns. We have addressed those elements of the 1990–91 overpayment which clearly merit exceptional treatment and where we have enough evidence to act now. We have also set the framework for constructive discussion on the handling of the remaining pay issues in support of the GP contract through the 1992–93 pay round and beyond. I look to the profession for a similarly constructive response.

  Food Hygiene
  Mr. Pike
  To ask the Minister of Agriculture, Fisheries and Food if he will make a statement on the current position of food hygiene training requirements in relation to the Food Safety Act 1990; and on the relative operative date for these regulations.

  Mr. Dorrell
  I have been asked to reply.

  Following comments made in response to our general consultative paper on food hygiene training, we have been considering what the scope of the regulations should be and will be announcing our conclusions in due course. No operative date has yet been fixed.

  Mr. Pike
  To ask the Minister of Agriculture, Fisheries and Food when the registration of all food premises with local authorities in accordance with the Food Safety Act 1990 will become compulsory; and if he will make a statement.

  Mr. Dorrell
  I have been asked to reply.

  Draft regulations on registration of premises used for a food business have been issued for public consultation. We shall be laying the definitive regulations shortly.

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

Palace of Westminster: Crèche
The Viscount of Falkland The Viscount of Falkland asked The Chairman of Committees:
Whether, in view of all party acceptance that workplace crèches are desirable, there are any proposals to provide a crèche for the children of those working in the Palace of Westminster.
The Chairman of Committees (Lord Aberdare): My Lords, I understand that a feasibility study of the provision of a childcare facility is being undertaken for the House of Commons (Services) Committee, which has approved in principle the provision of such a facility. Further action depends on the identification of possible suitable accommodation.
The Viscount of Falkland: My Lords, I thank the noble Lord for that reply. Does he agree that a sense of urgency on the part of all concerned is needed following the Prime Minister's recent positive remarks on Opportunity 2,000? Any research on the number of people likely to use such a facility in the Palace of Westminster should be conducted extremely speedily as in another place pressure has been applied for such a facility. In another place there are 200 research staff and secretaries, most of whom are women who, either now or in the future, may need such a facility. I do not know whether the same can be said for this House, but even if 50 crèche places were required by people in this House that still justifies an urgent consideration of this matter.
Lord Aberdare: My Lords, I agree that there is greater pressure for a crèche on the part of people in another place than is the case in this House. I am sure that personnel in another place appreciate that this matter is urgent. We are keeping in close touch with progress made in another place, but the most important factor is to find suitable accommodation for the crèche before we try to discover how high the demand for it will be. If we do not have suitable accommodation for the crèche we cannot make much progress. However, steps are being taken to find the accommodation.
Lord Graham of Edmonton: My Lords, what progress has been made in finding suitable accommodation? We appreciate that there are many calls on available accommodation in the Palace of Westminster. Further, will the noble Lord bear in mind the fact that we are not merely talking about Members of another place or Members of this House but also about the many hundreds of members of staff who work in the Palace of Westminster? I hope the
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noble Lord will remember that if this is the mother of Parliaments, we should consider the mothers in Parliament.
Lord Aberdare: My Lords, the House of Commons (Services) Committee has asked the Accommodation and Administration Sub-Committee in another place, in consultation with the New Building Sub-Committee, to take steps to identify possible suitable accommodation for this childcare facility. We are rather in their hands as the accommodation at this end of the corridor is far tighter than at the other end. The New Building Sub-Committee might well be able to make some suggestions on this matter. I fully agree with the final point of the noble Lord. This facility is being provided mainly in view of staff requirements.
Lord Harmar-Nicholls: My Lords, I agree that there may be a case for providing a crèche in certain circumstances, but as regards the research staff, to which the noble Viscount, Lord Falkland, referred, are there not too many researchers wandering around the corridors of Westminster?
Lord Aberdare: My Lords, the Question on the Order Paper does not address that matter.
Lord Jenkins of Hillhead: My Lords, there may or may not be too many researchers. However, I am glad, in spite of a certain incipient hilarity in the House, that the noble Lord, Lord Aberdare—as I would have expected—took this matter seriously; as was illustrated by his initial reply. The more one considers the advance, at once considerable and incomplete, made towards women's equality over the past 20 years, the more it strikes one that the biological barrier is a substantial barrier to full career development.
Lord Aberdare: My Lords, I fully agree with the comments of the noble Lord, Lord Jenkins. There is one aspect of this matter that is worthy of consideration; that is, in many cases young mothers may prefer to find a crèche or similar facility near where they live rather than bring young children into the centre of London in the rush hour.
Baroness Denton of Wakefield: My Lords, does my noble friend accept that the word "parent" is not a female noun? I hope that gentlemen on the staff may be allowed to use this facility too.
Lord Aberdare: My Lords, I am sure that matter will be considered carefully when the time comes.
The Viscount of Falkland: My Lords, does the noble Lord agree that I would not have had to table this Question in the first place if there had been adequate facilities at local level? Such facilities exist in France, West Germany, Belgium, Holland and other European countries. I believe in this country, according to recent statistics, only about 30 per cent. of mothers benefit from such facilities, whereas in France the figure is about 95 per cent.
Lord Aberdare: My Lords, I take the point made by the noble Viscount.
Baroness Strange: My Lords, if such a facility became available, would it also be available to grandparents in this House on a temporary basis?
Lord Aberdare: My Lords, that matter would also have to be discussed between the two Houses.

University Research
3.7 p.m.
Baroness Lockwood Baroness Lockwood asked Her Majesty's Government:
Whether they are satisfied with the plans being put in hand for the forthcoming Universities Funding Council research exercise.
Viscount Davidson: Yes, my Lords.
Baroness Lockwood: My Lords, I must thank the noble Viscount for that informative reply. Will he assure me, given the importance of this exercise to university finances generally, and in view of the fact that, for the first time, there will be assessment of applied science and industrially sponsored research, that the assessment panels adequately represent the interests of all universities? Will the panels include those with specialised knowledge and the ability to appraise applied research?
Viscount Davidson: My Lords, the UFC has made clear that the panels will consist largely of people with recent experience of academic work in both university and non-university institutions, including research in the area to be assessed. They will also, where appropriate, include people with relevant expertise from outside higher education. Members will be selected by the UFC executive with advice from institutions, research councils, subjects associations and other bodies. The UFC expects to draw on the full spread of institutions in appointing panels. I hope that that answer satisfies the noble Baroness.
Lord Taylor of Blackburn: My Lords, will the Minister publish the list of institutions and the subjects in which they specialise?
Viscount Davidson: My Lords, that is a matter for the UFC.
Lord Morris of Castle Morris: My Lords, is the noble Viscount aware that the previous research selectivity exercise cost some £4 million, involved 360,000 man days of staff time, as well as non-staffing costs, and required submissions from universities which would have made a pile of paper 200 feet high? In the light of those facts, will he tell the House what expenditure limits have been set for this next exercise and how the department intends to ensure that we get value for money?
Viscount Davidson: No, my Lords, I cannot provide that information. However, I can tell the noble Lord that the UFC issued a circular letter on 22nd October seeking the views of all higher education institutions and other organisations in the UK on the
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arrangements for the exercise. The deadline for consultation is 20th December 1991, so that should not take very long.
Lord Taylor of Blackburn: My Lords, in view of the answer that the Minister gave me, will he use his good offices to encourage the council to publish the list of institutions and the subjects?
Viscount Davidson: My Lords, as I said in my original Answer, the Government are satisfied with the plans being put in hand for the forthcoming research exercise. Therefore, I suggest, with respect, that if any noble Lords are not satisfied they take the matter up with the UFC.
Baroness Blackstone: My Lords, is the Minister aware that the transfer of funds from the UFC to the research councils does not include humanities research? Is he also aware that there is a great deal of concern about that in the universities, and can he say what the Government plan to do about humanities research in the universities? For example, will they commit themselves to setting up a humanities research council?
Viscount Davidson: My Lords, I am afraid that I cannot answer that question directly. However, I can tell the noble Baroness that the high quality basic and strategic research will attract funding irrespective of location. We have asked the funding council to ensure that assessments of research quality cross both sectors in order to inform allocations for 1993–94. I am sure that if the noble Baroness writes to the chairman of the UFC she will receive an answer from him.
Baroness Blackstone: My Lords, I am sorry to intervene again but the reply which the noble Viscount gave had nothing to do with my question. Moreover, it is not the responsibility of the chairman of the UFC to decide on the setting up of a new funding council. Therefore, I should be grateful for a reply to my question.
Viscount Davidson: My Lords, the reason I did not give a satisfactory reply to the noble Baroness was that I did not know the answer.
Baroness Lockwood: My Lords, in view of the issues raised by this Question, will the noble Viscount reassure himself that the arrangements are satisfactory by following up with the UFC the points that have been raised?
Viscount Davidson: My Lords, I shall certainly see that the UFC receives a copy of Hansard.

South Africa: Sanctions
3.12 p.m.
Lord Hatch of Lusby Lord Hatch of Lusby asked Her Majesty's Government:
What policy they adopted at the Harare Commonwealth Heads of Government Conference towards the lifting of sanctions on South Africa.
The Minister of State, Foreign and Commonwealth Office (The Earl of Caithness): My Lords, we called for the immediate lifting of sanctions on trade and investment and of financial sanctions.
Lord Hatch of Lusby: My Lords, can the noble Earl tell the House whether it is the case that all members of the Commonwealth, with the exception of the United Kingdom, agreed that sanctions should be lifted in stages, those stages coinciding with practical proof that discrimination was being reduced and that a democratic constitution was in the process of being created?
The Earl of Caithness: No, my Lords, because everybody agrees that it should be a process that progresses at a certain pace. It was the pace of that process which was in question.
Lord Mellish: My Lords, is the Minister aware that some of us regard the conference as a bit of a farce as in countries like Zimbabwe hundreds of cars are being driven around on petrol which comes from South Africa? How can they tell us what to do about sanctions?
The Earl of Caithness: My Lords, they do not. We discuss the matter and form our own views.
Baroness Ewart-Biggs: My Lords, does the Minister agree that one of the major concerns in South Africa at present is the ending of violence and continuing the peace process? Therefore, can the Minister say whether any meetings are arranged between Her Majesty's Government and Mr. de Klerk or with Mr. Nelson Mandela or any member of the Patriotic Front to discuss both sanctions and the present situation in South Africa?
The Earl of Caithness: My Lords, the majority of the question posed by the noble Baroness was wide of that on the Order Paper. Of course there are regular contacts with people in South Africa on those questions.
Lord Jenkins of Putney: My Lords, is it not rather unfortunate that Her Majesty's Government persist in falling out of step with the rest of the Commonwealth on this matter? Are they satisfied that standing alone on those issues is the right policy to adopt?
The Earl of Caithness: Yes, my Lords. It is totally in line with our policy with other European Community members.
Lord Hatch of Lusby: My Lords, the noble Earl did not quite answer my original supplementary question. Is it the case that each of the other members of the Commonwealth believed and agreed that sanctions should be lifted by stages and that those stages should be related specifically to actions taken by the South African Government whereas the British Government desired all sanctions to be lifted immediately? In view of the revelations of the past few months, do the British Government not recognise that there is a great danger that, unless sanctions remain in force, the present South African Government could continue the policy which they themselves have admitted they
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have followed in the past of financing organisations within South Africa which are opposed to the ANC and majority rule?
The Earl of Caithness: My Lords, we, together with our Commonwealth partners and the other members of the European Community, agreed that we should lift sanctions by stages. It is the pace with which they are lifted which is important.

Transport Schemes: EC Intervention
3.16 p.m.
Lord Boyd-Carpenter Lord Boyd-Carpenter asked Her Majesty's Government:
What reply has been sent to the letter from European Community Commissioner Mr Ripa Di Meana to the Secretary of State for Transport demanding cessation of work on a number of road and rail development schemes.
The Minister of State, Department of Transport (Lord Brabazon of Tara): My Lords, my right honourable friend has written to Commissioner Di Meana explaining that the schemes are urgently needed and have been subject to thorough and protracted environmental assessment. The department will continue to proceed with the necessary advance works for the schemes.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that reply. Can he confirm that the work on those schemes has not been interrupted as a result of the letter? Will he also comment on the rather strange procedure followed by the commissioner in writing in those terms, demanding cessation of work and apparently ensuring that copies of his letter went to various organisations in this country?
Lord Brabazon of Tara: My Lords, I can confirm to my noble friend that advance works for the schemes are proceeding. Construction is still some time off but we intend to proceed with it, subject to further action from Brussels.
As regards the notification from the Commission, it is rather curious that in August a private individual in the United Kingdom sent the department a letter which he had received from a Commission official saying that action was in prospect when the Government had not been sent a copy of that letter.
Lord Jay: My Lords, is the Minister aware that consultation on the M.3 extension scheme has now been proceeding vigorously for 16 years? Is not 16 years quite long enough?
Lord Brabazon of Tara: My Lords, I believe that it is in fact 20 years. There is no doubt that the scheme needs to go ahead and we shall press ahead with it as quickly as possible.
Lord Boardman: My Lords, does my noble friend agree that this evidence of increasing bureaucracy in Brussels does not help to enlist public support for a satisfactory agreement at Maastricht?
Lord Brabazon of Tara: My Lords, my noble friend is quite right. That is exactly the point which my right honourable friend the Prime Minister made in response to this particular letter.
Lord Clinton-Davis: My Lords, turning to the substance of the case rather than to the private letter, can the Minister confirm that since last January there has been a considerable amount of correspondence and discussion between the European Commission and the Department of Transport concerning these issues? Does he agree that, in those circumstances, when the Prime Minister said, as he did in Harare—supporting the Secretary of State for Transport's similar assertions—that the Government were not aware of any pending action and had no previous notice of it, that was not true? Will the Minister answer "yes" or "no" to that question?
Lord Brabazon of Tara: My Lords, it is perfectly true. In those four cases we received letters from the Commission at various times: in 1989, in 1990 and in March 1991. Each of those letters was replied to promptly and there was no further inquiry from the Commission. Therefore one might have assumed that our reply had been satisfactory and that no action was pending. I also refer to a written answer on the subject given by the Commissioner in June 1990 in which he said that he saw no grounds for initiating the infringement procedure for incompatibility with Community law.
We take exception to the fact that, as I said to my noble friend, the letter was not even sent to the Government but to a private individual. Furthermore, rather than being a private letter to my right honourable friend, the Commissioner's letter of October, saying that he was initiating proceedings, was sent to the press first.
Lord Renton: My Lords, does my noble friend recollect that, during the passage of the New Roads and Street Works Bill in the last Session, he made it clear that our country had accepted the European directive requiring environmental assessment before road schemes are started? Does he agree that we have obeyed that directive and that, having done so, have fully complied with European law, and that there was therefore no justification whatever for the letter that was written and circulated by the European Commissioner?
Lord Brabazon of Tara: My Lords, as I said at that time and as my noble friend is quite right to remind the House, we accepted the directive. We published our own regulations to bring that directive into effect in 1988. Those regulations state specifically that schemes in the pipeline are not affected by the regulations. Those regulations were seen by the Commission in 1988. It made no comment on them. One assumes, therefore, that it found them satisfactory at that time.
Lord Mackie of Benshie: My Lords, does the Minister agree that this is an irritation to be sorted out and not a reason for casting doubt on the value of our membership of the European Community?
Lord Brabazon of Tara: My Lords, for those people affected by the schemes it is somewhat more than an irritation.
Lord Monson: My Lords, does the noble Lord agree that the whole affair is a manifestation of the almost quasi-religious conviction of certain powerful and important people on the Continent that national frontiers and separate national identities are on the way out morally and to all intents and purposes legally, and therefore that the British have no more right to decide what goes on within Britain than do people living hundreds of miles away in other parts of the EC?
Lord Brabazon of Tara: My Lords, I am not quite sure whether I would go quite so far down that road as the noble Lord. We fully support the Commission's aim of ensuring that common procedures for environmental assessment are applied equally in all member states. However, decisions on specific projects, including the balance to be struck between environmental and social and economic factors, are entirely a matter for national governments.
Lord Stoddart of Swindon: My Lords, is it not insulting to this country and to the institutions of this country—our planning institutions, for example—that the Commissioner should write in such terms to the Government? Bearing in mind that this country lives up to its obligations and implements on time most of the directives, would it not be much better if Mr. Di Meana lectured his Italian compatriots, who have not implemented 60 per cent. of directives regarding communautaire practices? As regards the environment, would he not do much better to tell the northern Italians in particular that it is not for the good of the environment that they kill tens of millions of birds every year and everything else that moves?
Lord Brabazon of Tara: My Lords, the noble Lord strays slightly from the Question on the Order Paper, but he makes some good points. When we sign up to a directive and introduce our regulations, we abide by them. The argument in this case concerns schemes, some of which were in transition as long ago as 20 years before the directive came into force. I understand that the Commissioner is attempting to take similar action against nine other European countries on the same point. Perhaps in this case the member states are right and the Commission is wrong.
Lord Molloy: My Lords, is it not—
Noble Lords: Order!
Lord Clinton-Davis: My Lords, first, just to put the matter beyond doubt, does the Minister agree that Italy was one of those countries sent an Article 169 letter at about the same time as that received by the Government from the Commissioner? Secondly, in order to clear up the dispute over the facts—and there is a dispute over the facts and a difference between what the Government say and what the Commission says; as always, I am trying to be helpful—would the Minister be prepared to put into the Library a clear version of all the correspondence and discussions that

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have taken place between his officials and Commission officials in relation to those issues? Finally, would it not also be helpful in terms of encouraging open debate if the Minister were to disclose the terms of those Article 169 letters so that the public could know what was going on?
Lord Brabazon of Tara: My Lords, I understand that it is not normal practice to disclose the full text of those Article 169 letters. However, as the Commission appears to be willing to leak them to whomever happens to want to see them, no doubt people can find out about them in that way. I shall write to the noble Lord about the details that he requested in his supplementary questions. As regards our formal response to that letter, we have until 17th December to respond and we shall obviously do so by then.
Lord Molloy: My Lords, in view of the discussion on this extremely serious matter initiated by the noble Lord, Lord Boyd-Carpenter, in the Chamber this afternoon, should not the Government consider examining all the procedures in the EC which can so drastically affect this nation?
Lord Brabazon of Tara: My Lords, I am very much aware of the anxiety that has been expressed on this matter in your Lordships' House this afternoon and I shall certainly draw it to the attention of my right honourable friend the Secretary of State. I believe that he will be much encouraged by what has been said here this afternoon.
Lord Campbell of Alloway: My Lords, can my noble friend the Minister say whether perhaps, sooner or later, a decision will be taken by Her Majesty's Government to seek the opinion of the Court of Justice upon the legality of the Commissioner's conduct?
Lord Brabazon of Tara: My Lords, as I said, the next step is for us to respond by 17th December to the Article 169 letter. If the Commission is not satisfied, it will issue a reasoned opinion, to which we then have the right to respond. If the matter has still not been resolved, the Commission may then start proceedings before the European Court.

Business
Lord Hesketh: My Lords, it may be for the convenience of the House to know that, subject to the progress of business, the House will rise for the Christmas recess on Thursday 19th December. Your Lordship; may also find it convenient to know that, since Easter will be relatively late next year, it is intended that the recess will include the week before Easter, running up to Good Friday. Your Lordships may therefore plan on the basis that, whatever else is the case, Parliament will not be sitting in Holy Week.
Torquay Market Bill [H.L.]
Read a third time, and passed, and sent to the Commons.

Address in Reply to Her Majesty's Most Gracious Speech
Debate resumed on the Motion moved on 31st October last by the Earl of Selborne—namely, That a humble Address be presented to Her Majesty as follows:
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."
3.28 p.m.
Lord Brabazon of Tara: My Lords, over the last three days we have debated, among other things, foreign affairs, defence, the environment, health, education and social affairs. Today we turn to the economy. It is only right that we should do so because, whatever our aims and ambitions for those subjects, their fulfilment depends in a large part on our ability to pay for them, and that depends on the state of the economy.
I have already relayed the details of the Government's expenditure plans for the next three years in the Autumn Statement which I repeated yesterday. Today I propose to concentrate more on the economic prospect which is the background to those plans. The new Industry Act forecast is little changed from the view presented earlier this year by the Chancellor in his Budget Statement. As predicted then, inflation has fallen sharply and those gains are likely to be consolidated in the year ahead. The second half of this year will see a small rise in output and the upturn will gain strength as 1992 progresses. All the signs are that the economy is coming out of recession and is now on the verge of sustainable, non-inflationary growth.
What is the basis for this assessment? There is a mass of evidence to indicate that the emergence from recession is under way. The decline in manufacturing output has halted while output in the service sector may have stopped falling as early as the spring. Regrettably, unemployment is still rising though its rate of increase has definitely slowed. Though consumer spending fell in the same quarter, the rising trend in retail sales apparent even before then suggests that the first stirrings of a consumer-led recovery are in the offing.
That comes as no surprise. Seven months ago my right honourable friend the Chancellor first pointed to an end to recession and a recovery in the second half of the year. Critics have picked the bones of any unfavourable statistic that has come their way and ignored the accumulating evidence which day by day reinforces the message of recovery. In our reading of the economic runes we have shunned the slavish interpretation of each individual piece of new data

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that is published. Instead we have looked at the underlying trends over a period of time; at the full picture which emerges from the pieces. That picture is increasingly bright and this view is bolstered by increasingly positive signals from the two most important precursors to recovery.
The first of these is the outstanding achievement on inflation. Inflation has been cut by more than half in the course of only a year. Successive reductions in interest rates have played their part in this, but the fall cannot be dismissed solely as the result of special factors working their arithmetical magic; for other measures of inflation, such as producer output prices, have headed steadily downwards too. There is clear evidence of inflationary pressures abating sharply across the economy as a whole.
That process will continue over the next year though inevitably on a less spectacular scale. The headline inflation rate is forecast to be 4 per cent. by the end of 1992. It could well fluctuate a little around that rate during the year as this year's special factors drop out of the annual comparison. But the path of underlying inflation will be steadily downwards. Excluding food, drink and tobacco, producer output price inflation in the fourth quarter of 1992 is projected to be 3½ per cent., which is the lowest figure for more than 20 years.
These figures are an irrefutable testimony to the success of government policy. They are proof that the Government's prudent and cautious policy was the right one. But they are more than that. Low inflation is the first prerequisite for a high performance economy. That has always been the Government's belief. These figures hold the promise of a future with a high degree of price stability and of sustainable growth rooted in that certainty.
Yesterday I mentioned that our inflation rate may soon fall below that of Germany. In fact, with the return to trend growth in the second half of next year, the IMF says that we should be growing faster than Germany in the year as a whole and over the year our growth performance should compare favourably with that of France and Italy; and all the while underlying inflation will be falling.
The other key to recovery is confidence. The recession made a large and painful dent in confidence. But it has shrugged off the blow. Confidence is coming back among consumers and business alike. Consumer confidence has been on a rising trend since its low point in the spring. Last month it attained its long-run average level for the first time in almost three years —a sure sign of a bounce-back.
Business confidence is on the up too. The best guide to that is the long-established CBI survey whose results have consistently tracked movements in activity over the decades. Reliable as the CBI optimism balance is, nevertheless it requires some adjustment to account for its marked seasonal pattern. We all know that we feel more confident about the future at some times of the year than at others. Of course, it is not quite as simple as that; but then, the noble Lord, Lord Peston, as an economist,
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probably knows more about the mysteries of seasonal adjustment than I do. Even so, it sends a clear message from business charting the way to recovery.
We know that the return of confidence is vital to the recovery, because business itself has told us so. And we know that confidence has returned because people themselves know that government policies are working. They know that from our record on inflation; but they also have over a decade of solid economic achievement on which to judge us.
It is important not to lose sight of just how far the British economy has come over the past 12 years. Then, we were a second-rate economy, kicking our heels at the bottom of all the European and international league tables. We were wedded to outmoded and ineffective practices in industry, business and government. Today, despite the trials of recession, we lead the way with our record on growth, investment and productivity.
From 1981 to 1989 the United Kingdom economy enjoyed eight successive years of growth averaging over 3 per cent. The last time that growth held up over such a long period was the 1960s. What is more, we grew faster than either Germany or France over the 1980s as a whole, and that after two decades when Britain had the slowest growth rate in the EC.
We can be equally proud of our record on investment. Of all the major seven economies, only Japan's investment growth was faster in the 1980s. Progress over the years 1987 to 1989 was particularly impressive. Investment underwent its fastest three-year growth period since the war to reach record levels. Investment of course has fallen during the recession, but it will revive soon and by the second half of next year should be 4 per cent. above its current level.
Investment on that scale represents a vote of confidence in the future, with the capital stock built up for years to come. It was not just home-grown businesses which were voting with their capital spending. The 1980s also saw a steady flow of inward investment from overseas businesses eager to participate in the UK's industrial renaissance which amounted to £19 billion in 1990 alone.
In the past few years the United Kingdom accounted for a higher proportion of inward investment in the EC than any other EC nation. Over half of that was from the US and Japan. We can look at that another way. The UK attracted more Japanese overseas investment than the rest of the European Community put together. That investment is not just here today and gone tomorrow. It will enhance the economy's potential, creating jobs and sustaining growth for years to come.
This new found confidence is founded on a fundamental improvement in our industrial performance. Over the 1980s United Kingdom manufacturing productivity grew faster than in any other major industrialised nation. In the 1960s and 1970s our manufacturing productivity growth was the slowest in the G7. Like investment, productivity has naturally fallen in the course of the recession, though

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there is already some sign of a turn-around to pre-recession levels as manufacturing output has begun to rise again.
Profitability too is at levels far higher than a decade ago. The credit for that can be shared equally by managers and workers, for it would not have been possible without the sea change in industrial relations which was such a feature of those years. In any case the gains of the 1980s represent a real strengthening of our industrial base which will stand the economy in good stead as the recovery gets underway.
Those are achievements on a grand scale which testify to years of careful stewardship. But they are also achievements whose effects filtered down to make a real difference to individuals and their families. That, after all, is the real measure of economic success and the one by which every government are ultimately judged.
Since 1978–79 the real after-tax income of the average family has risen by nearly 37 per cent., and the real wealth of all groups in society has grown since then by an average of around 60 per cent. More and more ordinary people have taken a stake in the economy. One in four adults is now a shareholder and two thirds of homes are owner occupied.
Those are the bald facts. But what lies behind this transformation? From a look at the overall direction of government policy in the past 12 years several clear themes emerge. Chief among these is the desire to create the best possible environment for economic activity—not to engage in that activity itself, mind; that is clearly for the private sector.
That is why we have pursued policies designed to reduce and simplify taxation. That is why we have striven to control public spending and to increase the value that the taxpayer gets for his money. That is why the control and defeat of inflation has been at the heart of the Government's economic policy. The policies that were adopted to meet those ends yielded benefits in their own right. It is plain to see how lower inflation makes people better off, for example. But they offer more than short-term gain. They are the tools with which the Government have created the overall framework essential to the success of our dynamic modern economy.
Establishing such a framework is the role to which government are best suited. That is why the head of the CBI explained only a few days ago that the first requirement for industrial success was the right government—a government who understand this. Years of hamfisted intervention, and the experience of the dead-beat economy it produced, has taught us that the real driving force behind economic progress is not government but the individual citizen.
Hence the other major theme of policy: the freeing of markets to function as they should. For too long the British economy was handicapped by markets that simply did not work: a bit of inappropriate state meddling here, the grip of trade union stranglehold there, built up over the years to clog the market mechanism in so many industries. The state of the labour market exemplifies the problem: it failed to do
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its own job of allocating labour properly and as a consequence other markets were further undermined in their ability to do theirs.
That is why labour market reform and the rethink of the role of the trade unions that goes with it, has been one of the cornerstones of micro-economic policy. But the cause of markets has been pursued in other guises too. Privatisation has seen chunks of industry returned to the private sector. Forty-six major businesses and more than 900,000 jobs have been transferred, including the main public utilities. And they are managed better there by businessmen than they ever could be by civil servants.
The privatisation process is really about clarifying ownership. It boils down to plain common sense. Once it is clear who owns an asset, it is obvious who should look after it and making the link stronger between ownership and responsibility pays off in performance. More effort goes into running the business and that tells in hard results.
The relationship between ownership and outcome is not something that the Government have dreamt up on their own. It was spelt out long ago in the concept of the social market. We have long recognised the market as the most efficient means of organising economic activity. But it has an equally important quality that is often ignored. That is fairness. Markets are really about co-operation. They are what happens naturally when people get together to sort out their material needs.
But of course it cannot do that on its own. The market is only efficient and fair if it operates within the rule of law. No one claims that individuals can be left entirely to their own devices to produce a socially desirable result. It is human nature to try to beat the system. Therefore the market needs a legal framework to ensure that that cannot happen. Only government can provide that. Even so, they should use those legal powers with moderation. It is only too easy to overdo it and for regulation to extend into intervention. Our own experience and the lessons from Eastern Europe are warning enough that the invisible hand of the marketplace works more efficiently than the dead hand of the state.
Nor would anyone argue that the market—however firmly regulated—is best fitted to provide all the services that a modern industrial nation might require. The maintenance of law and order is an obvious duty of the state, as is the provision of defence; and governments must also concern themselves with health and education. You might call this part of the social framework which makes the fair play of markets possible.
That is reflected in the Government's public expenditure plans. Those continue to support the Government's objective of balancing the budget over the cycle. It is of the utmost importance that public spending be constrained so that the ratio of general government expenditure to national income falls over time. And it is a rule of good government that the existing commitments must be honoured. That is especially true where the most vulnerable members of society are concerned. But it is true for all our policies.

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We are spending more on health: a real term increase of 4 per cent. That brings the real rise in NHS spending to over 50 per cent. since 1978–79. We are also determined to go on increasing the number of students in higher education. In 1979 one in eight 18 year-olds went on to higher education. Next year the ratio will be one in four. It must continue to grow if we are to have the highly educated, fully skilled workforce we need to compete in the 1990s.
But the Government have also endeavoured to direct funds towards meeting our longer term economic objectives. That means focusing on infrastructure investment. Public transport investment will be 70 per cent. higher in the next three years than it was in the last, and provision for national roads will more than double from 1988–89 to 1994–95. That is a real contribution to our future.
We know that we are especially well placed to make the most of the years ahead. The ideas that I have described, and the principles distilled from them, have been the guiding light of Government policy. Throughout the 1980s they delivered tangible results. The domestic economy flourished and our international reputation soared. Our share of world trade is likely to rise in 1991 for the third successive year; and that has not happened for decades.
However, our progress abroad is not all on the economic front. The Government are continuing their positive contribution to the negotiations on economic and monetary union. The issues to be decided are of profound importance for our economic and political life. We have always made clear that we could not accept any changes to the Treaty of Rome that would bind the UK to move to a single currency without a separate decision by the British Parliament. Although there remains much to be resolved, there are signs that our constructive approach is bearing fruit. The Government continue to work for an agreement at Maastricht that will be acceptable to all 12 member states.
Just over a year ago we took sterling into the ERM. The cynics said that our membership would not last. But experience proved them wrong. By adding the discipline of the ERM to our policy framework, we have achieved the goal of lower inflation, lower interest rates and a strong currency. That is a sign of confidence in the economy from all sides. That confidence is fully justified, for the United Kingdom's prospects are brighter than ever. With the economy poised to grow, it is instructive to look at how far it has come already. This year GDP will be 27 per cent. higher than at the previous low point 10 years ago. Manufacturing output will be 25 per cent. higher and business investment will be up by 59 per cent. These are not fly by night statistics. They are a sure sign of an economy that is fundamentally stronger.
The last year has been a difficult one for many people but the sign now is that the gloom is lifting. Around such a turning point it is important not to lose sight of the longer view. That view is an encouraging one. We know about the achievements of the past and we can look forward with confidence for the gains yet to come.
3.47 p.m.
Lord Williams of Elvel Lord Williams of Elvel rose to move at the end of the Address to insert: "but regret that the policies of Your Majesty's Government have wrought serious and unnecessary long-term damage to the economy and thereby to the social cohesion of the United Kingdom."
The noble Lord said: My Lords, I should like to start by drawing your Lordships' attention to the text of the amendment. I do so because it refers quite specifically to the three major points that I wish to make today. It will come as no surprise to the noble Lord, Lord Brabazon, to know that my interpretation of economic events differs substantially from his.
First, serious and long-term damage has been done to our economy for which we believe Government policies are to blame. Secondly, I draw attention to the fact—and I believe that it is a fact and will argue the fact—that that damage was done unnecessarily. Thirdly, I shall draw attention to the social condition of our country, in many respects extremely worrying, which is to be directly attributed—as again I shall argue—to the economic policies pursued by this Government.
I am introducing this last theme—the noble Lord, Lord Brabazon, touched upon it and your Lordships might find it a little strange in a debate about economic affairs—because I wish to make it clear beyond peradventure of doubt that I and my noble friends do not believe that the economy (as we call it) is a thing in itself to be discussed in the abstract. It is the sum of all that happens every hour and every day in the lives of everybody, whether rich or poor, high or low. In other words, the economy is about people. If that seems a strange concept to some of your Lordships I point out that the word "economy" has its origin in ancient Greek. In that language it means the management of the household. It is the management of the whole national household that I wish to address this afternoon.
I put our charge against the Government simply and in direct terms. They have grossly mismanaged our national household. The result of that mismanagement is that when they leave office next year, as they most assuredly will, they will leave behind them a legacy of which even noble Lords opposite who are honest—and I know that noble Lords opposite are honest—will look back on with a deep sense of unhappiness.
In substantiating that charge I wish to concentrate on the longer term. The noble Lord, Lord Brabazon, has again taken us through the short-term forecasts of the Autumn Statement. I shall concentrate deliberately on the longer term. I do not propose to engage in debate on how much and in what particular the Government have decided to use our money—and I speak as a taxpayer—to offer inducements to this or that section of the electorate. As regards the Autumn Statement I have little to add to what my noble friend Lord Peston said yesterday; I very much hope that we are on the road to recovery. I do not want bad news. I very much hope that the recession has already bottomed out and that we can soon look forward to

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what I regard as the real recovery which will be when unemployment stops going up and starts to come down.
My argument is directed to the longer term but I have one immediate plea to make to the noble Lord, Lord Brabazon, and other Ministers. When dealing with economic issues will they please show greater openness and honesty in their statements to the public? May we have an end to selective statistics and biased, comment? I fully understand that the Government are facing a general election and that they are worried about that fact. However, it does not provide even half an excuse for the series of statements that we have heard during the past two years. They have been so devious —and I use the word advisedly —that I believe the public have simply stopped believing what Ministers say.
Your Lordships may remember that, first, there was to be no recession but something called "a soft landing". Then, if there were to be a recession it would not be very deep. Indeed, "shallow" was the word used. All that was under Mr. Major's period at the Treasury. In all decency I shall pass over that, remarking only that all the catastrophes that have overtaken us in the past few years—inflation, the poll tax, recession and so forth—have occurred while Mr. Major has been in charge of our national affairs one way or another. I am afraid that is not a proud record.
During the past few months announcements have been made at regular intervals of a recovery being "round the corner", or of there being "green shoots of spring", and other similar flights of fancy from an unknown poet in the Treasury. But to cap it all, a week or so ago the Chancellor of the Exchequer marched out of 11 Downing Street to announce—as the noble Lord, Lord Brabazon, has announced today—that there was an almost unprecedented rise. In what, my Lords? In something called the seasonally adjusted CBI business confidence indicator. Imagine that—a seasonally adjusted business confidence indicator! It is quite clear that the Treasury took a CBI finding, which in itself is a fairly crude measure, applied a statistically dubious seasonal adjustment factor and, hey presto, there came out something that the Chancellor proclaimed to the world as the greatest news possible.
This is not just a matter of poking fun at Ministers, however much I might enjoy doing so. It is much more important than that; it is a matter of confidence. What the nation needs above all, whether it be business, consumers or old age pensioners, is confidence that they are being told the truth. I say most directly to noble Lords opposite that the public no longer believe that they are being told the truth. If Ministers want proof of that they need only look at the opinion polls on the National Health Service. Whatever the merits of the argument—I shall not go into them—a clear majority of the public simply does not believe what the Government are saying.
The same is true about the Government's approach to Europe. The public should be told where the Government stand. This is not a new issue. Perhaps I may remind your Lordships that this Government signed the Single European Act which in its Preamble
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committed us to economic union. The Government then took us into the exchange rate mechanism. If, at the Government's request, we have signed up to European economic union, as we have, your Lordships would be entitled to think that the Government should follow the logic of their previous position and move towards that.
But instead, what do we have? As the next instalment we have the dithering around with what is known as an "opt out" clause in the proposed amendment to the Rome Treaty. Nobody else wants that—indeed, the Treaty would become absurd if everybody could opt out—and the rest will go ahead anyway. So why are the Government not giving the public a clear and honest lead following the logic of their previous undertakings? Why have we started apparently to let loose a sustained, and frequently offensive, barrage on Ministerial attacks on the European Commission and, indeed, on its individual members? Are we to be at the heart of Europe, as the Prime Minister has said, or are we not?
There is no doubt that this Ministerial prevarication—for that is what I call it—has done and is doing serious and long-term damage to the national economy. How can we expect companies to make their investment plans in this kind of atmosphere? How can we expect private households to make the everyday decisions of life unless they have honest answers from the Government to honest questions? But, in my view, worst of all is the effect that sustained disinformation has had during the years. Time and time again we were told that during the 1980s there was some kind of miracle in the British economy. Ministerial statements endlessly repeated were actually believed. But the truth of the matter is that there was no miracle in the British economy—it was all rubbish. Not only was there no miracle but the British economy, as it comes out of this recession, is in desperately bad shape.
Perhaps I may refer to the balance of payments. In every previous recession since the war our balance of payments has moved into surplus. In the mid-1940s, the mid-1950s, the mid-1960s, the mid-1970s and during 1980–1982 the pattern was always the same; we went into recession with a balance of payments deficit and came out with a balance of payments surplus. That occurred for obvious reasons. If you cut domestic demand you also cut demand for imports and business has a greater capacity to export. But what do we have this time? We have at the height of recession a balance of payments deficit of £6.5 billion or so and an expected deficit as we come out of recession of £9.5 billion or so. All that is in spite of the enormous benefit of North Sea oil. And to explain it all away on the grounds that it is "financeable" is nothing short of mendacious. The truth is that the economy is seriously out of balance on its external account, and even the Government cannot see it getting any better.
Let us take unemployment. Again, in every previous recession since the war, bar 1980–2, unemployment has settled back—within reasonable distance on either side—to where it was before the recession began. Now, what happened in 1980–2,

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when resulting unemployment peaked at over 3 million, can at least be argued intellectually to be the result of a necessary effort to improve labour productivity. It is an argument which I would willingly debate but it can be sustained intellectually. This time unemployment has been across the whole economy and has been simply used as a crude counter inflationary weapon. What is the result? The result is that the numbers of young and long-term unemployed increase. As the number of young people whom we fail to provide with skills, and the numbers of adults whose skills we allow to fade away increase, so does our structural unemployment problem. Every new recession—and there will be more if noble Lords opposite have their way—has a ratchet effect on our problem of structural unemployment. Increasingly, a low skill workforce is faced with high skill vacancies; and the two obviously fail to match.
Let us take our manufacturing sector, which everybody now accepts is the key to our future prosperity as a nation. Output since 1979 has grown at a slower rate than any other OECD country except Greece. Manufacturing investment has collapsed—down over 18 per cent. on the year, and due to fall again next year.
Let us take economic growth. We have fallen behind here, too, in spite of what the noble Lord, Lord Brabazon, said. Noble Lords opposite like to pour scorn on the 1970s, but how do they like the figures? Between 1974 and 1979 our economy averaged a growth rate of 2 per cent. per annum. Between 1979 and 1991 our economy averaged a growth rate of 1.75 per cent. per annum. And if noble Lords opposite do not believe my figures they should consult the OECD Economic Outlook of July 1991 where they may, to their surprise, find exactly the figures that I have quoted.
Finally, let us take our record on personal prosperity. In terms of per capita GDP we are now below the Community average. Furthermore, since 1979 we have fallen further behind. Real incomes in the UK between 1979 and 1991 have increased by 19 per cent. against a Community average of 24 per cent. Germany, France, Holland, Belgium, Luxembourg and Italy are, of course, way out in front of us. Again, if noble Lords opposite do not like the figures that I am giving them I would be happy to provide them with the source which, I hope I do not need to add, is an official publication.
I hope by now, although I say this with a certain degree of humility, that noble Lords opposite are getting my message. We are no longer a rich country in Europe. We are a poor country in Europe. In terms of real income per head we are now below the average, and the average includes Greece, Portugal and Spain. If, as is proposed, the EFTA countries join with the Community we will go even further below the average.
Now noble Lords opposite may respond that they hear what I say but that for their part they have a fine life. They do not feel economically below average. I can understand that. I imagine that they have all benefited from the shift in the tax away from income tax and on to VAT. They would no doubt say, as Mrs.
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Margaret Thatcher said of her Government's programme at the start of her full year in office as Prime Minister:
"It … means more inequality, but it means you drag up the poor people because there are more resources to do so".
Now I have no doubt that noble Lords opposite have been trying, over the past decade or so, to drag up the poor old poor people. But I have to tell them that their efforts have been unsuccessful.
In our country of 55 million people, some 7 million go without essential clothing, such as a warm waterproof coat; some 10 million people cannot afford adequate housing—their home is unheated, or damp, or both; or older children have to share a bedroom. Around 5 million people are not even properly fed by today's standards. Some 6.5 million people cannot afford essential household goods, like a fridge or a telephone. They cannot afford holidays. That is what has happened to Mrs. Thatcher's "poor people".
Those are facts. This deprivation is with us; and it is the Government's management of the national household, combined with its philosophy of inequality, that is entirely responsible. Is it any wonder that there are riots on Tyneside, or that the crime rate is soaring? The wonder is that more people are not more angry. But the worst effect has been to create an impoverished underclass, and that underclass is now opting out of the political process. And that way lies social disaster.
So what has the gracious Speech to tell us about these problems? It tells us nothing; absolutely nothing. It states that the Government,
"will promote enterprise and training and improve the working of the economy."
That is all it says. Yes, of course the working of the economy needs improving. But how do the Government propose to do it? Do they propose to adopt the proposals of the Confederation of British Industry; or the proposals of the Labour Party, which in fact are very similar? Apparently they do not.
The plain fact is that the Government have run out of ideas. Ministers are tired and quite obviously rather bored. The gracious Speech is a catalogue of measures either to correct their past mistakes or simply to keep Parliament going; measures which can be junked if they wish to cut and run for an election. It is perfectly clear that the main, indeed the only, objective of this Government is to fasten their eyes on the opinion polls to try to pick the most favourable time to hold a general election, for all the world like rabbits staring at the headlights of an oncoming car. Well, I will tell them something: rabbits get run over. And so, most certainly, will they. I beg to move.
Moved, at the end of the Address to insert: "but regret that the policies of Your Majesty's Government have wrought serious and unnecessary long-term damage to the economy and thereby to the social cohesion of the United Kingdom."—(Lord Williams of Elvel.)
4.7 p.m.
Lord Jenkins of Hillhead: My Lords, as I have rather a bad cold I may speak even more briefly than usual. I know that that is something which your

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Lordships always find easy to accept. I may also speak rather lass benignly than I did last Thursday. I hope that your Lordships will also accept that.
This subsiding Parliament can hardly be regarded as glorious from a legislative point of view. The poll tax is undone, the Broadcasting Act is unloved, that minor monstrosity of a football Bill remains unimplemented as does that more serious nonsense, the War Crimes Bill. Alongside an appalling record of misjudged legislation there is the dismal economic story, for such it is, of the past four years. We may or may not now be moving out of recession. I hope that we are and think that we may be, although, in view of his past chirpy but false predictions, it must be allowed that Mr. Lamont saying so is not evidence. Whether or not we are, there can be no doubt that all those claims of the mid-1980s or even more, of 1987 and 1988, that the British economy had been turned into a miracle of the western world look not just tarnished but ludicrous today. Even the noble Lord, Lord Young of Graffham, were his voice not so sadly stilled among us, would find it hard to coo quite so complacently as he did in those years.
The plain fact is that we went into the recession earlier than almost any other country, stayed in it longer and are coming out more slowly. We remain an economy with more problems than most. I should not dream of blaming the Government exclusively for that. I am prepared to admit that these problems are pretty deep-seated. Any other government might well find it difficult to do much about them. However, let us at least be spared the myth that the British economy is now living happily ever after, since the Thatcher revolution.
On the contrary, the troubles were undoubtedly made much worse by Mr. Lawson's mismanagement. We heard a great deal yesterday about prudent finance, and this Government's record, apparently throughout the whole period, of fiscal and spending rectitude. I believe that the question of whether or not Mr. Lamont is a prudent financier is at the moment non proven, but the case against him looks just a little potentially menacing.
Let there be no doubt that the great, profligate Chancellors of recent decades have been Conservatives. The noble Lord, Lord Barber, and Mr. Lawson stand in a class by themselves. Mr. Healey had his fling of profligacy, but at least he stayed and, with a little encouragement from the IMF, cleared up at any rate part of his own mess.
What is the position today? We had significant public expenditure increases announced yesterday which I welcome in the short term. However, they do not fit very well with the holier-than-thou smokescreen about public expenditure discipline which was so proclaimed. The deficit will be just over £10 billion this financial year and none of us would be surprised if it were £20 billion next financial year.
Nor do I believe that any of us could really convince ourselves that yesterday's Statement would have taken the same form had the election not been pending. Mr. Lawson's jollities earlier in this Parliament set the economic cycle out of phase with
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the electoral cycle. The dithering over the election date and yesterday's package are both attempts to correct for this.
The other prediction which I make with a good deal of confidence is that if the Government win the election and Mr. Lamont stays as Chancellor, he will be carrying out a cutting back exercise by about this time next year. That pre-election, post-election dance will be in the strict traditions of one or two of his Conservative predecessors as Chancellor.
I turn finally for a few minutes to Europe. I believe that Mr. Major wants a deal at Maastricht and on the whole he will get one. But I am depressed by many aspects of the way he is going about it because I believe it is likely to produce a deal which is least in the interests of the country. It may be thought to be in the interests of the fragile unity of the Conservative Party, but that is a different matter. Let me give one specific example of what I mean. It is pre0sented as a great negotiating triumph that we have secured the right to opt out of monetary union in 1997. I do not in the least mind the scheme having then to be submitted to Parliament. Everything needs to be endorsed as one goes along. However, what I greatly mind is that for the next six years at least it should be a basic fact of Europe that there are 11 members wanting to go ahead and one whose centre of interest is in having the right not to do so.
Let us consider what this means in terms of the specific issue of the site of the central bank. I would very much like to see it in London. Had we been in the exchange rate mechanism from the beginning, I have no doubt that with Britain rather short on Community institutions and London still the greatest financial centre in the Community, we would have had an overwhelming case for it to be here. Obviously we do not if, during this period of decision, this run-up, our main interest is in the right to opt out. No one in their right minds could think in those circumstances that we are a serious candidate. That illustrates a wider point. I believe that the median national mood—if one can conceive of such a thing—in this country on Europe is that we would like more British influence and that having the central bank in London would be a tangible symbol of it.
On the other hand, the mood towards Europe, particularly in the business community and among the young—and I speak from my strong experience of talking to many audiences in those two categories—is totally unimpressed by sterile doctrines about the legalistic sovereignty of Parliament. In so far as it is thought about at all, there is a realistic suspicion that it is much more the sovereignty of the Government Whips than of the people.
I am convinced that public opinion is now ahead of the political classes on Europe. That began to show strongly with Mrs. Thatcher's ill-judged campaign in the 1989 Euro-elections. But even before that, people were mostly willing to respond to a firm lead on Europe on the rare occasions when they were given one—in 1971 and at the time of the 1975 referendum.
If Mr. Major were now to stop the persistent barrage of anti-European noises off which, apart from anything else, suit Mr. Hurd's style remarkably badly,

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he would be surprised at the positive response he would receive. Instead, alas, while wanting a deal and being likely to get one, he shows every sign of being about to repeat, perhaps in a minor key, the mistakes of nearly every party leader's handling of Europe over almost the whole of the past 20 years. There is too much party finessing; no message of inspiration for either Britain or Europe; no really effective protection of British interests and not even the safeguarding of narrow party political interests. The handling of this issue destroyed the Labour Party as a party of government for at least a dozen years. We could see a repeat applied to the other side of the House. Let us remember that the Government show not a hint of offering an alternative strategy to a European orientation.
As we approach this period of decision, there are some extraordinary puffs of British chauvinism which come out of the rather dying - I hope - volcano. Some found their echo in your Lordships' debate on Monday. There is the view that the poor benighted Europeans do not know how to run a democracy, a legal system or even an economy. There is even the view expressed that they are all obsessed by jealousy of us because we won the war. I fear that such excessive nostalgia is now a British and not a continental European habit. I fear too that the predominant feeling towards Britain among our Community partners is far from being one of jealousy. I perhaps would like to see it a little more so, but that involves our not going on making the same mistakes over and over again.
4.20 p.m.
The Earl of Halsbury: My Lords, I am sure that all noble Lords know the story of the troubled musician who confessed to his friends, "Last night I dreamt that I was conducting a symphony at the Albert Hall and woke up to find that I was". I am rather in that state of mind over economics. For a number of years—I do not know how many—but at almost any time I could have said "Last night I dreamt that I was in a state of economic crisis and I woke up and I found that I was".
So in preparation for this debate I tried to see if the Library could produce anything that would be a guide to some kind of a conclusion. It produced a very interesting book The British Economy Since 1945. It was published in 1991. Searching through it I found —surprise surprise!—that it stopped in 1987 when our present troubles may be dated to. So I was left with no conclusion that I could quote on any authority to your Lordships and have to depend on my memory of events starting with a mistake made by the Chancellor of the Exchequer of the day who reduced the bank rate at the wrong time. He could not possibly have done that against determined opposition from the Bank of England, the Treasury and No. 10 Downing Street. Although they may have had reservations on this point or that, he could not have carried it through against a coalition of all three influences. So we must suppose that the best advice available just was not good enough at the time.
When remembering the past, if the party of the
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noble Lord, Lord Williams, were to win the election it would have a wonderful alibi for anything that went wrong in the future. It could blame everything on the inheritance of mismanagement from the previous government. But I have heard all that before. I refer to the 1979 election. The incoming government inherited massive inflation and massive unemployment and had to cope. Those factors could be blamed on their predecessors. I go back to 1970 when the incoming government inherited a very large series of pay rises leading to inflation. That again led to a wrong basic decision. The government of the day got, not what they intended, which was investment in industry to mop up unemployment, but a housing boom which made the situation even worse.
With all these yesterdays still fresh in my mind I have the temerity, not being an economist, to address your Lordships on the subject of the economy. However, I was a friend of a very eminent economist, the late Lord Robbins. He was not only of great stature as an economist; he was also of great physical stature and possessed great presence. His legs were so long that he had only limited space in which to stretch and sit with comfort during Question Time and at other times. For friendship's sake I used to sit beside him, he being the chairman of the court of governors of the London School of Economics and I being one of its members. In the nice little interval that we have each day between Prayers and Starred Questions, he used to give me tutorials on whatever piece of economics was in the news together with the latest information as to what was going on in the school.
He was my spiritual mentor in these matters. What he taught me and what I shall never forget is that economics is concerned with the allocation of limited resources to competing ends. Why the ends are what they are is a matter for a psychologist and not for an economist who must keep out of it. But since the allocation of limited resources must involve compromise, and compromise invariably involves squabbling, we find ourselves invariably squabbling over how to run the economy.
If something, regarded as a cause, interacts with something else regarded as an effect, the interaction may be positive or negative. By this I mean that a cause may have either a promotional or else an inhibiting action on its effect. The former, known as positive feedback, may have a destabilising effect on performance. The latter, known as negative feedback, may have a stabilising effect. If there is a lapse of time between cause and effect, a time lag, one can be converted into the other and the system may oscillate. In the sphere of economics, these oscillations are what we call crises. Because it is a periodic phenomenon, that is why we are going through it all over again as we have done so many times in the past. It is so much easier to blame someone else's mismanagement than to get down to the nitty gritty of why we are in this kind of perpetual mess.
I ran into this situation during the war when I was trying to study the transformation from Austenite into Ferrite of the kind of lightly alloyed steels of which armour plate is made. I did that by preparing a network which enabled control of a furnace while it

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was cooling over a very long period and at a very steady rate. I thought that I had achieved a masterpiece of design, but the result was absolutely disastrous. The thing proceeded to oscillate quite wildly from high to low temperatures because of the time lag involved between heat getting into and out of the walls of the furnace. The only course left to me was to re-invent the bicycle which is known as feed-forward. That is trying to anticipate what is going to happen.
I took all the relays out of the system and inserted myself in it as a relay. Unfortunately, my powers of prophecy were not what they should have been and the result was even worse. Finally, I did what I should have done in the first place which was to get down to basics and learn something about the subject. I have still got a large compact volume of the notes that I wrote on my shelves at home. Noble Lords are probably most familiar with control engineering in the form of a thermostat. A thermostat is a device which stabilises the temperature of your room and keeps it at a fixed temperature irrespective of what is going on outside. As a matter of fact, a thermostat does not do anything of the kind. It controls the rise and fall of the temperature in your room between an upper and lower limit by switching the source of heat off when it reaches the upper limit and on when it reaches the lower limit.
If you refine the difference between these two limits and thereby make it narrower and narrower, you make the system more and more sensitive to any time lag that there may be between a cause and its effect. That can mean that you pass over from negative to positive feedback and the system proceeds to oscillate. With all these matters in mind it was during the 1960s that I found myself with access to an analog computer. The economy was misbehaving as usual at the time and I tried to put it through the analog computer, not quantitatively, but qualitatively. To some extent it confirmed what I believed, but my results were overtaken by groups of people with access to digital computers who produced very much more sophisticated programs. There was one at the Bank of England, another a the Treasury and another at Cambridge. Academe generally did its best to study the economy with digital computers. One of the leaders in the academic field, in an interview, said to me, "My trouble is always input. Input always reflects what there was, not what there is. That is why I am unsuccessful in predicting what the economy is going to do. I cannot get a value for work in progress that is less than six months out of date. That is just enough to make it impossible for me to predict what is going to happen next."
Therefore, the only advice that I can give to noble Lords, who face one another in Government and Opposition, is exactly the same—which is befitting from the Cross-Benches; we have no preferences for one or the other. We have to uprate our information services so that we get more up to date relevant information in time to make use of it. Then we shall be able to avoid the type of oscillation which we consider to be an economic crisis.
4.30 p.m.
Lord Boyd-Carpenter: My Lords, I always listen to the noble Lord, Lord Williams of Elvel, with pleasure and with admiration. I often reflect—nervously, from his point of view—that he bears a very considerable resemblance to Socrates. Socrates, as your Lordships will instantly recall, was charged and convicted with the offence of making the worse appear the better case. Your Lordships will also recall that a penalty was imposed. That is why I am rather apprehensive that I may be called upon to administer a glass of hemlock in the Bishops' Bar to the noble Lord who has, I think, fully earned it on the Socratic principle.
The noble Lord made a most extraordinary speech. At no point in his speech—and I am sure that he will recall this—did he say what were the mistakes or errors that the Government have made which produced the situation he so vividly described. He was full of all the matters that have given rise to difficulty. He did not, incidentally, say a word about inflation, though he dealt at very considerable length with the subjects that have given rise to difficulty. At no point in that speech and this is surely relevant to his amendment to the Motion for a humble Address—did he indicate what were the actions of the Government which had brought about this situation.
No one disputes that this country, and indeed every other major country in the world, has been going through and is going through a period of considerable difficulty in certain directions. No one disputes that for a moment. But the noble Lord's amendment does not simply rely on that. His amendment, if he will allow me to say so, suggests in rather pompous terms that this was wrought—that was his word—by the policy of the Government. It was therefore surely up to him to indicate what were the errors of government policy which brought this about. We were given no indication whatever; and no indication whatever of what the party of which he is so distinguished a representative would do in the unlikely event of it being in a position of power and responsibility.
I was lost in admiration when the noble Lord began to indicate how much better things were in the late 1970s. He did not have time though, in discussing that, to mention the fact that the British Government and the British economy at that time had to be bailed out by the IMF and that any relief, or release, that we enjoyed at that time and during the closing years of the Labour Government was due to this country being in the humiliating position, for the first time in its history, of having to ask the IMF for assistance. That has not happened under the present Government.
Therefore, one really is driven to the conclusion that the noble Lord, in proposing this amendment to the Motion, is in a position of very real difficulty. If one is to criticise a government, and if one is to attribute the misfortunes which a country has suffered —great or small—to the action of that government, it is surely incumbent on one to point out what those actions were and why they had this effect. But the noble Lord simply brushed aside the fact that some of the difficulties which we have faced over the past few years are difficulties which we have shared with most —not all— other major countries. They have had their

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degree of recession; they have had their problems of one kind or another. What we have suffered has not been unique to us, as might be inferred from the suggestion that it was caused by the British Government, but has been very general throughout the world. Indeed, in that respect I was struck by the noble Lord's indication that government policy had made investment in industry in this country unattractive. The fact remains that that is not the view of foreign investors. It is not the view of Japan which, with the whole world as its choice, has invested very heavily in this country.
It is perhaps significant—and the noble Lord cannot brush this aside—that those with money to invest anywhere freely in the world have, in substantial degree, decided to invest in this country. That suggests a very different view of the economic management of this country from that to which the noble Lord referred. Nor did he mention at all the success of the Government in dealing with inflation.
I hope I do not need to say to your Lordships that inflation is the most damaging economic disease of all. Inflation undermines an economy; it imposes terrible hardship on individuals; it dislocates the working of the economy in one way or another. But we have succeeded very successfully in dealing with inflation which, as your Lordships know, has now come down to 4 per cent. Therefore, we find the charges made against the Government have not been substantiated.
It seems to me that your Lordships will do very well to reject, when the time comes, an amendment that has been proposed without any substantial support. No one would pretend that the Government's policy has always been free from error. That is not true of any government in this country, nor will it ever be. But broadly speaking the Government have seen us through a period of world difficulty. The economy is slowly but steadily improving. If that is so, it cannot be the fact that the Government have, as the amendment proposes, wrought lasting injury to the economy. On the contrary, I suggest that the Government's record is good and that it will continue to be good. Of course the medicine for dealing with inflation is painful. Every country in the world that has suffered inflation, and has indeed gone on to overcome it, has had to face considerable problems, not least from the point of view of employment. No one would dispute that. But the noble Lord did not say that the Government were wrong to do that. He just said that they were generally wrong in what they said, without specifying the errors which he alleged they had committed. Therefore, I hope your Lordships will consider in this debate the position of our economy in a more balanced way than the noble Lord, Lord Williams, indulged in.
I should like to deal with one point raised personally with me yesterday by the noble Lord, Lord Donoughue. He referred to the fact that I had said that the Autumn Statement was modest. The noble Lord said:
"Perhaps I may recall the comment made by Clement Attlee about one of his ministerial colleagues that he had much to be modest about".—[Official Report, 6/11/91; col. 247.]
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Noble Lords will realise that he got that the wrong way round. It was Sir Winston Churchill who remarked that Clement Attlee was a nice, modest little man with much to be modest about. Therefore, the noble Lord, Lord Donoughue, who I am sorry to see is not in his place, indulged in a quite extraordinary misquotation.
On the merits of the case I am a general supporter of the Government's policy. The present Chancellor of the Exchequer is doing an excellent job, but it will need most careful handling. I have two or three brief points to make which concern where I believe taxation is being misapplied. I understand that the Inland Revenue is approaching the universities with a demand to charge tax on the earnings which the universities, or some of them, make out of consultation or the grant of conference facilities. Whether technically, as a matter of taxation law, that is right, I do not know, but I believe that to seek to charge corporation tax on the universities at this moment in circumstances in which it has not hitherto been charged will cause a good deal of harm and ill will and be quite unnecessary.
Once again, because I have done it before, I beg my noble friend and the Government to consider the operation of inheritance tax on people's principal homes. By taxing them many people are driven out of their homes. If those homes happen to he famous and historic houses, that merely imposes a further financial burden on the state as those houses have to be maintained. In any event, someone's principal home is very important to the person and his family. There is already an exemption in respect of tax on improvements. Surely inheritance tax could be withdrawn from that area.
I hope that the Government, in providing, as they are doing at the present time, very large and necessary public expenditures, will not overlook the fact that we are still a heavily taxed country. The high rate of tax on personal earnings should be reduced as soon as possible. I hope that I shall hear from my noble friend that the Government realise the necessity of reducing taxation. Taxation discourages enterprise and work. High taxation makes people wonder whether it is worthwhile investing and whether it is worthwhile attempting an enterprise. The lower the level of personal taxation the greater the encouragement to enterprise.
Of course I understand fully the need to maintain some balance between expenditure and income. We are at the moment, after the Autumn Statement, dealing largely with expenditure. But it is impossible to separate the two. I hope again that we shall have some indication from the Government today that they have not lost heart in the policy of reducing taxation and that they will, as soon as they can judge it possible, make some reductions, particularly in direct personal taxation. Value added tax is a highly inflationary tax. It adds to the cost of everything. If VAT could similarly be reduced in due course, that again would give an easement to the economy.
Contrary to what has been said by the noble Lord, Lord Williams, most people in this country realise that the Government are tackling an immensely difficult

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job and are doing so with a considerable degree of success. I add the personal note that I am quite sure that that success will continue while our finances are handled by my right honourable friend the Member for Kingston-upon-Thames.
Lord Williams of Elvel: My Lords, before the noble Lord sits, down, perhaps he can help me on one point. He was Kind enough to compare me with Socrates. I am extremely flattered that he should so compare me. However, I am afraid that he did not get the charge of which Socrates was accused quite right. If he will consult his neighbour to his left, the noble and learned Lord, Lord Hailsham, he will learn the true charge of which Socrates was accused; and I shall declare myself not guilty of that charge.
Lord Boyd-Carpenter: My Lords, knowing my noble and learned friend's high professional reputation, I realise that to consult him is a very expensive operation.
Lord Hailsham of Saint Marylebone: Not now, my Lords.
Lord Williams of Elvel: My Lords, before doing so, perhaps the noble Lord might accept the glass of water offered by my noble friend Lady Hollis.
4.48 p.m
Lord Stoddart of Swindon: My Lords, I listened to the speech—or perhaps it was an eulogy—of the noble Lord, Lord Brabazon, and wondered whether I was living in Wonderland. What is certain is that the people in Langbaurgh, for example, have not received his message, as we shall see this evening when the Labour Party wins that seat with a substantial majority.
As we move inexorably towards the end of the electoral cycle we hear more and more of the business cycle. The "business cycle" is the "in" phrase with Ministers at the moment. What they are trying to do —and they were helped by the noble Lord, Lord Boyd-Carpenter—is to shift on to business the blame for their own appalling mismanagement of the economy. That is the idea. They are trying to shift the blame away from themselves and on to someone else. They must not be allowed to get away with it. The present economic situation has been caused not by world events, not by business itself—not by productive business anyway—but by the Government's complete mismanagement of the economy since 1987.
Let us have a look at the record. In 1987, just as the economy was booming, the increase in GDP was 3.5 per cent, but in 1988 it was 4.4 per cent. The economy was on an upswing. But at that point in time the Government decided to cut interest charges to the very low level of 7.5 per cent. Therefore, they poured money into an already booming economy. The result, of course, was complete disaster. That added to inflationary pressures which were already in the economy because it was overheated. That was their first mistake.
However, if that was not bad enough, the 1988 Budget not only reduced taxation but also sparked off
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a mad property boom which was engendered by the Chancellor of the Exchequer through the policy of giving six months' notice of the withdrawal of double mortgage tax relief. That sparked off the property boom. There are so many poor people still living with the consequences of that absurd policy which helped persuade people to make a decision to go into a property market which was bound to become overheated.
Hand in hand with the property boom went a further credit boom which was encouraged by the Government—it was certainly not discouraged by them—and fuelled by irresponsible and greedy lending institutions which were completely out of control. Indeed the Government looked on apparently helplessly at the progress of this monster which they had created. Borrowing for housing and consumption was at an all time high. The savings ratio was at an all time low. Manufacturing production was diving, and imported goods were rising. Moreover, the balance of payments had a record deficit approaching £20,000 million.
The noble Lord, Lord Boyd-Carpenter, asked us to examine the record. I have just done so. I hope that he agrees that that was a disastrous record and one which brought us to the point where interest rates had to be increased to an intolerably high level. We advised, other people advised, economists advised and even the CBI advised that there should be some measure to control this credit monster that had got out of control. But the Government sat back and said, "No, we will simply use high interests rates to do the job."
To continue with the record, just as the Government's medicine was hurting—whether it was working is another matter—they made another blunder, or perhaps it was, exceptionally, a brainwave. That blunder was to join the exchange rate mechanism. I said that perhaps it was a brainwave because they no longer had the opportunity to blame the trade unions or the Labour Party for their disastrous policies. After all, they had brought in so much legislation that the trade unions were almost powerless to do anything and the Labour Party had not been in office for 12 years. So they could not blame us. Therefore, they had the brainwave of, "Let's blame the foreigners." By joining the ERM they could say, "Well it is nothing to do with us any longer; it is all those people in Europe." I believe that it is generally known that I did not agree with our joining the ERM. But now whenever I, anyone else or the CBI suggests that interests rates should be cut they say, "We can't do it because we are in the ERM and we must protect the exchange rate." Of course people then say, "What is the ERM?" In response they say that it is 12 nations supposedly acting together. The Government can then say, "We have our international commitments. Therefore, we cannot reduce the interest rates; it's all their fault."
The Government made the same mistake. Just at the time when their medicine was going to cause deflation they fixed our interests rates and virtually went back to the gold standard. That meant that tens of thousands of businesses collapsed and unemployment moved quickly towards 2,600,000. If that is not

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a disastrous economic performance, I do not know what is. The Government simply do not deserve any praise for what they say is their achievement of low interest rates. Joining the ERM can only have baleful consequences for our economy, especially as regards unemployment; indeed it is stopping the Government giving the economy the boost which it needs at present.
In his Autumn Statement yesterday, the Chancellor of the Exchequer announced a modest increase in public expenditure and in the PSBR. In my view, public expenditure needs to be considerably higher than projected, particularly expenditure on health, transport, education and assistance to industry. However, I accept that higher public expenditure cannot be envisaged because of the parlous state of the economy generally. That is particularly so as regards manufacturing industry which, after all, is the real key to a successful and vibrant economy. We find that we still have stagnation in that part of the economy.
In paragraph 33 of the Autumn Statement, the Chancellor of the Exchequer said:
"I have never wavered from the view that the defeat of inflation is a necessary condition for economic success. The best performing economies are low inflation economies". [Official Report, 6/11/91; col. 236.]
He is only partially correct. The best performing economies —namely, those of Germany and Japan —hold that position because their manufacturing base is large. It is from that large manufacturing base that their low inflation rate stems, and not vice versa. It is because those two countries recognise that a high level of manufacturing capacity is the key to success that they are world leaders. Conversely, it is because this Government have not given manufacturing the priority it deserves that we are in the economic doldrums.
I served on the Select Committee on Overseas Trade—that great Select Committee under the leadership of the noble Lord, Lord Aldington, which gave so much good advice to the Government, but which they wilfully ignored. I can remember questioning the Treasury about manufacturing industry and stressing the need to build it up so that it could take up the slack when oil revenues went down. The attitude of the Treasury was, "Don't worry chaps. Just leave things alone and they will all balance out." In other words, as oil revenues came down so manufacturing industry would go up. Of course that has not happened, and it could not happen. That is why the Government were completely wrong in not heeding the advice given to them by industry, the Select Committee and many other people.
We do not need to quote any Labour Party material to show the grim news about manufacturing industry. The CBI was good enough to send me a document which I am sure that it sent to other noble Lords. I shall refer to the graph (exhibit 4) on page 11 of that document. It shows that taking 1975 as the base of 100, manufacturing output in Germany in 1990 was 260–260 per cent. above what it was in 1975; in Japan, it was 180; in the United States is was 138; and in the United Kingdom 118. That is 18 per cent. only above the level in 1975. That is why our economy is in
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such a parlous state. That is the dismal record under this Government. Until we take steps considerably to boost manufacturing output in this county, this country will drop further and further behind in the economic and living standards league.
I shall illustrate in real life terms what is happening to the British economy. On Tuesday this week I visited Iveco/Ford in Slough to see its new cargo truck. It is an excellent vehicle. It is well planned and constructed and is built by good British workers; but what has happened to Iveco/Ford? Vehicle production has fallen from 14,900 per annum to 6,000 per annum. The UK market for those vehicles is down by 54 per cent. That is what tells us the state of the economy. Its revenue is down by 200 per cent. The number of jobs —in Tory Slough, mind you, not the North of England—is down from 1,400 to 800. That is a drop of 600 out of a workforce of 1,400. That is the state of the economy. That is the state to which the Government have brought us.
I do not want to be destructive; I want to be constructive. I want manufacturing industry to succeed, but the Government must understand that they have a contribution to make, and they must make it. The first contribution that they must make is to boost the economy by an immediate reduction of 1 per cent. in interest rates. That would do more to boost confidence, the confidence of industry in particular, than anything else. I hope that the Chancellor will do that, and do that shortly.
Furthermore, manufacturing industry in particular needs greater assistance through better tax allowances for new plant, machinery and working methods. Again, I hope that between now and the Budget the Government will give a great deal of consideration to that point. We need incentives for people to invest long-term in manufacturing industry rather than for quick-profit speculation. We need to switch the ethos and encouragement offered to invest in houses to investment in goods. It is wasteful for us to spend some £7 billion to £8 billion per annum subsidising owner-occupation, whether the person needs subsidising or not. It is about time that we learnt to apply housing subsidies—whether in the private or public sector—to those who need subsidies. The money which would then be released could go into building our economy for the future.
We need to give much more assistance to the exporting industries to ensure that they can compete equally with their competitors abroad. The Government should work closely with industry instead of keeping it at arm's length. Finally, there needs to be a sea change in attitudes towards people working and making their careers in productive industry. For too long, manufacturing industry has been the Cinderella service. It is about time that people in schools, universities and the professions understood that no one can do anything better for their fellow men than to work in industry producing goods for people to use and enjoy.
5.6 p.m
Lord Vinson: My Lords, it was the Grand Old Duke of York who marched his troops to the top of the hill and marched them down again. The performance of our economy over the past 20 years closely resembles his conduct. Recession follows boom and the correctives necessary to reduce recurring inflation leave the economy with productive capacity inadequate to meet the country's requirements.
A number of noble Lords have drawn attention to our membership of the ERM and the stabilising effect that it is hoped it will have on our inflation rate; but I believe that that view is sanguine. Fixed exchange rates will deal with the symptoms by keeping us in a prolonged state of recession, but we should examine anew the causes of inflation which, uniquely to this country. are rather more fundamental. As the noble Lord, Lord Jenkins, said, the problems are deep seated. Like the hedgehog, inflation is hibernating and will reappear as the economy warms up.
Rather than rely upon the ERM mechanism alone, there are parallel actions which the Government, or indeed any government, should be taking. They should take steps to prevent inflationary pressures coming from the housing market and encourage alternative forms of saving, as the noble Lord, Lord Stoddart, said; take another look at the traditional controls of bank lending; and last but not least take steps to meet our endemic balance of payments problem.
In sum, we need a recovery strategy to ensure that growth does not rekindle inflation. I seek your Lordships' tolerance to expand upon three points which might help "to improve the working of the economy". I believe that what makes inflation in the UK almost inevitable is over-restrictive town and country planning, with the effect that that has on land prices and consequently ever-rising house prices. With that conies equity withdrawal, the feel-good factor, excessive spending and off we go to another boom: we spend too much and save too little. We are spending what we have not earned or even possess, as the illusory house market of 1988–89 with its tragic consequences has proved.
All that is fuelled by excessive bank lending because they are inadequately constrained by regulation to their monetary base. Since this subject was broached in a similar debate in your Lordships' Chamber some two years ago, the remedies are being more widely accepted —encouraging local authorities to release more land to meet housing demand where it occurs and constraining the reserve ratios of the banks and other financial institutions.
That leads me to my second point. I recognise that adequacy ratios are being tightened; but market man as I am, I believe that the Bank of England should exert its traditional role with greater determination. It should downgrade the banks' capital ratios if they securitise mortgages. It should downgrade them again if they lend money to customers at more than 90 per cent. of the value of the property, or at more than 3½ times the borrower's annual income. Building societies should be treated to the same effect. Houses should be
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subject to indexed capital gains tax just like any other investment. Last but not least, mortgage relief should be withdrawn.
In this way sensible long-term checks would be put on the amount of money sloshing about in this area. That would bring positive benefit to the first-time buyer due to the stabilisation in house prices and it would prevent the growth in credit collateral that has repeatedly fuelled our inflationary cycles. I hope that the Government will reconsider this problem. Due to the recession, house building starts are close to an all-time low, yet, out there, there is massive need in the housing market which must somehow be met without inducing a further boom.
We are left with a third major problem facing the economy, which is the supply side. The Government have done wonders to free up the labour market and reduce restrictive practices, and no doubt industry is much leaner and fitter than it was. But in capacity terms it is quite inadequate to meet the needs of the country at post-recession levels. Inevitably we shall enter a new balance of payments crisis as imports are sucked in to meet demand. That will mean that interest rates will have to rise to defend the pound and the whole grisly, self-inflicted stop-go cycle will start all over again. However, there is hope. I believe a number of helpful steps could be taken in this area and I hope that the Government will consider them.
Any examination of our balance of trade shows that it is not our inability to export that lies at the root of the problem —we export a higher percentage of our gross national product than do either Japan or Germany—but rather our propensity to import, and to import goods from others who have no inherent natural trading advantage. We import goods that could perfectly well be made within our own economy. A leader in the Daily Telegraph of Saturday 15th June stated:
"The recession has once again emphasised the fundamental weaknesses of the British economy that we do not produce sufficient goods of the kind we ourselves wish to buy. The folly of the view taken by some influential economists in earlier years that manufacturing is unimportant is now recognised".
What a baleful and damaging influence that was within the Treasury.
The argument that manufacturing no longer matters at all and that the UK can make its way largely through service industries always was bogus. I see not a grain of evidence to support this concept in any other major trading nation. The world's most successful economies, both traditional and emerging, are those that give priority in the formulation of their economic policy to the manufacture of material goods for a material world. They do so not only because they are more exportable but because productivity gains from manufacturing are easier to obtain and, thus, high real wages can be paid without high inflation. Productivity is not everything but, in the long run, it is almost everything. A nation's ability to improve its standard of living depends almost entirely on its ability to raise output per worker.
Why bother to have science, engineering or chemistry at our universities if there is no outlet for these fundamental talents? As the world gets more scientific we should be aiming to make our trading

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base more so not less. However desirable tourism and the service sector are, most services are simply not exportable and cannot substitute for imports. We must expand our productive base as we need it more than ever. Present levels of investment, although better, are quite inadequate to meet a demand upturn.
Our manufacturing underperformance is a symptom of a more general economic malaise, because when a country is forced to use high interest rates as the mechanism for containing inflation or holding the exchange rate, it shoots itself in the foot because manufacturing industries—slow cycle, higher capital cost industries—are precisely those that are doubly hurt by high borrowing costs. As the service industries in turn become more capital intensive, this will apply to them too.
Perhaps it would be helpful to spell out the cost to business of inflation which, over the past four years, has totalled some 30 per cent. This means that the working capital requirements of every business in the country have gone up by 30 per cent. The clear proof of the effect of this is the record bankruptcies we see around us today, where companies starved of cash and sales simply run out of money. The flood of rights issues currently being handled by the Stock Exchange is a sign of larger companies trying to replenish their liquidity. But for smaller companies, reliant as they are on bank lending, there is no alternative but to retract or go bust. It is this retraction that has been so damaging to our productive base.
The matter has been compounded by the accountancy profession, which has sat on its hands over the introduction of inflation accounting. That profession continues to produce accounts which grossly overstate real profitability, by failing to index stock or make allowances for replacement of plant at present rather than historic levels. The consequence of this is that many companies are paying tax on wholly fictitious profits when they should not be paying tax at all. That is yet another blow to corporate liquidity. If the accountancy profession and the Inland Revenue had together conspired to think of a system more likely to damage capital investment and accelerate bankruptcies, they could not have bettered it. Hundreds of thousands of people who were encouraged—I helped encourage them—to start their own business over the past 10 years have been betrayed by a financial system that handicaps rather than supports them.
It really is ironic that full relief is given to all gains on house purchase and full indexation to the ownership of stocks and shares, but relief is no longer given to the wealth creating heart of the economy. While the general "across the board" cut in corporation tax was good for many businesses such as finance houses, property developers and cash businesses like retailing, the withdrawal of indexed relief was singularly bad for the high capital intensive business. Many of us believe that that is just the sort of business this country needs.
At this point when inflation is being contained—I give full credit to the Government for that—it is perhaps too late to introduce inflation adjusted
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accounts and indexed stock relief, but it would be timely to do something about the cost of money. That is a matter that affects every investment decision. A relatively simple solution is at hand. Your Lordships will recall a debate in this House earlier in the year on the report of the Science and Technology Committee. It clearly showed that there was no shortage of innovative ideas in the UK but rather a shortage of capital at the right price. This is a key issue. Over 20 years the cost of capital in the UK has been higher, and often much higher, than that of our competitors as a consequence of our anti-inflationary fiscal policy.
Currently interest rates are absurdly high. Unless real interest rates fall, there are limits to the amount of productive investment that pays at current levels. Investment is not and simply will not take place at an adequate rate and our supply side problems will remain. It is a sad irony that one of the consequences of being in the ERM is that our interest rates are likely to remain high when they should be falling due to German borrowing to re-equip Eastern Germany. They will repair their manufacturing base at our expense.
Somehow we must offset this handicap. Let us try to be positive about this. What steps can we take within EC competition policy, within our own control and without subsidy to strengthen our manufacturing base, to replenish its liquidity, to reduce the cost of capital and to mitigate the ravages of inflation on corporate liquidity?
The concept of two-tier interest rates is unworkable, but what we could do is to allow our businesses to use their own self-generated funds for investment before they pay tax. The Japanese do this and, indeed, it is one of the secrets of their success. Let us take a leaf from their book. So, I would suggest to the Government that they re-implement the following policy: allow capital equipment to be charged as a revenue expense for taxation purposes in the year in which it is purchased. This is not a tax handout; it merely shifts the cash-flow benefit of depreciation back from the Treasury to the business concerned, and after some five years is virtually tax neutral. Accelerated amortisation was one of the most helpful aspects of our corporate tax structure prior to the Lawson reforms where he threw out the baby with the bath water. It should be re-introduced as a matter of urgency. As a fundamental matter of government policy anything which raises industrial and manufacturing costs and thus inhibits exports or encourages imports should be reviewed.
Reducing costs to our productive industries by tax mitigation would help counterbalance the inherent disadvantage of attempting to invest and grow in a high capital cost economy. One very much appreciates that the Government's sensible priority is to keep corporation tax low, but the re-equipment of industry lies at the heart of our economic success and should be a first call—even if other less capital-intensive businesses have to pay a touch more corporation tax pro tem.
Those and other changes must be debated more widely and not dismissed as special pleading from business. The Department of Trade and Industry,

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where we have had 12 Secretaries of State in 12 years, will, one hopes, under its excellent present incumbent, reassert its role as an influential department of state whose views really count.
In conclusion, I hope that as part of their recovery strategy the Government will take essential steps to tackle the underlying causes of house inflation and, more importantly, increase the nation's productive capacity by letting companies use their own self-generated funds for investment before paying tax. I fear that without such action the Grand Old Duke of York, in the form of an economic cycle, will be seen to have marched us up to the top of the hill and marched us down again.
I am very grateful to have had the opportunity to speak early in this debate and apologise for the fact that I shall be unable to stay until its conclusion.
5.20 p.m.
Lord Ezra: My Lords, with a general election looming it is only to be expected that attention should increasingly be focused on the economy; hence the importance of our debate today.
Of course, because we happen to be going through a recession, attention is directed mainly at the prospect 3 for recovery. A variety of signs are identified by the media every day of the week which appear to suggest either that we are on the way to recovery or that we are not yet on the way to recovery. On balance I believe that probably a slow recovery has set in. It will take a long time and for some time it will be accompanied by an unacceptably high level of unemployment. However, like other noble Lords who have spoken, I should like to concentrate on some of the longer term aspects.
It strikes me as very important that in seeking to emerge from the present recession we do not sow the seeds of the next one. The noble Lord, Lord Brabazon, spoke not only about signs of the recovery having set in; he considered that we were now entering a period, of sustainable, non-inflationary growth. I am afraid that I cannot agree that there are yet signs that that is likely to occur.
What worries me particularly is that in looking for prospects of recovery from the present recession we seem to be hoping for a resumption of consumer spending Yet it was precisely an excess of consumer spending which pushed us into the recession. The question can fairly be asked: how would the government of the day, from whichever side, deal with the level of consumer spending in the future when it reached a point of overheating?
I recall the many debates on the economy which we have had since 1988 in which a number of us from these Benches have drawn attention to the overheating of the economy. The Government's response was that it was not overheating; it was real growth. As it turned out it was not healthy growth but a form of economic obesity. We must ask how we are to avoid suffering from similar excessive indulgence in the future.
I have recently returned from a meeting in France. I often go to the Continent, as do many of your Lordships. I met a number of industrial and financial personalities. France has an economy very similar to
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our own. It is much the same size. France has run into similar difficulties and has a high level of unemployment. The French have also coped increasingly well with inflation. The present rate of inflation in France, at 3 per cent., is lower than ours. But the French are worried about the future and how they can recover.
In their recent budget the French Government set out a policy for recovery. It is different from ours because it puts the emphasis on a resumption of investment and a massive stimulation of exports. The budget estimates show consumption running level, one year with another. They also show a high level of savings, of not less than 12 per cent., being maintained this year and next.
I believe that that is something that we should seriously consider. Should we not be looking at a way out of recession which really sows the seeds of long-term sustainable growth? I do not believe that a re-stimulation of consumer spending is the right way forward. I do believe that what is required is a stimulus of investment—and I hope that the Budget will include measures to achieve that —and a massive resumption of effort in the export market to improve even on the better results which we have recently achieved.
That is very much the view which has come out of the recent report prepared by the CBI's manufacturing advisory group. The report states quite positively, in respect of government relations with industry, that the policy of benign neglect is no longer sufficient. It calls for a new partnership between government and industry. It draws a distinction between support on the one hand, which would be welcomed, and intervention on the other, which the CBI does not ask for.
In particular the CBI report draws attention to the position of the DTI, which has figured in some of our previous debates on the economy. It emphasises that the dual roles of the DTI, on the one hand as a regulatory body and on the other as a body which is intended to stimulate enterprise, can no longer co-exist. The report calls for a separation of those roles so that the government department concerned with industry will wholeheartedly support industrial policies and fight its corner in Cabinet and elsewhere for that purpose and not be confused by its regulatory role, which must consistently be holding it back. I hope that that proposal will be considered very seriously by the Government.
The time has indeed arrived, appropriately with an election coming up, for a reconsideration of industrial strategy, for a restructuring of government responsibilities, for much greater stimulus of investment and more positive export promotion. I deplore the Government's privatisation of the insurance services group of the ECGD. That will not help our export effort; it will simply add a degree of confusion. More attention should be paid to the transport infrastructure and to training and research, as we heard yesterday the Government intend to do. However, it worries me that that effort is being made so late in the day. It is something we have been seeking for years and could easily have been financed at an earlier stage when we were receiving the benefits from the North

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Sea and when privatisation revenues were at their height. It is now being done—we welcome it being done at all—when it is likely to lead us into a severe PSBR situation, a borrowing requirement of no less than £10 billion this year and, as it is generally estimated, of not less than £20 billion the following year. Although we welcome the steps now being taken, can they be sustained alongside such a high PSBR? That matter must be considered.
We must have a positive policy towards the European Community. We have the opportunity to play an effective role there—the Prime Minister himself has said so—but, as my noble friend Lord Jenkins of Hillhead said, we appear to be making the worst of our position, probably ultimately signing the agreement on economic and monetary union but deploring it frequently before we get to the table for signing. That does not put us in the best negotiating position.
Above all, in the period ahead we must avoid diverging from our main task of bringing about sustained industrial recovery. I fear that one of those diversions is the proposed privatisation of the coal industry to which the gracious Speech referred. The Government say that they are continuing to prepare for that privatisation measure. The problem facing the coal industry is what kind of future it will have and how effectively we can reconcile its various difficulties and maintain a viable source of indigenous energy for a long time in this country with all the skills we have for exploiting it. That is the main issue, not the question of ownership.
However, if the Government are in a position to carry that through, I should draw their attention to two features which, above all else, must not be broken up in any privatisation venture. Those features relate on the one hand to safety and on the other to research.
First, the mining operation is inherently unsafe. British mining experience has shown that we have made it the safest underground mining venture in the world. I played quite a part in that during my period in the industry. That tradition and experience of safety cannot be maintained if the responsibility is broken up.
Secondly, research in the mining industry is concentrated in two research centres. The first is mining research. There again, Britain leads the way in long wall mining technology. Substantial exports of such equipment have been based on our research effort. The second is a research centre on coal and the use of coal which undertakes a great deal of work on clean-coal technology, now becoming much more important given the environmental pressures.
I impress upon the Government, with regard to any plans they have for privatisation, not to break up those research centres. The question of research arose when we debated the Electricity Bill. It was never made clear what would happen to it. Long-term research in electricity generation has in fact been severely curtailed by the existing generating companies whose pressures and objectives are different from those that existed at the time of the Electricity
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Council which co-ordinated the research. We should be warned by what happened in the electricity industry and prevent it happening in another basic industry.
I should like to conclude still on the subject of energy, but on a more positive note. I welcome the increase mentioned in the Autumn Statement in the funding of the Energy Efficiency Office. We have debated funding in that regard many times. We believed that it was inadequate, but the Government have announced that it is to go up from £42 million to £59 million. A large part of the increase is to be spent on the home energy efficiency scheme which is handled largely by Neighbourhood Energy Action of which I have the honour to be president. That organisation insulates the homes of people on low incomes, particularly the elderly. We are doing so at present at the rate of 200,000 a year. The increased revenue will enable us to achieve a level of about a quarter of a million a year and I am most grateful for that.
I thought, in concluding, that I would balance what I had to say with a positive expression of appreciation to the Government. I hope that it will tempt them to take on board some of the other remarks that I have made.
5.35 p.m.
Lord Campbell of Alloway: My Lords, it is always a pleasure to follow the noble Lord, Lord Ezra, especially in a debate such as this where he has such vast expertise, and more particularly today because, like the noble Lords who preceded him—my noble friend Lord Vinson and the noble Lord, Lord Stoddart of Swindon—he made a most constructive contribution. Whether it is right or wrong is perhaps for others to say, but no one can doubt the spirit in which it was made and the importance of the contributions of all three noble Lords to the debate in the context of the manufacturing industries.
The economy should not be considered in the abstract. In the classical sense, it must be treated as the management of the household. It is not wholly and exclusively concerned with the manufacturing industries. With respect, the way in which my noble friend the Minister, Lord Brabazon of Tara, dealt with the matter appeared to be just about right because he dealt with the subject on the basis of the management of the household. Indeed, there is no other sensible way in which you can deal with economics or economic affairs other than in the lecture hall, if you happen to attend, or in the classroom, where one is taught theory. I go back to my days at Cambridge before the war, but certainly to no practice.
By and large, one must take a broad view: the Government are to be congratulated and, broadly speaking, in difficult times, have got it about right. With regard to the Opposition's attempt to rubbish my right honourable friend the Prime Minister by name and to cast aspersions upon the honesty of the Government, I took notes of their charges of sustained disinformation and so on. I do not reply in kind. I simply suggest to your Lordships that such charges afford no substitute for reasoned and constructive

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argument on such an important occasion when we all have to do our best to express our opinions for what they are. worth.
There is no perfect empiric solution. As the noble Lord, Lord Jenkins, with his experience, said, it is a deep-seated problem. As my noble friend Lord Boyd-Carpenter said, it is a world problem. One cannot pluck a cure out of the air or off an apple tree and say, "That's it". One can only apply sane, sensible and flexible policies.
It is interesting to note that, if this rather broad and simple analysis of the background as I conceive it is right, the Opposition have made no specific charge of mismanagement that I could note down and seek to answer. That is why I put down my name to speak in this debate. But I do not know the charge that I am supposed to answer. Assuredly, I would have listened to this debate in any event to hear what policies were proposed by Her Majesty's Opposition, but I have heard none. I heard some very constructive ideas proposed by the noble Lords to whom I referred, but I heard no constructive proposal advanced by the Opposition.
Down in the engine room of our export economy with its balance-of-payments set-up bolstered by oil and integrated within the European Community system, the orderly conduct of industrial relations is absolutely essential. That is why I say that my noble friend tie Minister got it right. As he said, it is the cornerstone. Without that one can forget the rest. Why?—because it affords predictability as to cost and supply not only of goods but of services.
Of course there must also be due provision of certain public services—the noble Lord, Lord Ezra, touched upon that point—such as transport, electricity, gas, water and telecommunications. Without the due provision of those public services both manufacturing and the services industries would grind to a halt. There must also be a benign fiscal regime, perhaps such as was referred to by my noble friend Lord Vinson, and financial policies to contain inflation, maintain a stable exchange and afford credit.
But with such a wide canvas, which also covers training. retraining, promotion of employment and problems arising from our integration within the European Community structure, one has to use a broad brush. Using that brush, is it barely to be doubted that, taken by and large, over the past 12 years the Government have duly discharged their obligations in the conduct of economic affairs? Indeed, would it not be fair and reasonable, standing back, to say that certainly governments make mistakes—we all make mistakes—and when governments make mistakes they are more important than the mistakes that we make? But would it not be right to say that by a shrewd, flexible combination of relevant measures and policies the United Kingdom, over this period, has literally been raised from its sick bed and from being the sick man of Europe?
The Opposition say no, but the difficulty is that our status in the world 12 years ago is not judged by the Opposition on the Benches today. I do not seek to be impertinent to noble Lords, but it is judged by other
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members of the European Community and that is as it was seen by them 12 years ago, when the Administration, which I support by and large, came to power. That is how we were seen. And that is the immeasurable service that the Government which I support have done, whatever else they have or have not done. That is a plain fact of international life.
If, as it is said, we are now seen in a different light, that is due almost entirely to the fact that down in that engine room there have been 12 years of relative industrial peace. Let us not forget that as an achievement and relevant policy of this Administration. It led to our remarkable recovery, a recovery which would not have ensued but for that.
It is well understood that the Opposition should table an amendment. But the terms in which the amendment is cast, humpty-dumpty, as a charge of damage to the economy by the party which I support, beggar credulity. Is the winter of discontent or the sad saga of mass civil disorder so soon to be forgotten? Is it to be forgotten that 12 years ago we were a second-rate economy, clicking our heels, toting the begging bowl around at the IMF? Is all that to be forgotten?
As it stands, the amendment has a false ring about it and as a coin of worth it would not pass muster on the nail. How is it to be supposed that the legal reforms in the trade union laws, introduced by the Thatcher Administration to remove the clog on productivity, have caused, in the terms of the Motion:
"serious and unnecessary … damage to the economy and — social cohesion of the United Kingdom",
or that the measures proposed in the Citizen's Charter or in the Green Paper, Industrial Relations in the 1990s, could have any such effect? It seems to have been forgotten—so many things seem conveniently to have been forgotten over the decade or the 12 years since the Conservatives came to power—that it was in fact the rank and file membership of the trade unions which supported the Conservative advent to power and indeed sustained them in power. The members of those unions may well welcome the proposals in the Green Paper to proscribe certain aspects of malpractice. For all one knows, they may well welcome the consumer protection proposals in the public services in the Citizen's Charter, a document that was once described by a noble Lord from the Front Bench opposite in a fit of misjudgment of exuberance as "waffle." Indeed, it was on that occasion, if I am not mistaken, that it fell to my noble friend the Leader of the House to expose the ineptitude of that description, which indeed he did, as recorded in Hansard.
Whatever the status of that document, its acceptance by the electorate or any section of the electorate, it is idle to discuss it here and now or to seek to pre-empt an election. This is a matter for the views of the electorate. But if principles are the rudder and compass of policy, are not one or two things totally plain? First of all, those in command of the ship of state, by isolating the militants and bringing industrial relations within a new dimension of the rule of law, have put the economy of this country back on its feet; they have made a substantial contribution to

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social cohesion; and they have set and propose to continue to set the only safe and proper course in the interests of the economy and the consumers.
Is it not equally plain—and I stress this and shall not repeat it again—that the party opposite has not as yet decided what course it is to set? Is it not plain that the amendment is moved as a critical and destructive political tactic without offering any viable constructive alternative resolutions. That is a tactic which is totally permissible. I do not criticise the tactic; I criticise only the content.
I would have dealt with certain matters but I have run over my time. I wish to conclude by expressing the hope that no legislation to reform industrial relations will be introduced until after the next election; that the policy of each respective party may be made plain in each manifesto; that public services—referred to in Chapter 4 of the Green Paper in implementation of page 46 of the Citizen's Charter—may be defined by express primary legislation; and that no enabling powers to designate or amend categories shall ever be conferred on a Secretary of State by subordinate legislation such as by regulation or statutory instrument.
Perhaps I may express the hope that after the next election there will be a consolidation statute on trade union laws. I hope that the Motion tabled by the Opposition may be rejected on objective consideration of its merits.
5.52 p.m.
Lord Jay: My Lords, the Minister's speech today sounded to me as though it had been written not by the Treasury but by the Conservative Central Office. It reminded me of the golden scenario about which we used to hear a year ago. Noble Lords will remember that at that time we had not merely an economic miracle but the golden scenario too. The golden scenario—using the broad brush, as the noble Lord said—about what was to happen in 1991 went something like this: joining the ERM was the best way to revitalise the British economy; the new fixed exchange rate would, according to the fantasy, enable interest rates to be speedily reduced; industrial production and investment would be stimulated; growth would be resumed and unemployment would fall during 1991. In the resulting glow of prosperity all round, a Tory Government would be re-elected some time at the end of the year.
Those of us who took a less imaginative view predicted that a fixed and over-valued exchange rate would produce the same results that it has always produced: an old-fashioned deflation with still high interest rates, falling output and investment, and rising unemployment. In the corresponding debate in this House on 14th November last year, I was rash enough to forecast that unemployment would rise by 50,000 to 70,000 a month and reach 2.5 million by the end of 1991, with the balance of payments still in deficit.
What has actually happened? Output and industrial investment have both fallen, the total output by 2 per cent. throughout most of the year, as
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the Government now admit. Unemployment has risen by 65,000 a month. It now stands at just under 2.5 million and is still rising towards 3 million which, on the previously accepted method of calculation, it has probably already reached. The balance of payments deficit for the coming year is now forecast by the Government to be £9.5 billion.
Indeed, the Government admit that the balance of payments deficit is partly due to the artificially high exchange rate since it is said in this spring's Budget red book that,
"owing to the somewhat higher level of the exchange rate, exports are forecast to grow slowly".
Until 1980 UK governments had always been forced to choose between the objectives of low unemployment or a viable balance of payments. Under present policies, and in the ERM, we have neither. I believe that those factors explain the Government's new definition of recovery: a state of affairs in which things are getting worse not quite so quickly as they were six months ago. We are now promised—we heard the promise again today—not recovery but predictions of recovery. It is little comfort to discover that in France, which also joined the ERM, unemployment has been rising at the same time and that, at about 10 per cent., it is even higher than our own.
The present level of almost 3 million unemployed has been deliberately imposed by government policy. It is surely shown by the present Chancellor's famous remark that it was, "A price well worth paying" for restraining the rise in the RPI.
Mass unemployment means first a huge waste of output, goods and services which we might be producing and consuming. At the very least, 10 per cent. of the total productive capacity of this country must be idle and unused at the present time. However, with a GDP now of £600 billion a year it means that we are depriving ourselves of about £60 billion a year of real resources that we might have. Incidentally, £60 billion is roughly equal to the total yield of UK income tax.
We argue fiercely about £1 billion or £2 billion more or less for the health service or defence, and at the same time we throw away about £60 billion a year through our economic policies. Purely financially, this loss due to unemployment shows itself in huge extra budget spending directly on unemployment, which I understand now runs at about £20 billion a year.
Secondly, under-use of capacity on this scale means falling productivity resulting inevitably from idle plant and industry working short time. Again, the Government's red book this year admitted that by stating:
"productivity has fallen, as it usually does when the economy goes into recession".
Thirdly, every time the economy is acutely depressed, as we all know that it now is, real capacity—and in particular manufacturing capacity—is lost, much of it for good. Plants that would be perfectly viable with a reasonable level of demand in the economy have to be abandoned because they cannot any longer be financed in idleness. The same is true of labour. There

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are now over half a million people in the UK who have been unemployed for a year or more. Inevitably their skills deteriorate and are often permanently lost.
Such is the price we have to pay economically for a policy of deliberately tolerating mass unemployment at this level. On top of all that, as even Mr. Nigel Lawson, reminds us, mass unemployment beyond a point leads to unrest, political instability and even crime. Yet, with present policies, unemployment is likely—indeed is almost certain—to increase further for at least another year. The Government have apparently now abandoned all responsibility for the level of unemployment. Their doctrine is that we are suffering from a mysterious visitation—which they call recession - which will one day just as mysteriously disappear through some force of nature. According to this doctrine, all the Government can do is to stand by and watch these tides flowing this way or that. Unfortunately, recovery from depressions does not necessarily occur automatically. It did not do so in the Great Depression of 1933 and it is not happening in the United States at the present time.
As I see it, the reality now is that even in deep depression we have a £9.5 billion balance of payments deficit and heavy unemployment at the same time. Frankly, so many mistakes of policy have been made —and, incidentally, so many instruments of policy have been thrown away—that probably the only way to escape from the present deadlock is to lower interest rates substantially and soon and let the exchange rate find its own economic level. It is no service to the public to hide from it the fact that, unless we act in some such way soon, the outlook for the economy with the present policies and a fixed exchange rate is prolonged stagnation with a chronic 3 million people unemployed. That will further weaken this country not merely economically but also politically and diplomatically.
6.1 p.m.
Baroness Denton of Wakefield: My Lords, this is my first experience of a debate on the gracious Speech. I have noted with interest the division of subject matter during the four days and have wondered at the wisdom needed to make these decisions. There is a total interlinking of a successful economy with all other aspects. I was interested to see that view confirmed in the amendment tabled by the noble Lord, Lord Williams of Elvel, by relating the economy to social cohesion. I hope that the noble Lord means the same as I mean: that profits are wages and the necessary support for the social infrastructure. Although his Greek is superior, we are on common ground about people being important.
It has been an interesting week in industry. A week may be a long time in politics but it is a short time in industry. However, with the CBI conference, the British Telecom figures and major dramatic changes in one of our large commercial companies there has been an opportunity to observe events as they are and not as they are historically measured or forecast. I have a nervousness about surveys. When such forms arrive in
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a company, even government forms, the skill is not in completing them but getting them onto somebody else's desk.
Two events that happened last week strike me very firmly. If one reads the results of British Telecom without being critical of the chairman's salary—which I confess is difficult—or is concerned about the strength of the regulator—which is crucial—one has a company apologising for making profits and looking for a brownie point because of its downturn in the latest quarter. That is ludicrous. Are we not in danger of being driven by the lowest common denominator and leaving managers without motivation? When talking about the health service on this morning's "Today" programme the interviewer asked, "Is there not a fear that this money will go into management?". If money does not go into management and management training I fear that in a few years' time the noble Lord's amendment could be right.
In Washington recently I spoke with representatives of a major electronic company looking to locate within the Common Market. I was obviously pitching the cause of the West Midlands but was told that the UK could not be on its list because it did not have the skill levels to compare with its German colleagues. That overrode the language disadvantage. How did they perceive that we did not have the skill levels? They said that we had told them so. Time and again they had read reports from this country that we did not have trained people. Of course we do not have enough trained people—there is always further to go —but we have some of the best skilled people in manufacturing and engineering in the world. It is sad that we are giving the world a different message. Fortunately, as my noble friend Lord Boyd-Carpenter pointed out, the Japanese came and looked for themselves. Digging our own holes and shooting ourselves in the foot will not be the climate in which we attract growth of the economy. That is on the whole very British. The Japanese buy the cars that they build; we buy other people's cars. German trains do not always run on time but people believe that they do. The French have major industrial conflict but it is not fed around the world by the news networks day in and day out. One of the first requirements for the economy to gain in strength must be our own commitment to it and confidence in it.
That brings me to the CBI conference. Attendance was smaller than usual. Although that may be bad for the hoteliers in Bournemouth, is it bad for British industry that people are working at it rather than talking about it? As my noble friend Lord Brabazon said, conference was confident that manufacturing output had levelled off and that an upward curve was ahead. It was also realistic and many directors with optimistic views of the coming year were returning to their companies to take out more costs and inevitably more people. However, I can say with confidence that they will not be taking out more women managers because, despite the CBI consisting of those business leaders who applauded the Prime Minister so vigorously at the "Opportunity 2000" launch, one did not need two hands to count the number of women managers visible.

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It is obvious from their action that an upturn in the economic climate will not take us back to where we were. It will take us forward but the shape will be very different. Many years ago Machiavelli wrote that change was difficult to instigate as protectors of the old order held on to their security. A recession is a painful but inevitable means of forcing the pace of change. There will in future be more investment in technology in all areas. That will be at the expense of some people but to the benefit of others who will become more highly skilled and divorced from repetitious work. Measuring the state of the economy only by unemployment figures is no longer possible. In future Budgets it may be possible for the Government to support by fiscal means investment in technological solutions which will increase our global competitiveness.
Our economy must build on global competitiveness and I must disagree with the noble Lord's amendment that the Government have caused serious long-term damage to companies and to the economy. Companies have been forced to put their houses in order and to play on the international scene. It has always been interesting to note that the companies which in the past have not received government largesse, such as those in the pharmaceutical industry, should emerge as infinitely more successful global players than those in the defence industry which have been reliant on government grants and, even worse, costs plus contracts. I have yet to discover how anyone can run a successful company operating on the cost plus basis. Additionally, I have never found it helpful to the future of the manufacturing industry for the only profit in the company to come from the Treasury and to be based on currency gain.
In recent years we have seen manufacturing industry turn round from the philosophy of, "What can we build?", to, "What do our customers want?". I fear that I must share the view of the noble Lord, Lord Stoddart of Swindon, that building vans is not difficult; building vans which the customer wants and will buy is difficult. Technology has made it possible for small vans to do what the large Ford vans did so well for so long.
Quality has become a hygiene factor for good companies and it is built in and not inspected for afterwards. The power of the manufacturing director has been balanced at the boardroom table by that of the sales and marketing director and as a team they can enter world markets.
We have reason to be grateful to the Japanese for showing us the importance of long term strategy and core focus and for emphasising that knowledge is not a prerogative of senior management and that a team covering the whole of the process is an efficient way of improving that process. The lessons are well learned by many British companies.
We should be grateful, too, to the Government for having the foresight to encourage inward investment when other European countries were putting up barriers—invisible in many cases, but totally effective at keeping inward investment out. The result is now that in this economy, of which the noble Lord is so
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critical, we are about to become a net exporter of both video players and cars and probably other products. We have to be grateful that the Government were prepared to go to the table and ensure that other member countries of the Community played by the rules and accepted these products, and that they have given us the opportunity to show that a British workforce can build world-class quality.
I should like to move nearer to the area of which I have the greatest knowledge; that is, the Black Country. The gracious Speech identifies that work for the regeneration of our cities will continue. We have been working for the regeneration of the Black Country with the development corporation for four years now and, with government money to pump prime, have managed to achieve success even in a difficult climate.
We have built, or have under construction, 4 million square feet of industrial and commercial floor space. Four years ago I negotiated rents for our own office at £2.50 a square foot for refurbished premises; the latest new building opposite us is in the market at £15 per square foot. We have helped to return some wealth to the area.
We have created 7,600 jobs from new schemes and, although there have been losses from some companies —not all from failure, but some from increasing productivity—there is still a net gain in jobs in the area.
Eleven hundred homes have been built and, even more important, sold. Companies investing in the area have bought land, built houses, sold houses and bought more land —hardly a failed economy. It could just be that those houses were sold because they fulfilled local needs for small starter homes and that the final cost to the buyer bore some relationship to the cost of land and the cost to build, which could not be said about housing prices just before the downturn. Over our lifespan so far, we have attracted £350 million worth of private investment to be firmly committed to the area, which means that we are achieving a gearing ratio of four to one on our use of government money.
Now, we are entering a new phase, whereby, after years of assembling and reclaiming land, we have substantial packages to market and people are going out and selling them. There could be lessons to be learned from success in this small 11 square mile patch. It may be small physically, but, with 35,000 people living in it and 76,000 working there, would it have happened without us? It seems extremely doubtful. The £100 million road, authorised by the Department of Transport this year, was not even in the submissions from the local council when we arrived, yet it opens up acres and acres of dereliction. Developers had little confidence in the planning committees, whereas now, having discussed their applications with our officers and met our very stringent environmental requirements, they know they can bring their bulldozers on site the same afternoon as the meeting. We do not ask them to tie up their money and ambitions for endless periods of political wranglings. We were brave. We helped developments to start by providing funds for site reclamation with

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claw-back agreements. I am pleased to report that we were the first development corporation to receive a claw-back. We have been involved in public consultation; we have listened and we have trained; we have a projected spend of £2 million, over three years, on training. The areas range from foundries to construction to security, and I show no prejudice in telling your Lordships that the money invested in training women returners has represented some of the best value we have found. The women have found jobs quickly and many have triggered a hunger for qualifications, which can only be to the benefit of the area.
We have ahead of us a local government Bill and it will be interesting to see which of the lessons learned in the hardest possible climate can be used for the value of future regional developments. For regional development has proved hardy enough to weather the storm. London and the South East have bent and uprooted in the tough climate both physically and very noisily. However, if one talks to people in the insurance industry about the great storms of 1987, they will tell you that the wind speeds were no greater than the wind speeds that blew through Scotland in 1967; there was just a lot more to hit and it was a lot closer to the media, as was the South East recession. The media is an area where we have not succeeded. It is possible for them that the end of the world has been moved in recent years from Watford to Milton Keynes; it still has a long way north to go.
Much of the success in the Black Country, I am pleased to say, has been built on industrial and commercial business, but these are the blocks around which retail and service industries provide the cement. I think it important that we do not allow their success to fade. Jobs in those areas, described condescendingly as "Mickey Mouse" by many people who should know better, are real jobs, bring income into real families and allow people to return to work, for them to be part of a team and to learn to work. The current leasehold rental systems on retail property are long overdue for examination.
The learn to work brings me full cycle, because if there is one part of the gracious Speech which has a crucial effect on the economy, and is of crucial relevance to the economy, it is that:
"Action will be taken to improve quality and choice in education".
Industry can work wonders. It has. However, it needs the raw material to enable it to compete worldwide. Improving and constantly focusing on our educational programmes will be the long-term key to our success. Other Members of your Lordships' House have, arid will, swap figures of great magnitude, but they are all built up of single units. I hope that I have managed to share with your Lordships policies which have allowed growth and a bright future.
6.17 p.m.
Lord Sefton of Garston: My Lords, I too could relate my experiences of a development corporation, going back to the movement which the Labour Government started in the 1940s. There were new town developments all over the country. I accept the
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case which is made out for the development corporation in the Black Country. Elsewhere, the same story can be told. Runcorn could have boasted about being the first new town which had the Japanese investing in its industry. We could have boasted that we were the first to have finally persuaded the Government to send to it a department of the Ministry of Labour. I have no doubt that today Merseyside can boast that it holds a garden festival and that it has improved the Albert Dock and turned it into a tourist attraction.
When all that has been said and tribute has been paid to the work carried out by the new town corporations, especially in the north of England, there remains the undeniable fact that the differences which existed before between the North and the South still exist. The deprivation suffered in the North is just as bad as it ever was. It has not improved in relation to the South East.
I make no apologies for the fact that I tried to guess how this debate would proceed. Of course, it has gone as I forecast. People have spoken about macroeconomics and whether or not the Government are right in doing this, that or the other. One side has said they are and the other side has said they are not. I do not wish to become involved in that because I do not claim to be sufficiently clever to decide whether we are coming out of a recession, going into a recession or staying in a recession; I do not know.
I was tempted to ask a question of the noble Lord, Lord Brabazon, yesterday as to whether he would publish all those optimistic reports and surveys so that we could all read them. He was questioned about the accuracy of the estimate or rather lack of an estimate of unemployment figures. He replied that it is impossible to be precise in estimating unemployment figures. I was tempted to ask him in which economic estimates this Government have ever been precise. I have no intention of getting involved in macroeconomics and whether or not this country is coming out of a recession. I am more interested in the latter part of the amendment that has been moved:
"damage to the economy — and thereby to the social cohesion of the United Kingdom".
In 1979 I made my first speech on the Address and I know how one feels. I was brave enough to suggest that there was a belief in Great Britain that the country was a tremendous financial centre which was perhaps under threat. In addition, when the Financial Times started printing a copy in Frankfurt, it was felt that that might indicate that we would lose our privileged position as a great financial centre. I was pooh-poohed. This man from Liverpool was coming down here suggesting that our sacred citadel, the capital, was under threat. It does not seem so secure now, especially if the Government are going to dither about whether we will wholeheartedly take our place in Europe.
Whether we do or not, it is important that the south east of the country be made viable, a place that will attract people from other parts of the world. It must be a place to which financiers and big businessmen wish to come. Do they want to come now? Is the

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capital of Great Britain such an attractive place, commercially, socially or in any other way? Is it so great that it will attract people? Of course not.
In 1979 I also drew attention to the fact that in the North people believed that there was a North-South divide. Some people even suggested that I was imagining it, it was a figment of my imagination that a divide was growing up between the north and the south of the country. They do not say that now. Even Mr. Heseltine admits that the divide is there. He went so far as to suggest, having seen some of the problems in Liverpool—as the noble Lord, Lord Alport, said from the Benches Opposite in the debate on Liverpool —that, if there were a revolution in this country, it would probably start in Liverpool. He said it because he had seen the deprivation, suffering and anxiety of the people there. He had begun to understand.
I plead with the Government here to begin to understand the anxiety, the depression and feeling of hopelessness, the feeling that people have been deserted by our prime institutions of political government. The Government should begin to understand and do something about it. I pleaded that whenever we had development in the South East and discussed increasing the wealth and prosperity of the capital city of Great Britain, we should give just a thought to the consequences of the development for the rest of the country. I thought that perhaps when we were proposing and building the Channel Tunnel it was a sufficiently important and large-scale development to have consequences for the north of England. Therefore I suggested to the House that we should have an inquiry and examine the consequences of building the Channel Tunnel for the rest of the country. What did the Government say? Oh no, there was no need. The committee managed by the Government said that perhaps there was a need to consider the consequences upon Kent. I wonder what the consequences of the tunnel will be, when it opens, we hope, in 1993 for the west coast of our island. British Rail has evidently made up its mind that it will concentrate on the east coast. Bravo for that area; hard luck for Merseyside. We shall have one container depot, which will not encourage more activity in Merseyside.
My belief is that the tunnel will have a very bad effect upon the west coast, particularly North Wales, Holyhead, and Northern Ireland. I notice that the Leader of my Party is pleased with the reference to North Wales. I am glad. All this has been done without any thought. With the advent of Mr. Heseltine's concern about Liverpool and other places, I thought that things would change. Then along came Canary Wharf. Would that be a fine thing? Of course it would. Did anyone suggest to me that it would not have an effect upon the City of London? People are not saying that now. The poor old estate agents and people who deal in property are suffering and down go the rents. Did the Government consider the consequential effects on the City of London? No, they allowed it to go ahead. They said, "Let private enterprise move in. Not only that, pay it to move in". They give it millions of pounds to put up a
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monstrosity that need never have been built if we had made proper use of the office accommodation that already existed in London.
Did anyone give that consideration? Of course not. Regional policy had acquired a bad name, "regional" was a dirty word. There was regional policy in name only, all it provided was aid to the deprived regions. That is not what we want. We want a regional policy that also takes into consideration the problems that exist in the South East.
I swore that I would not take longer than 10 minutes and I will do my best to finish in time. I wish to deal with what has happened in London. I have mentioned the Channel Tunnel, Docklands and Canary Wharf. The airport sits right on top of the docks, much to the comfort of local people! On the site at the Tate Gallery, the bureaucrats in London bought it for £300 million and then told the Government. When I asked the Government whether it was true that we were buying the site at the Tate Gallery they said "Yes". Did we know what for? No. Did we know how many people would be employed there? No, the Government did not know anything about it, the PSA had evidently done it without their knowledge.
Another example is Vauxhall Cross. Noble Lords may not even know what that means but they will shortly. It is a building that is being erected on the other side of Vauxhall Bridge. It will probably employ 6,000 people according to the estimate of the developers. I understand it was built as speculative offices and that the Government have bought it. I ask the Government what for. Perhaps the Minister will tell us in his reply what it is for.
Rumour hath it that the British KGB will go there. What the hell we want to put the secret service into London for I do not know. It could well be the other side of Birmingham. No one considers that. Why do we need such a large institution? I thought we were talking about a peace dividend; perhaps they will spy on the Russians to see how they affect our economy. Or perhaps they will spy on our partners in the Common Market and see what they do.
I conclude on this note. I believe that we are inextricably bound up, economically and socially, with the continent of Europe. I have always supported that view. I told my own party that they were talking nonsense in opposing the idea of going into Europe. Regardless of whether they or anyone else liked it, we would go into Europe because economic forces would compel us to do so. If we go into Europe, I want London to be one of the best financed capital cities in the world. We had better make our minds up and get in there and try to make the bank in the City of London the premier bank in the Common Market. We had better hurry up and decide and then go in.
Over and above all that, social cohesion means that when the Government plan or decide on anything such as changing all the methods of communication between here and the Continent, they should take the whole country into consideration. It means that we must begin to plan. I know that because of events in Eastern Europe central planning is now a dirty expression. Nevertheless, unless we plan our economy

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centrally it will fragment and individual companies will begin to take decisions which are purely in their own interest.
I am not going to talk about the problems of Liverpool. I say to both parties that for 45 years while I have been in active politics I have been fighting to redress the balance between North and South. I am prepared to admit that I have failed because that redressing of the balance has not been achieved. In the 1960s there was just a glimpse of it because we nearly got big investment in Liverpool. However, some do-gooders wanted to keep the Albert Dock so we did not gel the investment. Since the 1960s there has been a steady decline in the belief in Liverpool among ordinary working class folk, who are just as entitled to a decent standard of life as people living anywhere else in the country. There is a general belief that those at the centre of our political activity have neglected Liverpool.
This is not a party political issue, but one where the economy has been allowed to run rampant. Our party should have done something about redressing the balance but it did not. Politically, we are now suffering for that. There is no need for Mr. Heseltine to talk about the possibility of a revolution and suggest that it will start in Liverpool. It has already started. It is not a violent revolution at the moment and I hope to God that it never will be. I hope that we shall never see again the riots which occasioned the visit of Mr. Heseltine. But there is a revolution because people in Liverpool are beginning to believe that the North-south division has now become the division between them and us. "Them" are in the south east of England and "us" are residing in the North, sometimes in misery, because of the South.
6.32 p.m.
Lord Wade of Chorlton: My Lords, I am another one of ' us" because I too come from the North West, which I also shall be referring to. I have always believed that government should only do what individuals cannot do for themselves. It also follows that where matters can only be dealt with by government the government should see to them. There are a number of measures related to this debate on the economy which I believe the Government are not taking, but which they should be taking and which only they can deal with. They do not relate to expenditure but, to a large extent, to attitudes.
I refer to Sir Robert Peel's Tamworth Manifesto in which, as noble Lords will remember, he referred to,
"that great and intelligent class of society… which is much less interested in the contentions of party, than in the maintenance of order and the cause of good government".
The noble Lord, Lord Williams, said, in the only part of his speech with which I agreed, that the economy is about people. It is the mass of people that we most need to consider. The prime concern of the Government should be an ever-growing and steady improvement in the economy if we are to benefit all people and give them a better standard of living. That is what the economy and its growth should be about.
In that context I wish to refer to one or two issues in the North West to which the noble Lord, Lord Sefton, also referred. I shall refer to some of the issues
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which do not cost money. The Government are not taking decisions which only they can take on matters which can do a great deal to improve the economy of that area. The North West is the second largest region in the United Kingdom. It is the most important for exports from this country. It is the most innovative area for manufactures and, in particular, new manufactures.
During the past 10 years the population of the North West has fallen and it is the only region where that has happened. It is the region with the lowest increase in the dwelling stock. The number of houses built has been less in the North West than in any other region. There is another figure which is depressing. We have the highest level of young people leaving school without qualifications. At the same time, we employ more people in agriculture as a proportion of the population than any other region. The average number of people employed in the United Kingdom in agriculture is 1.4 per cent. In the South East it is only I per cent. Of those in employment in the North West 4.6 per cent. are employed in agriculture. I see that the noble Lord, Lord Cledwyn, is nodding his head because exactly the same situation applies in Wales.
We are all aware that the one industry in this country which is under the greatest threat and which will suffer more economically than most is agriculture and many of the industries associated with it. So, of all the regions the North West is the one where we are likely to suffer most from the loss of jobs and economic activity as the agriculture industry declines. Therefore, we must be very aware of the need to create other centres of wealth to replace the economic activity now coming from agriculture.
On the good side, I refer to the fact that we have had an enormous increase in the GDP per head in the North West. During the 1980s the manufacturing base and its GDP increased in the region by about 76 per cent. We are now the second most effective area in terms of GDP within the United Kingdom.
The North West contains a great number of hard working people. There is a great deal of innovation. Yet it is a declining area as a great many people are leaving because standards are not being generated in the way they see them being developed in the rest of the United Kingdom. There are two or three provisions which could go a long way to redress the situation, but governments are preventing it. There is only one government that can have any impact on the present position.
The North West appreciates its problems and wishes to take a number of actions to redress them. There is a great desire among the people of that area to have economic growth, the growth of cities and to improve inward investment. Only 4 per cent. of the total inward investment into the United Kingdom comes to the North West against its GDP of 10 per cent. Therefore, we are not offering the attractive investment opportunities, as are other parts of the country, to those who invest on a multi-national scale. Inward investment, which is valuable to us, is not made by people who will decide between Liverpool and Birmingham or Chester and York. These people decide between the United Kingdom and France or

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Germany, Greece or even Eastern Europe if the investors are offered more attractive sites and opportunities in those countries than we are able to do here.
We need to have a much more positive approach towards encouraging the selection of attractive inward investment opportunities to the North West. We are aware of the problem in the North West and have taken great steps to develop our structure plans to meet it, but it is this Government who have taken action to stop them. I find that extremely unacceptable and it is also unacceptable to many people in the North West.
Salford University has recently demonstrated that a daily flight between Manchester and the United States of America would provide 1,400 new jobs and increase the economic activity of the area by £14 million. That is, for each flight between the USA and Manchester. We are at present seeking to build a new runway at Manchester airport. I find it odd that we are having extreme difficulty in doing that. Clearly there is opposition to the project, but it is essential for the economic growth of the area. It is not a question of whether we might or might not build a new runway because it is essential. It will bring enormous funds to Greater Manchester, Merseyside and the whole of the region. The Government seem to be able to stop that development, which will bring investment, but do not seem able to help us to make the necessary decisions which will encourage more investment. We in the North West cannot understand that. In order to get further flights into Greater Manchester airport, American airlines are prepared to invest. Two American airlines wish to commence services from Manchester to the United States, and would do so tomorrow. The Government say, quite rightly, that the first opportunity should be given to British Airways, but no British airline is prepared or wishes to do so. As a result the Government have not yet given permission for any of the American airlines to proceed with their offers which the Manchester airport authorities wish to accept.
This is yet another instance where the Government, through their policy decisions, are preventing a great deal of commercial and economic activity which could be a great boost to the North West. It would not be at great cost, but it would do a tremendous amount to improve the economic position of the North West.
We were very glad to see the extra funding for transport. But a number of essential issues remain. There is no railway line to Manchester airport, so passengers to the airport have to travel by bus or car. We are anxious to see a proper electrified line running between the airport, the city of Manchester and other prominent cities in the North West. We were hoping that resources would be made available for that. Clearly such plans are in the programme and British Rail is anxious to carry them out. We hope that the British Government will ensure that, if they are to make commitments, they will make the area one of their primary targets to ensure that the airport will have the opportunity to grow, as undoubtedly it can grow.
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One of the successful industries in the North West has been the Mersey Docks and Harbour Company. The noble Lord, Lord Sefton, may not think that that company has been improved as much as it has, but the abolition of the dock labour scheme has turned that company into one of the most successful companies in the North West. It has improved because the Government, through my noble friend Lord Brabazon, did a great job in promoting the Bill which abolished the scheme. The scheme had permitted restrictive practices to hold back the performance of that company and of the whole of the city. Yet, at the same time, our Government are imposing light dues on vessels using UK ports—dues which are not having to be paid by vessels visiting any other European port. Those dues have increased twice this year. It seems to me that it is just as much a restrictive practice to impose dues on our ships visiting our ports, when dues do not have to be paid in our competitors' ports, as it is to have a restriction on how to utilise labour. It is important that restrictive practices, which can apply in all areas, and not just in the use of labour, should be taken away.
We have already discussed the need to bring inward investment to the UK. In that regard we must compete with countries and cities throughout the whole of the EC. We must also look at how we utilise the funds which are available from the EC. It is a matter of considerable anxiety to many of us that companies can invest in the UK and get the full benefit of grants available from the EC in addition to grants from their own countries. The principle of additionality does not apply as it does in this country. It is against the interests of many of our companies in the UK. If that rule did not apply they, too, could receive grants from both the EC and our Government. But because of our additionality rules that is not possible. They lose the benefit which they would have had; whereas our competitors get the benefit of support from their own countries together with the support of the EC. I can give many examples. For instance, the German company, Muller, is investing a large amount of money in Cheshire to build the biggest yoghurt plant in the whole of Europe. That company is getting the full benefit of funds from its own country, from the Bavarian region in which it operates, from the EC, and all the benefits provided by the UK Government. It is getting many more benefits than its competitors or that I would receive if I wanted to build a yoghurt factory in Cheshire. I would receive only the regional grants that would be available in that area.
There are a number of issues which it is now essential for the Government to consider in order to make the growth of our economy the most important matter for our society. There are many other pressures on governments to protect this and to protect that. However, there are certain times in our history when we should put those other things on one side and say that the first step we have to take is to stimulate the economy and create the wealth that will then make the other things possible. If the Government do not make that a clear priority, then the rest of us cannot.
I conclude by referring to the amendment of the noble Lord, Lord Williams, which I find utterly and

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completely unacceptable. Although I have drawn attention to a number of actions which the Government can take to improve our region, I have no doubt at all that the prosperity we have created over the past 10 years has been enormous. I have seen individuals whose wealth has surpassed all their dreams of 10 years ago. The noble Lord, Lord Williams, referred to the fact that people go without overcoats, yet at the same time the Littlewoods company is selling more overcoats each year. The largest bedding company in the world is in the North West. The man who owns it refers to himself as the manufacturer of the world's biggest playpens. He sells more and more mattresses each year. The way that sales of these items have increased is no indication that people are becoming poorer.
Therefore, the idea that the Government's philosophy and the economic philosophy of the past eight years have been wrong is not acceptable. It is the right approach. The fewer restrictive practices and the more market-led we allow our people to be, the more prosperous we shall he. No governments have been more restrictive than Labour governments; and no governments are more likely to impose more taxes and more restrictions on the way industry grows and develops than Labour governments. However difficult things may be at moment—and I am certain that there are many things which I have described that the Government could do to improve the situation—I hope and pray that it is by a Conservative government that this country will continue to be economically led.
6.48 p.m.
Lord Ardwick: My Lords, I am sure that we are all very pleased to have heard in succession the realistic speeches of two noble Lords from the north. Indeed, I wonder whether the Whips were doing a little grouping because I too came originally from Manchester. However, as it is 45 years since I was there, I am afraid I cannot bring the message the two noble Lords have brought today.
Until the day, the mind of the Government must be concentrated on the election. I am not blaming them for that. But this time, so the pundits tell us, there is to be no election boom; no big tax reductions are expected. There will be just the kind of rather modest stimulus of which we have learnt.
I thought the Government received a rather bad press from their friends. The Times judgment of the extra sums devoted to the National Health Service, education, the railways and so on, was to describe them as a pre-election giveaway on a scale not seen for many years. I thought that valid only in comparison with past paucity. The Government have, however, taken one short step away from Thatcherism—and that is a good thing.
The Government are now anxiously watching for the day when the signs of the recession coming to an end, which they themselves optimistically see, are big enough to be visible to electors yearning for relief. The Opposition spokesman in another place said that the Government's attitude reminded him of a song about good times just around the corner. It reminded me of another song, "Faint in the east behold the dawn
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appear"; but so faint that it requires the eye of faith to see it. Even if the Government's faith were justified, it would still be faith in slow recovery of modest size; slow growth, more bankruptcies, continued mass unemployment and a stagnant housing market. That is the prospect.
As we have heard from several of my noble friends, many people are suffering either directly from the recession through unemployment and bankruptcies or because the Government have not been able to provide the resources needed for adequate social provision. There are the very poor, particularly the one-parent families, faced with a baffling system of payments; there are the young, poorly equipped with skills and feeling hopeless about their opportunities; there are the owners of small businesses whose courage, enterprise and hopes have been defeated by the recession. There are those laid off from the big industrial concerns; there are the redundant professional men and women of a class that has never known unemployment and in districts that until the past year or two always enjoyed prosperity. And now the Government hope to be given credit for bringing to an end a recession the creation of which they see as being no responsibility of theirs. I am sure however that that responsibility will be pinned on them.
Any belief that the Conservatives have achieved a miracle has been shattered. Any belief that the Conservatives have a unique genius for managing the economy has faded away, although not in the case of the noble Lord, Lord Campbell of Alloway, who I regret to see is not in his place. I wonder about the kind of people he meets when he can regard the effects of government policy with so much complacency. Even the boast that the economy is stronger to meet the challenge of 1992 looks thin. It is true that inefficient firms have been driven out of business. But many firms that were not inefficient have also disappeared or have been much reduced in size. So now there are real anxieties about the size of our industrial base and its capacity to expand when, in time, the chances are there.
What disturbs many young people is that there no longer seem to be any formulae for a return to growth and full employment. Most of us remember the years after the war when we had full employment and believed that it would go on forever. It seems a golden age in retrospect. I had a distinguished colleague, Fritz Schumacher, the prophet of intermediate technology, who used to pass on his faith that all the problems of economics had been solved. Alas, poor Fritz. Or I think of Tony Crosland, with his belief that continuous economic expansion would create continuous full employment plus painless provision for welfare, education and greater equality. Alas, poor Tony. When the Keynesian remedies were not working in the 1970s, other prophets such as Friedman convinced many people that they had the magic secret. All one had to do was to control the money supply and inflation would disappear—the vulgar version of monetary theory. But that too, in time, was found wanting. Today even the Opposition do not make claims that there is one sure way that will quickly restore growth and full employment.

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Nevertheless, some people are brave enough to raise the odd Keynesian voice. My hopes were stirred at the weekend by Mr. John Grieve Smith of Robinson College, Cambridge, who said that a generation is growing up that is in danger of adopting the inter-war attitude of fatalistic acceptance of mass unemployment. That, he thinks, is to some extent due to the growth of the extreme doctrines of market economics associated with Friedrich von Hayek and Friedman, which provided the intellectual content of Thatcherism and created the idea that governments should not—indeed could not—influence the economy. Mr. Smith says that demand management has continued but that the emphasis has shifted towards keeping demand down to fight inflation. Mr. Smith admits that expansionary policies will be possible only if we devise alternative means of tackling inflation. At present, any recovery, even some kind of automatic recovery, is liable to lead to a renewed wage-price spiral, and so Mr. Smith is led back to what many of us regard as an impossible remedy—a crucial change in pay bargaining methods. Bargaining over individual claims should be preceded by a national agreement on the general size of increases. That is a beautiful, logical solution, but one can see the difficulties of making it work.
Yet there is a new climate in the world. It is possible for Labour men to talk, as they do on the Continent, about unions and employers as social partners, a phrase which not long ago would have been condemned as the mortal Marxist sin of class collaboration. There is another change. Everyone is aware that the pursuit of full employment in one country is impossible. So Mr. Smith would like the Community to adopt the achievement of full employment as one of its policy objectives. He points out that the Dutch draft treaty on economic and monetary union lists high employment as an objective but nevertheless seems to reflect the need to keep demand down to fight inflation. Indeed, he might have added that the strict criteria for convergence could have that very effect.
I have not done justice to Mr. Smith's argument but it has to be considered if we are to get out of this age of unemployment. Other theories have to be considered. There are 28 million unemployed in the OECD area. That is intolerable in a great democratic tract of the world whose members vowed from the beginning to make its prime object the seeking of high employment and growth coupled with financial stability; but perhaps that is the philosopher's stone.
7 p.m.
Lord Jeffreys: My Lords, I am sorry to break the sequence but I am not from the North West; indeed, I have hardly ever been there. However, any place that can produce the Beatles, the Grand National, Liverpool Football Club and a bishop who has played cricket for England must be a good one.
Our economy is entering a critical phase; we are still engulfed in a recession and yet the first glimmers of light are beginning to appear at the end of a tunnel. At this stage I should like to make a small plea to my
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noble friend to take great care that, in the coming months, some of the short-term mistakes that have been made are not repeated. Inflation—the defeat of which has been the centrepiece of government strategy in the past 12 years—did not appear on its own. A combination of the expansion of M4 money supply and drastic interest rate reductions in 1987–88 were both major contributory factors.
The overall boom to bust situation that we have seen must never be repeated. I can appreciate that some factors relating to the current recession have been beyond government control. However, the doubling of interest rates in the space of two years and consequent unemployment of an extra 1 million people, with all its social cost, is quite unacceptable. It is like a blunt axe in the hands of an eminent surgeon and, as an instrument to fight inflation, is both indiscriminatory and unnecessary. What is needed is due care and attention and a correct diagnosis before inflation has had a chance to appear. We need proactive, not reactive government.
While there are many things that go together to produce a successful economy, it is the lead given by the Government of the day, and their agent the Bank of England, that sets the tone. Many of those seeking a recovery in the economy pin their hopes primarily on the housing and retail sectors. I very much hope that this will not be the case. Certainly some stability is needed as this will allow first-time house buyers struggling under the high cost of our housing a chance to purchase. We should not be looking for a short-term fix to bail out a few overstretched property dealers.
On the retail side, another spending boom would be a complete disaster. What is needed is a return of consumer confidence, a modest recovery and the return of good housekeeping by the consumer. People should be encouraged to save money. That is the only way in which long-term economic stability can be achieved with low interest rates, gentle but sustainable growth and a reduction in unemployment. Perhaps, to this end, the Chancellor of the Exchequer might take steps, first, to reduce excessive bank lending against property assets and, secondly, to reintroduce the tax exempt savings and endowment policies that were abolished in 1984.
In that respect, I accept that the introduction of personal equity plans has gone some way down the line. But they cover only one investment and anyone who experienced the 1987 crash will know that it is not necessarily a safe one. One wonders whether some greater independence for the Bank of England along the lines of the Federal Reserve in New York might not further promote this stability. As an aside, it might also head off a takeover by Brussels.
Not only the individual, but also the corporate sector of our economy has suffered badly. Again, stability is essential. While the enormous strides in productivity and performance over the past 12 years are most welcome—and that cannot be understated —I am forced to conclude that, when taken too far, this can seriously undermine long-term investment strategy.

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In particular, this drive for higher productivity has had some undesirable spin-offs in the investment fraternity. Not surprisingly, this sector has become almost entirely results driven. I would cite, for example, a company which, in order to satisfy the demands of its shareholders, is forced to borrow money so as to maintain a satisfactory dividend. Again, that is totally unacceptable; it reduces funds available for investment in plant and machinery and also contributes to higher interest rates. Perhaps some guidelines to curb the immense power of the institutional shareholders would be in order.
I listened yesterday to the Chancellor of the Exchequer's Autumn Statement. I shall say only this: it is traditional at the end of a recession, and before an election, to increase spending. Given that taxes are unlikely to be raised, it would appear that the funds will have to be raised by borrowing. That will inevitably cause interest rates to rise. I sincerely hope that the economy has recovered sufficiently to cope with this rise because, if not, the scenario of rising interest rates and an economy still in recession—or, at least, bumping along the bottom—is almost too awful to contemplate.
The noble Lord, Lord Williams of Elvel, hopes that we will support his amendment. On that point I suggest, as other noble Lords have done, that he made no case at all for our doing so. Indeed, I think that perhaps some noble Lords on these Benches have been more helpful in that respect. In addition, I may be a young Member of this House but I remember well the unemployment and high inflation that existed under the last Labour Government. For that reason, I find his amendment more than hypocritical and I urge your Lordships to vote against it.
7.6 p m.
Lord Desai: My Lords, as the last speaker before the Front Bench speakers conclude the debate, I believe that my task has been made somewhat easier by the noble Lord, Lord Jeffreys. He brought us back to the amendment before the House. I should like to speak to that amendment and perhaps advance a case which some noble Lords think, possibly misguidedly, that my noble friend Lord Williams did not put forward.
The amendment mentions two things. It says, first, that the Government's policies,
"have wrought serious and unnecessary long-term damage to the economy";
and, secondly, that,
"the social cohesion of the United Kingdom"
has been damaged.
Perhaps I may begin with the problem of "social cohesion". In the streets of London, and in those of all major cities, we have visible homelessness and begging. It is something new. I have been in this country for 26 years, but it is only in the past four or five years that I have seen third-world-like scenes in the centre of London. The change in entitlement for the young has meant that many of the homeless wandering the streets of London are young or even juvenile. They have nowhere to go and no money with
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which to find housing. They are roaming the streets of London and are therefore open to all sorts of evil influences.
As regards business, we have had 45,000 business failures recently. We have had mortgage repossessions. Many of the people concerned did not want to be homeless. They were actually prudent and responsible householders who were saving money. They had been told that the rainbow was there and that, at the end of it, they would be part of the property-owning democracy. Eighty five thousand of them have had their houses repossessed. One does not know where they are currently being housed. The burden has, perhaps, fallen on local authorities that have only limited resources with which to accommodate them.
As many noble Lords have mentioned, we also have unemployment. Indeed, twice in the past 12 years the level of unemployment has nearly doubled. It has not reached the high figures of the early 1980s, but neither the gracious Speech nor the Autumn Statement offer any hope that unemployment will come down at any speed. If anything, it will increase. If we were to calculate unemployment on the basis upon which it was calculated in 1979 when it was 1.5 million, it would be way above 3 million. Let us now forget about that.
Three building societies this year have had to be rescued. We have seen bank failures. One of the major omissions of the proposed legislative programme is that there has been no mention of the fact that the system of financial regulation is in a sorry state. It is time that there was a comprehensive look at financial regulation across the board— banks, building societies and other financial institutions. Let us now forget about that too.
We have had the homeless, the jobless and profitless businesses. Let us look at the question of the long-term unnecessary damage. The noble Lord, Lord Boyd-Carpenter, who I am glad to see has just returned, said that my noble friend Lord Williams had not pointed to the errors that had caused the damage. Where shall I begin? The night is not long enough for me to tell your Lordships. Over the past 12 years the Government have abandoned their philosophies a number of times. Does that provide a coherent vision of how the economy works or could be bettered?
We have had an epic tragedy in two long acts. In the first long act we were told, as my noble friend Lord Ardwick has reminded us, that the control of the money supply was everything and that if it were controlled miracles would happen. Indeed the Government's friends, such as Professor Friedman and Professor Minford, were heard to tell the Treasury Select Committee in 1980 that if the money supply were controlled, inflation would decrease painlessly and there would be no increase in unemployment because the market works so efficiently. We know much better now. It was not painless and nor was it successful. As Professor Beckerman of Oxford has pointed out, the drop in inflation was due more to the collapse in world

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commodity prices than to a successful control of the money supply, which of course was not controlled. However, that is a long story which need not be retold.
Even were Ito grant that the Government then had a coherent philosophy—not a good one—it was abandoned after 1986. In the rush to win the 1987 election there was a conversion to Keynesism. We were then told that Keynes was dead and that Friedman was the new king. The then Chancellor of the Exchequer made a pre-election Autumn Statement in 1986 and launched the economy into a boom. Then the second tragedy started. The first tragedy caused a great deal of unemployment, painfully controlled inflation and almost destroyed manufacturing industry. The second act was different. It seemed as though we were to have prosperity. Indeed we were told that we had prosperity.
The Chancellor was the darling of the party opposite. Now of course he is hardly mentioned. He said that inflation was the judge and the jury. The inflation rate doubled once again. In the second quarter of 1979 inflation was at 10 per cent. By 1981 it was 20 per cent. Then it came down. Between 1986 and 1989 we again doubled or even trebled the rate of inflation. It is easy to claim that inflation is now under control, but who increased it in the first place? We were not in power. We were a long way from it. The Government increased inflation and then they brought it down. That is very nice, but it is not a consistent philosophy upon which to run an economy.
We have wasted five long years. It has taken from 1986 to 1991 to bring back the rate of inflation to almost what it was in 1986. It is still somewhat above it. As the Autumn Statement shows, it has now reached a plateau. It is difficult to say whether the RPI will go much below 4 per cent., despite entry into the ERM. If I were on the other side, I should be cautious before I claimed too much success with inflation.
We have heard about blips and such matters. The inflation was not a blip, it was caused deliberately. It was chosen, and it damaged the economy severely.
My noble friend Lord Williams has said that the damage to the economy was unnecessary; it need not have been caused. The Government had the remarkable achievement of not just having a pre-election boom, which is perhaps forgivable—we are all weak—but a post-election boom of an unprecedented nature for which I saw no necessity; but we had it. We had the most incredible credit expansion by a government who said how financially prudent they were going to be. They thereby wrecked the economy severely.
Let us now consider manufacturing output. It is not a statistic that Members opposite want often to mention. In the second quarter of 1979, when the Government took office, the manufacturing production index was 108.7 (the base being 1985); in the second quarter of 1991 it was 112.6. Let me be generous and say that that is a 4 percentage point rise over 12 years. The highest it has been—let me not be unfair—is 119. In 12 years hardly 1 percentage point
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per year growth in manufacturing has been achieved. It is no good saying that industry is lean and fit; it is dying and emaciated. It is not lean and fit.
Let us then turn to the Government's great claim—repeated in the gracious Speech—about the downward trend in government expenditure as a percentage of GDP. The Government's great claim is that over the past 12 years they have achieved that remarkable miracle. If your Lordships study the Autumn Statement, or today's Financial Times, you will see that in 1978–79 the Government's share of expenditure, as a percentage of GDP, was 43 per cent. Under the first Thatcher Administration it rose to 47 per cent. From there it was brought down to 40 per cent. in 1988–89. The Autumn Statement promises that by 1992-93 it will be at 42 per cent. Between 1979 and 1992 we shall have achieved a staggering 1 percentage point reduction in the ratio of government expenditure to GDP. Was all the destruction worthwhile for that small achievement? That is why I say that there have been frequent changes of philosophy—monetarism one day; Keynesism another day; financial responsibility one day; and profligate credit expansion another day. Where is the coherent philosophy upon which the Government will build sustained growth? What sustained growth? A growth rate of 1.75 per cent. over the past 12 years! Is that large? It is certainly way below the capacity rate of growth of the economy which is 2.5 to 2.75 per cent.
Even when we are coming out of a recession all we are promised is a growth rate of 2.5 per cent. That means that the loss of output over the past year will not be made up over the next year. We shall have a deficit. The economy should be growing much faster than it is if the Government have got the economy right. However, the Government have not got the economy right. Noble Lords opposite have differences of opinion on this matter. It is quite clear that the frequent changes in philosophy that have occurred have been damaging.
The Government should say to themselves, "Enough of all this turning and twisting. The time has come to think very carefully about what policy will obtain steady growth in the 1990s". The Government should have thought about this matter much more carefully and they do not have much time left. The Government must think about a stable macro economic framework. That has been lacking over the past 12 years. The Government must adopt a decent, long-term supply side policy on manufacturing, investment, innovation and education. That was promised but not delivered. Despite what some people may pretend, the Government must admit that there is a difference between a real economy and a paper economy. It is time we turned our attention back to the real economy. As we enter the single market if we are not strong in our real economy, we shall become marginalised in a way that has not been the case for a long time. I urge noble Lords to support the amendment of my noble friend Lord Williams.
7.21 p.m.
Baroness Seear: My Lords, I hope—however I cannot believe this—I heard the noble Lord, Lord Brabazon, use the words "the social market" in his opening speech. If I heard him correctly and he now approves of the idea of the social market, that is indeed a conversion greatly to be welcomed. I suppose that IS a sign of what we are now coming to call post-Thatcherite conservatism. However, I do not see that philosophy greatly reflected in the gracious Speech.
It is always a great pleasure to hear speeches made in your Lordships' House by former colleagues of mine from the LSE. That is a pleasure I shall have enjoyed rather often this evening. There was much in the speech of the noble Lord, Lord Desai, that was of the greatest value. However, I would suggest to him that it is a little unwise, even from the Back Benches of the Labour Party, to accuse any other party of changing its policies. It is also perhaps a little unwise to taunt one's opponents too greatly on the subject of rising inflation. That is now being controlled. After all, wider the previous Labour Government inflation reached a figure of 25 per cent. at one stage. I remember the noble Lord, Lord Shepherd, saying that the British public at that date looked over the abyss and then drew back. They drew back partly because we were rescued by the IMF. People in glass houses —even if they were in those glass houses a long time ago and have attempted to construct a different kind of building since—should be a little cautious about where and at whom they throw stones.
I do not see much evidence of the change of heart I referred to reflected in the gracious Speech. There is an extraordinary optimism about much of the gracious Speech. A leading theme of that speech is the Government's intention to,
"maintain the conditions necessary for sustained growth".
Other speakers this afternoon have paused over the word "sustained". After all the Government themselves have admitted that there has been a fall of 2 per cent. I imagine that is not the kind of figure the Government wish to see sustained. A great deal has to be done—I suggest a great deal more than we see in the gracious Speech—if growth that we can be proud of is to emerge from the position we are in at present. I admit, of course, that during the past 12 years there have been periods of considerable and valuable growth.
Neither in the gracious Speech nor in the debate this evening, except to some extent in the speech of the noble Lord, Lord Wade, have I heard any recognition of the fact that this country must recover in a global economy and live in that economy. We are still talking as if we were a single trading unit peripherally involved in the activities of the European Community. But no one has talked about the challenges coming from the little dragons or from a recovery in the United States. However, we realise that recovery is some way off yet. No one has talked about what may well happen if the eastern European countries really get under way. It is even possible that some day there will be a real recovery in Russia, let alone in China. Until we wake up to the fact that we are operating in
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a global economy with all that that involves, any idea that we shall achieve a sustained economic recovery and continued economic success in this country is the idea of someone living in cloud cuckoo land.
We can start to get ourselves involved in the global economy through the obvious method of getting inside—I believe the Prime Minister uses the expression getting "at the heart of—the European Community. We should use the EC as an instrument for being effective in the global economy. The Community can go either way and we should be there influencing it so that it does not become a fortress but rather an instrument for a worldwide improvement in international trade.
No one else has referred to my next point. I am glad to see the gracious Speech stated that the Government will,
"with our Community partners, pursue the successful conclusion of the Uruguay Round of multilateral trade negotiations".
Nothing can be more important than that the Uruguay Round should succeed. The failure of the Uruguay Round would lead to the worst possible restrictions on international trade. It is a grievous matter that our position in the European Community is not strong enough to ensure that we bring about a satisfactory outcome to the Uruguay Round. The Uruguay Round means so much to many of the things to which we pay lip service. A successful outcome would give some hope to developing countries which, ultimately, can become markets. If the negotiations are unsuccessful, there will be a cut back in trade throughout the world.
I realise we all have our farming friends. My farming friend is not here tonight, thank goodness. But those people are a minute problem compared with the size of the whole issue of playing an effective role in the global economy and operating effectively in global trade. Of course there are problems with the Uruguay Round of talks and now is not the moment to discuss them, but let us back that sentiment in the gracious Speech for all we are worth. But we shall not do so successfully unless we are powerful and accepted and respected within the European Community. At the moment we are none of those three things.
Part of the Uruguay Round negotiations relates to the form of the common agricultural policy. The CAP is a quid pro quo for success in the Uruguay Round. I am not saying that all the faults with that policy lie on the side of the European Community. America is by no means Simon Pure in the matter. However, those are issues that must be fought through. We cannot stand by and allow ridiculously small changes to be made in the CAP. I hardly ever agree with the noble Lord, Lord Jay, but it is, of course, perfectly true that the effect on consumers of the way in which the CAP has operated has been disastrous for the people and the economy of this country, and particularly for the poorer people in this country.
There are other ways in which, as an effective and leading member of the EC—which is what we should be—we could be taking steps to improve our position here at home. Let us back an independent bank. That will come. However, I fear that we shall do what we have done all along: we shall carp at it, we shall drag

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our feet and then, when it has been shaped and developed by other people into a form which we do not really like, we shall go in and have to put up with it. We have done that time and time again. This time we ought to be in there, leading.
Let us get into the narrow band of the ERM. That will give us greater discipline and make it easier to reduce interest rates than if we stay in the wider band.
Working through the European Community we can do much to improve the position of this country in a way which would otherwise not be possible. We shall never be effective in the global economy if we attempt to operate on our own with only marginal co-operation, grudgingly given, with the other members of the Community.
That is the scale of what needs to be done. That is how we should be approaching the tremendous problems which we face. I am not optimistic about the future. We must grapple with those problems. The competition from all over the globe is very serious indeed. The social market means that success in the market will provide us with the wherewithal for the social policies which we all want to see. It is the foundation of success in the economy, and success in the economy depends on all the matters which I have mentioned, and others as well.
Turning to more local matters, it is not only in the European Community that we have to find our salvation. There is also a great deal that we can do here at home at the same time. I greatly welcome and support the speech of the noble Baroness, Lady Denton. That is not just a feminist conspiracy. Her experience of what can be done in terms of sensible regional policies, properly worked out, properly staffed and properly backed should be a model for the way we ought to proceed.
Where there is to be intervention—and we need intervention, of the right kind—it cannot be from the centre because the climate of each region is so different. It must be by people who live and work in the regions who are in daily contact with those living there and the problems they encounter. Those people must have the wherewithal, the money and the ability to make decisions for their regions if those policies are to be effective.
So on the one hand we are looking at the global, Community, level and on the other hand—this is an example of subsidiarity (and there should be a huge prize for anybody who can think of a better word than "subsidiarity")—there is the smaller unit of the region in which the really effective, down-to-earth, day-to-day work which produces results can be done effectively.
The gracious Speech talks about encouraging enterprise. I now come to what in many ways is the nitty-gritty. We all know that small businesses, which are a very important part of enterprise, are going to the wall day in and day out. One very important reason for that is the refusal of people to pay their bills on time. In this House we have asked again and again for the Government to take action on this matter. It is monstrous that finance departments in large organisations, and in local authorities and government
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departments, are extremely bad about paying up. If a small business cannot get credit from its suppliers, it still has to pay its rents and wages at a regular time, and if it has to wait weeks before receiving its money from creditors it will go broke.
Perhaps I may add, since I am in the midst of such a problem at the moment, that that also applies to voluntary organisations. Up and down the country voluntary organisations, to which the Government pay so much lip service, are in deep trouble because they are not paid on time. In particular, they are not paid on time by the TECs. That is making it impossible for many voluntary organisations to operate effectively. An average of nine weeks to pay bills is enough to put many voluntary organisations into the bankruptcy court and is doing so in some cases. Therefore, we ask that, along with all the big schemes, the Government should look again at how pressure may be brought to bear on people to pay their bills promptly.
The gracious Speech also favours the encouragement of training and education. That comes out like the refrain of a song, and it is sung by all parties. We sing it too. The TECs will need more money in order to do their job. They are woefully behind. There have been cuts in the money available to TECs. Can more money be siphoned into the TECs and channelled quickly to the people who have to do the training? Without that, the statement that there will be great improvements in training is so much pie in the sky. We beg the Government to look at this again and to see that the financing of training of all kinds, not least for people with special needs, is adequately met. At present the money is not adequate, as everyone concerned with training will tell you.
The expansion of the universities is something that we all wish to see. However, I beg the Government not to try to do it on the cheap. It has been said by people who are well aware of how universities operate that if we continue as we are at present there will be no world class university in this country in 20 years' time. That would be a disaster. I read in the newspaper only the other day—and this may not be true—that there is a proposal to do away with tutorials. I do not want to go into details in your Lordships' House, but all of us who have taught in universities know that the tutorial system is essential if there is to be high class work, at least for some categories of student.
Again I put in a plea for support for graduate students. They form the backbone. They are the people who will take leadership positions in academia, in industry, in the civil service and in politics. At present we are starving them, and that is a most shortsighted economy. The expansion of universities leading to the greater numbers which we all want to see must not be paid for by cutting down on quality.
7.37 p.m.
Lord Peston: My Lords, I shall deal first with some individual contributions and then develop some broader themes. I was delighted to discover that the noble Earl, Lord Halsbury, and I have something in common. I gather that he was taught what little economics he knows by Lionel Robbins. I was taught

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all the economics that I know by the same great man. The noble Earl is right to quote Lionel Robbins as referring to economics as concerned with the relationship between ends and scarce means which have alternative uses. I learned that as an undergraduate as the answer to an examination question and it has never left my mind. Robbins emphasised, of course, that it was not the business of economists to pronounce on ends. The trouble is that ends are so interesting that it becomes irresistible to think about ends. Robbins gave in to that temptation as the as the rest of us.
Turning to the noble Earl's remarks on policy, there are three maxims: do not stimulate a system which is already expanding; do not dampen a system which is already contracting; and, most important, if one does not know what the economy is doing, for goodness sake do not intervene. Curiously, when they were first elected in 1979 the Government seemed to understand those maxims. As my noble friend Lord Desai said, they argued that they would set a monetary framework and all would be well. What has been interesting about the last 12 years is that from Sir Geoffrey Howe's excessive contraction at the beginning, through Nigel Lawson's excessive expansion to Mr. Lamont's fine tuning, the Government have always done the exact opposite of the basic principle which they themselves laid down.
It is always a pleasure to know that the noble Lord, Lord Boyd-Carpenter, will be taking part in an economics debate in which I shall be winding up. He always asks the right questions. The trouble is that he invariably gives the wrong answers. He asked the central question; namely, what were the mistakes? I thought that my noble friend Lord Stoddart of Swindon gave all the answers that were required in a devastating contribution. I shall certainly not repeat them. I was puzzled by the noble Lord, Lord Campbell of Alloway, who said that no one answered that question.
Lord Boyd-Carpenter: My Lords, my criticism was of the noble Lord's noble friend Lord Williams of Elvel who said how terrible things were, but did not indicate a single mistake that he could allege the Government had made.
Lord Peston: My Lords, I must reiterate the point. I had not intended to do so, but, if the noble Lord insists, I shall have to take longer and give the compete list of mistakes that my noble friend Lord Stoddart gave. Perhaps I may give a few of them; the list is so long that it becomes very tedious.
Perhaps we may start with the excessive fiscal and monetary expansion of 1986 and 1987. Incidentally, for those people who think that the excess started in 1987, I should point out that they are quite wrong; it started in 1986. That is the first mistake. The second major mistake is that, when that became obvious, the Government simply failed to rein back early enough. The third mistake was the excessive and continuous reliance on the expansion of consumer spending, the excessive borrowing by consumers and the house price boom. The list is endless. The most peculiar mistake of all is the Government's total inability to control the
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money supply on which they originally got themselves elected. One of the great paradoxes of the past 20 years is that the Labour Government had the money supply under complete control, although they were non-monetarists who did not believe in it; yet every measure that the Tory Government, who believe in all that kind of thing, try just collapses in their hands. It is one of the most amazing experiences in my life as an economist.
Like the noble Lord, Lord Boyd-Carpenter, the noble Lord, Lord Campbell of Alloway, said that he did not hear any exposé of the Government's mistakes. I assume that the noble Lord has a kind of filter so that he eradicates my contribution or that of my noble friend Lord Stoddart. However, I believe that he was in his place when his noble friend Lord Vinson spoke. If you were to ask me who did a better job on the Government than either my noble friend Lord Stoddart or me, I would say that I thought the noble Lord, Lord Vinson, tore the Government apart to only the required degree. Indeed, I sat here wondering what the noble Lord was doing on those Benches.
Perhaps I may now deal more generally with the Government's mistakes. I talk to many businessmen. I have never known members of the business community to be so antipathetic to the Conservative Party as they are at present. They may not vote for us—I am not suggesting that at all—but they certainly say to a man or woman that they will definitely not vote for the other side. Above all, they express a total contempt for the Department of Industry under its present leadership. Our businessmen do not want special treatment; they want the kind of support from our Government that is given to their foreign competitors by their governments.
The noble Lord, Lord Brabazon, described the reduction in the inflation rate—I use his exact words —as,
"irrefutable testimony to the success of government policy".
No, my Lords. It is irrefutable testimony to the failure of government policy. We would not have had the inflation problem in the first place were it not for government error. Putting those errors right has caused a great many efficient firms in the real economy to be destroyed because of financial difficulties, as my noble friend Lord Ardwick said.
The noble Lord, Lord Brabazon, praised privatisation. Again, his exact words were that it,
"pays off in performance".
It certainly pays off in higher salaries for top management, far in excess of their market value. In the case of British Telecom, it pays off with massive monopoly profits and the exploitation of the consumer. Perhaps I may tell the noble Baroness, Lady Denton, whose excellent speech I thoroughly enjoyed, that the objection of people on this side and of most economists on the Conservative side is not to profits; it is to the monopoly exploitation of consumers. As almost everyone recognises, one of the more absurd features was the creation of a private monopoly through privatisation.
The Government now wish to privatise further. I understand that they want to privatise railways and

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coal. For the latter, as far as we can understand, privatisation will mean the virtual disappearance of the industry. It is all very well for the noble Lord, Lord Ezra, with whom I agree on this matter, to say that we must maintain safety if the industry is privatised. The problem of safety will be a complete irrelevance because, on present plans, there will be no viable industry to keep safe. As regards railways, everyone else in Europe believes that privatisation would be the craziest thing that one could possibly do. The railways need more public support and a rational transport policy environment, not privatisation.
The ultimate paradox—this is what I was thinking when I listened to the noble Lord, Lord Brabazon—is that in one case, suddenly and remarkably, privatisation is inappropriate. The Government are terrified of the use of the word in connection with that case. If privatisation is so good and if it pays off in performance, why limit its application? Why are the Conservatives unable to follow the logic of their own policies? In other words, why do they react with such horror when they are accused of wanting to privatise the NHS?
I must say a few words on the history of unemployment under the Government. They inherited a low rate of unemployment of about 5 per cent. I thought that the contribution of the noble Lord, Lord Jeffreys, was most interesting and that much of it was damaging to the Government. I was mystified by the noble Lord's claim to recall the high level of unemployment under the last Labour Government. At its peak, unemployment was lower than the minimum figure ever reached by this Government. It is preposterous for him to suggest that he remembers the high rate of unemployment under the last Labour Government. This Government ended an unemployment rate of 5 per cent. which, I might add, was measured in the old way that pushed the figures up. They drove the rate up from 6 per cent. in 1980 to over 10 per cent. between 1982 and 1987. Towards the end of the decade, they were able to get it back down again to 6 per cent., but, having got it down to that figure under their regime, the economy became uncontrollable again. It looks as if from now on the rise will take us well back to 10 per cent. next year.
It appears that, as a result of the Government's policies, a figure of 6 to 7 per cent. unemployed will be the lowest level that we can now have in the economy under the Government; otherwise the economy becomes uncontrollable and inflation increases. As has been said, that is so despite all the limitations on the powers of the trade unions and all the heralded supply side measures, the verbal but not the actual commitment to monetary control and the alleged return to prudent budgetary finance. It is clear that, with this Government's policy, the country will be saddled with a permanent army of unemployed above 7 per cent. of the labour force.
As to inflation, perhaps I may reiterate a point that I made early on in my time in this House. If I had known that it was permissible within a civilised society to drive unemployment up to 3 million and beyond, I could have advised Labour Ministers to get rid of
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inflation. If we could have done that, we would have got rid of it for ever. There is a world of difference between trying to get rid of inflation while maintaining full employment and getting rid of inflation when you have destroyed the lives of over 3 million people and their families.
I wish also to express my concern about the Chancellor's rather cavalier remarks in the Autumn Statement on the ease of financing a current account deficit. The cumulative deficits of the past six years, which will last through 1992, 1993 and, on every forecast that I have seen, well into 1994, have seriously weakened our net overseas asset position. There has been and will continue to be a consequential deterioration in the invisible account which will make the current account even harder to sustain.
As noble Lords wish to know what we on this side think, my judgment is that a policy priority of the highest order must be to bring the current account back into surplus. As the noble Lord, Lord Ezra, remarked, that will not be helped by the consumption-led expansion upon which the Chancellor appears to rely. Furthermore—these are Treasury figures issued yesterday—the 2.5 per cent. decline in real fixed investment in 1990, followed by the 10.75 per cent. decline in 1991 is particularly shocking. Perhaps even worse, the Chancellor expects total investment next year to rise by only 1.25 per cent. and what we might call total business investment—in the productive part of the economy—by only 1 per cent. We are storing up trouble for the future. Once again when we try to expand, our expansion will be limited by lack of industrial capacity and also by serious skill shortages.
In this connection what are the Chancellor's responsibilities at the moment? He is trying to talk up the economy. Optimism, seasonally adjusted or not, is today's watchword. But is that right or sensible? Are our economic problems solved to such a degree that it is safe to encourage households to spend more, save less and perhaps even start borrowing again on a large scale? I think not. The underlying problems remain and it would be imprudent for anyone to encourage households to commit themselves in that way at this time.
My advice to business also would be to proceed cautiously—at least so long as this Government remain in power or if there is a risk of their being returned to power. As I argued yesterday, the Government's expenditure plans and tax proposals do not add up to a prudent financial policy. They imply either a new bout of inflation followed by a government-induced recession or alternatively, if the Government are returned to power, there will be a full reversal on the fiscal front.
I turn to a subject about which most other noble Lords have not spoken; namely, monetary policy. It is rather difficult to ascertain what in fact is the Government's monetary policy. I assume that it is to adjust interest rates to keep sterling within its broad bands in the exchange rate mechanism; and also to hope that markets will be reassured sufficiently eventually to allow some further interest rate reductions to help the domestic economy.

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Let me add that as an economist I was particularly interested in the contribution to the debate made by the noble Lord, Lord Jeffreys. He argued—I shall have to think about this a lot more—that the danger was a rise in interest rates. I shall not dwell on that point at the moment but I promise him that I shall think through the issue because I find that even more alarming.
Unfortunately, because of worries on the domestic front the Chancellor of the Exchequer is unable to move sterling to the narrow bands, which is a great pity. Some time in the not too distant future we must move to the more disciplined approach of almost every other member of the exchange rate mechanism.
I come now to a slightly more controversial matter. I wish to say that what matters in the monetary field is our position on economic and monetary union. I believe that the stance adopted by the Prime Minister and the Foreign Secretary is unhelpful, to say the least. The image of a rump of Tory anti-marketeers apparently driving government policy is unedifying. To see Britain continually as the recalcitrant, nagging complainer is unattractive. The long-term interests of the united Kingdom lie with the EC. I say that not as an enthusiastic marketeer but as a realist. Sometimes the Commission goes too far and pushes its nose into things which do not concern it. Of course they do that and the Foreign Secretary is right to object to it. But the issue is minor compared with the great issue, which is the decision on economic and monetary union.
I understand those who oppose further developments in the EC. Many did not want to join in the first place and they continue their campaign. They are entitled to do so. Why should they not? I find it harder to comprehend why those who voted for entry and for all further extensions, notably the Single European Act, now say that they did not understand or appreciate that it would lead to a demand for a single currency or a European central bank. Of course the Community would go in that direction. However, I agree with the Bruges Group and others that we must have a great national debate on these matters. It would be a disgrace if we moved into EMU by stealth. At least noble Lords know where I stand on the issue.
Because I favour economic and monetary union let me say that I do not believe that introducing a single currency or an independent central bank will be easy. There are serious problems of convergence that we must look into. An inability to devalue means that vast funds must be devoted to regional policy, as my noble friend Lord Sefton, and the noble Lord, Lord Wade, pointed out; indeed it was an implication of what was said by the noble Baroness, Lady Denton. I strongly support the need to proceed further on the regional side. We need to examine carefully what fiscal restraints need to be placed on national governments. Certainly I would not die in the last ditch for the sovereignty of Parliament which enabled it to say that we can run budget deficits as big as we like. If that is the definition of parliamentary sovereignty, I can do with rather less of it.
But we must devise rules, and I do not think that they will be easy to find. In my view it all boils down to how we approach the matter. In my judgment, if we
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are to solve the detailed problems with respect to EMU, we must have commitment in the first place. To say that we must first solve all the problems and then we shall make up our mind what to do is to say that we do not wish to join and that we want the rest of Europe to go on without us. I cannot believe that that is in the national interest.
Perhaps I may say a few more words about Labour Party policy. We say that we need to spend more on health, education, training and infrastructure. We have never hidden that from the electorate. But we know that we can only spend what we can afford and we believe that it is our duty to make that plain to the electorate. We have not kept secret our taxation plans and we shall endeavour to convince the electorate of their validity in the election whenever it happens.
When the noble Lord, Lord Brabazon, pointed out yesterday that moving the national insurance contribution limit was a taxation increase, I nodded my head. It is a taxation increase. They are resources that we should like to bring in because we need to spend them on more important things than imported consumer goods. We are quite honest about that. We also do not look for easy ways out by talking about such nonsenses as national lotteries which somehow will finance the health service, the arts, every football stadium that we need, and so on. I hope that we do not spend too much time on such nonsense. We do not and shall not pretend that we can spend more and cut taxes yet not have an unmanageable budget deficit as a result.
I wish that the Conservatives would respond to my noble friend Lord Williams of Elvel. He made a very simple request. He asked them to come clean and explain how their various economic proposals can be made to stick together. I know of no economic commentator today who, having looked at the Autumn Statement, can see it as a logical whole. Even in their dying days, this Government must face up to their responsibilities. Certainly when our term comes in the very near future we shall rise to the needs of the nation.
7.57 p.m.
The Lord Privy Seal (Lord Waddington): My Lords, we have had four days of most interesting debate. I should like to congratulate all those who have taken part, particularly the three maiden speakers: the noble Lords, Lord Craig of Radley, Lord Ponsonby of Shulbrede and Lord Skidelsky. The noble Lord, Lord Ponsonby of Shulbrede, said that he hoped one day to be working to abolish the House of Lords in its present state. All I can say is that the speeches which I have heard in this debate have been a credit to the House and have not added to the arguments for our abolition.
When one reads the amendment, it is hard to believe that the author could have been as close to the centre of events in the late 1970s as was the noble Lord, Lord Williams. I am unclear as to what the noble Lord means by "social cohesion" but I cannot think of a nearer breakdown of social cohesion than that which we all saw with our own eyes at the time of the winter of discontent. That was a time when one

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citizen was set against another and little regard at all was paid to the rights of the most vulnerable in society.
The winter of discontent in fact offended the most basic of civilised standards of behaviour. It is just worth reminding people about it every now and then because there is a new generation growing up which did not have to live through those horrifying, dying months of the last Labour Government. In the early weeks of 1979, ports were blockaded, the dead left unburied, rubbish piled high in the streets, hospitals reduced to emergency cover, schools closed and much of industry was at a standstill. Violent picketing threatened the rule of law and many began to think that Britain was ungovernable, or certainly ungovernable without the permission of what were then known as the union barons.
As my noble friend Lord Campbell of Alloway reminded us, we were referred to as the sick man of Europe because of our lamentable industrial relations. We were a laughing stock when we went abroad, as most of us, if we are honest with ourselves, well remember. People looked at what was going on and talked of Britain being in permanent, irreversible decline. They wrung their hands saying that they did not know what could be done about it.
When I think of a breakdown in social cohesion I also think of runaway inflation and the effect of that in the second part of the 1970s. Inflation—the unfairest tax of all—ravaged the savings of people of modest means who had put something by for their old age and who could not protect themselves by striking. To adapt the words of the noble Lord, Lord Jenkins of Hillhead, Mr. Healey cleared up only a small part of the mess he had caused and for some—those people with small savings—the mess he caused could never be undone. A large part of their savings had just gone.
Lord Callaghan of Cardiff: My Lords, will the noble Lord allow me one moment? I have corrected Ministers before and I correct the noble Lord now. When the Labour Government left office in 1979 the rate of inflation was lower than it had inherited from the Conservative Party in 1974. If he is comparing social cohesion, what does he say about the miners' strike and the three-day week when we all lived under the shadows of candles in the House of Commons?
Lord Waddington: My Lords, the noble Lord is perhaps forgetting that the peak of inflation was reached during those years of the Labour Government; and if one takes the whole period of the Labour Government and compares it with the whole period of the Conservative Government, what does one find? One finds that the average rate of inflation, year on year, has been exactly half of that under the Labour Government. Therefore I do not consider that the point made by the noble Lord is a good one.
Lord Callaghan of Cardiff: Perhaps the noble Lord will allow me to intervene again. Is he aware that the peak of inflation, which he said occurred during the early days of the Labour Government, followed on the policies of the Conservatives in 1973–74 with the
392
second oil shock? Inflation was taken in hand by my noble friend Lord Wilson and later by myself and reduced to a lower level than we inherited from his party.
Lord Waddington: My Lords, the noble Lord was not present in the Chamber when the noble Lord, Lord Desai, spoke. The noble Lord made quite a point of the fact that inflation reached 20 per cent. in 1980. There was certainly no reference from the noble Lord, Lord Desai, to the fact that that was the fault of the Labour Government and not the fault of the Conservative Government. So I do not consider there is much in that point either.
Lord Callaghan of Cardiff: You increased VAT. That is why it went up. The Government's claims are untrue.
Lord Waddington: My Lords, I believe that I have answered the point adequately. As my noble friend Lord Boyd-Carpenter pointed out, it was quite amazing that the noble Lord, Lord Williams of Elvel, who spoke for about 20 minutes, never once mentioned inflation. It seemed that he had no comprehension whatever of how destructive inflation can be to society. It seemed as though he had no recollection whatever, and had never read in the history books, of what happened in Germany in the 1920s.
Noble Lords: Oh!
Lord Waddington: My Lords, inflation was not a factor that mattered. It was not mentioned once by the noble Lord, Lord Williams of Elvel.
Britain is certainly a different place from the Britain of those days—those last years of the 1970s—and thank goodness for that. One has certainly to be blind not to see the signs of increased prosperity: higher car ownership, higher home ownership, more homes with central heating, more homes with colour television and more homes with a telephone. More people go abroad for their holidays. One in four adults owns shares. That represents a real increase in income for all groups of society. For many it has also meant a very much fuller life.
When I go into a house, I am struck by the number of times on the mantelpiece there is a photograph of the son or daughter, or grandson or granddaughter in his or her graduation gown. Far more young people now have the opportunity of higher education. As my noble friend Lord Brabazon pointed out, next year one in four young people will have the opportunity of higher education compared with one in eight in 1979. Yet it is argued that somehow or other those have been wasted years and that nothing has happened. The figure will not be one in four: by the end of the decade one in three young people in this country will have the opportunity of higher education.
The amendment refers to serious and long-term damage to the economy. But that assertion is not easy to square with the facts. I invite your Lordships to consider the facts, even if they are painful. Even after the recession GDP is up 23 per cent. on 1979. Business investment is still up nearly 40 per cent. despite the fall

393
during the recession. The noble Lord, Lord Jay, said that productivity had fallen; but consider the whole story. In the 1960s and 1970s we were near the bottom of the European league for growth in manufacturing productivity. Now we are close to the pre-recession peak after the fastest growth in the G7 in the 1980s.
I ask your Lordships to consider the United Kingdom's share of world trade. In volume terms it is expected to rise for the third year running after decades of decline. We have been through a very painful recession but there is no doubt about the signs of recovery, and the fall in the RPI has created the conditions for a return to sustainable growth and the reduction in unemployment that we all wish to see.
The noble Earl, Lord Halsbury, made an important point about statistics. There is not the slightest doubt that we should all work to improve the quality of statistics at our disposal. It is only as a result of good quality statistics that we can react as we ought to changes in the economic situation.
My noble friend Lord Boyd-Carpenter pointed out, rightly I submit, that foreigners choose to invest in this country rather than elsewhere in the European Community. They certainly have confidence in the economic management of this country. He raised three points with me. I understand he was saying that the Irland Revenue was approaching universities to seek to charge tax on what they earn from conference facilities. I shall look into that matter and will write to my noble friend. He raised the question of inheritance tax or homes. I shall pass that on to my colleague. My noble friend wants an assurance that the Government attach importance to reducing taxation on earnings. I can give your Lordships that assurance. It remains the objective of the Government to reduce income tax to 20p iii the pound when it is prudent to do so.
The noble Lord, Lord Stoddart of Swindon, made an interesting speech. Unless I heard him wrongly, he complained about our cutting interest rates after Black Monday in October 1987. I remember our being urged to do so by the Labour Opposition at the time. If a misjudgment was made, it was certainly a misjudgment that was shared by almost every prominent member of the Labour Party at that time, including Mr. Kinnock. The noble Lord also said that the best performing economies were those of Japan and Germany. That is probably correct; they are certainly not socialist economies. The last action that the governments of either countries would take would be to Adopt the policies now being advocated by Her Majesty's Opposition.
My noble friend Lord Vinson made a detailed speech which warrants most careful reading. The noble Lord, Lord Peston, said that he liked it. However, I doubt whether he liked the comments about over restrictive town and country planning—
Lord Peston: I did not understand them.
Lord Waddington: My Lords, I do not believe that the noble Lord liked other ideas which my noble friend mooted in the field of taxation. However, I take the point made by the noble Lord, Lord Peston. I cannot do justice to the speech by replying in a word or two.
394
I assure the noble Lord, Lord Ezra, that safety must be paramount. When any industry is put into the private sector, machinery must be put in place to ensure that there is no decline in safety standards. I certainly take the point that he made.
My noble friend Lord Campbell of Alloway thought that the Government were right in their response to the present economic position. He referred to our record on industrial relations reform. There are few who do not now applaud that. My noble friend spoke of the Green Paper, Industrial Relations in the 1990s, and asked me to confirm that no more industrial relations legislation will be introduced before the general election. There is no reference in the gracious Speech to the introduction of such legislation. The consultation period on the Green Paper has not yet concluded or was concluded only in the past week, so my noble friend can take it that there is no question of such legislation prior to the general election. He wanted consolidation of the statute law on trade union law and I shall pass on that suggestion. It would be of great convenience to practitioners.
In an interesting speech the noble Lord, Lord Jay, said that output had fallen recently. In fact it has risen during the past three months. When he said that there are only predictions of recovery but no real recovery he ignored that fact. He also ignored the fact that there has been a rise in retail sales during the past three months compared with the previous three months. Manufacturing output too has risen as has export volume and the number of car registrations. Furthermore, one cannot ignore the renewed business confidence shown by the recent CBI survey.
All noble Lords were most interested in the speech made by my noble friend Lady Denton of Wakefield. She spoke with great authority, not least because of her experience with the Black Country Development Corporation. She described how so often we as a country run ourselves down. She spoke of people saying that we do not have such good training as is available overseas. Recent figures show that more 16 and 17 year-olds in this country have formal qualifications than do those in Germany. I am sure all noble Lords will agree that we damage ourselves by the criticism to which, without sufficient foundation, we subject ourselves. She said that there was no long-term damage to the economy but that companies have had to put their houses in order.
I am a northerner so I listened with great interest to the speeches made by the noble Lord, Lord Sefton of Garston, my noble friend Lord Wade of Chorlton and the noble Lord, Lord Ardwick, who hails from the North West, even though he no longer lives there. I am sensitive to criticism that not enough is being done for the North West. It is nice to hear someone such as the noble Lord, Lord Sefton, bang the drum for the North West. However, I do not believe he is right in suggesting that every time a development takes place in the South there should be an inquiry to see what impact that might have on towns in the North—
Lord Sefton of Garston: My Lords, I was serious all right! The noble Lord would not suggest to this House that the building of the Channel Tunnel was not important and did not have a consequential effect on

395
the economy. Neither would he suggest that the building of Canary Wharf and the Dockland Development Corporation did not have a consequential effect on the economy. I was serious in making my suggestion. I tied it up clearly with the fact that we have a capital city that is more congested than any other, that is more badly run and that this Government have destroyed any possibility of a decent government for the capital.
Lord Waddington: My Lords, I assure the noble Lord that I was not treating his remarks with frivolity. I merely believe that in some respects he went a little too far.
I agreed with much of what was said by my noble friend Lord Wade. He referred in particular to the development of Manchester Airport. I understand that the Government recently negotiated with the United States for three new routes for regional airports and all have gone to Manchester. I also understand that the construction of the rail link between Manchester and Manchester Airport has begun.
My noble friend Lord Jeffreys made a most thoughtful speech to which I cannot possibly do justice now. I shall read it with great care tomorrow.
The noble Lord, Lord Desai, pointed out that unemployment is not calculated in the same way as it was in 1979. He will be the first to agree that the Labour Party has not suggested that the definition should be changed in any way. He made the remark to which I referred when dealing with the intervention of the noble Lord, Lord Callaghan, who criticised the Government for having an inflation rate of 20 per cent. in 1980. I thought that the remark was a little unfair but I must try to reconcile the remarks made by the noble Lord, Lord Callaghan, with the remarks made by the noble Lord, Lord Desai. I do not believe that the two can be reconciled.
Lord Callaghan of Cardiff: My Lords, perhaps the noble Lord will allow me to intervene. The more aggressive he becomes the more inaccurate he is. Surely the noble Lord knows that the reason why the rate of inflation rose so fast when his Government came to power was because Sir Geoffrey Howe increased the rate of VAT to 17.5 per cent. The rate was almost doubled and that increased the retail prices index. The two elements are compatible.
Lord Waddington: My Lords, again I must point out to the noble Lord that inflation was reduced to a level which was, on average, half the level of inflation achieved by the Labour Government. I believe that concludes the argument in our favour.
I have dealt as quickly as I can with all the various interventions. This has been a good debate and I have tried to do justice to the speeches that have been made. I submit that the Government have won the battle in respect of the amendment without a great deal of difficulty. The arguments put forward have been rather frivolous and I invite my noble friends to reject the amendment.
8.19 p.m.
Lord Williams of Elvel: My Lords, I am grateful to all noble Lords who have taken part in the debate. I accept the view expressed by the noble Lord, the Lord Privy Seal, that noble Lords opposite will probably win the vote in the Division Lobby. I wish to make only one serious point, because it is not right to make a long speech. In moving the amendment, I made a plea to Ministers to be honest and truthful in their presentation of economic matters. I am afraid—and I must say this—that my plea has gone unheard. I say directly to the noble Lord, the Lord Privy Seal that in this House we like to have matters straight and honest. I beg to move.
On Question, Whether the amendment shall be agreed to?
Their Lordships divided: Contents, 63; Not-Contents, 124.

Division No. 1

CONTENTS

Ardwick, L.

Kagan, L.

Beaumont of Whitley, L.

Kilbracken, L.

Boston of Faversham, L.

Listowel, E.

Callaghan of Cardiff, L.

Lockwood, B.

Carmichael of Kelvingrove, L.

Longford, E.

Carter, L.[Teller.]

Lovell-Davis, L.

Desai, L.

Mayhew, L.

Donoughue, L.

Milner of Leeds, L.

Dormand of Easington, L.

Monkswell, L.

Ezra, L.

Morris of Castle Morris, L.

Falkender, B.

Murray of Epping Forest, L

Gallacher, L.

Nicol, B.

Galpern, L.

Peston, L.

Graham of Edmonton, L.

Pitt of Hampstead, L.

[Teller.]

Prys-Davies, L.

Grimond, L.

Richard, L.

Harris of Greenwich, L.

Seear, B.

Hatch of Lusby, L.

Sefton of Garston, L.

Hilton of Eggardon, B.

Serota, B.

Hollis of Heigham, B.

Shackleton, L.

Houghton of Sowerby, L.

Stallard, L.

Howie of Troon, L.

Stoddart of Swindon, L.

Hughes, L.

Strabolgi, L.

Irvine of Lairg, L.

Taylor of Blackburn, L.

Jacques, L.

Turner of Camden, B.

Jay, L.

Underhill, L.

Jeger, B.

Wedderburn of Charlton, L.

Jenkins of Hillhead, L.

White, B.

John-Mackie, L.

Williams of Elvel, L.

Judd, L.

Wilson of Rievaulx, L.

NOT-CONTENTS

Aldington, L.

Campbell of Croy, L.

Arran, E.

Carlisle of Bucklow, L.

Astor, V.

Carnegy of Lour, B.

Balfour, E.

Cavendish of Furness, L

Barber, L.

Clanwilliam, E.

Bathurst, E.

Clinton, L.

Beaverbrook, L.

Cochrane of Cults, L.

Belhaven and Stenton, L.

Colnbrook, L.

Beloff, L.

Colwyn, L.

Belstead, L.

Cork and Orrery, E.

Blatch, B.

Cross, V.

Boardman, L.

Dacre of Glanton, L.

Borthwick, L.

Davidson, V.[Teller.]

Boyd-Carpenter, L.

Denham, L.

Brabazon of Tara, L.

Denman, L.

Brougham and Vaux, L.

Denton of Wakefield, B.

Butterworth, L.

Downshire, M.

Byron, L.

Eden of Winton, L.

Caithness, E.

Elibank, L.

Campbell of Alloway, L.

Ellenborough, L.

397

Elles, B.

Munster, E.

Elliot of Harwood, B.

Murton of Lindisfarne, L.

Elliott of Morpeth, L.

Nelson, E.

Elphinstone, L.

Northbrook, L.

Elton, L

Oppenheim-Barnes, B.

Erne, E.

Orkney, E.

Faithfull, B.

Oxfuird, V.

Ferrers, E.

Park of Monmouth, B.

Foley, L

Pearson of Rannoch, L.

Forbes, L.

Perry of Southwark, B.

Fraser of Carmyllie, L.

Portsmouth, E.

Gibson-Watt, L.

Quinton, L.

Glenarthur, L.

Reay, L.

Gridley, L.

Renwick, L,

Grimthorpe, L.

Rochdale, V.

Haig, E.

Romney, E.

Hailsharm of Saint Marylebone, L.

St. Davids, V.

Halsbury, E.

Salisbury, M.

Henley, L.

Savile, L.

Hesketh, L. [Teller.]

Seccombe, B.

Holderness, L.

Selborne, E.

Hooper, B.

Selkirk, E.

Howe, E.

Shrewsbury, E.

Hylton-Foster, B.

Skelmersdale, L.

Jeffreys, L.

Southborough, L.

Joseph, L.

Sterling of Plaistow, L.

Kinnoull, E.

Stodart of Leaston, L.

Lane of Horsell, L.

Strange, B.

Lauderdale, E.

Strathclyde, L.

Long, V.

Strathmore and Kinghorne, E

Lucas of Chilworth, L.

Swinfen, L.

Lyell, L.

Thomas of Gwydir, L.

Mackay of Ardbrecknish, L.

Trumpington, B.

Mackay of Clashfern, L.

Ullswater, V.

Macleod of Borve, B.

Vaux of Harrowden, L.

Marlesford, L.

Vivian, L.

Massereene and Ferrard, V.

Waddington, L.

Merrivale, L.

Wade of Chorlton, L.

Mersey, V.

Wedgwood, L.

Monk Bretton, L.

Whitelaw, V.

Montgomery of Alamein, V.

Wolfson, L.

Mottistcne, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
On Question, Motion agreed to: the said Address to be presented to Her Majesty by the Lords with White Staves.

Folkestone Harbour Bill IH.L.
Committed to an Unopposed Bill Committee.
Midland Metro (No. 2) Bill
Brought from the Commons; the declarations of the agents having been deposited pursuant to the resolution of 24th July last, the Bills were read a first time, read a second time pro forma and committed to Select Committees.
London Docklands Railway Bill
Brought from the Commons; the declarations of the agents having been deposited pursuant to the resolution of 24th July last, the Bill was read a first time, read a second time pro forma and committed to an Unopposed Bill Committee.

London Regional Transport (Penalty Fares) Bill
Brought from the Commons; the declaration of the agent having been deposited pursuant to the resolution of 24th July last, the Bill was read a first time and referred to the Examiners.
House adjourned at half-past eight o'clock.

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