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Commons Chamber

Volume 114: debated on Monday 6 April 1987

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House Of Commons

Monday 6 April 1987

The House met at half-past Two o'clock

Pray Ers

[MR. SPEAKER in the Chair]

Private Business

Exeter City Council Bill Lords

Order for Third Reading read.

Queen's Consent, on behalf of the Crown, signified.

Read the Third time, and passed.

Oral Answers To Questions

Transport

Road Schemes

1.

asked the Secretary of State for Transport what representations he has received about the changes he proposes to make in the system whereby the economic benefit of road schemes is assessed.

One. We invited a number of experts and others to let us have their comments. I hope that those who intend to comment will do so by 21 April.

Will my hon. Friend confirm that the new formula means that the added weight that road users attach to their leisure time means that more road schemes will be justified economically in the future? Does this not demonstrate that the additional boost that the Government have already given to the roads programme to ease congestion is justified?

My hon. Friend will recognise that the change in the value of non-work time does not automatically increase the budget for the Department of Transport. It is true that the proposed changes will strengthen the economic case for most planned road schemes and heighten the urgency of building them.

Will these proposals prevent decisions such as that which resulted in the building of the Humber bridge? What will be done about the debt on that bridge? It is running at £250 million with the capital debt increasing by £22 million per annum. What will happen? Will the Government write off the debt?

In view of the possible election some time in the next year, my hon. Friend rightly draws attention to the most expensive by-election promise in history — the 1966 Humber bridge proposal. I look forward to hearing the proposals of the Humber bridge board. As the Government acknowledged in their response to the Select Committee report, there is perhaps a different case with the Humber bridge than with other estuarial crossings.

Merchant Fleet

2.

asked the Secretary of State for Transport what recent consultations he has had concerning the future of the merchant fleet.

I and my Department have had numerous discussions with shipowners and seafarers, their representatives, and other interested parties about matters affecting the future of the United Kingdom shipping industry.

Has the Minister had a chance to study the statement made in the 1987 shipping review by the general council, which predicted that the mainland United Kingdom fleet may be as low as 100 ships by 1995? Against that background, does the Minister not think that two matters need to be looked at : first, the tax regime that applies to shipping and the unfair effect that it has compared with overseas competitors; and, secondly, the unfair competition that comes particularly from countries such as Korea, Taiwan and other Asian countries in terms of the subsidies that are given to their shipbuilding industries?

The hon. Gentleman will not need to be reminded that the tax question is one for my right hon. Friend the Chancellor of the Exchequer. Having said that, I take the hon. Gentleman's second point quite seriously. He will be aware that under the British presidency during the last six months of last year we were able to secure for the first time a package of measures in regard to European Community shipping, which includes our own. It is important to try to prevent unfair competitive practices of the kind to which the hon. Gentleman referred. It is an important point.

Will my right hon. Friend, who is already aware of the problems of the British dredging fleet, keep in mind the fact that we need a dredging fleet capability under United Kingdom control, not only to keep the shipping lanes open for civilian craft, but in particular for servicing naval dockyards?

My hon. Friend is right. We are aware of the needs for shipping for military and civil re-supply in times of crisis or war, and to that extent we are concerned about particular kinds of vessel, including that to which my hon. Friend referred.

Is the right hon. Gentleman aware that Britain is possibly the only maritime nation that does not have a maritime policy? Will he have a word with his colleagues in the Department of Trade and Industry and in the Ministry of Defence and produce a policy that will save not only the merchant fleet but the shipbuilding industry?

The hon. Gentleman is wrong. We have a maritime policy. He is aware from his experience of the shipbuilding industry and the problems of oversupply, which are a consequence of excessive shipbuilding throughout the world, that most maritime nations have suffered — many even more than we have — from the radical decline in the shipping industry. To the extent that I have departmental responsibilities for these matters, the hon. Gentleman will be aware of and, I trust, will support, the initiatives that I announced in December last year, about which we are consulting and which I hope to bring before the House as soon as possible and as soon as legislation permits.

I endorse what the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said about possible solutions to the difficulties of the merchant fleet. Will my right hon. Friend urgently consider the report by his Department's working party on the registration of merchant ships, particularly the idea of splitting off the fishing fleet from that register so that the merchant fleet and the shipping fleet can benefit? May we have legislation before the general election?

The other day my hon. Friend was given a relatively positive response by my right hon. Friend the Leader of the House on this issue, which he has pursued persistently. My hon. Friend will know from that response that my right hon. Friend the Minister of Agriculture, Fisheries and Food and I are conscious of these needs and wish to bring measures forward as soon as practicable. I know that concern about this important issue is felt on both sides of the House.

The Government have a policy on the maritime fleet, shipbuilding and the ancillary industries in general, but most people think that it is a policy of presiding over the decline of the British merchant fleet, with no efforts being made to begin the rejuvenation of our merchant fleet and coastal shipping and to make greater use of inland waterways. Those measures would be environmentally and economically advantageous.

It will be of no use to our maritime interests if we ignore basic realities. We are living in a world in which there has been a pattern of massive world oversupply of shipping and shipbuilding. In a world recession there has been an enormous drop in oil carriage, two thirds of the decline having been in tanker tonnage. I do not need to remind hon. Members of the relevance of that. There has also been a radical change in our trading patterns with the EEC. In the face of all that, I know that the hon. Gentleman will support the measures that I announced last December and which I hope to introduce in the House in the not too distant future.

Is the Secretary of State aware that the difficulties already mentioned have been compounded by the imposition of light dues, which will have a heavy bearing on the merchant and fishing fleets? The right hon. Gentleman is incorrect in saying that we are well up with our competitors. Britain is one of the worst European nations in terms of backing the merchant service.

I know that the right hon. Gentleman, as a fair man, would like me to correct the slightly unfortunate impression that he gave about light dues. Despite the unfortunate recent increases, they have decreased in real terms by 18 per cent. since the Conservative party took office in 1979. The right hon. Gentleman will be aware that nearly 90 per cent. of the vessels that are charged those dues are foreign. I am, of course, aware that dues are also relevant to the problems of our port industry.

The fact that 90 per cent. are foreign is a clear sign of the decline of the British fleet. Is the Secretary of State aware that he is showing all the hallmarks of his predecessors' complacency on this issue? If the right hon. Gentleman does not believe me, I suggest that he reads the debate on the Royal Navy and the contributions by his right hon. Friend the Member for Taunton (Sir E. du Cann) and my right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan), who spelt out in graphic detail the problems that Britain is facing with the decline of our merchant fleet. Indeed, it is not just a decline; it is a massive haemorrhage. Unless the Government do something soon to stop that decline, within the next 10 years there will not be a British fleet. Why does the right hon. Gentleman not look at what the Irish Government have done with their fleet? What is he doing about the efficient ship programme? The Secretary of State sits in Cabinet beside the Chancellor of the Exchequer, so why does he not ask him to do something about benefits for our ship owners?

As the hon. Gentleman would expect, I have read fully and thoroughly the debate in question and I am not under any illusions about the difficulty facing our merchant marine, nor about the difficulties facing merchant marines throughout the world. Within that context, I know that the hon. Gentleman, who has understandable emotions about this subject, would not wish me to react Canute-like but would wish me to relate to the real problems that we face. The measures that I announced in December seek to address those problems and my statutory responsibility with regard to them.

Local Authority Airports

4.

asked the Secretary of State for Transport what is the total of capital allocations to local authority airports since 1979.

Since 1979 we have authorised local authorities to spend in excess of £220 million airport development. This compares with £16 million spent on capital investment at local authority airports during the period of the last Labour Government.

I am grateful to my hon. Friend for that reply. Will he contrast the figure that he has quoted with the increase in the traffic at, for example, Bristol airport?

The figure for Bristol since 1979 is 79 per cent. I am sure that that is a very much higher rate of increase than the increase under the previous Administration.

Does the Minister agree that expenditure on capital developments at regional airports would greatly assist the development of the depressed areas of our country?

Will my hon. Friend say how much of this investment has taken place at Manchester airport?

Between 1981 and 1986 the figure for Manchester airport was £80 million, which is an enormous figure.

I thank my hon. Friend for his confirmation that the creation of a plc for Hurn airport in my constituency will in no way change the planning aspects thereof. Will he please confirm that it is the Government's view that once these plcs have been set up the companies should no longer have the automatic right to get their sticky fingers on taxpayers' and ratepayers' money, as many of them have done in the past? Will he also confirm that county councillors who are directors of these companies will be required not to vote in county councils when these companies come along asking for money?

My hon. Friend's second point is about county councillors. Under the terms of the new Act any councillor or county councillor who is a member of the board of the company will not be allowed to vote on council airport matters. My hon. Friend asked about subsidies. It is our clear intention and desire that these airports should be privatised, but as long as they remain in local authority hands it will be for the local authorities to decide what subsidies to provide for their airports. The accounts will now clearly show the ratepayers what they are contributing towards their airports.

Arising from the supplementary question by my hon. Friend the Member for Eccles (Mr. Carter-Jones) and the Minister's comprehensive reply, does the Minister agree that the economy of the west midlands might well be boosted in the context of capital allocations from central Government by the granting of gateway status to what is, after all, on his Department's own figures the fastest growing provincial airport in Britain?

I thought that the hon. Gentleman was going to ask about figures, and I was about to give him the figure of £63 million as the amount spent on Birmingham. That is also a case where we have spent massive sums—about four times as much as the Labour Government spent in total. The hon. Gentleman asked about gateway status. I imagine that he is talking about American carriers. If they wish to come forward to apply to enter Birmingham, of course we will listen to their requests very seriously.

Will my hon. Friend pay attention to those successful and profitable local authority airports, like Southend, that do not want any money at all? We have been trying to persuade the Government to persuade the German authorities to allow us to run one bus to connect Ostend with Frankfurt. We have been trying for two years and have not been able to persuade the Germans to agree to what we were told was agreed by the Common Market 15 years ago.

My hon. Friend is quite right when he says that Southend airport does not cost his ratepayers any money. It balances the books very largely because private companies come in and help with the management of that airport. My hon. Friend asks about the bus that the Germans will not allow. With the great encouragement of my hon. Friend, we have made many representations to the German Government and no doubt they will have heard what he has said in Parliament today.

London (Bus Services)

5.

asked the Secretary of State for Transport what recent discussions he has had with the chairman of London Regional Transport about the quality of bus services.

My right hon. Friend and I meet the chairman from time to time to discuss a range of issues, including quality of service. I last met Sir Keith Bright on 24 March in Camden for the launch of another innovative high frequency midibus service.

Is the Minister aware that our constituents are thoroughly fed up with the ever-worsening bus services in London? Does he agree that the threatened closure of Wandsworth, Hendon and Clapton bus garages and the threat of others to follow will make matters a great deal worse? Will he make representations to London Regional Transport and London Buses Ltd. to halt the closure of those garages?

There has been no overall worsening of London Buses' performance, although engineers' industrial action at the end of 1986 caused temporary problems. Waiting times and the percentage of schedules operating this year are considerably better than they were in the early 1980s when the GLC was responsible for them. As for garage closures, it is for the management of London Buses Ltd. to decide how many garages are needed to service its fleet.

If quality of service is to be measured by increased use and frequency of services, does my hon. Friend agree that since the demise of the GLC there has been an improvement in the quality of public transport throughout London? If quality is to be measured by comfort, does my hon. Friend agree that the best way to achieve that is to increase capital investment, which was increased last year and is to be further increased this year?

My hon. Friend is absolutely right about capital investment, which is running at £260 million for LRT this year and is expected to increase to £280 million next year. London Buses Ltd. expects the highest passenger mileage this year since 1978 and has introduced a number of frequent midibus services, of which the Camden Hoppa is the most recent, and these are well and truly welcomed by the travelling public.

Does the Minister appreciate that large buses are appropriate for many routes, especially the No. 15 route, from which London Transport may remove the Routemasters? Is he aware that when I wrote to the chairman pressing him to retain these very popular platform buses and asking why he was trying to sell them to China he replied that conditions in China were less rigorous than those in London. As the chairman also said that customer service remained the chief objective, does the Minister agree that his answer in relation to the Routemasters was ridiculous, stupid and illogical?

No, Sir, because platform buses have a greater accident problem with passengers getting on and off, and that must also be taken into account.

A23 (Crawley)

6.

asked the Secretary of State for Transport when he proposes to upgrade the A23 south of Crawley.

Timing of existing schemes for the improvement of the A23 from the M23 at Pease Pottage to Handcross and from Warninglid flyover to Brighton will depend on the progress of the statutory procedures. I am considering the needs of the section between Handcross and Warninglid in the current review of the trunk road programme.

The West Sussex county council is responsible for the A23 between Crawley and the M23 at Pease Pottage.

I thank my hon. Friend for that reply. Does he agree that it is devoutly to be hoped that the statutory procedures will be hurried up in view of the great difficulties, which he has seen for himself, on the A23 at Pease Pottage and to the south? Will he ensure that as soon as it is convenient and legally possible to do so the important repairs and improvements to that stretch of road will be speedily and efficiently carried out?

Yes, Sir. My hon. Friend has a reputation for pressing for the traffic needs of his constituents and others to be met. We hope to consult the public on improvement options for Pease Pottage to Handcross this summer and to publish compulsory purchase orders this year for the Warninglid flyover to Brighton section.

Kings Cross-Edinburgh Line

7.

asked the Secretary of State for Transport what information he has as to when British Rail expects to complete its assessment of the case for investment in the east coast route King's Cross-Edinburgh, and onward routes to Glasgow.

East coast mainline electrification was approved in 1984 and it is expected that the scheme will be completed on schedule in May 1991. BR is still at an early stage of assessing whether there is a case for electrifying any further route from Edinburgh to Glasgow.

Before any conclusions are reached on the matter, could there be some opportunity for public discussion as to whether to electrify the Fauldhouse-Shotts route, or the Linlithgow-Polmont-Falkirk route? Are there not grave implications, one way or the other, for local services, which could be disrupted by long distance London-Glasgow traffic via Edinburgh?

The hon. Gentleman is making a perfectly fair point — one which should certainly be considered. At the moment no proposals have been received from British Rail by Ministers, so we are not yet in a position to give the further examination that is needed. I shall keep the hon. Gentleman's point in mind and draw it to the attention of the board.

Has the Minister noted the interesting suggestion, made a few days ago, that British Rail might well be divided into two, with the running of the trains left to a private company and British Rail left to run the tracks, the signalling and the stations? Does he think that if that were done it would, in any way, lead to the faster achievement of the objective of the hon. Member for Linlithgow?

The concept of a track authority has been examined by different Governments and a number of experts. The case for moving in that way has not been made.

Is the Minister aware that British Rail plans to reroute all the Anglo-Scottish east coast sleeper services down the west coast from 1988, on the quaint assumption that it is better to arrive at Euston than King's Cross? Does he realise that that would deprive the Borders and Northumberland of sleeper services, and give passengers from Edinburgh a less smooth and comfortable ride than they now enjoy going down the east coast route?

That question is entirely for the management of British Rail. It is the management that decides— [Interruption.] I know that some Opposition Members would like to fiddle with the railways and interfere with the management so that it cannot get on with its job. The routeing of sleeper trains is entirely a matter for British Rail management. Having said that, I will draw the hon. Gentleman's concern to the attention of the chairman.

When all is said and done, does my hon. Friend agree that the east coast main line electrification has been discussed for half a century, has now been authorised and is currently under construction? Disregarding all the excuses from the Opposition about why that was not done before, are the Government not entitled to take some credit for having given the go-ahead for this and many other projects of railway improvement for which we have waited for a long time?

My hon. Friend is right. I do not think that the House is fully apprised of how massive a modernisation of British Rail is now fully under way. Between 1974 and 1979 the Labour Government authorised three electrification schemes. We have authorised 19. Approvals were at the rate of £38 million per annum under the previous Government, compared to £69 million under this one, all sums adjusted to current year prices.

Will the Minister take a look at his geography and recognise that the east coast line extends further than Edinburgh? Will he encourage British Rail, before it contemplates electrification of the line from Edinburgh to Glasgow, running from east to west, to plan now the electrification of the line from Edinburgh to Aberdeen?

Before the hon. Gentleman declares his interest in that particular matter, I wish to say that British Rail is alert to the opportunities for further electrification. It is considering a number of schemes, and it would be right and proper to see what it brings forward.

Railways (Electrification)

9.

asked the Secretary of State for Transport if he has received any recent representations concerning the electrification of railway lines serving south Wales.

The Secretary of State has received no recent representations on that matter.

Does the Minister appreciate that if the Government are serious about the Channel tunnel project, let alone the future well-being of the Welsh economy, electrification should go ahead without any further delay, and coupled with that should be the development, not the closure, of the Severn tunnel junction?

The form of locomotion that is used between Wales and the Channel tunnel does not necessarily have a direct bearing on the availability of services. I can assure the hon. Gentleman that the needs of Wales, which are considerable and well understood, will be borne in mind.

Is it not a disgrace that not a single mile of railway line in Wales is electrified? If the Government, as suggested by the hon. Member for Christchurch (Mr. Adley) a few moments ago, take credit for the electrification of the east coast line, surely they must take responsibility for the failure to electrify the railways in Wales?

There is no implicit failure on the part of British Rail if it has not discovered that it is possible to provide the most efficient, fast and punctual services in Wales by electrification. Modern diesel multiple units, such as the Sprinter train, can provide almost the same standard of service as electrification, and where the numbers travelling are lower and the frequencies fewer than in the intensively used parts of the system, it makes much better value for money for British Rail to provide diesel services.

Infrastructure (Expenditure)

10.

asked the Secretary of State for Transport if he will make a statement on the increase in capital spending on transport infrastructure in real terms since 1982.

Capital spending on transport infrastructure is expected to show an increase of 16 per cent in real terms in 1987–88 over 1982–83.

Is my right hon. Friend aware that that very important figure should be publicised, given the myths that are being perpetrated on the Opposition Benches about the extent of the Government's increase in infrastructure expenditure? Can my right hon. Friend tell us how that compares with the wasteful expenditure that one sometimes gets on things such as subsidies?

My right hon. Friend is, of course, right. I recall so many times in the past his arguments for a better quality and increased pattern of capital expenditure by the state. On my right hon. Friend's specific point, as opposed to the 16 per cent. increase in transport infrastructure capital expenditure in real terms, subsidies are down by 31 per cent. in real terms.

Does the Secretary of State agree that investment in freight facilities is an important part of the infrastructure, not least if we are to have an upturn in manufacturing industry, and also if the nations and regions of Britain are to benefit from the Channel tunnel? How can the right hon. Gentleman justify the closure in the past week of the Freightliner depots?

I congratulate the hon. Gentleman on getting in the question that has not been asked because of the absence of the hon. Member for Monklands, West (Mr. Clarke). He will recall that the changes that have been announced by Freightliner relate to the problem that it has had on constant losses on the domestic, not the international, side. We must rely on those who seek to manage that successful business to advise us on how they should invest in freight opportunities for the future. They have done that.

Will my right hon. Friend advise the House what proportion of the transport infrastructure applies to the railway industry, which has constantly been attacked by the trade unions, yet under this Government has gone forward in real terms?

Without notice I cannot give the precise proportion, but, just in case the Opposition would like me to give the precise figure for capital expenditure in regard to the question, although they will not appreciate the answer, the increase is 48 per cent. in real terms.

It is all right for the Secretary of State to stand at the Dispatch Box and brag about the increase for transport infrastructure, but is he aware that in the county of Nottingham we have an expanding industry in many places, particularly in my constituency, which is striving very hard in areas where the Government have closed down one or two pits? Several of those firms have a marvellous export record, but they cannot move the goods. Why not spend some money in my area for a change?

I know that the hon. Gentleman will not mind me reminding him of the way in which, under a Labour Government, far more pits were closed than under this Government, but I understand his legitimate interest in the movement of goods in his area. I hope that he will remember what I have said so far in my answer to the question. In real terms there has been a major increase in all forms of infrastructure capital expenditure throughout the Government's period of office. I know that the hon. Gentleman will welcome that expenditure, especially on British Rail and on local and national roads. I can give the hon. Gentleman detailed figures for his area in a letter that I shall be happy to send him after this Question Time.

When my right hon. Friend is looking at his capital programme for transport infrastructure, will he look again at the A417 and A4I9 route between Swindon and the M5 at Cheltenham? Does he accept that we now have a patchwork quilt of single and dual carriageway sections, which are dangerous to road safety and could be improved dramatically by the provision of dual carriageway throughout the length of the route? That would also help the economic needs of firms in my constituency.

I know that my hon. Friend the Minister with responsibility for roads will consider my hon. Friend's question carefully. He will also direct my hon. Friend's attention to the fact that since 1979 capital expenditure on roads has increased by 30 per cent. in real terms.

Will the Secretary of State tell the House how the allocation of that expenditure in 1986 differs from the allocation to various forms of transport in 1982?

I should not like to give all the details without notice, but I shall be happy to write to the hon. Gentleman drawing his attention to the variations, going back to 1979, if he wishes. However, that would not deny the basic, essential point that is made from the Dispatch Box time and again, that we have massively increased expenditure on transport capital infrastructure.

Does my right hon. Friend recall that when he visited Eastbourne last year he came by train? If he made the journey by car, would he agree that extra capital expenditure is required to improve the A22 trunk road?

Of course I went by train, because I knew that it was the proper way to travel on that route. However, I am also aware—because my hon. Friend has told me personally and at the last Question Time, the Minister with responsibility for roads — the road movement down to his constituency. I am sure that he will have heard the arguments again this time.

National Bus Company

12.

asked the Secretary of State for Transport what progress he has made in the privatisation of the National Bus Company.

Eighteen of the National Bus Company's local operating subsidiaries have been sold to their managements. Twelve other subsidiaries have also been sold. I congratulate NBC on this excellent progress. I am particularly pleased that so many companies have been sold to their managements, and that in most of these cases employees are being given the opportunity to acquire shares in their businesses.

Is my right hon. Friend aware that a bus company in my constituency, Eastern National, has been successfully sold to its management, and that following privatisation the number and standard of services provided by the company have improved dramatically, to the benefit of my constituents and consumer demand in the area?

I am delighted to hear that. It reflects well on the Government's programme, which seeks to improve benefits to the consumer.

Is the Secretary of State aware that there is continuing disquiet about the price obtained in the sale of National Bus Company subsidiaries? Is he further aware that his reticence in giving the figures is fuelling speculation that the companies are being sold off at grossly low prices and with great possible capital and investment opportunities? Will he now clear the air by telling us as soon as possible the price at which each subsidiary has been sold?

The hon. Gentleman is normally very fair, and I hope that he will recognise that such comments are not normally made in public. On 26 November, in the bus deregulation debate, I said :

"we need to protect confidentiality to ensure that the proper benefits go to the taxpayer".
I explained the problem of trying to illustrate the figures, which might reduce the possibility of the public purse receiving the proper amount of funds from further similar sales, and I said :
"the information must be regularly made available to the National Audit Office, and so to the PAC, which has arrangements for conserving public confidentiality". — [Official Report, 26 November 1986; Vol. 106, c. 282.]
That is a means of ensuring that the House is aware through the proper route, without the state being denied the benefits of full and proper proceeds from future sales.

Greater Manchester (Bus Services)

13.

asked the Secretary of State for Transport what representations he has received from political parties on the effects of the introduction of competition into bus services in the Greater Manchester area.

None from political parties, but during the period following bus deregulation I received a number of representations about problems in Greater Manchester where the PTE failed to deliver the normal, smooth transition achieved in most other areas.

If, as now seems to be extraordinarily unlikely, the Conservative party were not returned to office at the next general election, what would happen to free enterprise bus operators and to Stockport's Bee Line Buzz Company? My hon. Friend has already seen this busy little company and knows that it has stung the Greater Manchester Bus Company, which has fumbled and bungled for years, into action. Stockport is now all abuzz. What will happen to us if that untoward event were to happen?

I have visited the Bee Line Buzz Company in south Manchester, where over 220 minibuses are operating at present. The whole place is a hive of activity. My hon. Friend is right to be concerned about the future of minibus activities in the 150 towns and villages up and down the country where minibuses operate, including Manchester, because the Labour party's policy for transport statement says:

"The first legislation to be introduced by a Labour Transport Secretary will include the repeal of the 1985 Transport Act".
In that case, my hon. Friend has very good reason to be concerned, as have many other people who have benefited from the new services that have been introduced following the passing of the Act.

Attorney-General

Wright Case (Appeal)

42.

asked the Attorney-General what discussions he intends to have about the progress of Her Majesty's Government's appeal in the Wright case.

I have had discussions with my colleagues within Government and with counsel in the case and these discussions will continue during the preparation of the appeal. As Members of the House will know, the Government lodged their notice of appeal on 31 March.

Speculation about some of the allegations of this obsessive, senile twerp range from "predictable" in the case of Walsall to "reasonable" in the case of Leeds, South, but does my right hon. and learned Friend agree that the main issue is the bounden duty of somebody who has taken an oath of security to the Crown to honour those pledges of confidentiality? As the Opposition parties fall over themselves to criticise the Government for the course that they are following, will my right hon. and learned Friend take some comfort from the fact that most of our fellow citizens applaud the Government's firm, albeit uncomfortable, line?

I think that it would be right if I did not comment on my hon. Friend's opening words. After that, he put his finger on exactly the point that the Government are seeking to make.

Will the Attorney-General comment on the allegation that has also been raised in connection with this affair: that there were serious breaches of the law by agents of MI5? Will the Attorney-General now confirm that if the Government thought that it was a serious enough matter they could have an independent investigation into it, without having to wait until the end of the case?

I shall make certain that the right hon. Gentleman's remarks are made known to my right hon. Friend the Home Secretary, because that is not a matter for me.

Will my right hon. and learned Friend seek an undertaking from the office of the Leader of the Opposition that during the appeal his office, and those Opposition Members who behaved like that during the hearing at first instance, will not contact the office of Mr. Malcolm Turnbull? What steps does the Crown propose to take to ensure that Mr. Paul Greengrass is not present in court when hearings take place in camera, because he informed other journalists waiting outside the court about the proceedings inside the court, and it is strongly suspected that this information filtered back to this House and that it was used by Opposition Members? What action will be taken to prevent a repetition of what happened last time?

It is not for me to advise the Leader of the Opposition. It is up to his good sense as to how he behaves during the course of the appeal.

As for Mr. Greengrass, that will be a matter for the Court of Appeal to decide, just as Mr. Justice Powell, against the Crown's wishes, allowed Mr. Greengrass to attend the hearings.

Does the Attorney-General recognise that all the legal ramifications and the rest will not stop Labour Members demanding that there should be a full judicial inquiry into the serious allegations that criminal and subversive elements in MI5 tried to destabilise an elected Government in the 1970s? Are not the Attorney-General and his right hon. and learned Friend the Solicitor-General not concerned at the way in which the Prime Minister has, over a number of years, seriously besmirched their office and used various ways to undermine the position of the Attorney-General?

With regard to the latter part of the hon. Gentleman's question, I am satisfied, as is my right hon. and learned Friend the Solicitor-General, that there has never been any case in which any improper influence was brought to bear by the Prime Minister upon our office. I want to make that absolutely clear.

Bail Act 1976

43.

asked the Attorney-General if the Lord Chancellor has received any representations from the judiciary about the working of the Bail Act 1976: and if he will make a statement.

The Lord Chancellor does not reveal confidential communications between judges and himself. The Lord Chancellor has, however, authorised me to say that he has not received any representations from the judiciary on this subject. The working of the Bail Act is a matter for the Home Secretary.

Bearing in mind last Wednesday's vote on capital punishment, does my right hon. and learned Friend agree that it is more important than ever that the circumstances under which Winston Silcott was released from gaol and subsequently murdered PC Blakelock must never be repeated? What assurance can he give the House that the matter is being looked into and that suitable action will be taken?

Everything practicable must be done to ensure that those circumstances — I am referring, of course, to the murder of the police constable by somebody who was on bail—are not repeated. My right hon. Friend the Home Secretary is looking at the events that led to the grant of bail to Winston Silcott. The Government will consider whether there are any lessons to be learnt and will take into account the points made in the House since the case.

The Attorney-General is fond of telling the House about the importance of collective responsibility. Which side are the Law Officers on? Are they on the side of the Lord Chancellor, or of the Home Secretary? In an outburst the other day the Lord Chancellor said that the Bail Act was not working and that he had prophesied that it would not do so. However, the Home Secretary had been saying how important it was to ensure that not too many people were kept in prison, that the courts are more reluctant now to let people out on bail and that one fifth of the people in prison have not yet been convicted. Will the Solicitor-General bring the importance of collective responsibility to the attention of the Lord Chancellor?

The opening part of the right hon. and learned Gentleman's question owed more to careful preparation than good judgment. The Lord Chancellor has said—I have taken the trouble to see a transcript of the broadcast—that there might be a case for reviewing the operation of the Bail Act and, equally, it may be necessary to allow the Act to remain in force for rather longer before a clear picture will emerge. I do not think that my right hon. Friend the Home Secretary was saying anything different. As I have just told the House, he is looking at the events leading up to the granting of bail to Winston Silcott, he will consider whether there are any lessons to be learnt and he will take into account all the points that have been made.

Divorce (Child Custody)

44.

asked the Attorney-General what information he has about the average time taken in settling disputes in divorce cases over the custody of children.

For an application estimated to last half a day, the average time between the issue of the application and the hearing is seven weeks. For an application estimated to last one day, the average is eight weeks. Expedition is possible in urgent cases on application to the court.

Does my right hon. and learned Friend agree that with 160,000 children under 17 being involved in divorce cases annually, all too often it is they who are the innocent, inarticulate and often unrepresented parties who pay the price? Will he look at the Law Commission's recent working document, which suggests that disputes often take over six months to settle? That may be long for an adult, but it can be almost a lifetime for a child. Will he consider imposing a time limit in those cases?

My hon. Friend, who sits as a magistrate and knows a great deal about cases such as this, is absolutely right when she says that it is children who suffer as a result of delays. The Government will not reach a decision in advance of a final report from the Law Commission, and the commission itself is awaiting responses from the public and various organisations which have been consulted on its working paper.

Is the Solicitor-General aware that one of the reasons for the delay in custody cases is the extreme difficulty of arranging conciliation appointments, because of the shortage of court welfare officers to carry out those appointments? Will he take steps to ensure that more court welfare officers are appointed quickly so that that part of the process can at least be dealt with?

The hon. and learned Gentleman is right to say that one of the factors causing delay between inception and determination of these cases is the need to get welfare reports. I shall draw the attention of my noble Friend the Lord Chancellor to this point.

Will my right hon. and learned Friend ensure that the Law Commission expedites its recommendation, as this matter is causing considerable concern? What is the time scale likely to be before its deliberations come before him?

I am sure that it is necessary that there is a considered final report from the Law Commission, but I do not think that my hon. and learned Friend would wish that to precede careful consideration of the responses to the consultation.

Is the Solicitor-General aware—I am sure he is—that the answers that he is giving in response to this question are the reason why there is so much support for the family courts campaign? What is the Government's attitude to that campaign? Will we have a debate on family courts in Government time?

A family court would not of itself cure the problem of delay, but I agree with the implication of the hon. Gentleman's question—that the setting up of family courts would provide the opportunity for reviewing procedures. The Government are considering the position in the light of the responses to the consultation paper on family and domestic jurisdiction, which was published last year.

Overseas Development

Aid (Environmental Factors)

52.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on what account is taken of environmental factors in planning the overseas aid programme.

53.

asked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the methods by which he takes into account, in project appraisal procedures, environmental considerations such as impact on soil erosion, deforestation and pollution in developing countries in receipt of United Kingdom aid.

Environmental concerns are at the forefront of our thinking. Our approach is set out in the booklet "The Environment and the British Air Programme", published to mark the European Year of the Environment. Copies are in the Library and have been widely circulated among Members.

I thank my hon. Friend for that answer. I admire the publication that he mentioned. I am pleased that the Government are taking the environment issue so seriously. However, as 40 per cent. of our aid goes through multilateral agencies, will my hon. Friend ensure that those agencies consider environmental issues with the same seriousness?

I am delighted to be able to assure my hon. Friend that this issue will be discussed at the spring meeting of the development committee of the World Bank this week. I also intend to raise it at the European Community Development Council meeting in May, if not otherwise engaged.

Absolutely. I draw the attention of the hon. Gentleman to what we say in the booklet that I mentioned on that subject, and in particular to our programme on the Korup forest.

Given the Minister's declared commitment to environmental programmes and policies and the fact that this is the European Year of the Environment, why was his Department's environmental unit abolished some years ago and merged into the natural resources section? Will he undertake to reconsider that this year, so that environmental matters can have the precedence in his Department that his statements imply they should have?

I do not accept what the hon. Gentleman has said. We have 23 professional natural resources advisers, backed up by 320 scientists and experts in our scientific units. We have two social development advisers, and we have recently appointed an environment adviser. We have quite enough professional advice, and more than many others.

Does my hon. Friend agree that more scientific research is needed into forestry, so that reafforestation can take place more quickly and effectively?

There is a strong argument for that. I am pleased that our aid to forestry has increased by 80 per cent. over the past four or five years, and also that our research programme related to environmental issues has increased.

When the Minister attends the EEC meeting in May, will he ensure that no EEC funds or, if it is in his power to do so, no World Bank funds, are used to finance development projects in the Amazon rain forest that result in the destruction of the environment of the indigenous Indian community and cause serious soil pollution through deforestation?

As I said earlier, if I am able to attend the Development Council meeting in May I shall raise the sort of matter to which the hon. Gentleman refers, because I wish environmental issues to be discussed at such meetings.

Rotary International (Polio Campaign)

54.

asked the Secretary of State for Foreign and Commonwealth Affairs whether he has any plans to assist with Rotary International's Polio Plus Campaign overseas.

I thank my hon. Friend for that reply and for the Government's support for the splendid voluntary initiatives of Rotarians in this country and abroad. What steps are the Government taking elsewhere to eliminate childhood diseases in Africa and in primary health care generally?

I agree with my hon. Friend that this is an excellent campaign. The Rotarians are to be congratulated on their initiative, and I am sure that all hon. Members will want to give the campaign maximum support in their constituencies.

In addition to the support that we are giving to the campaign, I announced recently an increased contribution of £5 million to UNICEF, much of which will be used to help immunisation programmes in China, Zambia and Zimbabwe.

Third World Debt

55.

asked the Secretary of State for Foreign and Commonwealth Affairs whether he intends to take any new initiatives with regard to the debt problems of Third-world countries.

We are already considering new initiatives and the next opportunity to take these further will be later this week at the spring meetings of the IMF and the World Bank.

Will the Minister make the best possible use of that opportunity to stress the urgency of the situation, which is illustrated by what is happening in Brazil, and the need for international action? Will he also note the all-party overseas development group's report on international debt, which will be published shortly after Easter?

I regret Brazil's recent decision to suspend the payment of interest on commercial debt. It is a matter for the Brazilians to discuss directly with the banks, and I hope that negotiations will begin soon.

On the more general issue of debt, particularly the debt owed by Africa's poorest countries, Britain has played a leading role in discussions about exceptional measures to deal with that problem. We expect further discussions at meetings of the IMF and the International Bank for Reconstruction and Development this week, which the Chancellor of the Exchequer will attend. If there are further developments, no doubt he will inform the House. The details of any new measures will take some time to resolve.

If additional money is made available to the African countries to which my hon. Friend referred, will it be in addition to the current budget, or will it come out of that budget and, therefore, deprive development projects and other schemes of necessary money?

The details have not yet been resolved, but I assure my hon. Friend that new measures would not be at the expense of the existing aid programme.

The Minister will be aware that it is indeed debt, rather than drought, deprivation or disease, that is affecting the countries of sub-Saharan Africa. May we be sure that when the Chancellor of the Exchequer addresses these issues on Friday we shall not have a merely cosmetic response, but that the right hon. Gentleman will address the fact that we need to reschedule the debt of developing countries, to cap interest rate ceilings, especially for sub-Saharan African countries, and to fix their debt repayments as a given percentage of their export earnings? For sub-Saharan Africa we need, in particular, a write-down, if not a write-off, of a major share of that debt. May we have an assurance that the Chancellor of the Exchequer will address those issues rather than talk, talk and talk again about the problem?

As ever, the Chancellor's response will be profound rather than superficial.

Will my hon. Friend reread the Pentateuch with regard to years of jubilee and debt remission and see whether it has any application to our present problems with the Third world?

That point has already been made to me by the Catholic Fund for Overseas Development, though I am not sure that it would read the Pentateuch in exactly the same way as would my hon. Friend.

Multilateral Organisations

56.

asked the Secretary of State for Foreign and Commonwealth Affairs what proportion of United Kingdom aid goes through multilateral organisations other than the European Economic Community.

In 1985–86, 23 per cent.—that is £279 million— of the gross aid programme went to multilateral organisations other than the European Community.

Is the Minister aware that many Opposition Members would like to see that proportion increased, since it is very much in the interests of developing countries that, as far as possible, aid should be without the sort of strings that generally accompany it when it is provided on a national or multilateral basis through the EEC? Can he assure us that he is actively seeking to change that percentage in the right way?

I find that for about 50 per cent. of the time I am criticised for our multilateral contributions going up too much, and the other 50 per cent. of the time I am criticised on the other flank with regard to our bilateral contributions. I believe that we have the balance about right. I was particularly pleased recently that we were able to make a contribution of £524 million to the replenishment of the International Development Association. The hon. Gentleman will also know about our contributions to the International Fund for Agricultural Development special programme for Africa and to the UNICEF global immunisation programme, which I mentioned earlier.

Africa

57. Mr.

asked the Secretary of State for Foreign and Commonwealth Affairs what action has been taken by the British Government to follow up the programme of action agreed at the United Nations special session on Africa last May.

Since the special session we have made new pledges of over £180 million in bilateral aid to sub-Saharan Africa, excluding emergency assistance. We have also supported the larger than expected replenishment of the International Development Association, up to half of which will go to Africa. I have also agreed to contribute to the IFAD special programme for sub-Saharan African countries.

Is my hon. Friend satisfied that African Governments are coming to their senses over the management of their economies? Has he discussed that with any African Governments recently?

Yes, I am very pleased about the extent to which many aid recipients in Africa are embarking on structural adjustments and policy reform programmes. I was in Tanzania recently, where I pledged £25 million in support of policy reform, making a total of £50 million pledged in the past year.

Privatisation (Multiple Share Applications)

3.31 pm

On a point of order, Mr. Speaker. In view of the fresh evidence of hon. Members making multiple share applications, will the Government now make a statement, and will the Attorney-General also make a statement on the attitude of the DPP? May we have confirmation that everyone is equal under the law?

Bill Presented

Infant Life (Preservation) And Paternal Rights

Mr. Peter Bruinvels, supported by Sir John Biggs-Davison, presented a Bill to reduce the period of pregnancy which for the purposes of the Infant Life (Preservation) Act 1929 is evidence that a woman is pregnant of a child capable of being born alive and to provide for the father of the unborn child to be consulted where a termination is intended: And the same was read the First time; and ordered to be read a Second time on Friday 1 May and to be printed. [Bill 133.]

Statutory Instruments &C

Ordered,

That the draft British Nuclear Fuels plc (Financial Limit) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Portillo.]

Opposition Day

[IITH ALLOTTED DAY]

Social And Economic Policies

I must announce to the House that I have selected the amendment in the name of the Prime Minister.

3.32 pm

I beg to move:

That this House notes with concern the increasing divisions within British society; condemns the Government for the constant pursuit of policies which have widened these divisions; and loold forward to the time when a Government is elected which is committed to the creation of one nation.
May I begin by expressing my personal regret that the right hon. Member for Plymouth, Devonport (Dr. Owen), the leader of the Social Democratic party, is not with us today.

May I express my gratitude for the fact that the right hon. Gentleman has returned from what I understand was his mission to open Joanna Southcott's box, in order to predict more accurately the dates of flood, famine, pestilence and the end of the world. I understand that the right hon. Gentleman has no prediction to make about the second coming, as he believes that that has happened already. I shall now turn from the right hon. Member for Devonport to serious matters.

This debate is about a divided nation and a Government with double standards, a Government who insist that the highest paid must be paid more to increase incentives, but insist equally that the lowest paid must be paid less to preserve jobs. This debate is about a Government who can afford to abandon the investment income surcharge, but who can afford an increase in pensions of only 80p. It is about a Government who claim to support the family and family values but who increase homelessness, force families into bed-and-breakfast accommodation and prevent husbands from coming to Britain to join their British wives because those husbands are black or Asian.

The double standards of the Government are exemplified and demonstrated by the claims that they are making about the success of their economic policies. The Prime Minister says, and will repeat with increasing stridency in the weeks ahead, that Conservatism has produced prosperity.

I expected that someone would say that. Perhaps the hon. Gentleman will tell me, if that is true and we have the unique prosperity which the hon. Gentleman claims and about which he cheers, why we cannot afford to pay pensioner couples an additional £8 and a single pensioner £5 more, thus taking a major step towards returning pensions to the levels that they would have been had the Government not broken the link between increases in pensions and increases in earnings?

If we are so prosperous, why can we not increase child benefit by £3 a week, thus increasing its purchasing power and helping the hardest-hit families? If the economy is so buoyant, or our prosperity so certain and secure, why can we not provide a decent system of unemployment benefit for the 1·3 million men and women who have been out of work and on the dole for a year or more? There is now a greater number of long-term unemployed than the sum total of unemployed people in 1979. Why, if we are so prosperous a nation, do the Government make mean little cuts in maternity grant, death grant, housing benefit and mortgage relief for the unemployed?

The Government claim that they have created an economic miracle and define "economic miracle" as an average rate of growth of less than 1·4 per cent. a year, yet they refuse point blank to provide help for the hard-pressed families, pensioners and the unemployed. Either the claims of economic success are bogus, or the Government simply do not care about pensioners, the unemployed and the sick and poor.

Anyone who denies that the Tory party has cynically survived on double standards should answer two questions. What does the House imagine that the hon. Member for Ynys Môn (Mr. Best) would say to an unemployed man in his constituency who made six separate applications for supplementary benefit? Would he say that such a man had done nothing wrong, or would he excuse that man because he claimed that he did not under the rules? What would the hon. Member for Ludlow (Mr. Cockeram) say about a woman in his constituency——

Order. The tradition is that we do not criticise hon. Members, except by motion.

With the greatest respect, Mr. Speaker, your final comments were inaudible because of objections from my hon. Friends——

May I make two points? First, I notified each of the hon. Members that I intended to refer to them. Secondly, the notion that we do not criticise one another on matters such as this will come as a surprise to some of my hon. Friends. If you, Mr. Speaker, instruct me to abandon the points with regard to the behaviour of the hon. Member for Ynys Môn or the hon. Member for Ludlow, I shall do so, although I suspect that the country will not abide by your ruling and that we shall hear more about it in other places on other occasions.

I turn from the double standards—[Interruption.]

I say to my hon. Friends that I shall abide by your ruling. The point has been made, and it will be made, made and made again outside the House.

I turn from the double standards of the Tory party to the facts about the divided nation which, with your permission, Mr. Speaker, I shall be able to pursue.

Britain is a deeply divided society, and the gulf between the classes, regions and races has widened continually, consistently and comprehensively since 1979. It has not happened by chance or coincidence. The widening gulf between the rich and the rest, north and south, inner cities and outer suburbs, working and unemployed and black and white is the direct result — indeed, the intentional outcome—of government policy. That is the natural and inevitable outcome of the new Conservatism. The philosophers of the new Right, for whom the Prime Minister has open and apparently unrestrained admiration, base their hope of progress on increasing inequality. It is clear that——

I am asked what is wrong with that. Will you allow me to criticise the hon. Gentleman, Mr. Speaker? I shall probably refer to him precisely.

The right hon. Gentleman and I were brought up in Sheffield during the 1950s and 1960s. He is saying that what has happened in Sheffield, among other places in the north, is the result of the Government's policies. Does he accept that what happened in Sheffield and other places throughout the north, north-west and north-east is the product of the decline that set in after the war, which had nothing to do with this Government, who have done a geat deal to sort out the problems and to restore economic prosperity to this country?

I would not accept that for a second. The hon. Gentleman boasts, as he is entitled to do, because it is a matter of great credit that he was born and brought up in Sheffield, but I hope that he will join me in congratulating Sheffield city council, which is sometimes derided by Ministers as a loony left council, on the commendation that it has received from the Department of Education and Science for running one of the best education systems in Britain.

I want to deal with the philosophy of the new Right and its tactics, which have been based and built on that philosophy. It is clear that Conservative tacticians believe that by neglecting the men and women whose votes they have already lost — the unemployed, the ethnic minorities and the one-parent families — they can concentrate resources on the purchase of votes in the prosperous south and in the prosperous suburbs. I believe that the modern Conservative party is profoundly wrong in that judgment and that its error of underestimating the British people was demonstrated in its Budget strategy. The Government had £6 million to spend, and they chose not to invest it on our future. All the evidence remains that it was not the Budget that the people needed and wanted.

The Labour party and I believe that the lasting and real success of this country, whether it is to be measured by a reduction in the crime rate or by increases in national income, is dependent upon the creation of one nation in which every citizen feels part of the whole community, with a vested interest in society's success. A more equal society will be a more prosperous society and a more peaceful society. The vast majority of the people want to see the freer and fairer society against which the Tory Government have turned their face.

The right hon. Gentleman has repeatedly, as in the terms of the motion, referred to one nation. Will he, in the forthcoming election, give Scotland and Wales the message that they are fighting for one nation?

The hon. Gentleman will discover as my speech continues that I prudently make a point of not referring to the regions, but refer to the nations and the regions. This is explicitly intended to meet the hon. Gentleman's point. If he wants me to elaborate, I shall do so. I agree with the point about the nationhood of Wales and Scotland. I deeply resent the idea that Wales and Scotland have been written off economically and socially by the Government. That is the view of many people who do not live in those two nations.

The Conservative Central Office is wrong to believe that the haves have no concern for the welfare and prospects of the have-nots. The well-off, the well-housed and the well-educated realise that they have the strongest vested interest in living in a society which is not ravaged by poverty and unemployment and which does not deny a decent house to millions of its families, does not discriminate against the black and Asian British, does not deny full-time education to working-class teenagers and does not provide a declining level of medical care for those families who cannot afford private treatment. The British people have more compassion and more commonsense than the chairman of the Tory party realises.

With the general election approaching, the more intelligent Conservatives will attempt to obscure the hard face of the real Tory party. Last Saturday the cosmetic treatment was applied by the Home Secretary and the Secretary of State for Energy, both of whom spoke in Oxford about disadvantage and deprivation.

My constituency is part of the inner city of Birmingham. let me tell those two right hon. Members what has happened since they joined the Government in terms of disadvatage and deprivation in the inner city that I know best. In my inner city ward, male unemployment is now almost 50 per cent. Improvement grants planned and promised by a Tory council cannot be financed. Career teachers in the secondary schools are being retrained to help young people face four or five continuous years on the dole. I hope that during the forthcoming election campaign the Prime Minister will come to Sparkbrook and express the Government's concern about the conditions in the inner cities. I can promise her a peaceful, but spontaneous, reception.

T will, probably for the last time, but certainly to the hon. Gentleman.

The right hon. Gentleman knows that my constituency is also in the west midlands, not far from his. If things are as had as he says, why is the Conservative party leading so heavily in national polls, and even leading by several points in the west midlands?

The hon. Gentleman, who has spent so much of his time parading traditional values, ought to spend a moment thinking, not about opinion polls, but about the real lives of the real people that we are debating. Those people include the 50 per cent. of male unemployed in my constituency, in whose interest I deeply resent what is happening as a result of the Government's policies.

Does the right hon. Gentleman not accept that while his party and the alliance parties understand the inner cities, which are, mainly, no-go areas for the Government, the difference is that the alliance parties also understand and represent the rural poverty which exists in those areas, from which the Labour party is now entirely excluded?

I apologise to the hon. Member for Halesowen and Stourbridge (Mr. Stokes) because his triviality has been matched by the triviality of the hon. Member for Southwark and Bermondsey (Mr. Hughes). I intend to do what is expected of the Opposition and that is to talk about real people with real problems, and about the way in which those problems, have been intensified during the last nine years.

The problem that we see in the inner cities is the most dramatic and desperate manifestation of our divided! society. A majority of the British people have a moral objection to these divisions in all their manifestations. I know that all those people pay a price for living in a divided nation, as the the most typical and terrifying example of the penalties demonstrates. In the last eight years there has been a crime explosion in Britain. Total crime has increased by 50 per cent., burglary by 60 per cent., violence against the person by 44 per cent., theft by 39 per cent., and criminal damage—the vandalism that defaces so much of our country — by 91 per cent. In every community there is a growing fear that the crime wave will engulf us all.

While preaching a crusade against crime and making token attacks on its symptoms, the Government have fostered the conditions in which crime flourishes. The crime rate has escalated because of the great divide—the consumer boom and credit cards on one side, and unemployment on the other. That is not my judgment; it is the opinion expressed by Sir Kenneth Newman, the Commissioner of Police of the Metropolis. Between 1979 and 1986, the last year for which figures are available, gross earnings, that is to say the earnings before tax of the lowest paid 10 per cent. of the workers, increased by 80 per cent. Over the same period, the earnings of the most highly paid 10 per cent. rose by 180 per cent.

The increase received by the lowest paid was exactly the same as the increase in the retail prices index, so, while the rich grew richer, the absolute best that can be said about the real earnings of the poor is that they stood still. Inflation, however, hits low-income families far harder than it hits those higher up the income scale. Indeed, a special inflation index has been constructed for the low-paid. This index rose by 86 per cent. in a period of seven years in which the pre-tax earnings of the low-paid rose by only 80 per cent. At a time when the City began to pay what the Chancellor himself has described as "telephone number salaries", when the Cabinet Secretary's salary was increased by 50 per cent. and when the chairman of British Telecom doubled his own salary to celebrate privatisation, the real value of the gross earnings of the lower paid actually fell.

That was just the beginning. The gap that separates the income groups—the gulf between the rich and the rest--was actually widened by the tax structure. The Prime Minister always talks about income tax, conveniently ignoring national insurance contributions, which are also a direct tax. On an honest calculation, for a family with two children and one wage of half the national average the tax contribution has risen by 36 per cent., while for a similar family living on one wage of twice the national average the direct tax burden has fallen. Instead of reducing the discrepancy between the living standards of the rich and the rest, the tax system has accentuated it, and the richer the taxpayer, the greater the benefit. The taxpayer with five times average earnings has enjoyed a tax cut of 11·2 per cent., while the taxpayer with 20 times average earnings has had a bonanza of 25 per cent. Moreover, that calculation of the burdens placed on lower income families and the benefits heaped on the rich does not even include the near doubling of VAT, a tax by which the least well off are hardest hit.

The result of changes in gross earnings and tax rates has been, according to the Treasury's own figures, that the richest 10 per cent. have improved their standard of living seven times faster than the poorest 10 per cent. If the Government were re-elected the gap would widen still further, because the income tax cuts in the Budget would be wiped out by a massive increase in VAT. The tax cuts that help the rich will be maintained, but other increases will hit the rest.

The Paymaster General may seek to justify a system that increases unemployment by more than 2 million and cuts the living standards of the lowest paid, while giving the largest tax reductions—£3·6 billion in a full year—to those who need them least. That £3·6 billion turns out to be just a little more than the amount that we discover today has been denied to pensioners by the break between their annual increases and the level of earnings. A pensioner couple should be receiving £11 per week more than they receive today. When pensioners wonder why the Government have denied them that £11, I hope that the message will go out to them from the Tory party that they should be consoled by the knowledge that their sacrifice has not been in vain, because it has made possible tax cuts of £50 per day for the very highest paid.

In all these particulars, the Government can at least take credit for consistency. They have not only betrayed the old, who most need help. They have also betrayed the young, with an equal determination to assist the privileged few at the expense of the majority of pupils in our schools and sixth form colleges. The education budget allows £30 billion per year for the assisted places scheme in private schools—a subsidy of £30 million for children who are already advantaged and whose families already enjoy social and financial privilege.

Meanwhile, state schools are short of books and equipment. Urgent repairs and renovations wait to be done. At the same time, city technology colleges are being established in the most prosperous areas and the inner cities are being neglected. These city technology colleges are, as the new director of the CBI described them a month ago, at best irrelevant. At worst, they are a stark example of the deliberate creation of divisions within society. Thus, we are to have a city technology college in Solihull, while five miles down the road in Sparkbrook valiant work is being done in huge classrooms, in buildings that should have been pulled down 10 to 15 years ago.

The Secretary of State for Social Services seemed to scoff at me for representing the interests of my constituents. Let me tell him that the perspective of life in Great Britain is slightly different in Sparkbrook from that enjoyed in Sutton Coldfield. I propose, today and in other debates, to speak for the dispossessed, the disadvantaged, the underprivileged and all those who have been penalized——

I shall not give way immediately. I shall give the Secretary of State time in which the Paymaster General can tell him what to say.

I was objecting to the right hon. Gentleman's reference to Solihull. As he well knows, the area that is most improved and advantaged by the facility is Chelmsley Wood, which, of course, is part of Solihull. In the interests of honesty, the right hon. Gentleman should make that clear.

That is not true. I do not know, Mr. Speaker, whether I should abide by your ruling better by saying that the right hon. Gentleman has made a mistake, or by saying that he invented his answer. The college in Solihull will help most the privileged children of privileged families. Down the road in Sparkbrook, Ladywood and Small Heath, or, for that matter, in inner cities all over the country, there are overcrowded classes, dilapidated buildings, shortage of teachers of English as a second language and of teachers dealing with remedial needs. At the same time——

—parents are increasingly being asked to pay for or contribute towards essential equipment for their children's education. I am sorry to enrage the Secretary of State's sensitivities, but paying for equipment is one thing in Sutton Coldfield and quite another—it is impossible—in Sparkbrook and areas like it.

Children who live in underprivileged areas are those most in need of a regular school meal. In 1979 the law required every education authority to provide a midday meal up to a national standard of nutrition, at a national price of 25p. At that time two thirds of all school children had a school meal, but in 1980 the Tory Government abolished the obligation to provide such meals and removed the price limit from them. In areas under Tory-controlled authorities the average price rose from 25p to 67p.

Inevitably, the number of children taking school meals declined from more than 66 per cent. to barely 50 per cent. The provision of free school meals for those in special need simply does not protect many of the children who most need a school meal. Indeed, all means-tested systems of welfare and benefits inevitably discriminate against the least self-confident, the least articulate and the least determined.

All hon. Members must know from their constituency surgery work of the problems faced by applicants for discretionary grants, and of the confusion of tenants who are unable to calculate their full entitlement to housing benefit. They must know of the supplementary benefit recipient whose assessment has under-calculated his need. In my constituency surgery, an old, single, confused man —[Laughter] You can see, Mr. Speaker, why some hon. Members vote against televising the Chamber.

I repeat that I have seen in my constituency surgery an old, single, confused man who was refused a bedding allowance because new regulations introduced by the Government required him first to prove that he had made three attempts to find furnished accommodation. That is a disgrace to a civilised country, and I have no doubt that the complications of the benefit regulations are intended to reduce the number of successful applicants. It is part of the Government's campaign against so-called social security scroungers — a campaign which they have pursued with a determination which does not characterise the drive against wrongdoers in the City and in other parts of the community.

That is another example of Government policy, of Tory conduct and the damage that it does to the welfare of the most underprivileged members of society, but the Government's neglect of the generality of families is equally blatant and undeniable. Increases in child benefit are the most direct and cheapest way of helping low and moderate-income families, but increases in child benefit have not kept pace with increases in the cost of living. Their real value has fallen during the past eight years. That leads me to ask the Paymaster General a direct question on the subject. I shall give way immediately if he wishes to reply. Does he believe that child benefit should at least maintain its real value? As he knows, it has lost value during the past eight years. Does he agree that, as a minimum,
"it is therefore essential to put this benefit in some relationship to the index-linking and regular review procedure"?—[Official Report, Standing Committee A, 24 June 1975: c. 149.]

I seem to remember speaking of voting for that during the period of hyper-inflation caused by the Labour Government, and I seem to remember the right hon. Gentleman voting against it.

The right hon. and learned Gentleman believed it then, but he does not believe it now that his talents have been recognised and he has been elevated to the glory of special assistant to Lord Young. I believe it now, and I believe that it should be introduced in a way that protects families and concentrates resources on them. All the evidence confirms that the families most in need, the 4 million unemployed, pensioners and families on wages that hold them below the poverty line, suffer from multiple deprivation under the Government. All the deprivations — low income, reduced services, reduced benefits, deteriorating housing and increasingly inadequate medical care—come together.

In Britain today, 800,000 families are in need of decent housing. Those families live in multiple occupation, in homes unfit for human habitation and in slums and tenements. The Building Employers Confederation reports an annual shortfall between demand and supply of 100,000 houses. That annual shortfall, like the total shortage, is the direct result of the Government's abandonment of public sector housebuilding. In 1978, 107,000 municipal houses were built in Britain. Last year the total was barely a quarter of that, at 31,000. Homelessness has doubled since the Government were elected, and let there be no doubt why that is: the Government have turned their back on those in greatest housing need. Meanwhile, the highest earners with the largest mortgages enjoy the highest tax relief on their investments and on their appreciating assets.

The remedy for the housing crisis will come when we again begin to build public sector housing. That process will help in the general reduction of unemployment, which has been the prime cause of increased poverty during the past eight years. The indictment of the Government for the jobs that they have lost and the unemployment that they have caused demonstrates two distinct tragedies: first, the widening gulf between those who are at work and those who are unemployed; and, secondly, the widening gulf between the nations and the regions of the United Kingdom.

In East Anglia, employees in work have increased by 8·5 per cent. in eight years; in the south-east there has been a job loss of about 2 per cent.; but in Wales the total number of jobs has fallen by almost 17 per cent.; in the north-west by 15 per cent.; in the northern region by 14 per cent.; and in the west midlands by 10 per cent. Exactly the same pattern applies for the long-term unemployed. In the west midlands, almost a third of the unemployed have been without work for more than a year. In the north and north-west, it is almost as bad at 29 per cent. To the Government, Scotland, Wales, the north, the north-west and the industrial midlands are distant countries about which they know little—and care even less.

A similar rule—neglect of those most in need—has applied to the provision of health care.

Is my right hon. Friend aware that in my borough, which is in an area of high unemployment, low wages and the rest, no council dwellings have been built since 1979, simply because of Government policy? Does he know that more than 1,000 pensioners with firm medical recommendations from community physicians are waiting for special old-age pensioners' bungalows? Most of those people will never be rehoused. That is the deplorable state of public sector housing in my borough.

The tragedy of my hon. Friend's example is that it is not unique, but I do not diminish the importance of his point by saying that. Similar conditions apply throughout the country. They apply — this compounds the disgrace— in an economy that is soon to be projected as the most successful economy in Western Europe. Of course, that is untrue, and it undermines the Conservatives's claim to have anything resembling care and compassion for the people of the country.

The report from the Health Education Council entitled "The Health Divide", which managed to escape from the clutches of its Tory chairman last week, confirms my point. The report's conclusions are simple and stark. The health of upper income families has improved much more rapidly than has the health of families on low incomes. In some cases, the health of poorer families has deteriorated. The health divide is also a life expectancy divide, for the risk of death from coronary heart disease decreased by 12 per cent. among the professional classes, but increased by 6 per cent. among manual workers.

The report's conclusions have been challenged, but all the evidence supports the view that the report is correct. I offer four suggestions as to why it is wholly vindicated. First, it has been attacked by Woodrow Wyatt, the Plato of the News of the World When the Government are especially worried, they wheel out their most consistent toady to address the subject in the style and grammar of a Monday Club newsletter. Perhaps more important in terms of the report's credibility, "The Health Divide" does no more than confirm the class differences in health prospects and life expectancy which have already been demonstrated beyond reasonable doubt. It was the message of the Black report, which the Government tried to suppress eight years ago. Last year, Social Trends recorded that variations in the standard mortality rate by social classes were as high in recent years as they were 50 years ago. Only last August a survey of health prospects, led by the Lancet, concluded:
"The social gap has widened. Widening in equalities between social groups are evident in mortality from lung cancer, coronary heart disease and cerebrovasculic disease."
Some critics of the report have suggested that it does not show the neglect in health care provided for the low-paid, but simply demonstrates that the low-paid are inherently unhealthy and that they are increasing in numbers. To argue that case is not to refute the report, but to confirm its basic premise. Low-income families are at greater risk from illness. Unemployment has increased to almost 4 million. Families living on or below the supplementary benefit level have increased by 50 per cent. to nearly 9 million during the lifetime of the Government. The health care of those families in special need, who should have been compensated for their deprivation, has been scandalously neglected.

I shall give one example—if pressed I shall gladly give more—of the coincidence between low employment and low subsistence levels and standards of health care. In Liverpool, over the past eight years, 22 per cent. of the total number of jobs has been lost. At the same time, in that area of unique deprivation, the Merseyside hospital authority has lost 16 per cent. of its hospital beds.

The tragedy of that situation is that the deprivation is transmitted from generation to generation. That is the message of every survey ever conducted into deprivation in this country. That is why the National Childrens Bureau once wrote of children in the inner cities that they were "born to fail." That is the meaning of the cycle of deprivation, about which the right hon. Member for Leeds, North-East (Sir K. Joseph) used to lecture us 10 years ago.

By dividing the nation the Government are prejudicing the prospects and destroying the hopes of both deprived and dispossessed members of this generation, and are doing exactly the same damage to their children and grandchildren. It is above all that reason — the permanent damage that it has done, and is doing, to this country — that makes the Conservative party wholly unfit to govern.

4.10 pm

I beg to move, to leave out from "notes" to the end of the Question, and to add instead thereof:

"the Government's commitment to seeing all citizens of the United Kingdom share in the increased prosperity and improved public services resulting from the economic policies it is pursuing and applauds the Government's continuing commitment to the principles of one nation.".
The speech that we have just heard from the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) was widely billed in some of this morning's newspapers as the relaunch of the Labour party in advance of the general election. If that is what was intended, it seems to me that the already melting number of Labour Members is a poor turnout for this great occasion.

This is an Opposition Supply day. I have no doubt that Opposition Members have made the same decision as a high proportion of Members of the House — namely, that that story has all been heard before, and, as has just been revealed, the relaunch is a relaunch of all the same ideas and all the same policies, rehashed in the usual way.

The first stage of the rocket got off to a bad start. Having arrived at the last moment, the right hon. Member for Sparkbrook seemed to be a little flustered and breathless, no doubt having just had a good lunch in the City, which I do not begrudge him. Having failed to notice the leader of the Social Democratic party, the right hon. Member for Plymouth, Devonport (Dr. Owen), in his place only four seats away, the right hon. Gentleman threw away a good joke. I suspect that the failure to see the right hon. Member for Devonport was a Freudian slip; a case of wishful thinking in view of the present state of play in the opinion polls. I advise the right hon. Member for Sparkbrook to get a little more used to that gap along the Front Bench because, from the Government Benches, it seems that the two right hon. Members will be changing seats after the election and that the right hon. Member for Devonport will speak from the Dispatch Box, while the Labour party will have moved below the Gangway. That will be the Labour party's fate if the attack on the Government's policy that the Opposition motion represents is pursued. It is fundamentally mistaken.

I refer, first, to the allegations about the Government in the Opposition motion. The Government are committed to encouraging a society in which wealth is created, a society in which that wealth creation benefits all our citizens, and a society which offers equality of opportunity, above all, to all its citizens. Our concern is to ensure that our people are better off, that they all enjoy rising standards of living, a better quality and quantity of health, better quality education and better public services, all of which we are achieving.

Of course, that does not imply that what we are seeking to create is a uniform society in which there are no differences. To some extent, differences are bound to exist. Those differences will change, and always do change, in any society as the economy changes. It will always be the case, and always has been, that at any given moment some industries in some areas may prosper and develop more than elsewhere. Over any given period, earnings in some occupations will rise more than others because skills and talents in limited supply will be rewarded more highly. That is inevitable. It is part of the process of society in history.

However, differences are not the same as divisions, and people who try to elevate the differences that exist into divisions within a society are doing that society a gross disservice. Socialists have always based their politics and their approach to politics on an emphasis on the divisions in society. It is in their interests to paint those divisions in exaggerated colours. They need to point to divisions in society as the justification for state activity to tax and spend on particular interests.

Conservatives, on the other hand — members of the present Government—do not believe in huge inequalities in income or differences in lifestyle. As I have said, we believe, and we have always stated that we believe, in equality of opportunity. We believe in the stability of society that the idea of "one nation"— a classic Tory philosophy—creates. As every trade unionist knows who has argued about differentials, as all trade unionists have at some time, differences of income have a purpose in society. They encourage people to develop the skills that are in demand. They provide incentives for people to advance, to lead and to change society for the better.

Let me give an example. I find it odd that the party that talks with concern about the brain drain complains about all wider income differences. Surely we all recognise that a major response to such a problem is to raise the incomes of top scientists and, if possible, to reduce their tax rates. The Labour party says, "Give them more facilities, but bring back punitive tax rates." Would that stop the brain drain? I beg to differ. Our policy would produce bigger earnings differences, but it would also encourage scientists to work and create more wealth in our society, and that is beneficial for everyone.

The nurses have had a bigger increase in their real living standards in recent years under the Government than they had under the Labour Government. Their living standards fell under the Labour Government.

My right hon. Friend the Secretary of State for Social Services and I are back in harness again today, and we well remember the strike in the Health Service, supported by the Labour party, when the biggest objection that the Labour party and trade unions had to the settlement that we were endeavouring to make was that we were paying the nurses a bigger increase than was paid to people in the unions affiliated to the Labour party. That strike was extended by the Labour party because it did not want us to pay more to nurses than to the people in the National Union of Public Employees and the Confederation of Health Service Employees, to which the Labour party is so indebted. We set up the review body. We have given a real increase in living standards to nurses, and the Labour party tried to block every step along the way. I am talking about inequalities in income and the higher position of nurses in the earnings league table. That is a product of what we have done.

The mistake that is made over and over again by the Opposition is to assume that any changes that widen differences, as long as they are not called differentials, are always harmful, but such changes can be beneficial to everyone in society—I stress, everyone—simply because total wealth and income are raised. If one uses incentives and rewards intelligently, everyone can share in that growth. Someone has to create wealth before the politicians fall to sharing that wealth out.

I know that the right hon. Member for Sparkbrook does not agree. It would be surprising if he did. We would not be on opposite sides of the House if we agreed. The right hon. Gentleman made it most clear in the postmortem of the Labour party's election defeat, when he went on a "Newsnight" special on 31 July 1983 and said :
"We are not the party of equality of opportunity. That is a view of society of the Conservative party…We are the party of equalty of outcome".
That was the main thrust of what the right hon. Gentleman said today. The result was that he made a great deal in his speech, when he got down to it, and spoke eloquently of the faster earnings growth of the better off in society. Obviously, he objected to that.

If we look at the percentage changes in real take-home pay while the Government have been in office, it is true that between 1978–79 and 1987–88 people on five times average earnings enjoyed real increases in pay greater than those on half average earnings. We took away all the higher, punitive rates; I do not deny that. As a result, those on five times average earnings received an increase in real take-home pay of 38 per cent., compared to an increase of 20 per cent. for those on half average earnings. People at every level of earnings received a remarkable increase in take-home pay.

Perhaps single people on half average earnings would have preferred the position under Labour between 1973–74 and 1978–79, when they did better compared to those on five times average earnings. However, it is only a comparison between the two periods. Between 1973–74 and 1978–79 the low earners lost only I per cent. in real take-home pay, while those on five times the average lost 18·5 per cent. The Labour party was happier when its policies resulted in everyone becoming poorer in terms of take-home pay, but the very low-paid becoming poorer at a slower rate than the very highly paid.

The right hon. Member for Sparkbrook made much of the fact that a higher proportion of earnings is paid in tax now than in 1979.

If the figures that the Minister has quoted are correct, why do the Treasury tables published in the second week of January show that the lowest decile had increases of only 3·5 per cent. over the appropriate period? That does not even meet the increase in inflation as measured by the low-income inflation index.

The earnings of the lowest decile—that is those who at one time are in the lowest 10 per cent. of earnings; it is not the same people all the time— kept pace with inflation. I have the answer here, unlike the right hon. Gentleman, who was making such convoluted comparisons that he had to read his text especially carefully when he came to his earnings and taxation figures. He is being highly selective. He knows perfectly well that a comparison of the period from 1973–74 to 1978–79 with that from 1979 to now shows that the entire population have received much larger increases in take-home pay recently than they did under Labour, and that significant sections of the population suffered actual decreases under Labour. Equal misery was the policy of the last Labour Government. People are now sharing in growing prosperity.

I ask a simple question. Are the Treasury figures right, or wrong? During the Government's term of office, have average earnings in the lowest decile increased by 3·5 per cent.? That is a simple statistical question. Is the answer yes, or no? If it is yes, all that the Minister said a moment ago is nonsense.

The answer is yes, but all that I said a moment ago is not nonsense. Those people have received a real increase.

That is much better than what the Labour party achieved. The figures that I quoted for those on half average earnings and those on five times the average. and the figures for married and for single people across the incomes bracket, are vastly better in terms of take-home pay than anything achieved during the years of total economic failure under the last Labour Government. The partial quotations given by the right hon. Gentleman cannot conceal that.

The right hon. Gentleman also made much of the fact that a higher proportion of earnings is now paid in tax than in 1979, and the hon. Member for Blackburn (Mr. Straw) is anxious to repeat that allegation. I find complaints about the high level of tax a somewhat curious tactic for the Labour party to employ. One of the daftest moments that I recall in the Chamber during the past few months—indeed, one of the daftest moments for several years—was when the Leader of the Opposition attacked my right hon. Friend the Prime Minister during Question Time for her policy of high taxation. Those who believe that the Labour party is criticising us for reducing taxation too much should note that on 12 February—it is at column 456 of the Official Report—the Leader of the Opposition called my right hon. Friend "high-taxer Thatcher". That contrasts rather with the reaction to the Budget by the Labour party and, indeed, the Liberal and Social Democratic parties.

The figures for take-home pay that I have just cited show that those in work are much better off now that they are paying a higher proportion of their higher incomes in taxation. The secret behind what we all realise is a great increase in living standards for those in work is that real earnings have risen substantially, whereas they did not rise before we began the economic revival. We have experienced such a significant rate of economic growth, and such a significant increase in real earnings, that people in work are very much better off. They can afford to pay more taxes, and those taxes are being used to provide better public services.

When the right hon. Member for Sparkbrook was making his tax comparisons, he neglected, in his excitement, to mention that if the present tax system were the same as the system in 1979, people would be paying a much higher proportion of their incomes in tax.

The Minister is rehearsing the passage, which I anticipated, about how well the economy is doing. Will he answer the question that I related to that? If we are doing so well, why can we not afford to pay pensioners an increase related to average earnings?

We have more than maintained the real value of the pension at a time when the number of pensioners has increased by 1 million, as we did throughout the economic recession that dogged the first two years of our period of office, when we were assigned to sort out the mess left behind. I shall return to the question of pensioners in a moment. The right hon. Gentleman will not then laugh at our record on pensions compared to that of his Government. Pensioners, along with the rest of society, have benefited considerably from the improved prosperity that we now enjoy.

I have dealt with the right hon. Gentleman's points about incomes and tax. I do not believe that rising real incomes for those in work are the answer to everything. In my present job, I am acutely aware of the danger that increasing real incomes may go only to those in work and that growth in the economy may pass by the unemployed — especially the long-term unemployed. We cannot allow society to divide into a group of insiders becoming better off in work, and a group of outsiders remaining in low incomes for long periods. Pay bargaining can easily reflect that, particularly the kind of pay bargaining often encouraged by the Labour party.

The reason why academics often ask why pay restraint has taken a long time to be achieved, despite high unemployment, is that trade unions and employers have no interest in remembering the long-term unemployed when negotiating settlements" but that has been the whole point of our policies on employment, work experience and training for the last two or three years. We must ensure that the long-term unemployed—indeed, all unemployed people — do not become outsiders. We want to take them back into the main stream of the economy. The measures that my right hon. and noble Friend the Secretary of State for Employment and I keep pushing forward are intended to achieve that in a more purposeful way than has so far been attempted. We have also concentrated on regional differences and the inner cities in all our activities in the Department of Employment, the Manpower Services Commission and wide parts of the Government. We have an ambitious range of employment and training measures to ensure that the unemployed are drawn back into the labour market to enjoy the benefits already enjoyed by those in work.

We are spending about £3 billion this year, and we are spending it where it is most needed. In the present financial year the Manpower Services Commission has spent roughly twice as much per head of the labour force in the areas—usually categorised as the north, hut to be found in various parts of the country—where the decline of traditional manufacturing industry has had the greatest effect on jobs, as it has spent elsewhere. We are targeting our policies to ensure that divisions in society are not created and to ensure that the more prosperous economy that we are producing provides benefits for those who might otherwise be excluded.

Our spending has been concentrated on the young and the long-term unemployed. We know that every young person needs training, and a sound introduction to working life, as soon as he leaves school. That is what we offer through the YTS, on which every 16 and 17-year-old school leaver is now guaranteed a place, so that none of them need be unemployed any longer.

Many of the long-term unemployed need personal help, and we provide that in our restart interviews, which are intended to help them return to the labour market. From now on we offer that help, on an individual and personal basis — man-to-man, woman-to-woman or woman-toman—every six months. In this way we shall be giving direct help to over 1 million people.

The problems that many long-term unemployed face in terms of illiteracy, poor education and a real lack of skill are being tackled by the Government through the job training scheme and job clubs. People are being given motivation and skills to help them back to work. We are also finding new ways to tackle inner-city problems. In the inner-cities initiative we are combining the resources of central Government with the private sector, and with the talents of individual residents, to create opportunities for enterprise and employment in the rundown inner areas of some of our large cities.

That package of measures cannot be challenged. Each of those policies, all of which are aimed at reducing the divisions in our society and helping the disadvantaged, has been belittled and attacked by the Labour party, not least by the right hon. Member for Sparkbrook.

I shall give way in a moment.

When the right hon. Member for Sparkbrook is not making his "one nation" speech he is fond of attacking all those measures, and he tries to draw on his experience in his own constituency. I am not sure whether the right hon. Gentleman has ever lived in Sparkbrook. I lived for six years in what is now his Sparkbrook constituency. However, I am glad to say that the boundary commissioners did not include my ward in his Sparkbrook constituency, so I was never represented by him. I remember Sparkbrook in the 1960s. It was the first area in any city to which the phrase "inner-city policy" was applied. The Sparkbrook initiative goes back 20 years, when the right hon. Gentleman was first elected. Therefore, his claim that the deprivation in Sparkbrook has been created by Thatcherism and the Tory Government is a little wide of the mark to those who know the area that he represents.

It is not true that every part of the right hon. Gentleman's constituency is deprived. The areas that will be served by the city technology college are not so deprived as the prosperous bits of Moseley that fall inside his constituency. However, this is not the time to give the right hon. Gentleman an A to Z to Birmingham, in an effort to fend off those who are fighting to deselect him as the Member for Parliament for Sparkbrook. When he attacks job clubs and the restart programme, and when his hon. Friend the Member for Kingston upon Hull, East ( Mr. Prescott) — who is not here today—calls the YTS a "skivvy" scheme and tries to undermine all that we are doing for the long-term unemployed, they do damage to the residents of Sparkbrook, and of Peckham, and to people in the north. After listening to today's speech by the right hon. Gentlman, it is clear that the Labour party has no alternative to offer those who find themselves in that position.

If the Minister is so keen on the restart programme, will he remember that on Merseyside 28,175 people were interviewed under the Government scheme but that only 295 were placed in jobs? That is a 1 per cent. success rate in an area of massively high youth unemployment. Furthermore, youth unemployment is fuelling the drugs problem in that area.

If the hon. Gentleman tables a question about that matter—he may already have done so —I shall make yet another attempt to clarify that point, as I do for every Opposition Member. The figure to which the hon. Gentleman referred relates to those who have been directly placed in jobs after an interview. I have explained over and over again that that is no measure of those who find work after training, under the enterprise allowance scheme, and all the other opportunities that they are given. This is yet another example of a Labour Member of Parliament seeking to belittle a highly successful scheme, simply because Opposition Members are terrified that we shall be seen to be successful in reducing the number of long-term unemployed. Long-term unemployment is being reduced. In fact, as a result of all Government's policies it has been coming down for the past six months.

As my right hon. and learned Friend knows, the Labour party wishes to have a debate about alienation, division and deprivation in our society. Will he tell the House why it is that alienation, poverty, unemployment and deprivation are far worse in Labour-controlled local authority areas than they are in the rest of the country?

It is partly because of the poverty in some of those areas, but in many of them it is due to the policies of Labour-controlled local authorities, not all of which are in London. They contribute to the problem and do nothing to try to eliminate it.

I shall give way in a moment.

The Labour Government have nothing to contribute by way of an alternative to those schemes. We are giving training, work experience and opportunities to the young and the long-term unemployed. We are also tackling the inner-city problems. The right hon. Gentleman's solution to heal the divisions in our society is to tax the rich and to spend that money on the poor. That is a beguilingly straightforward solution.

In a speech last year the right hon. Gentleman announced for the first time that the Labour party would use the £3·6 billion that it claimed, slightly erroneously, had been given in tax cuts to the most highly paid 5 per cent. in our country, to raise the level of state benefits for various groups of voters. As the two are sitting side by side today, perhaps the right hon. Gentleman should check with the hon. Member for Oldham, West (Mr. Meacher) what is the Labour party's policy, because it seems from the speeches of the hon. Member for Oldham, West that he would use some of the same money for a domestic insulation programme and for winter premiums to help to pay fuel bills. They ought to sort out the divisions in their own ranks and stop spending the same money twice—except that that would reveal that, between them, the Labour shadow Cabinet has pledged to increase public spending by about £34 billion, which would bankrupt the national economy.

I was asked about pensioners. I am sure that everybody wants more money to be spent on pensioners. However. I am sure also that pensioners recognise that the country can spend money in this way only when it has earned it by creating more wealth. We have more than maintained the real value of the pension, although there are 1 million more pensioners and the country has been emerging from a recession.

When the Opposition refer to the divisions in our society, they always forget to mention that between 1979 and 1985 the average net income for pensioners rose by 18 per cent.—an average annual rate of just under 3 per cent. That means that those above retirement age have, as a group, done well under this Government and that they can expect to continue to do well. [Interruption.] Of course the world is changing. I want to see good occupational pensions. The Labour party wants people to have just the state pension and state benefit. According to the Labour party, if it is not state benefit it does not count.

As a group, pensioners have been growing more prosperous. A major reason for that is our pledge to keep inflation low. That is where the real weakness lies in the Opposition's policies. The ravages of inflation in the past and the havoc that it created for so many vulnerable members of our society have been too easily forgotten by some members of the public. The Opposition seem to regard as a matter of no consequence the inevitable rise in inflation that would result from their spending policies. Inflation is one of the most divisive and unfair influences that any society can inflict upon itself.

One key to an examination of inflation as a problem in any debate about the inequalities in our society is that inflation robs the weak and gives to the strong. It harms the saver; it does not harm the borrower. It harms the pensioner; it does not harm the high earner. It harms all those who are unable to adjust their incomes quickly to rising inflation. The yuppie with the big mortgage, the big overdraft and the high earnings will do well out of inflation, if he keeps his job.

If one talks to many pensioners who are now in their 70s or 80s, one discovers how they were made poorer than they need have been by the hyper-inflation of the Lib-Lab Government of the 1970s, which robbed them of their savings and destroyed the value of the fixed occupational pensions which they had expected to enjoy. The inflation caused by the last Labour Government was one of the most divisive influences in our society and created more poverty than all their spending policies helped to cure. I see no reason why that should change.

I am glad that the Paymaster General has referred to inflation. Will he explain why Lloyds Bank Review, published this morning, considers that the Government's record on inflation, relative to other countries, is worse than that of the last Labour Government's? Will he also explain why, in his stupefyingly complacent speech, he has not once explained that the Government's unemployment record is the worst of all other major industrialised countries, bar one?

The hon. Gentleman does not often drop his voice at the end of a sentence, so I assume that there is some magic in the little phrase "compared with other countries." If he is trying to claim that the Government's record on inflation vis-a-vis the previous Labour Government's record, and that of the Lib-Lab Government, is poorer it is totally incredible. It is relative to other countries, so it may be that during the 1970s, if one looks at some of the wilder countries — perhaps Italy, Argentina, Uraguay and Brazil had fantastic inflation — the double-figure inflation of the Labour party can by comparison, be made to appear respectable. The fact is that we now have low single-figure inflation.

My point, which the hon. Gentleman does not like — hence he is trying to go back to weird international comparisons—is that if the Labour party's policies, as they would with £34 billion public expenditure, produce high inflation, that would impoverish pensioners, cause poverty and recreate divisions in society far beyond those that it is contriving to complain about today.

How does the Paymaster General reconcile his statement of abhorrence of inflation with the fact that, since his Government came to office, we have seen the numbers of homeless inflated to 100,000, house prices in the inner city areas inflated out of reach of ordinary people—it is £2·5 million in my constituency for a penthouse flat — and unemployment in the so-called targeted inner cities inflated to 30 per cent., as it is in constituencies such as mine? How is that reconcilable with his great virtuous principles about inflation?

We have had many debates about unemployment and the hon. Gentleman has attended many of them. We know that in 1979, 1980 and 1981 unemployment rose dreadfully under the impact of the oil price increase and world recession, and under the impact of the over-manning and inefficient state in which we inherited British industry, the level insupportable of subsidy that sustained that industry, and the fact that the country's economy was left at the end of the 1970s in a state in which it could not withstand international competition. He also knows that from 1981 we have steadily recovered, that since 1983 we have created over 1 million additional jobs and that unemployment is now coming down steadily. It came down by a record-breaking amount only last month. We are, as I explained earlier, seeking to extend that into the inner cities.

The fundamental belief underlying Labour's programme on poverty and on jobs and the Liberal's policy on jobs, remains the belief that more public spending is the best way to create jobs and solve what they see as the ills of our society. That fundamental belief is fundamentally nonsense. It does not mean that one should never increase public spending. We have increased public spending on our public services where they require it. The right hon. Member for Sparkbrook selected various services to try to disprove that.

I shall give way shortly, but I have given way quite a lot.

At the weekend, in one of the Sunday newspapers, I saw a specimen of one of the advertisements that the Labour party will put out to try to show that somehow, in the recovery of our economy, public services have been cut back. It was an advertisement about health care, so it took me back to the days when I worked for my right hon. Friend the Secretary of State for Social Services. The Labour Health Service advertisement had a marvellous series of slogans stating that there were "Less beds", "Less staff" and "Less hospitals" and that the Tories could not care less. If the Labour party is to challenge educational standards, it should use the English language correctly. The word "fewer" would have been correct. Leaving that aside, I advise the right hon. Member for Sparkbrook, in the launch, to stop relying on the old stuff from the hon. Member for Oldham, West.

With the statement "Less beds", the hon. Member for Oldham, West is still relying on the furniture as a measure of how the Health Service is performing. Presumably he arrives at "Less staff- by not counting those working for private contractors because they are not on the Health Service payroll. He refers to "Less hospitals". He still thinks that if one closes two old Victorian buildings and replaces them with one big modern hospital one is reducing the service. I am sure that when my right hon. Friend the Secretary of State for Social Services replies to the debate he will point out that during the past seven years we have put more money into the Health Service, employed more doctors and nurses, and most important, treated many more patients. That is the result of well judged public spending. A key part of the Chancellor's Budget strategy this year was the great increase in public spending that we were able to announce, particularly on health and education. It was first announced in the autumn statement last year.

I am sorry. but I shall not give way.

The whole experience of the 1960s and 1970s should have taught us that public spending beyond what the economy can afford will not tackle the problems of either unemployment or low income. Indeed, the combination of higher interest rates due to more borrowing, and higher taxation and higher inflation, which will inevitably flow from the increase in public spending, will make people worse off and reduce jobs.

I grant that in one area of policy there has been a significant increase in spending recently. We have seen it in expenditure on bed-and-breakfast hotels. Will the Paymaster General tell the House why it is better to spend more money on bed-and-breakfast squalor for homeless families than it would require to build brand new homes that would put people back to work while building them and provide people with better housing?

No one wants to see money spent on expensive bed-and-breakfast provision. If the Labour local authorities, particularly in London, could tackle the 110,000 empty houses in council ownership, we might make some progress in dealing with that problem as well.

I was referring to the higher taxation and higher inflation that are likely to make people worse off and reduce jobs. I accept that both the Opposition parties have an answer of sorts to the inflationary problems that their policies would create. The Labour party has a particular problem because of its relationship with the unions. That is made worse by its clear commitment to repeal all our industrial relations legislation. If Labour were in office it would be easier to strike, easier to take secondary action, there would be no need for strike ballots, no restrictions on picketing, and so on. That will make it difficult in inflationary times, as the Labour party is putting up public spending and increasing taxation.

That could make it impossible to achieve what David Currie and Maurice Peston said in their article in the New Sta