House Of Commons
Monday 23 March 1987
The House met at half past Two o'clock
Prayers
[MR. SPEAKER in the Chair]
Oral Answers To Questions
Wales
Labour Statistics
2.
asked the Secretary of State for Wales what are the latest unadjusted figures for unemployment in (a) Newport, (b) Gwent and (c) Wales; and if he will give the equivalent figures for 1979 on the most nearly comparable basis.
On 12 February 1987 the total numbers of unemployed claimants in Newport district, Gwent and Wales were 9,758, 27,708 and 171,393 respectively. Unadjusted figures for 1979 are not available on a basis which enables a valid comparison to be made.
Are these figures not critically high, despite the 19 changes in the method by which they are compiled? Is not the claim that unemployment is coming down a bit of a fantasy? Will the Secretary of State confirm that manufacturing output and investment are down on 1979 levels? Is this not a tragic legacy to leave after eight continuous years of office?
It is not a fantasy that unemployment is coming down. The legacy is that unemployment, seasonally adjusted, is down by 15,000 from its peak in March 1986. It has fallen for nine consecutive months and for 10 out of the last 11 months. The fall over the last 12 months of 1·1 per cent. is the largest drop of all the regions of the United Kingdom, as was the fall this month. This is good news for Wales, as I hope that the hon. Member for Newport, East (Mr. Hughes) will agree.
As notified vacancies are sometimes a better guide to the progress of the economy, will my right hon. Friend tell us about the changes in the number of notified vacancies for each of those months?
Not only are the unemployment figures down, but vacancies are up 2,390 on February 1986. Indeed, all the indicators point in the same direction—the number of regional selective assistance applications in the first two months of 1987, and the sharp reduction in redundancies over the last 12 months. Almost any set of indicators shows a strong recovery of economic activity in Wales and a great improvement in unemployment.
Everyone welcomes any fall in the unemployment figures, but will the right hon. Gentleman tell us how long, at this pace of reduction, it would be before the unemployment total was back to the still serious level of 1979?
If we go on at this pace of reduction, on the policies that we are pursuing, we will meet the Labour party's stated objective of reducing unemployment over the next two years. We have a policy that is working. The results show that it works. The Labour party does not have a policy, except to increase inflation and increase costs on employment generally, and almost certainly, therefore, to destroy the prospects that it seeks to create.
Will my right hon. Friend join me in welcoming the collaboration agreement that was signed this morning between British Coal and Ruhrkohle Oil and Gas which brings Ruhrkohle into the Point of Ayr coal-to-oil liquefaction project? Will he also welcome the simultaneous announcement by the Department of Energy that the £2·5 million worth of support for the project, which was conditional on acceptable private sector participation, will now be made available?
That project is relevant and will create jobs in north Wales. I can confirm that my right hon. Friend has made £2·5 million worth of support available, and that will cover the period of construction, commissioning and operation of the plant.
Does the Secretary of State have any further plans to reduce unemployment in mid-Wales, and in Teifi valley in particular?
There has been an improvement in the unemployment figures over the last 12 months in all Welsh travel-to-work areas. We recently announced a package of measures for the rural areas, including a series of special encouragements and incentives for the creation of new firms. I am sure that that will make a strong contribution to job creation in areas such as the hon. Gentleman represents.
Primary Schools (Expenditure)
3.
asked the Secretary of State for Wales how much was spent per pupil in primary schools in Wales in the most recent year for which figures are available; and what was the comparable figure for 1978–79, at constant prices.
In 1985–86 the amount spent per pupil in primary schools in Wales was £825. The equivalent figure for 1978–79 was £724.
Do those figures not make nonsense of allegations that primary schools in Wales are short of cash?
My hon. Friend is right, in that total expenditure has remained broadly constant in real terms. At the same time, pupil numbers have been falling. We now have the best pupil-teacher ratio, but I must admit that there are about 56,000 surplus places in primary schools. If we were able to eliminate the surplus places we would have more resources for primary schools.
Is the Minister aware of the lobby of Parliament tomorrow by parent-teacher associations to complain about education in Wales, and in particular about primary education? In view of the experience of parents and teachers, who are much closer to what is going on in our schools than we here are, how can the Minister justify the answer that he has just given?
I am aware of the intended lobby, but I understand that the parents are more than likely to complain about the disgraceful disruption in our schools. I hope that they will condemn Mr. Smithies, the general secretary of the NAS/UWT who says that the half-day strikes will continue until the election. That is a clear sign that he is trying to turn our schools into political battle grounds.
Will the Minister confirm that since the hon. Member for Staffordshire, Moorlands (Mr. Knox) last asked this question — which is becoming a little tedious — the position in our schools has worsened considerably in terms of the reality for pupils, in terms of the text books and materials that they need and in terms of the maintenance of the buildings that they attend? Is it not high time that adequate resources were allocated to ensure that the schools are worthy of the pupils?
It is clear from my answer that we are spending more per pupil in Wales. On materials we have made additional funds available, particularly for secondary school pupils involved in the general certificate of secondary education. However, it is up to the local education authorities to concentrate resources into capitation fees.
That was an evasive reply. Why is it that many schools in Wales, in spite of careful spending of capitation cash, have to apply it to basic items such as text books and stationery? Does the Minister agree that parents want smaller classes, more teachers, more nurseries and more books and equipment? Is it not shameful that our schools go begging while the Budget can assist, say, the Duke of Westminster's estate by about £600 million in inheritence tax?
Not only are there 56,000 surplus places in primary schools, but, taken overall, there are about 150,000 of them in primary and secondary schools in Wales. That means wasted expenditure of about £18 million per annum. That money could be spent on more worthy causes within education. In addition, my right hon. Friend the Secretary of State has made available extra money for education in the coming year.
Fluoridation
4.
asked the Secretary of State for Wales which health authorities in Wales permit fluoridation of water supplies.
The powers to permit fluoridation of water supplies rest with water authorities acting on requests from district health authorities. Certain areas within the Gwynedd and Powys district health authorities' areas currently receive fluoridated water supplies.
Can the Minister confirm, first, that when some foods are cooked in water that has been fluoridated — especially acidic foods — and possibly cooked in aluminium utensils, there is a large ingestion of aluminium into the human body? Secondly, will he confirm that there is some research to show that Alzheimer's disease is linked to the ingestion of large quantities of aluminium? If those two statements are confirmed, will the hon. Gentleman ban the use of fluoride in water in Wales?
The hypothesis that aluminium may be relevant to the cause of Alzheimer's disease is one of many under investigation. I am aware that the Medical Research Council is researching such a. hypothesis, and I can assure the hon. Gentleman that the Government will give full consideration to any recommendations that may emerge.
Is my right hon. Friend aware that the incidence of dental caries has been falling considerably in recent years and that therefore there is no excuse to force fluoridation on to those many people who do not want it?
I am aware of improvements in dental care, hut, at the same time, my hon. Friend should be aware that many parents are in favour of fluoridation.
Does the Minister agree that the reduction in dental caries on the island of Anglesey by over 50 per cent. over a period of 40 years is a glowing example of interventionist medicine?
I certainly agree with the hon. Gentleman. Those findings have been borne out by recently conducted opinion research.
Is my hon. Friend aware that the majority of people in Anglesey are against the artificial fluoridation of water supplies? Is my hon. Friend further aware that a recent survey conducted by the Ynys Môn and Isle of Anglesey borough council showed conclusively that the vast majority were against such fluoridation? Is he also aware that Gwynedd health authority continues artificially to fluoridate the water of Anglesey against the wishes of the people? Is it not about time that a non-elected health authority took some cognisance of the democratic wishes of the people?
My hon. Friend is aware that fluoridation of the water in Anglesey has been a continuing policy for some time, certainly before the Bill that the Government recently piloted through the House of Commons.
Beef Production
5.
asked the Secretary of State for Wales what representations he has received from farmers organisations on the future of beef production in Wales.
I have received representations about the future of the beef industry in Wales both from farmers' organisations and from indviduals. These representations covered a very wide range of issues concerning the beef regime and the impact of measures taken by the European Commission in the dairy sector.
Will the Secretary of State urge his colleagues, who are involved in the Brussels price negotiations, to have a major devaluation of the green pound, of at least 12 per cent.? It is practically impossible at the present time—I am sure the right hon. Gentleman will agree—for Welsh beef producers to make a profit out of that enterprise. We shall have little beef enterprise left if the present position is allowed to drift.
I am sure the hon. Gentleman will agree that the December reforms represented a considerable step forward in improving the beef regime in general and reducing the dependence on intervention. I certainly agree that the relative green pound discrepancies and valuations will be a matter that will be in the forefront of the negotiations that will take place in the coming weeks in Brussels.
Will my right hon. Friend take account of the fact that, while many of our farmers are alive to the problems of over-production in many types of farming, they are deeply concerned at the possibility that, having been driven out of milk production, and having moved into beef production, they may now be driven out of beef production? This seems to be a never-ending tendency and the farmers are extremely worried. I hope that my right hon. Friend will consider this problem extremely carefully.
I understand the concern of farmers about this matter and their anxiety about knock-on consequences of the various changes in the CAP support system. I believe that we made remarkable progress in December, especially with the protection of the beef premium scheme, for which we have fought so hard and consistently over recent years. Having said that, I also understand that there is a great deal of anxiety about the green pound discrepancies and, clearly, that matter will be a part of the negotiations that are now under way.
Is it not a fact that farmers are now a thoroughly dissatisfied body, as witness their recent vote of no confidence in a Conservative Minister of Agriculture, Fisheries and Food? Farmers are asking why they should cut their production when Britain is far from self-sufficient in its production of food.
The hon. Gentleman should not try to give the impression that the Labour party would avoid substantial changes in the CAP and a reduction of the huge European surpluses. The Opposition spokesman on agriculture is much too straightforward and honest to pretend anything of the sort. It does not help if the hon. Member for Newport (Mr. Hughes) pretends at the Opposition Dispatch Box that the Labour party supports policies that would not involve a substantial reduction in the heavy overspending that is going on in Europe to produce surpluses.
House Building
6.
asked the Secretary of State for Wales how many housing starts were made in (a) the public sector and (b) the private sector in Wales during 1986.
In 1986, 1,276 dwellings were started in the public sector and 7,136 in the private sector.
Is the Minister aware that that figure represents a total build in the public sector in the past seven years in Wales of only 14,000 houses, when there would have been 36,000 had the level that prevailed in 1978 continued? That means a loss of 22,000 houses in the public sector. At the same time, the Government have arranged the selling off of 50,000 council houses. Therefore, there has been a loss of council housing for rent in Wales of over 70,000 units. Is it any wonder that people in Wales are having difficulty in finding houses in which to live, because of the public sector sales policy and the lack of building that has taken place under the Government?
I am not entirely sure to which figures the hon. Gentleman is referring. I have given figures for one year, and it is worth stating that during that year the number of private sector completions rose to over 7,000 houses. That is the first time that that has been achieved for a number of years. There has been a rise in the number of houses completed in the private sector in every year for the past five years.
Does my hon. Friend accept that Cardiff is being especially innovative with the announcement last week of a partnership of the city council, two housing associations and two building societies to build 600 new homes for rent in St. Mellons? Does my hon. Friend agree that there is the opportunity for many other developers to follow Cardiff's lead?
I agree entirely with my hon. Friend. There is scope for an increase in the number of housing units that are available in the private rented sector. I predict with considerable confidence that 1987–88 will mark the start of a significantly rising trend in the provision of homes to rent in Wales.
Is the Minister aware that there is a lack of conviction in his answers? May I remind the Minister that the Library research figure reveals plummeting investment in housing between 1983 and 1987 of some £61 million? As our housing problems have reached a crisis, why did the Budget neglect Wales? The contrast between the sleek south and Wales is painful. Is it not true that the Welsh economy is at the crossroads and that we needed from the Budget a cash boost for houses and cash for the Health Service? The Budget betrayed Wales.
I remind the hon. Gentleman that in the current financial year there has been a substantial boost for housing in Wales—
Downwards?
No, upwards. It has been the Government's policy to encourage renovation in both the private and public sectors, and I shall remind the hon. Gentleman of the figures. The Conservative Government have spend £333 million repairing private stock, compared with the Labour Government's spending of £57 million. We have spent £259 million repairing public sector housing stock, compared with the Labour Government's £86 million. What sort of record is that?
Fire And Public Health Regulations
7.
asked the Secretary of State for Wales what discussions he has had with local authorities about enforcement of the fire and public health regulations in houses in multi-occupation in Wales.
I have asked my officials to undertake consultations with all local authorities and other relevant bodies in Wales with a view to bringing about improved safety and other standards in houses in multiple occupation. Those consultations are now under way.
I am grateful for that answer and somewhat reassured by it. Is my hon. Friend aware that the fall in standards accompanied by the increase in the number of houses in multiple occupation suggest that it is not just the resources that are made available to local authorities that are important, but that powers of entry are important, as landlords, are not always willing to allow inspections to take place to determine whether safety precautions are adequate.
I am very much aware of my hon. Friend's point. There is indeed a far wider range of considerations, and that is why my officials are today discussing some of these problems with the Rhuddlan borough council.
Does the Minister agree that it is not belated consultations that are needed, but action? The facts are well known to those who want to hear them, and were addressed in my HMO Bill. Does the Minister realise that more than £25 million is now spent by the DHSS in Wales on supplementary benefit claimants in bed-and-breakfast accommodation? Does he realise that that expenditure and the failure to monitor the quality of the accommodation for those claimants, have come about because the Government do not wish their woefully inadequate programme for young single people to be exposed?
I am aware of the hon. Gentleman's interest in the matter. However, it is for local authorities and fire authorities to decide how they will use their existing powers. It is disappointing that only Swansea and Cardiff have so far taken advantage of the registration schemes available to them.
Is the Minister aware of the serious fire in Merthyr Tydfil only yesterday, in a property owned by a Mr. Elwyn Morgan? Eleven people were taken to hospital and four are still being detained. Is he further aware that the property had no valid planning permission and that Merthyr borough council, supported by the Welsh Office, had been trying to enforce orders for the best part of 15 months? Will the Minister investigate the particular circumstances of the fire? Does it not prove the need for better regulations and their more effective enforcement?
I join the hon. Gentleman in expressing sympathy for those injured in the fire. The Welsh Office has supported the local authority in refusing planning permission for this house to be used for multiple occupation. The local authority had issued a statutory enforcement notice giving the landlord two months to stop using the house for that purpose. It is unfortunate that the accident occurred during that two-month period.
Swndwr Farm, Northop
8.
asked the Secretary of State for Wales if he will make it his policy not to sell Swndwr farm, Northop, to British Coal for opencast mining; and if he will make a statement.
No. My right hon. Friend's general policy is to dispose of land surplus to highway requirements on the open market, subject to the advice of the district valuer. No land at Swndwr farm is yet available for disposal.
Does my hon. Friend agree that the sale of any part of Swndwr land to British Coal would prejudice my right hon. Friend's position in relation to British Coal's forthcoming planning application for opencast coal extraction at Pont Einion? Will he assure the House that when it has been established what part of Swndwr farm is surplus to highway requirements, that surplus land will not be sold to British Coal?
I cannot give my hon. Friend that assurance. The Department is not negotiating the sale of any part of Swndwr farm to British Coal, so his request is superfluous.
Does the Minister recall that, some time ago, we accused the Secretary of State of allowing opencast mining to take place anywhere other than in Pembroke? In view of the question asked by the hon. Member for Delyn (Mr. Raffan), I wonder whether Delyn is also to be in the exclusion zone, and whether the hon. Gentleman is seeking another election bribe.
I do not think that that question is worthy of answer. My hon. Friend's question related specifically to Swndwr farm near Northop.
Anglesey (Public Funds)
9.
asked the Secretary of State for Wales if he has any plans to increase the amount of public funds provided through his Department or its agencies to Anglesey; and if he will make a statement.
The provision of total expenditure within my responsibility in 1987–88 represents an increase of 10 per cent. comparable provision for 1986–87. Anglesey will benefit from this along with the rest of Wales.
I welcome my right hon. Friend's statement. Is he aware that there are a number of projects on Anglesey which are helping its regeneration and which are pump-primed by Welsh Office cash, such as the scheme at Llanfairpwll station and the generation of a fishing industry in Holyhead? How does this massive injection of Welsh Office cash into my constituency compare with the amounts available under the last Labour Administration?
In general terms, the last Labour Administration cut capital expenditure hard, having got into a considerable mess, and having been directed to do so by the IMF. Since then there has been strong growth in the economy. We are increasing public expenditure at the same time as reducing taxation and borrowing. My hon. Friend is right. Holyhead has benefited particularly. There has also been a significant increase in spending on tourism on the island. My hon. Friend has rightly drawn attention to the rural package which has helped Pringle to produce its very exciting scheme at Llanfair PG.
I remind the right hon. Gentleman that every fourth man in Holyhead is jobless, that nearly 5,000 people on the island are out of work and that the county has the worst unemployment record in Wales—all those statistics being a consequence of his policies. Why did the right hon. Gentleman accept in Cabinet a Budget that denies Wales a strategy for jobs? The Budget did nothing for Wales. Wales is forgotten by the right hon. Gentleman in this instance. We need a stronger regional policy, including discriminatory measures favouring Wales and the regions. Why did the Budget not help Wales?
The hon. Gentleman is asking a question about the Budget and Wales, and particularly Anglesey. I cannot help noticing that unemployment in Holyhead fell by 3 per cent. in the 12 months until February, which is a larger fall than in almost any travel-to-work area in the whole of the United Kingdom.
Why is the Secretary of State so coy about giving figures? Will he now come clean and admit that his Department's expenditure in the last financial year was, in real terms, 34 per cent. lower than it was 10 years before? Does that not reflect what the Government have done to Anglesey?
I notice that the hon. Gentleman is now changing direction and using a point of expenditure before the IMF cuts. In recent years, as a result of economic growth, we have increased public expenditure substantially. There has been a 10 per cent. increase in public expenditure in Wales, while inflation has been about 4·5 per cent. That is the result of the economic policies which are producing extra expenditure, reduced taxes, lower unemployment and lower interest rates.
Job Training Schemes
10.
asked the Secretary of State for Wales what information he has about the progress to date of the job training scheme in the Welsh pilot area; and if he will make a statement.
Progress with the pilot in Neath and Port Talbot, which has provided places for over 300 entrants, has shown that the job training scheme offers unemployed people valuable training and work experience and the opportunity of a worthwhile vocational qualification.
I hope the Minister is not suggesting that the scheme is a success. If he is, can he explain why only 50 per cent. of the available places have been taken up and 50 per cent. of the people who have accepted a vacancy are over 25, when the scheme is intended for those under 25? Can he explain why only 18 per cent. of the vacancies have been taken up by women, when 40 per cent. of those who are unemployed and are eligible to be entrants are women?
The hon. Gentleman has got his facts wrong. It is intended to extend the scheme nationwide as from the end of this month. There will he some 6,020 places available in Wales for this scheme by the autumn of 1987. Therefore, all the hon. Gentleman's comments on the scheme are limited to the pilot in Neath and Port Talbot. My overall impression of the pilot is that it has been successful. Because of that success, it is being extended nationwide.
While I appreciate the value of the training carried out in the Port Talbot centre, may I ask the Minister to say where — these people having completed their training — are the jobs in Neath and Port Talbot for them to go to?
Obviously the 18 to 25-year-olds at whom this scheme is particularly directed will be considerably better equipped for jobs. The evidence is that people are going into jobs after training.
Outgoers Scheme
11.
asked the Secretary of State for Wales what has been the response within the Principality to the most recently announced outgoers scheme for the dairy farming industry; and if he will make a statement.
The first phase of the milk community outgoers scheme, which sought to buy up 2 per cent. of our national reference quantity to offset the 2 per cent. reduction in quotas, which is due to take effect on 1 April 1987, closed in 15 February 1987. Twenty-eight applications were received from producers in Wales, 12 of which were subsequently withdrawn, giving a total litreage offered under the scheme of 1·7 million litres.
Does the Minister agree that, with an outgoers scheme, which is really a redundancy payment scheme, it would be much better to pay three or four years' payments immediately an outgoer leaves dairy farming? He would then have much more cash to develop some alternative diversification.
The hon. Gentleman will be aware that we shall now have to introduce across-the-board compulsory reductions in quotas to producers in England and Wales under the scheme that has been agreed by the European Community. He will also be aware that compensation from EC funds has been increased from 18·3 to 27·5 per litre for seven years under the outgoers scheme, which is designed to effect permanent cuts. We must now wait to see how such new arrangements, which have been agreed by the Commission, operate.
Is my right hon. Friend aware that many dairy producers in my constituency are trying to eke out a living on a net income of £3,000 or less? Does he not consider that there needs to be positive discrimination in favour of the smaller farmer to ensure that the rural life of Wales and Cefn Gwlad is not inhibited? Does he accept that the £90 dairy inspection charge was just about the last straw that broke the dairy cow's back for many of my constituents?
I happen to believe that the campaign against the charge has been rather exaggerated. I do not believe that the impact of about 50p a cow will break any backs. I agree that the smaller producer is important. That is one of the reasons why we made special arrangements, when we introduced the quota scheme, to bring smaller producers up to a minimum level. I am sure that the increased compensation arrangements under the outgoers scheme will also be welcomed by such producers.
Will the Secretary of State inform the House why the many dairy farmers who have left the industry have turned their backs on the outgoers scheme during the past two years?
Clearly, those who did not take up the outgoers schemes did not believe that it would be good value for money and made a judgment on the available alternatives. Of course, sale and leasing arrangements have also been taken into account. We are now moving into a new situation with a compulsory reduction in quotas, and the compensation arrangements will therefore be quite different in the period ahead.
Severn Barrage
12.
asked the Secretary of State for Wales if he has carried out a study of the economic impact on South Wales if the Severn barrage were constructed.
A study of the potential regional effects of a Severn barrage is being undertaken as part of the £4·2 million programme of advanced investigations and site studies announced last July by my right hon. Friend the Secretary of State for Energy.
I am sure that all hon. Members are pleased to hear that news. I believe that the House will agree with me that the sooner the studies are completed and the barrage is built, the better. Is my right hon. Friend aware that there is a threat to an economic and social asset in Wales if the barrage and the seven other smaller barrages on estuaries and rivers are built? That threat relates to fishing. What provision has my right hon. Friend made for migratory fish stocks to be catered for if the Severn barrage and the other smaller barrages for electricity generation are constructed?
It is quite a good idea to carry out the studies before we decide whether the the barrage should be built. Certainly, the studies will address important conservation matters, including fish stocks. In much smaller schemes elsewhere in Wales we have made provision for salmon passes. They can sometimes be a matter of controversy, as we discovered in north Wales, where such a scheme has been criticised on environmental grounds. Therefore, the proper way to proceed is through the inquiries that my right hon. Friend has launched.
Is my right hon. Friend able to tell me what the financial impact on the barrage would be if a road were to be built over it?
Clearly that is one of the possibilities, but the consideration of this proposition is at a very preliminary stage, and we had better decide whether to go ahead with the barrage before we decide whether there is to be a road on it. As my hon. Friend is fully aware, we are committed to proceeding with the work on a second Severn crossing, irrespective of any decision about a barrage.
Does the Secretary of State acknowledge that not only fish stocks but other wild life are likely to be threatened by the proposed barrage? Will he confirm that his Department is aware that the Severn estuary is a site of international importance for nature conservation, and will he give a guarantee that any proposed development of the barrage will at least ensure that environmental considerations are given full weight?
I am aware of the facts to which the hon. Gentleman refers, and I have no doubt that the studies that I have mentioned will take those facts very fully into account.
Church Commissioners
Historic Buildings
18.
asked the hon. Member for Wokingham, as representing the Church Commissioners, how much was spent in the past year by the commissioners on historic buildings under their control; what were the comparable figures 10 years ago; if he will give details of this expenditure; and if he will make a statement.
(A Church Commissioner)
I have been asked to reply.
The commissioners have a large number of listed historic buildings under their control but do not keep a separate record of expenditure for this category. I regret that to calculate the information which my hon. Friend requires would cause disproportionate expense.May I say how splendid it is to see my right hon. and learned Friend acting in this important capacity? May I ask him whether the Church Commissioners have any plans to charge for entry to cathedrals—as recommended by the Select Committee on the Environment—during certain periods of the day, provided that parts of the cathedrals are always left for prayer? If so, will there be a standard charge for all cathedrals, or will some be more expensive than others?
I am grateful to my hon. Friend for his kind remarks. I am always grateful for anything that is passed my way.
The Church Commissioners have no responsibility for the upkeep of cathedrals or, indeed, for the upkeep of churches.Vat (Buildings)
19.
asked the hon. Member for Wokingham, as representing the Church Commissioners, if he will make a statement on the effect of value added tax on repairs on those buildings for whose upkeep the commissioners have responsibility.
I have been asked to reply.
In 1986 the commissioners paid over £500,000 in respect of VAT arising from the repair of buildings.As the Church of England is a major owner of listed buildings, as instanced by the fact that nearly half the grade I listed buildings are Church of England churches, and as it is generally accepted that the zero rating of VAT on building repairs to such buildings would provide the greatest boost to conservation, would my right hon. and learned Friend, as a commissioner, be prepared to encourage the other commissioners to lead a campaign in Europe to get the European Community rules changed so that the other major owners of buildings, the Government, bring forward proposals to this House to zero rate for VAT purposes the repairs to listed buildings?
All hon. Members will have sympathy with my hon. Friend's objective. Versatile though I am, I do not think that I will undertake to encourage the commissioners, but I will undertake to see to it that they take careful note of my hon. Friend's point.
Is my right hon. and learned Friend aware that the commissioners and others, particularly the Historic Churches Preservation Trust, have repeatedly lobbied the Chancellor to reduce or eliminate VAT on such buildings? Will he talk to his colleagues in the Government — and how glad we are to see that he is answering this particular question today — and urge them to make this change?
I am grateful for what my hon. Friend has said. I certainly undertake to draw the attention of my right hon. Friend the Chancellor of the Exchequer to my hon. Friend's point.
Does my right hon. and learned Friend agree that, though many evils flow from Brussels, there is no responsibility on Brussels for the imposition of VAT on repairs to buildings of this kind? Will my right hon. and learned Friend confirm that it would be open to my right hon. Friend the Chancellor of the Exchequer to include in this year's Finance Bill a measure giving relief from VAT for repairs on this kind?
I understand that there are difficulties in introducing a new zero rate. That is a matter to which the Select Committee gave its attention in its admirable report. I shall draw the attention of my right hon. Friend the Chancellor of the Exchequer to all points of this nature.
Compensation Payments
20.
asked the hon. Member for Wokingham, as representing the Church Commissioners, what measures the Church Commissioners propose to take to enable the payment of compensation to those clergymen who have announced their intention to leave the Church of England once the legislation admitting women to the ordained Ministry has been passed.
I have been asked to reply.
The commissioners have no jurisdiction to make proposals in a matter of this kind. It would be for the General Synod to decide, in the first instance, the form of any financial provision.I thank my right hon. and learned Friend for his answer, realising that you, Mr. Speaker, could have answered it as well. My right hon. and learned Friend, who is a Church Commissioner, will know that 2,000 Anglican clergy might leave the Church of England if women are ordained. The report by the House of Bishops on the ordination of women to the priesthood makes it clear that it wants unity rather division. The assessment so far undertaken in the study shows that a number of clergy would lose office and promotion. There would certainly be a starvation of promotion for those opposed to the ordination of women—
Order. This is not a debate.
Will my right hon. and learned Friend prepare the costings for that move, recognising that 1991 is not far away?
I know — indeed the whole House knows — that my hon. Friend takes a close interest in this matter, as in so many others.
Whereas I recognise the importance of financial provision in the event that women were able to be ordained as priests, that is perhaps not fundamental to what is an extremely difficult issue. It is not a matter upon which the commissioners have jurisdiction to initiate proposals.Is the right hon. and learned Gentleman aware that many of the 2,000 priests who are threatening to leave the Church are doing so under the assumption that, should they leave, they would take a substantial part of the historic resources of the Church of England with them? Will the right hon. and learned Gentleman advise us that if such a division were contemplated, legislation would have to be passed by the House to approve it. Will he offer his own opinion on the chances of getting such legislation through the House?
I am sure that the hon. Gentleman is right about legislation. To go any further into this issue on what is necessarily an ephemeral outing on my part would be unwise.
Is my right hon. and learned Friend aware that we are glad to see him on that outing today? I hope that he makes the best of it. Is he aware that, as has been pointed out already, the Synod does not have the power to ordain women as priests? That will have to be done by this House, and that step must never be taken for granted.
No one speaks with greater personal knowledge of these matters than my hon. Friend, who is, of course, a member for the General Synod. He will recall that in February the General Synod passed a resolution requiring the standing committee to bring forward two Measures for consideration.
What my hon. Friend says about the outcome is constitutionally correct. It has to be passed by the necessary majorities in all three Houses of the Synod and then come to this House.I also congratulate the right hon. and learned Gentleman on his promotion, which, no doubt, is a welcome relief from his various other duties. Will he give a guarantee that any letter that he writes on this sensitive subject will not be leaked, wholly or partly?
The first of the hon. Gentleman's observations was more welcome than the second.
Will my right hon. and learned Friend give a firm indication that any legislation along the lines that he has discussed will have to be discussed pretty carefully with the Law Officers?
Voluminous though our jurisdiction is, I am not sure whether it extends to that. Naturally, as we are both commissioners, we shall take a careful interest in this matter.
Wales
Teachers (Shortage Subjects)
13.
asked the Secretay of State for Wales what action he has taken to overcome the lack of teachers in shortage subjects; and if he will make a statement.
The Government have introduced various measures to increase the supply of teachers in the shortage subjects. These include a new bursary scheme to attract graduates to teacher training courses, increased expenditure on course development, increased grant-aid for in-service training, tax concessions for firms willing to second employees to schools and colleges and the establishment of the teaching as a career unit.
I am pleased to hear my hon. Friend's answer. However, are there any signs yet that the measures he describes are proving successful?
I am pleased to tell my hon. Friend that recruitment to postgraduate teacher training courses in Wales in the shortage subjects — mathematics, physics, craft design and technology — in 1986 showed a significant increase as compared with the previous year. I am sure that he will agree that that is encouraging and is due largely, I am sure, to the new bursary scheme of £1,200 per annum which the Government have introduced to attract graduates to teacher training courses in those subjects.
House Of Commons
Opposition Parties (Finance)
21.
asked the Lord Privy Seal what recent representations he has received concerning the requirement that financial assistance provided to Opposition parties should be expended solely in support of the parliamentary business of those parties; and if he will make a statement.
As I told my hon. Friend in answer to his question on 2 March, each Opposition party qualifying for financial assistance has to certify that any reimbursement claimed is in respect of expenses incurred exclusively in relation to that party's parliamentary business.
Is my right hon. Friend able to tell the House when the next review will be undertaken? When that review is undertaken, will the assessment be made of how the £630,000 which was allocated in 1986 is spent? Will it be an undertaking that the assistance is given to a particular party for carrying out its "parliamentary work here at Westminster," as Lord Glenamara said on 20 March 1975, or for "activities at Westminster," as my right hon. Friend the Leader of the House said on 23 January 1985?
As I have already said to the House, I thought that we were now sufficiently close to a general election to ensure that the next review would be in the next Parliament. The point raised by my hon. Friend about the whole question of monitoring spending is one that could be considered at the time of the review and, of course, it would be done in respect of all political parties.
Does the right hon. Gentleman not recall that when his party was in opposition those sums were disbursed largely to the Conservative research department? Could it be the temporary absence of those funds that has led that organisation to become so slipshod and inaccurate in its work; such as, for example not knowing that during the Lib-Lab pact inflation went down from 20 to 7 per cent. and that Labour's nationalisation measures were stopped? Is he looking forward to the return of those funds to his party?
The hon. Gentleman has raised a facile point. I assure him that if we are to quarry for the ineptitudes of research activities on behalf of the respective parties, the Liberal aspect of the Liberal-Social Democratic alliance would come out top of the league.
I shall now turn to the more serious point, which is what I am sure the hon. Gentleman intended. I thank him for pointing out the great importance of research in sustaining a party in opposition. That was never more evident than now.Palace Of Westminster
22.
asked the Lord Privy Seal what representations he has received about progress with the cleaning and restoring of the external stonework of the Palace of Westminster; and if he will make a statement.
23.
asked the Lord Privy Seal what representations he has received about progress with the cleaning and restoring of the external stonework of the Palace of Westminster; and if he will make a statement.
I have not received any recent representations on this topic, but I am aware of a general wish among hon. Members that the stone restoration work should be completed as soon as possible.
Will my right hon. Friend accept the wide admiration of the House and the country for the beauty of the parliamentary building as it is revealed by the restoration, and will he accept from me and many people that it would be extremely sad if the Victoria Tower was not fully restored, as it has been rumoured it may not be? Would it not be tragic if it stuck out like an elegant sore thumb?
I agree with my hon. Friend. The restoration work that has been undertaken for the Palace of Westminster has had admirable consequences and I hope that in due course the Victoria Tower can be similarly restored. My hon. Friend will understand that I am in no position to say when that work will be undertaken.
While commending the work that has been done, which is surely an example of how Parliament and the Government should lead the country in the proper care of architectural conservation, may I ask my right hon. Friend whether there are any plans to try to improve some of the internal courtyards of the Palace, which are very untidy and a disgrace to the splendid architectural heritage that has been passed on to us?
I cannot answer that specific point without notice. However, if my hon. Friend would like to get in touch with me, I will ensure that he receives an answer.
I wonder whether my right hon. Friend would see to it that a gargoyle is constructed of the Boy David, which apparently is the new title of the leader of the Liberal party, as described by the leader of the Social Democratic party.
I thought that that description was so striking that it could stand on its own.
Would my right hon. Friend pass on the thanks of the House to all those responsible for what is, by any standards, superb work?
I am most happy to undertake that request.
Catering (Curried Cornish Pasties)
24.
asked the Lord Privy Seal if he will take steps to secure the withdrawal of curried Cornish pasties from the cafeterias of the House; and if he will make a statement.
I have been asked to reply.
I unreservedly apologise to my hon. Friend for the human error that occurred when his delectable cornish pasty, whose name and fame is worldwide, was attributed to another of lesser renown; and the Catering Sub-Committee, through the General Manager, has taken immediate corrective action.Does my hon. Friend realise that I am completely disarmed by that helpful reply? Does he also appreciate that if such action had not been taken his own very fine reputation as the best Chairman of the Catering Sub-Committee that the House has ever seen might well have been in jeopardy? While on the subject of pasties, may I go a little further? Does he realise that this insult against the culinary traditions of Cornwall has been further intensified by the fact that a more conventional type of pasty, sold as a Cornish pasty in the House, has a giveaway tag on its cellophane wrapper which reads "Made in Kent"? Will he, therefore, after these exchanges, taste a real genuine Cornish pasty that has been kindly made for him by a constituent of mine?
I am very grateful to my hon. Friend, who is a great defender of Cornish traditions. I think that he may be able to help me by sending me a note to tell me the sort of name that he would give to this Cornish patsie—I am sorry, pasty.
May I invite my hon Friend the Member for St. Ives (Mr. Harris) to send my hon. Friend the Chairman of the Catering Sub-Committee an authentic Cornish recipe, if he could do so without engendering further controversy?
That is a most admirable suggestion.
In order to make amends to the people of Cornwall, and in recognition of the fact that they have just elected another Liberal hon. Member to this honourable House, will my hon. Friend consider the introduction to the menus of this House of that very fishy dish Stargazy Pie?
I should be very happy to give that matter careful consideration. However, I am afraid that pasties or patsies are non-political.
Wales
Schools (Peace Studies)
14.
asked the Secretary of State for Wales what information he has as to the extent of the teaching of peace studies in Wales and as to the local education authorities involved; and if he will make a statement.
I am not aware of any Welsh local education authority promoting peace studies as a distinct item in the curriculum.
I am most grateful to my hon. Friend for that answer. However, should peace studies be introduced in our schools, would he provide the finances for that subject?
The financing of education is a matter for local education authorities. However, I would feel obliged to stress that any attempt to smuggle in politically biased teaching would breach the requirements of the Education (No. 2) Act 1986. Local education authorities, governing bodies and head teachers are required by that Act to forbid the promotion of partisan political views in the teaching of any subject in the school.
Does the Minister accept that implicit in this question is the suggestion that there should be greater centralisation of curricula — something that is causing considerable concern in Wales — and will he give an undertaking that if the responsibility for financing these or any other studies in schools is a matter for local authorities, curricula should remain a matter for local decision?
I do not agree with the hon. Gentleman. There has been considerable discussion of the curriculum, and the general opinion among teachers, parents and all concerned with the education of children is that there should be more central direction of the curriculum than there is now.
Job Clubs
15.
asked the Secretary of State for Wales how many jobs have been gained in Wales by those attending job clubs since the scheme began.
Since August 1985, 1,355 people in Wales have attended a job club, and 828 — or 62 per cent.—have obtained employment as a result.
In view of that success, what plans does my hon. Friend have to extend job clubs throughout Wales?
My hon. Friend knows that there are 24 job clubs in Wales, and we hope to extend the total to 60 by the end of this month. My right hon. Friend the Secretary of State has visited a job club in Haverfordwest and I have visited one on. Deeside. and there is no doubt that they do an
Hospital Services (Ealing)
3.31 pm
I beg to ask leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
The dispute has arisen because, before the elections last May, the Labour party promised council employees a review of the non-payment of the London weighting allowance, but, gaining control, the new Labour council has refused to pay London weighting. Hospital services have been seriously affected. Ealing hospital cannot send people out into the community because no back-up services are available for them. The hospital is slowly coming to a standstill because there can be no discharges into the community and admissions cannot be accepted because hospital beds are full. People cannot have urgent operations and treatment. One side effect of the damage caused to Ealing hospital is that welfare officers are not operating in schools. About 32 schools in Ealing are closed today, including special schools for disabled children, some of whom are severely handicapped. The matter is serious and urgent. It is also specific and important. Ealing hospital is central to the welfare of the people of Ealing and must be kept going. The dispute between Ealing council and its employees must be ended urgently."the deterioration of hospital services in Ealing as a result of the industrial dispute involving Ealing council employees."
The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration. namely,
I have listened with care to what the hon. Gentleman has said, but I regret that I do not consider the matter that he has raised as appropriate for discussion under Standing Order No. 20 and I cannot, therefore, submit his application to the House."the deterioration of hospital services in Ealing as a result of the industrial dispute involving Ealing council employees."
Ministerial Answers
3.33 pm
On a point of order, Mr. Speaker. Although it is clearly not for you to become involved in the answers which Ministers give to the House — you would have a very difficulty task if you were—nevertheless, is it not right that from time to time we should draw it to your attention when hon. Members feel that Ministers have persistently misled the House or persistently failed to give the House the information for which hon. Members were asking—
Order. Ministers do not persistently mislead. They may give information with which the hon. Gentleman disagrees.
In the hope that we might dispel any impression that they could have done, and with the Leader of the House present and perhaps in a position to use his good offices, may I draw to your attention the fact that, on many occasions, hon. Members on both sides of the House, including several of my hon. Friends, have raised with Ministers the question whether battlefield nuclear weapons in the British Army of the Rhine were or were not being updated, and on every occasion—
Order. I think that this would adequately come into Defence Questions tomorrow. It is not a matter of order or a matter for me.
rose—
Order. I cannot help the hon. Gentleman. I am genuinely sorry, but I think that we can deal with this tomorrow.
Further to that point of order, Mr. Speaker.
Order. It is not a point of order for me.
Personal Statement
3.34 pm
In last Friday's debate on law and order I made remarks which reflected upon the personal conduct of certain hon. Members and which must have caused them offence. I wish now to apologise to the House and to those Members and to withdraw unreservedly the comments that I made.
Bill Presented
Optical Appliances (Blind And Partially Sighted Persons)
Mr. Alfred Morris, supported by Mr. Jack Ashley, Sir John Farr, Mr. Lewis Carter-Jones, Mr. Dafydd Wigley, Mr. Robert N. Wareing, Mr. Laurie Pavitt, Mr. David Alton, Mr. Tom Clarke, Mr. Donald Stewart and Mr. Norman Atkinson, presented a Bill to amend Schedule 12 to the National Health Service Act 1977 and section 70 of the National Health Service (Scotland) Act 1978 to enable registered blind or partially sighted persons to obtain optical devices provided under the National Health Service free of charge: And the same was read the First time; and ordered to be read a Second time upon Friday 1 May and to be printed. [Bill 121.]
Statutory Instruments, &C
Ordered,
That the draft Statistics of Trade Act 1947 (Amendment of Schedule) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c.— [Mr. Durant.]
Orders Of The Day
Ways And Means
Order read for resuming adjourned debate on Question [17 March].
Amendment Of The Law
Motion made, and Question proposed,
That it is expedient to amend the law with respect to the national debt and public revenue and to make further provision in connection with finance; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide—(a) for zero-rating or exempting any supply; (b) for refunding any amount of tax: (c) for varying the rate of that tax otherwise than in relation to all supplies and importations; or (d) for any relief other than relief applying to goods of whatever description or services of whatever description.—[Mr. Lawson.]
Question again proposed.
Budget Resolutions And Economic Situation
[Relevant documents: European Community Document No. 10155/86, Annual Economic Report 1986–87 and the unnumbered document, Annual Economic Report 1986–87 (final version as adopted by the Council).]
3.36 pm
We shall be concentrating today, as frequently is the case, on the implications for industry and commerce of the Budget of my right hon. Friend the Chancellor of the Exchequer. On the last day of the debate on the Budget it is clear that it is a difficult one to criticise, because there are only 10 Labour Back-Bench Members present to hear the debate. They are right to think that there is nothing to criticise, because I am glad to be able to report to the House that the outlook for industry today is extremely promising.
Is the Secretary of State aware that there is a lobby of this place from the construction industry and that that is where our colleagues are? The right hon. Gentleman should follow them there.
That may be deemed to be more important than the Budget to the future of the country. It is for hon. Members to decide their priorities.
It is hard to remember a time when the economic climate for business was as favourable as it is now. The economy as a whole grew by 2·5 per cent. in 1986, and in 1987 it is expected to grow by a further 3 per cent. Manufacturing output, in which the whole House is interested, has grown by 14 per cent. over the past six years and will grow by a further 4 per cent. in 1987. This is a remarkable reversal of the downward drift in manufacturing output from its peak in 1973 and is a striking testimony to industry's revival. The level of investment in the economy is also buoyant. Total fixed investment is expected to increase by 4 per cent. in 1987.If the Secretary of State is correct and manufacturing output increases by 4 per cent. in the coming year, is it not the case that even after that it will still be below the level of 1979? On that basis, why should the Government be entitled to any credit?
I do not think that the right hon. and learned Gentleman is right in that assumption. If my forecast is correct, we shall be at about the level of 1979. Whether or not it is, I must point out, as there seems to be a great deal of debate about the 1979 figures, that they were lower than the 1973 figures because of five years of Labour Government, during which they consistently went down. The idea that there is some miracle Labour party potion that cures everything is sheer nonsense. What is important when we look at the future is to see what will happen, and output will grow by a further 4 per cent. in 1987, and the outlook for output is extremely good. That is why Labour Members are so distressed to hear the news.
The figures that I am quoting are from my right hon. Friend's Budget, but outside forecasters, including a number by no means sympathetic to the Government—I can quote them if the House wants me to—make similar predictions. The figures announced last week confirm that unemployment is firmly set on a downward trend. It is particularly encouraging that some of the sharpest falls were recorded in areas of highest unemployment. The House spent last Thursday debating employment and my right hon. and learned Friend the Paymaster General convincingly showed that that trend will continue. The prospects for our exporters are also excellent. In 1986 our non-oil exports were 3 per cent. higher than in 1985, and they are forecast to be 5 per cent. higher again in 1987 than in 1986. The volume of our manufactured exports is at an all-time record, after six years of steady growth. A further healthy increase in growth from that all-time record is expected in 1987. In recent months the growth in the volume of our manufactured exports has been running ahead of that of our manufactured imports. The combination of a competitive exchange rate and a world economy that is responding to lower oil prices means that, as the Financial Times pointed out a week ago,The Labour party tries hard to conjure up the spectre of a sterling crisis. Perhaps the loss of £5 billion in oil exports would have produced a sterling crisis if that party had been in office. However, after a cumulative balance of payments surplus of £20 billion over the seven years to 1985 we face the prospect of a deficit this year equivalent to one half of 1 per cent. of GDP. That this figure is so small is a tribute to the resilience of the economy in the face of a massive adjustment that was imposed so quickly by the falling oil price. It also illustrates the contribution to the balance of payments of our earnings from overseas assets, now running at £4 billion a year. A relatively rapid rise in import volume is to be expected while the economy expands. About three quarters of manufactured imports are bought by business and commerce as essential inputs to their production. The full benefits of improved competitiveness have yet to come through. However, I expect the growth in imports to slow by the end of the year. British industry is well placed to make the most of its opportunities. Productivity in British manufacturing, which was the despair of our friends in the 1970s, has improved by no less than 40 per cent. in the last six years. This puts us right at the top of the international league for productivity growth, ahead of Japan, Germany, the United States, Italy and France. Productivity has grown more than three times faster than when the Labour party was in power. During that time our productivity growth was lower than that of all our major competitors, yet Opposition Members have the cheek to argue about the prospects for British industry. In recent months, unit costs in British industry have risen no faster than those in Germany and Japan, although I still see scope for improvement. The latest figures of the profitability of the non-North seas sector are the highest since 1973, and I am confident that this improvement is continuing. For the benefit of Opposition Members, I should emphasise the vital importance of profits, which are the source of three quarters of the funds needed by industry for capital investment. It is not only in those aspects that can be quantified that British industry has now recovered. Our reputation for quality is being gradually and painstakingly restored. The industrial relations climate has been transformed. The number of industrial disputes last year was down to the level of 1935. Multinational companies are not only saying that the United Kingdom is once more a logical location for manufacturing operations; they are acting on the belief. In today's Financial Times, the American chairman of British Oxygen stated:"the opportunities to rebuild the UK's share of export markets have rarely been better."
It must be said that 1986 was another excellent year for foreign direct investment in Britain."In the last half dozen years Britain has done a pretty good job. If I was a company having to set up in Europe, it is Britain I would choose".
While one in no way wishes to carp at an excellent speech and superlative Budget, may I ask my right hon. Friend whether he accepts that hon. Members on both sides of the House are worried about the level of research and development in manufacturing industry? If we are to stay in the position that we have attained, research and development in the new technologies to keep us ahead of the world are of the greatest importance. If there is any way in which my right hon. Friend can help companies to further research and development, it would be worth undertaking.
There is a great deal in what my hon. Friend says. In my Department's budget there has been a massive switch of resources to research and development during the Conservative Government's period of office. We are considering a range of matters and in due course we will have to reply to the Select Committee in another place on this important aspect.
On foreign direct investment, I should tell the House that more than 300 foreign companies have shown their confidence in the strength, stability and future of the British economy by deciding to invest here.Will the Secretary of State give way?
I must continue; I have given way three times already.
New investment projects in manufacturing included those announced by Compaq Computers from the United States at Erskine; NEC at Telford; and Orion Electric at Port Talbot. Substantial expansion projects included those announced by Ford at Dagenham and Halewood; Peugeot Talbot at Ryton; Sharp at Wrexham; and Sony at Bridgend. These decisions confirm the positive experience of those companies already operating here. Since 1980 foreign direct investment in the United Kingdom has created or safeguarded over 200,000 jobs. The list of our industrial successes is lengthening all the time. Jaguar, with the stimulus of a return to the private sector, has re-established a reputation for quality and turned a £30 million loss in 1981 into a profit of more than £120 million in 1986, creating 1,500 new jobs in the process. In 1978–79 it took British Steel nearly 14·3 man hours to produce a tonne of liquid steel. By 1985–86 it took 6·3 man hours and BSC's productivity had caught up with the best in Europe. J. C. Bamford, a family business, has taken on the American giants of the construction equipment world. It has remained profitable, while its competitors have been in retreat. It has quadrupled its turnover to £220 million in 10 years, and half of it is exported. Vickers, a company rooted in traditional heavy industry, has diversified, so that in addition to its longstanding activities it now has 40 per cent. of the world market in controllable pitch propellers, and it has diversified into several other areas. In recent weeks and months there has been a general resurgence of business confidence. The CBI's monthly survey of industrial trends for February was the most encouraging of its kind for at least 18 months. The majority of firms expecting their output to increase was greater than it has been for three years. A majority of companies now say that their total order book is above normal—one of the highest figures ever recorded. On export order books, the response was more favourable than any since the middle of 1985, which was the most optimistic in the history of the survey. The most recent survey by the Association of British Chambers of Commerce recorded a high level of business confidence among its membership in all regions of the United Kingdom.My right hon. Friend mentioned the BSC, and it was a great pleasure to have him visit the most efficient steelworks in Europe last Monday. Certain proposals have been aired by Eurofer and the Steel Council. Will he confirm that the BSC is among the most efficient and profitable steel corporations in the world, that any future cut in capacity must depend on the profitability of the industry concerned, and that as the BSC is the most profitable steel works in Europe we would expect no steel cuts in its operations?
My hon. Friend makes an important point, and exactly the same point was made by my hon. Friend the Minister of State at the Steel Council on Wednesday last week. I agree with him and am happy to confirm how impressed I am by the efficiency at the Scunthorpe works, which are probably the most productive steelworks in western Europe. If they are not the most productive, they are certainly right up with the leaders. That is a remarkable turnround, especially when one considers that when we came to office British Steel was losing well over £1 billion a year. This year its half yearly profit is albut about £68 million. In the past few years there has been a complete turnround.
I was dealing with the Association of British Chambers of Commerce. Its latest survey recorded a high level of business confidence among members in all regions and showed how confidence was picking up in the areas of high unemployment. The Government are determined to continue the fiscal and economic policies that have brought about these hopeful trends and my right hon. Friend's Budget is ideally suited to this purpose. Above all, industry needs a stable economic and financial framework. The runaway inflation of the 1970s must not be allowed to reappear. With the annual increase in the retail prices index now at about 4 per cent., and expected to remain in that region for the rest of this year, industry no longer faces the constant worry about prices shooting up as they did not very long ago. Nor does industry need to fear that Government borrowing will enjoy priority over wealth creation in Government policies. The PSBR this year and next will be at lower levels than we have seen since the beginning of the 1970s as percentages of GDP. Industry, of course, has made a major contribution to this development, through increased payments of corporation tax. I point out to Opposition hon. Members that that is a classic demonstration that lower taxes and prosperous taxpayers mean more, not less, revenue for the Exchequer. It is a matter of great satisfaction that the prudent economic and fiscal policies pursued consistently by my right hon. Friend and his predecessor have made it possible for this year's Budget to include a range of measures, direct and indirect, that are greatly to industry's advantage. My right hon. Friend's decision to devote more than half the scope for fiscal adjustment to a £3 billion reduction in public borrowing was not only financially prudent but will be of great benefit to industry and commerce, and thereby to jobs. The CBI welcomed the Budget as just what it wanted. [Interruption.] Opposition Members laugh at the CBI figures. They are not interested in the voice of the views of industry. One immediate benefit of the decision to reduce the planned PSBR has been a further reduction in interest rates. All of us are aware of industry's long-standing concern that real interest rates have been higher in this country than in most of our competitor countries. It has been the Government's policy throughout that interest rates should be maintained no higher than is necessary to maintain downward pressure on inflation. The whole House will welcome the fact that the strength of the economy and the Government's prudent policies have permitted a cut in interest rates. Not only does each percentage point off interest rates represent a cut of £250 million in industrial costs, but, even more important, the prospect of a sustained cut in interest rates which can be taken into account when industrialists calculate the return on new investment will make it easier for them to plan for expansion. The reductions in tax will help industrial performance. If Opposition Members believe that the money will be spent on imports alone, they have little confidence in British industry. Have they stopped shopping at Marks and Spencer which, like many companies, has British sourcing? My right hon. and learned Friend the Paymaster General has said that the same argument would apply equally to increased wages, but the Opposition do not argue that wages should be cut. The reductions in personal taxation will encourage everyone not only to work harder but to acquire new skills and qualifications and to seek additional responsibilities. I commend particularly to the House and to industry the proposed new tax relief for profit-related pay. For a married man on average earnings who accepts 5 per cent. of his pay in the form of profit-related pay this offers the prospect of an extra £1·50 a week, which is equivalent to 1p off the basic rate of income tax. With 20 per cent. of his pay in the form of profit-related pay the tax relief is worth £6 a week, or 4p off the basic rate. If this new relief is widely taken up, as I hope it will be, it will help to create a sense of common purpose among all those who work for companies. It will bring much needed flexibility in pay structures, without which firms are understandably reluctant to take on more employees when things go well, and may see no alternative in a downturn to reducing employment. Industry's most important resource is its people. The Budget will help to ensure that the energies and potential of countless individuals are put to good use. It is an excellent Budget for the individual entrepreneur and the small business. The large increase in the threshold for inheritance tax and the improved business reliefs will make it easier to pass on a flourishing family business to the next generation. The increased retirement relief from capital gains tax will also improve the incentive to build up a small business. My right hon. Friend's package of VAT measures for small businesses responds to a number of legitimate concerns. The proposal to allow firms with an annual turnover of up to £250,000 to account for VAT on a cash basis will be particularly welcome. It will mean that small firms are no longer required to pay VAT on transactions for which they have not been paid, and it will thus allow automatic relief from VAT on bad debts. The option to account for VAT annually, with a system of monthly instalments, will be found useful by many firms. The changes in the business expansion scheme will increase the value of this useful measure. It will no longer be necessary for all the funds subscribed to be invested within the same financial year if tax relief is to be obtained. This has led to a bunching of BES investments in March of each year, with the risk that the quality of the investment suffered. The change will increase the confidence of potential investors in the scheme, as well as its potential for helping to launch small and innovative companies. A further specific change is designed to enable the business expansion scheme to be used more easily for financing film production in the United Kingdom. This is something that the film industry has been urging on the Government for some time, and my right hon. Friend's proposal will be very welcome to them. This Budget represents the continuation of an economic strategy that is plainly succeeding. It maintains the prudent fiscal and monetary policies that have resulted in inflation finally being curbed. It takes a further step towards increasing incentive and enterprise by allowing people to keep more of what they earn, and it continues to reduce the level of public sector borrowing, so releasing more funds for private sector investment at a lower price. These policies have led to the successes that I have already outlined and have contributed to achieving the biggest monthly fall in unemployment on record. Yet the Opposition—with their heads still buried in the discredited economic tomes of the 1960s, rather than observing the reality of economic success all around them—continue to advocate the reverse. In a welter of high spending, high borrowing and high taxation, they would throw away all that has been achieved. They have a prescription that would send us sliding back to the bottom of the league once again. On every front their policies would be crippling to industry and business. The climate of understanding and co-operation in industrial relations, which the Government's trade union legislation has helped bring about, would be lost as power was handed back once more to the militants and extremists in the trade unions. Industry would be hamstrung by a plethora of bureaucratic committees and controls. Management would be prevented from taking any decisions until it had been cleared by innumerable committees, local authorities, the trade unions and any other pressures that the Labour party wants to put on it. Some companies would fare even worse. For them it would not just be management which the state took over, but ownership as well. Despite the overwhelming evidence of its manifest failure, nationalisation is still on Labour's agenda, although it calls it by a different name nowadays. In case industrialists are tempted to believe that their particular commanding height of the economy is not on the list for seizure, I remind them of the words of the right hon. and learned Member for Monklands, East (Mr. Smith), who last year said:The right hon. and learned Gentleman nods. That is the Labour party's policy. I am glad to have that confirmation. The House welcomes that clarification. One thing is certain. Once the right hon. and learned Gentleman and his colleagues got their hands on those companies they would not be profitable for long. Labour has also promised to impose selective import tariffs and subsidies. This would lead to swift retaliation against British exporters, just at a time when our export prospects are better than they have been for years. In addition, to my astonishment, the Opposition have said that they propose to abolish the aid and trade provision, which, since its inception, has helped to win exports worth £1·7 billion. I cannot fathom what on earth the policy reason for that can be. Perhaps the right hon. and learned Member for Monklands, East will tell us a little about that proposal, because it seems utterly astonishing. Hon. Members will remember that during the Knowsley, North by-election, when I much enjoyed the presence of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), the hon. Member for Kingston upon Hull, East (Mr. Prescott) let the cat out of the bag by announcing that Labour would impose a levy of at least 1 per cent. on companies' turnover to finance industrial training."I don't see why we should just go round taking over clapped-out companies. It would be nice to get into the new profitable areas. Stuff that makes money."
That is right.
I am glad the hon. Member for Kingston upon Hull, East has the support of the hon. Member for Liverpool, Walton (Mr. Heffer). Others are not too sure. His colleague, the right hon. Member for Sparkbrook, hurriedly tried to put the cat back in the bag again by saying in the same place the next day that that was not Labour party policy and that he could not imagine that it would be.
A week later the hon. Member for Kingston upon Hull, East added to the confusion by telling me during the industry and employment debate that compulsory training levies were certainly Labour party policy and that 1 per cent. was the minimum under consideration. It seemed that the two were split by irreconcilable differences and that buns might start flying in the Tea Room. Last week the Labour party introduced its new training document describing a new adult skill plan financed by Government and industry, but no mention is made of levies. All that we are told is that there is to be a new name—a new national training fund, which would require a fair financial contribution from all employers. I should be grateful if the right hon. and learned Member for Monklands, East would tell us exactly what is proposed. What is the size of the burden which the Opposition intend to put on industry? Is it to be a 1 per cent., 2 per cent., or 3 per cent. levy? Is it to be on turnover, on profits or on sales? As recently as last Thursday the hon. Member for Kingston upon Hull, East, who is rapidly becoming to the Labour party what the albatross was to the ancient mariner, forgot his brief and admitted that there would be a levy. But then, in a remarkable attack of amnesia, he denied that he had ever said that the levy would be 1 per cent. on turnover. Surely the House and industry in general are entitled to know exactly what the proposals are, what they will cost and whether small companies are to be exempt. We must be told, or industry will have no idea what financial burden the Labour party proposes to impose. That is a disgrace.If we are not to have a levy of 1 per cent. or a fair contribution to training, how will we train the people whom we need?
I am strongly in favour of more training expenditure, but I am not in favour of a compulsory 1 per cent. training levy on the turnover of companies whether they be big or small. That is what is promised. Either that is Labour party policy, or it is not.
Will the right hon. Gentleman give way?
Not now. The right hon. and learned Gentleman will have a chance in a minute.
I should like to answer.
Very well, we shall hear the answer.
The right hon. Gentleman's reluctance to give way might arise from the fact that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) asked a pertinent question. If the right hon. Gentleman is in favour of extra expenditure on industrial training, how is it to be financed?
I believe that training should be financed by the companies themselves. The House will have noticed that even though I gave way the right hon. Gentleman chose not to answer the question. He did not answer the question, either because the Labour party has not decided, or because the answer is too embarrassing. Perhaps we shall be told a little later, although I suspect that we might not be.
Will the right hon. Gentleman give way?
I must press on. Many hon. Members wish to speak.
The Budget is prudent. It is a Budget for industry, with sound money, lower interest rates and improved incentives. Industry's performance over the last six years has been a success story that is perhaps only now being fully recognised. The Budget will allow industry to build on that success. I hope that it will be the signal for many firms to move from successful consolidation to renewed expansion. The criticism from the Opposition Benches is a time-honoured part of our ritual. What matters is the response to the Budget by industry and the country. I am confident that the response will be positive. The outlook for industry has seldom looked brighter.4.6 pm
Having listened to the Secretary of State's speech, one can hardly believe that we live in a country with over 3 million unemployed. Those people rated hardly a mention from the beginning to the end of the right hon. Gentleman's speech. yet unemployment is one of the three great problems in this country. The first is mass unemployment which is at a disgracefully high level by any civilised standard. The second is a manufacturing industrial base which has been dangerously reduced and urgently needs to be expanded. The third is the deepening entrenchment of the north-south divide.
It is clear that the Budget was not intended to help a sustained effort to reduce unemployment. In speech after speech during the Budget debates Government apologists have sought to claim that tax cuts, particularly the reduction in the standard rate, will create jobs. They might, but if the extra money available for consumption is spent on imports—as the evidence shows is likely—new jobs will be created, but they will be in Frankfurt and Tokyo, not here. If the Government had any intention of creating new jobs in the United Kingdom, which one might have thought to be a reasonable aspiration of any sane Government, the best value in jobs and in the improvement of services is to be achieved in a carefully targeted programme of public expenditure. The Labour party has produced such a programme in "New Jobs for Britain". The intention is to reduce unemployment by 1 million in a two-year programme. It involves four main elements. The first is encouraging economic enterprise by stimulating investment in manufacturing, promoting industrial and regional policy and reducing industry's costs by cuts in national insurance contributions on a regional basis. That will provide 250,000 jobs. The second element is stimulating capital investment in the nation's infrastructure, with particular reference to the housing programme and transport systems. That will produce another 250,000 jobs in the public and private sectors. The third element involves a major skill training programme, converting the current piecemeal schemes into a national training programme providing 360,000 jobs and training places. The fourth element is improving health, education and personal social services to provide another 300,000 jobs. The cost will be £6 billion each year.
We understand that the Labour party's programme is to be financed by increased borrowing. Last Wednesday the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) said that he would be happy with a PSBR at 4 per cent. of GDP, at about £15 billion or £16 billion, which represents an increase of £12 billion. What effect will that have on interest rates?
My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said nothing of the kind. Certainly at no time did he say that the programme would be financed entirely by borrowing. The hon. Gentleman should reread Hansard.
On a point of order, Mr. Speaker. Is it in order for the right hon. and learned Member for Monklands, East to misrepresent what his right hon. Friend the Member for Sparkbrook said on Wednesday?
The hon. Gentleman can seek to raise that matter later if he is called.
My right hon. Friend the Member for Sparkbrook was talking about the public sector deficit, not public sector borrowing. When the hon. Gentleman rereads Hansard he will be under an obligation to withdraw the allegation and not to repeat it.
We have repeatedly made it clear that the cost of the programme will be £6 billion in each year. We know from this Budget that that could be afforded—let it not be said that there is no alternative. The Chancellor had at his disposal £6 billion and that could have been used to finance the programme. Each time a sensible policy has been advocated to the Government we are told that there is no alternative to their current policies, as if it was beyond the wit of man to devise any alternative. They cannot use that excuse in this case. The Labour party's programme spells out what can be done and the Budget showed that that it could be afforded. It is a matter of choice.Oh!
The Chancellor laughs. We are used to his lack of concern for the unemployed. In Budget after Budget he has refused to lift a finger to help the unemployed. In this Budget he has made the cynical choice to disregard them entirely. The Chancellor's ambitions are not as high as ours, but if he had even spent £2·6 billion—the amount of money he used to cut the standard rate—it would have made a significant impact on reducing unemployment.
What type of Government do we have? What kind of society do we live in that does not put the reduction of unemployment by 1 million in two years at the top of its list of priorities?The level of unemployment is coming down, you silly man.
I shall avoid replying directly to the Chancellor's vindictive personal abuse—it is no substitute for argument. When I develop my argument I shall have a word to say about some of the things he has said in the past, but I hope that he can contain himself for a moment or two.
The Chancellor does not seem to understand that the figures for unemployment in this society are higher than they were in the 1930s—and we thought that was the most dismal decade of our century. He does not seem to understand that unemployment is lasting longer than it did in the 1930s. It is not just the loss of economic opportunities that is so disheartening; it is the blighting of individual opportunities and the stunting of personal development, especially that of our young people, which is the tragedy of our times. The Chancellor and his colleagues talk about getting unemployment below 3 million, as if to get unemployment below that figure would be an occasion for national rejoicing, when we would all break out into cheers at the Government's success.Surely the right hon. and learned Gentleman will be pleased if that occurs?
I will be pleased when unemployment finally gets below 3 million, but I will not regard that as an opportunity to congratulate a Government who should never have allowed that figure to get near 3 million in the first place. This is the first post-war Government to put us into such a position. If the Government do get to the stage where unemployment is below 3 million, with all the associated flags and buntings, I hope that they will not be surprised to discover that the public do not consider that much of an achievement. The Government will be reminded that they inherited an unemployment level of 1·25 million. The public are also aware that, in modern Britain, 1·25 million under-25s alone are out of work at the moment.
The Government have a determined policy towards the unemployment figures and that is why they have made 19 changes to them. I wish they had an equally determined policy towards the true problem of unemployment. This Budget is irrelevant to the millions of unemployed and their families. The Chancellor—we need not be surprised that he did this—walked by on the other side of the street. In the presentation of the Budget an attempt was made—it was repeated today by the Secretary of State for Trade and Industry—to claim that industry was prospering under the Government. It is a difficult task to claim that industry is prospering under the Government and we must consider the facts. How can industry be prospering when investment in manufacturing industry—the key to our future success—is 20 per cent. lower than it was in 1979? How can industry be prospering when manufacturing output is 5 per cent. lower than it was in 1979—in fact it is lower than it was in 1972—and when 20 per cent. of our manufacturing capacity has disappeared? I challenge right hon. and hon. Members on the Conservative Benches to question any one of those figures. They cannot. They know that they are precisely the current facts about British industry. Those are the results of eight years of Conservative Government. How can the Government have been succesful if investment is one fifth below what it was when the Conservatives came to office? Output has still not reached the level that the Conservatives inherited. At the end of next year, output, based upon the Secretary of State's prediction and the prediction in the Red Book, will still not have reached the 1979 level. The fact is that one fifth of our industry has disappeared. How can that be a record of success? The Secretary of State for Trade and Industry and other apologists seize upon one statistic—that of productivity—and say that everything is reassuring because manufacturing productivity has increased. Today the Secretary of State for Trade and Industry introduced a new phrase, "comparisons of rates of productivity growth". Almost certainly that will be something different from productivity, but the sleight of hand that goes on in the presentation of statistics is such that we must consider the productivity statistics with care.Will the right hon. and learned Gentleman give way?
I am developing an argument at this stage and I will not give way.
The Government argue that manufacturing productivity has increased, but I hope that they know that productivity figures have only comparatively improved because employment has fallen faster than output. In effect, workers have been thrown on the dole faster than production has declined. Productivity growth on its own is not the objective that we should seek, rather productivity against the background of increased production. That should be the true objective. In that way we generate higher output through improved utilisation of all our resources. I have reminded the House that manufacturing output is some 5 per cent. lower than it was in 1979. Productivity has increased only because employment has fallen by 28 per cent. The Government should take no credit for chat figure. In Government speeches copious references are made to an increase in exports. We heard it again today from the Secretary of State for Trade and Industry. It is true that, since 1979. manufacturing exports have risen by 15 per cent., but why is it that, in all the speeches from Ministers, in the Red Book and in answers to questions, there is only ever reference to exports? There is never any reference to imports. Surely the Government comprehend that it is the relationship between exports and imports that is the crucial matter.indicated dissent.
If the Chancellor does not understand that, it is no wonder that we are in our present economic difficulties. Perhaps the Chancellor believes that it is all right to talk about exports and totally to ignore imports. I thought it was had enough that the Secretary of State did not know the difference, but now we have a Chancellor of the Exchequer who does not know the difference either.
rose—
No, I will not give way.
The Government refer to exports rather than imports only because if they refer to imports it gives the game away. Manufacturing exports have risen by 15 per cent. since 1979, but if the Government referred to imports they would have to admit that, since 1979, they have gone up by 48 per cent. In all the Government propaganda a cloud of silence has descended on the trade figures, especially the figures for manufactured goods. The reason for that is that we had a deficit of almost £6 billion in 1986 and, as the Red Book tells us, we are heading for a £8 billion deficit in 1987. Not only are we in deficit, but we are, in fact, facing a deficit that is accelerating on a downward curve.That is neither here nor there.
According to the Chancellor, it does not matter that we have moved from a £5 billion surplus in 1979 to a £8 billion deficit in 1987. It does not matter that there has been a £13 billion deterioration in the balance of trade in manufactured goods. The Chancellor sits there smugly and says that it does not matter. That reveals the mentality and competence of the people who are temporarily in charge of our affairs.
rose—
I will give way to the Chancellor if he would like to explain why a £13 billion change in our balance of trade does not matter. It would be an interesting explanation. We know, however, that these are facts that cannot be denied. The alarm bells should be ringing both in the Department of Trade and Industry and in the Exchequer to signal the deterioration in our balance of trade in manufactured goods. That would be happening within any sensible and competent Government. Worst of all, this is the first time since the industrial revolution that Britain has had a deficit in its balance of trade in manufactured goods. It is the unique achievement of the Government to put us into deficit to the extent of £8 billion.
Despite the depressing statistics for British manufacturing industry, is there any notion of help in the Budget? The answer is no. To all intents and purposes, the Government have turned their backs on manufacturing industry. It was the Chancellor of the Exchequer who reminded us some years ago that he did not understand the special importance that the Opposition, and some Tories, attach to manufacturing industry. I shall explain the special importance that we and, I suppose, some Tories still give to it. The manufacturing sector is the nation's indispensible wealth creator. Secondly, without a vigorous and expanding manufacturing sector, we shall not be able to pay our way in the world. There are those who speak of the important contribution that is made by the service sector. I accept, of course, that it has an important contribution to make, but it will not have a future unless it has the market that the manufacturing sector provides for it. It is the interlinking of the two sectors that the Government fail. to understand whenever they address these problems.Will the right hon. and learned Gentleman advance the argument that only one third of services are tradable whereas virtually 100 per cent. of manufactured goods are?
I would make that point if it were precisely correct. The argument is slightly better than the hon. Gentleman suggests. Only one fifth of services are internationally tradable as opposed to all manufactured goods. I am grateful to the hon. Gentleman for his help, but perhaps he will help me a little more when he next intervenes by getting the facts right.
Tomorrow the Labour party will launch its industrial policy, entitled "New Industrial Strength for Britain". The document will show how a constructive policy can help to transform the prospects for British industry. We wish to set in motion three engines of growth: first, new policies for investment; secondly, a new approach to research and development; thirdly, an entirely new approach to education and training. We know already of the Government's appalling investment record. That is why we need the British investment bank that the Labour party proposes, which will bring forward new investment in manufacturing industry. I need hardly dwell on the case for research and development. An intervention in the speech of the Secretary of State for Trade and Industry made the point. It is so obvious that more research and development is needed. Britain will fail if it does not encourage new products and processes. In that context, it was chilling to note a few days ago a report from the Science and Engineering Research Council that it would have to stop financing all further projects this year because of an acute shortage of funds provided by the Government. The scandal of Britain's neglect of industrial training has been revealed in report after report. In "New Jobs for Britain" the Labour party has shown what could be done. What do the Government say? The Secretary of State has told us that he is in favour of industrial training, but he added that it would have to be financed by companies and he did not have a clue how that was to be done. Next time the right hon. Gentleman thinks that he has a stick with which to beat the Opposition, I advise him to ensure that the stick does not hit him over the head. He should formulate his own policy before he attacks the policies of others.Is the right hon. and learned Gentleman aware that a 1 per cent. levy on the turnover of our most successful companies would turn their profits into loss?
I am aware that in many unsuccessful companies there is no provision for proper education and training. The Chancellor of the Exchequer told us last year that the responsibility for research and development and for industrial training could be left to industry, which he claimed was profitable. He argued that it could afford to pay for it, and would do so. The fact is that industry has not responded. British employers for the most part—there are some honourable exceptions—cannot be relied upon to provide industrial training. Their neglect of industrial training is a measure of their failure to calculate their own long-term self-interest. This is a serious matter for the nation and for all those who are affected by the failure to provide training opportunities.
Is my right hon. and learned Friend aware of the effect of the changes in the way in which British Rail is to be organised in my constituency, which mean that, for the first time, this year 88 apprentices will complete their training and will not be given jobs? Is he aware also that no new apprentices will be taken on? That is one of the effects of the Government's policies.
I am grateful to my hon. Friend for drawing atttention to a serious situation that has arisen in her constituency, and in many others, as a result of the terrible decisions that have been taken by the management of British Rail.
The most sickening feature of all is the de-skilling of the nation. In most areas of Britain if an engineering company advertises for a small number of apprentices, the management is embarrassed by the hundreds of youngsters who apply. Only recently a manager in my constituency told me that he would never advertise again for apprentices. He explained that he did not know how to handle the queue of hundreds of youngsters who came looking for work. In future he will let it be known more locally that apprentices are required, and it is probable that they will be supplied by relatives of the existing work force. He told me that he had not understood the depth of the problem until he experienced it for himself. Unfortunately, that is the position throughout the country. Instead, we should have a policy that is designed to create the best educated and most trained work force in western Europe. That is well within Britain's capacity. That could be achieved if it were set as one of our objectives, but that will not happen by accident. It will need the commitment of employers, employees, trade unions, trainers and educators at all levels. Above, all, the Government must give a lead. Anyone who reads the Budget statement and listens to our debates will not guess that we are talking about issues that are vital for Britain. No one who studies the measures that are set out in the Budget statement will guess that we live in a nation that is more deeply divided now between north and south than ever before. Outside the south-east, the south-west and East Anglia—that is Britain to the north and west of the line between the Severn and the Wash—there has been sustained 94 per cent. of all the jobs lost since 1979. We know that the north-south divide is not the only relevant statistic. In pockets of the southeast, in some of the industrial towns, and especially inner city areas, there have been serious and worrying job losses. The most striking division, however, is between north and south. For many hon. Members it is not necessary to deploy statistics on this issue. They know only too well from their constituency experience what is happening. A journey around Britain, especially by train, will draw attention to empty factory sites and deserted premises where there was once the hum of productive activity, where people and communities earned a good living for themselves and contributed to Britain's industrial and training strength. Too many areas are either derelict sites or factories with broken windows.Labour local authority areas.
The hon. Gentleman makes the cheap remark, "Labour local authority areas". I do not think that they are uniquely Labour areas. If they are Labour areas, thank goodness that there are some Labour Members who understand what it means.
rose—
I shall not give way to the hon. Gentleman merely because he shouts from a sedentary position. That does not give him the right to intervene in the debate.
My hon. Friends—I wish that this were the position on the Government Benches—know of the tragic new phenomenon that is caused by the north-south division. Workers are driven south to look for work. They travel down from the north to find a job in relatively prosperous parts of the south. Many of them find a job but they cannot settle because there are no local authority houses, and house prices are tens of thousands of pounds above any ceiling to which they could aspire. We see these workers during the weekends on long-distance buses. They are the new industrial gipsies of Britain. These are men who travelled south to find work and they return home for the weekends. They are driven to make impossible choices. They are unable to settle with their families in the area in which they can find work. This means that they have to travel on long-distance buses during weekends. Some of these men decide that family life is more important than a job and retreat, disillusioned and despairing, to where they came from. That is understandable. Others struggle on, having added to their problems the difficulties of a divided family. This tragic division of our country cannot be right, but it has not happened by accident. It is not something that has visited Britain like the black death of the middle ages, about which nothing could be done. It is the direct result of Government neglect. Regional industrial assistance has been halved since 1979, and the Government are planning to halve it yet again in spite of these appalling problems. The Government have abandoned regional industrial policy, which they described in their 1984 review as "a social policy". That is the essential difference between the two sides of the House. We do not argue that regional policy is a social palliative to deal with the problems of run-down industries; we make an economic case for it. We say that we must use all the resources and skills of the people in the relatively disadvantaged areas so that they can create a new future for themselves, and so that we can lessen the division between north and south and the dependency which is so demeaning to both sides. That is why the Labour party is committed to new development agencies, which will spearhead an industrial recovery in the regions. It is why we will place special emphasis on high-class new technology as part of our regional industrial policy, and will review the classification of assisted areas to breathe new life into a commitment that is now dwindling by the day. We do not and cannot accept that the accentuation of unemployment and the deprivation of personal opportunity can be justified. It is bad for the north, but it is equally bad for the south. If economic expansion is to be confined by unfettered market forces to the overcrowded segment of our country, there will soon be overheating, skill shortages and pressures on the environment—all of which could be avoided by sensible planning to distribute industry not only more fairly, but more rationally. Bringing jobs to the people instead of driving the people around the country in pursuit of them seems a much more intelligent approach. To listen to the Government speak about the Budget, one would think that the problems did not exist. There is certainly no hint of a policy to deal with them. That is the crucial difference between us. The Labour party wants a better, more productive future for our country, and we know that that can be achieved only by an expanding and competitive industry that taps the skills of our people and gives them an opportunity to take on the world. We know that we must create the wealth, as well as advocating that it should be spent on improving the quality of our society and the opportunities for our people. That is why we wanted to see a Budget that mounted an assault on unemployment, made its principal purpose the revival of our industries and sought to counter the deepening divisions in our country and among its people. We oppose this Budget not merely because the Government have proposed no policies to deal with the problems, but because they do not even share our objectives.
4.32 pm
I listened to the right hon. and learned Member for Monklands, East (Mr. Smith) with, as always, great respect. He ended his speech by emphasising the division between north and south. I recently had the opportunity to campaign for my party on Tyneside and in Durham, and I must say that I was surprised to find that the position, at least superficially, was not so very different from that in Brighton and the south-east.
Of course, big changes take place, including industrial changes. When Bristol and Liverpool were deprived of the slave trade a great many problems were created for those who had been employed in it, but some industries cannot be brought back. The same kind of thing is happening in various parts of Britain where industries that were once of major importance cannot be revived today. The right hon. and learned Gentleman said that we must have a strategy for bringing work to the people. Of course we must, but we must also think about how to bring people to the work. The debate has reminded me of a fable which I am sure you, Mr. Deputy Speaker, were taught as a boy. It concerned some hunters who were hunting a bear and arguing about how to divide its skin. Until this year our Budget debates have largely raised the question, "What is the best way to hunt the bear, and what is the best way to divide the skin when we have caught it?". This is the first time that we have caught the bear, enabling the Government—I shall discuss in a moment whether they were right or wrong—to spend nearly £5 billion on hospitals, schools and so on, to cut taxation and to pursue a policy that is bringing down interest and mortgage rates. I am sure that the right hon. and learned Gentleman—who I think will end up on a different Bench from that on which he now sits—will be the first to recognise that that is a considerable achievement. I do not think that anyone would deny that. We have climbed a steep and stony path and, to paraphrase Sir Winston Churchill, we have emerged on to sunny uplands. where we have something to distribute. The interesting point about the debate is that it has not been about the policies; it has been about how we should divide the proceeds. Conservative Members are entitled to ask, "Would the bear have been shot if the Labour party had been in power?". I think that the answer is no. I am sorry to see that the right hon. and learned Gentleman has momentarily left the Chamber; he may have some natural function to fulfil. Would the policies advocated by the Labour party since 1983 have produced the results that ours have produced? Labour's policies have been modified from week to week and from month to month. I understand that it is announcing some tomorrow that are different from those that it has preached before, but all that those policies have advanced is the need for more public expenditure. There is a reasonable argument for that, but where does it lead? We have been through it before, and we know that it leads to higher inflation, to austerity and, in the end, to bringing back the International Monetary Fund. We know what it did to our industrial relations, which are now among the best in Europe. My right hon. Friend the Secretary of State mentioned that foreign companies were now investing here. They would not have done so had the National Coal Board not won the battle against Mr. Scargill, or had the newspapers been stopped by the Wapping dispute. On both issues, the Labour party was on the wrong side. A new world is developing. My right hon. Friend said that 300 German companies were investing here. I have heard of 200. Asked why, they said that our industrial relations were better and that our taxation was more sensible. When I was on Tyneside I was interested to note that the Nissan company was taking up work in Sunderland in a big way. All that is the result of policies that have worked. More growth, more employment, lower interest rates, lower inflation and a stable currency cannot be called bad results. I question whether those results would have been achieved if we had pursued the policies advocated by the right hon. and learned Gentleman. I come to the policies advocated by the alliance. They are rather like the old Austrian eagle. They have two heads. One says to the country that whatever the alliance thinks the audience wants to hear. The other, which is quite natural, coming as it does from the new chancellor of Oxford university—the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) —is the Socialism of the Gaitskell era. I understand and respect that view, but where does it lead? To call it "cloth cap Socialism" is out of date, but I would say that the SDP comprises well-dressed Socialists with a penchant for the better things in life, and why not? Because SDP Members have learnt from their experience that that policy cannot be made to work without producing inflation, they have advocated a form of incomes policy. It is a rather complicated formula, which penalises employers. It might lead to a flight of capital unless exchange controls are introduced. It is not a sensible policy or one that might create or encourage economic growth. I understand that the right hon. Member for Hillhead and his colleagues want to show that they are not in favour of inflation, but what will they do? Will they invite Barbara Castle to join their ranks? "In Place of Strife" is what they are trying to say. With hindsight, it could be said by Labour and alliance Front Benchers that the Government might have done better. I do not deny that. All politicians are fallible. Alfred Marshall, who was the doyen of all our economic policies when we were young, said that to achieve economic success one has to apply reason, perception and imagination. That is exactly what my right hon. Friend the Chancellor has managed to do. The former Leader of the Opposition, the right hon. Member for Blaenau Gwent (Mr. Foot), who is not here today, said:The Opposition parties, simply because of their inability to criticise the Budget, have fastened, rightly, on the unemployment issue. It would be ridiculous, particularly in an election year, for anyone to suggest that we do not care about unemployment. We want to be elected, so of course we care about unemployment. Even if we were hard-faced, hard-boiled men, we would still have to care to get the votes. It would be silly to pretend that we are not interested in that issue. One million new jobs have been created. The right hon. and learned Member for Monklands, East said that unemployment is worse now than it was between the wars, but the position is different now. Between the wars very few working men would allow their wives, when they had children, to work because there were not the amenities that are now available today—refrigerators, washing machines and the other goods that take the burden off the housewife. There is now a much larger working population. Of the 3 million unemployed, more than 1 million have been unemployed for more than a year, and this is the hard core of the problem. The other 2 million, apparently, to judge from the statistics, are re-employed within 12 months. That is what the statisticians would call a transfer of human resources, but what I would call people changing their jobs. If, as happens in many cases, they are given a "handshake" from the firm that they leave, it is not all that rough. I am glad to say, as a rather old-fashioned Tory, that we do not make it too difficult for those people to make the change. The real unemployment is created by the type of industrial action that we saw during the coal strike. Tens of thousands of coal miners lost between £8,000 and £9,000 by obeying Scargill, and the Labour party did nothing to stop that nonsense. It has been said that this is an electioneering Budget. I was amused to hear the Leader of the Opposition answer the speech by my right hon. Friend the Chancellor. It is always very awkward to speak immediately after my right hon. Friend. The right hon. Gentleman attacked my right hon. Friend's speech as the speech that he had not made. I can understand that the right hon. Gentleman's speech writers had not guessed what was in it. It was interesting to note the light that the right hon. Gentleman's speech threw on the Labour party. The Labour party thought that if it had been in our shoes an electioneering Budget would have been produced, but it has not. This throws some light on what the Labour party would have done if it had happened to be in our shoes. Ever since, we have heard about how Labour would have spent the money if it had it, about what Labour would have done with the £5 billion or £6 billion that was available and about how Labour would have spent it differently. All right, but Labour thought that we would produce a Budget to grab votes. We have not, but Labour should not think that this is not an election-winning Budget. The caution and prudence shown are guarantees that when my right hon. Friend the Prime Minister brings forward her manifesto, and if she offers something pretty good, it will be credible in a way that nothing else would have been."More governments, including left governments, have been thrown out of power through a failure to deal with inflation than through any other single cause."
4.47 pm
The right hon. Member for Brighton, Pavilion (Mr. Amery) said that this was an election-winning Budget because it was a prudent Budget. I shall question that later, but first, while the Chancellor is here, I think that I should do what my right hon. Friend the Leader of the Opposition does each time he responds to the Chancellor. He congratulates him on the manner of his speech. We all recognise that the right hon. Gentleman's speech was his own—I could detect no trace of any civil servant's injection into it—but that is the limit of my congratulations. [Interruption.] I have seen many Treasury briefs, and one gets to know their language. I did not detect it on this occasion.
The Chancellor talks repeatedly about this country's economic success. I only wish that that were true. Talk of success is somewhat credible when one sees what is happening in the west end of London, but in my constituency what is known as the west end of Ashton-under-Lyne shows no sign of success. There is unemployment of more than 20 per cent. In Droylsden houses are decaying and their fabric is being destroyed. Window frames are rotting to such an extent that the standard practice is to get large wads of newspaper and stuff them between the brickwork and the window frames. How can one talk of success when that is happening and when the roads are in hopeless disrepair? I would welcome the opportunity to show the Chancellor around some parts of my constituency. I think that even his confidence might be shaken. He certainly could make no claim to success. If the right hon. Gentleman has been so successful, why were retirement pensions, for example, not allowed to share in his success? If he has been so successful, why was child benefit not increased to help the least well-off couples? Why are houses rotting? The Public Accounts Committee has heard that £19 billion is required just to maintain a reasonable level of house repair. That has not been undertaken. It is false economy to allow house repairs to be neglected and windows to fall out, as is happening in my area. I can find further examples in which sensible assistance would have been of enormous financial and economic value. It would have been value for money. That sort of expenditure is required just to maintain the level of our investment. A most important question was put by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith). If the Chancellor of the Exchequer is so successful, why is our industry not being modernised in the way that is should be? Why has our balance of payments deteriorated from a surplus of £2·5 billion to a deficit of £7·5 billion? Why have education and training been so generally deplored? There are many problems. I cannot understand how one can talk of success when such crucially important matters are before us. Above all, if we are so successful, why is this still such a divided country?The hon. Gentleman spoke about education. Does he accept that we are spending more in real terms per pupil than at any time in history and that pupil-teacher ratios and expenditure are as good as they have been at any time in history?
I never concentrate on inputs. I am mo