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Industry And Transport

Volume 180: debated on Friday 9 November 1990

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Before I propose the Question again, I must tell the House that many hon. Members have sought to take part in today's debate and therefore I propose to put a 10-minute limit on speeches between 11.30 and 1 o'clock. If those who are called before that time are relatively brief, it may be possible to relax it.

9.36 am

The Secretary of State for Trade and Industry and President of the Board of Trade
(Mr. Peter Lilley)

Although Friday is not the most crowded day in the House, in my experience it is a day when those hon. Members who attend are among the most perspicacious, assiduous and discriminating. [HON. MEMBERS: "Hear, hear."] So Friday debates are occasions for greater frankness and concentration on the key issues than is perhaps possible on some other days of the week.

The Gracious Speech makes it clear that the key issue facing the world economy is the success or failure of the Uruguay round. The world economy is clearly slowing down, and the normal trade cycle is exacerbated by the Gulf crisis and higher oil prices. So what the world needs, above all, is a non-inflationary stimulus, and only a successful GATT round could provide that.

Lower tariffs and the removal of barriers to trade would simultaneously put downward pressure on prices and encourage increased trade and activity. So the failure of the Community to table any offer on agriculture by the agreed date threatened to derail the whole Uruguay round. That would have had incalculable consequences for world prosperity.

We must all feel relieved that Farm and Trade Ministers averted disaster when they finally reached agreement on Tuesday. That outcome owes much to the insistence of the Prime Minister and the Foreign Secretary that Heads of Government should consider the matter at Rome, and to the tenacious insistence in Brussels by my right hon. and hon. Friends the Agriculture and Trade Ministers that the matter be pursued to a successful conclusion.

I will be able to reduce my speech by at least five minutes if I obtain an adequate response now. What about the consequences of a 30 per cent. reduction in agricultural incomes? When will the Government make their views known on the consequences of that?

My right hon. Friend the Minister of Agriculture, Fisheries and Food has already made it clear that that 30 per cent. is related to the position in 1986 and hence includes many of the changes that have already been made. So the effect on farm incomes is by no means a 30 per cent. reduction in the present level of support. It has also become clear over the years that agricultural support, both in the Community and in other countries, rarely finds its way unitimately into farmers' pockets. It finds its way into the increased costs that farmers incur and they should not fear that a reduction in subsidies will necessarily result in a corresponding reduction in their incomes. However, to some extent it will result in the reduction of their costs, to the great benefit of consumers and agriculture, particularly in this country, which has the most efficient agriculture in Europe.

We have jumped the hurdle of the agreement, in Brussels, but there are plenty more hurdles to jump before we can bring the round to a successful conclusion. Not only our Common Market partners but our friends in north America, the Cairns group, the newly industralised countries and the less developed countries will all have to be ready to compromise.

I have held meetings during the past two or three months with innumerable Trade Ministers. They all recognise Britain's pivotal role in bringing about agreement, first at Punta del Este, then in Brussels and in the remaining negotiations. We have taken that constructive lead, not least because Britain is one of the great trading nations of the world so we stand to gain most from a successful round or lose most, if, heaven forfend, the world sinks back into protectionism, trade wars and beggar-my-neighbour policies.

We are not motivated simply by self-interest. The Government believe passionately in free trade, which is the guarantor of prosperity, binds nations together and is the ultimate foundation stone of peace. Much the same philosophy lies behind the single European market. That is why it is Britain's number one priority on the Community agenda. It was originally a British idea. The programme was drawn up by a British Commissioner, and the vision behind the single market is closely related to the policies that the Government have pursued with success in the United Kingdom.

I am glad to say that the Community is making good progress on the single market front. Some two thirds of the legislative programme is now agreed. Perhaps the most concrete example of how seriously this country takes the single market and European Community commitments generally is its record in implementing single market measures. Our record is better than any of our partners, except Denmark. We shall continue to press our partners to liberalise outstanding sectors such as life assurance and investment services, implement agreed directives and enforce directives that they have already implemented.

In view of the events of the past 12 years, it is perhaps unwise of holders of my office to look too far ahead, but that caveat apart, I confidently look forward to chairing the Internal Market Council when it presides over the successful completion of the single market in the second half of 1992. What is more, I am confident that, when I do so, I shall have the wholehearted backing of the Conservative party for the principles that underlie both the GATT round and the single market.

Those principles are exactly in tune with the Government's belief in open markets, unsubsidised competition and free trade. But those principles are completely alien to the policies and beliefs of the Labour party. I have never heard a Member of the Labour party call for abolishing subsidies, scrapping protection, encouraging competition, freeing markets or liberalising trade. Whereas the Conservative Government have had their foot on the accelerator for GATT and the single market, Labour would be forever applying the brakes.

We have been eager to promote free trade, deregulation and unsubsidised competition in international trade because we have seen its benefits domestically. The simple fact is that during the 1960s, when, to a greater or lesser degree, we pursued policies that the Opposition believe in, the United Kingdom had the slowest growing economy in western Europe. During the 1970s, the United Kingdom still had the slowest growing economy in western Europe. But during the 1980s, thanks to our policies, Britain has been in the vanguard of growth; our output has grown faster than that of France, Italy and Germany.

The hon. Member for Dunfermline, East (Mr. Brown) is always lecturing other people on the dangers of shorttermism, but when it comes to economic performance, he is a short-termist of the worst kind. He ignores the long-term performance of a whole decade or the prospects for the decade to come, and focuses on the short-term outlook over the next few months.

Of course, there are short-term issues.

Surely there can be no greater example of short-termism from the Conservative Government than the remit that they gave British Steel to buy cheap and sell dear and stop manufacturing, which yesterday led to 1,200 job losses and the closure of the Clydesdale steel works. Those people who are to be unemployed face not short-term but long-term unemployment.

That is manifest nonsense. British Steel has been put in the hands of the private sector to work for the long-term benefit of this country, its employees and its shareholders. It is not for us to second-guess the commercial decisions it takes. I would be interested to hear from the Labour party whether it proposes to renationalise it, direct its actions and break the European Commission rules that prevent subsidies and intervention or whether it has any policy on the issue. The fact is that it does not.

Will the Secretary of State confirm that the Secretary of State for Scotland set out the Government's policy towards British Steel in Scotland a few months ago, which was to persuade British Steel to reconsider its decision to close the Ravenscraig strip mill and pressure it with a view to reversing it? Will he name one thing that he has done in the past five months to implement that policy?

I endorse entirely the words and actions of my right hon. and learned Friend the Secretary of State for Scotland. He is not going to breach the rules of the Euopean Community. Is the hon. Member for Dunfermline, East going to do so? When the hon. Member for Dunfermline, East spelt out his five-point plan for Scottish steel, four of its items were contrary to the European Community rules and a fifth was to set up a committee.

I shall return to the short term, which so obsesses the hon. Member for Dunfermline, East. I promise to be frank and consider the problems that we face. The central problem facing the country is inflation. I spend a great deal of time visiting businesses, meeting and talking to business people. Virtually all of them agree that inflation is the supreme enemy. It destroys savings, undermines investment, prevents planning and destroys jobs. Get inflation down, and other problems become far easier to tackle; but to prescribe a cure, we must first understand the cause of the recent resurgence of inflation.

For that, we must look back to the crash in the world capital markets in October 1987, which was unprecedented, except for the crash of 1929, which was followed by the slump of the 1930s. We were determined to prevent a recurrence of that pattern, so we reduced interest rates, relaxed monetary policy and encouraged expansion. With the benefit of hindsight, we acknowledge that that was a mistake.

It was after the election. The hon. Member's sense of time is as mistaken as most of his other ideas.

The economy in 1987 was not, as it seemed, faltering but growing strongly, and the stock market crash was no more than a technical correction. Nineteen eighty-eight, far from being a year of recession, turned out to be the year of strongest growth in nine successive years of growth. We got it wrong, but the Labour party urged us to get it wrong in spades. Some months after the crash in 1987, the right hon. and learned Member for Monklands, East (Mr. Smith) was still urging us to relax even more. He said:
"Now is the time for cuts in interest rates to stimulate the economy … Now is the time for a programme of well-planned public investment to mobilise the unused capacity … There is no economic constraint on such action."
With the benefit of hindsight, we know that monetary relaxation which we were urged to do in greater measure, triggered strong consumer spending, which, fuelled by mortgage borrowing and a simultaneous boom in investment, meant that there was too much money chasing too few goods. That is the age-old recipe for inflation.

If the Government were wrong to relax interest rates at the beginning of 1989, were they not also wrong to give away £6 billion in tax cuts in the Budget? Is that not one of the major reasons why we face our current problems?

Once again, the hon. Gentleman is absolutely wrong. The Budget to which he refers increased the surplus. In case he does not understand these things, let me explain that, in the 1988 Budget, the Government took out of the economy in taxes £14 billion more than they spent. That represented not a relaxation but the tightest fiscal policy that this country has ever had.

We are now at the most difficult point in the process of getting inflation down. Monetary relaxation triggered inflation and monetary tightness is its cure. Higher interest rates encourage saving and discourage borrowing. That slows spending, which in turn curbs price rises.

I repeat that we are at the most difficult point in the process. Interest rates are still high, although my right hon. Friend the Chancellor has been able to cut them by one point. Demand has begun to slow, and although inflation has not yet responded to weaker demand, it will respond. All outside forecasters agree with my right hon. Friend the Chancellor that inflation is set to fall rapidly next year. When inflation falls, my right hon. Friend will be able to reduce interest rates, and non-inflationary growth will resume.

Yesterday, the hon. Member for Dunfermline, East disputed that, although, given his track record in forecasting, that fills me with confidence. The House will recall that, in October 1986, the hon. Gentleman wrote in The Guardian:
"In 1990 around 3·12 million of us will still be unemployed … the Government simply cannot reduce unemployment by present economic policies."
The hon. Gentleman said that that could prove to be an underestimate. In fact, unemployment has fallen in 43 of the subsequent 48 months. In 1984, the hon. Gentleman did even worse, when he told us that there was no evidence that economic recovery was in sight. When he made those remarks, we were already three years into the longest period of sustained economic growth since the war.

Economic policies are more important than economic forecasts. Before the Opposition criticise the present slow-down in demand, they must answer a simple question: do they know of any method of reducing inflation, successfully tried in any country, that does not involve a slow-down in demand? To coin a phrase, the Opposition had better either "put up or shut up".

At a time of slack demand, industry is still chalking up some impressive achievements.

Coming from the hon. Gentleman, that is a compliment indeed, because he knows something about it.

Manufactured exports in the last quarter were up 8 per cent. on the previous year, whereas imports have not grown during that period. For the second year running, our manufactured goods have increased their share of world markets. That is a tribute to industry's competitiveness. Despite high interest rates, the number of businesses has increased by about 70,000 over the past year, after taking account of closures, mergers and companies ceasing to trade. There are now nearly 400,000 more businesses in Britain than there were when we came to power in 1979. That is a tribute to the climate of enterprise that we have created.

The number of industrial disputes in the past year has been the lowest for 50 years. That is a tribute to our trade union reforms, which the Labour party has opposed so vehemently.

Business investment is at a record level and, even allowing for the cyclical movement predicted by my right hon. Friend the Chancellor, investment next year will be 50 per cent. higher than when the Opposition left office. That is a tribute to the vast improvement in industry's profitability under this Government.

Industry is right to take the long-term view and continue to invest in its future because, once the short-term problem of inflation is licked, the prospects for British industry in the 1990s will be even better than in the 1980s.

The 1980s saw manufacturing industry improve its productivity faster in Britain than in any other major country—faster even than in Japan. That has set the basis for a substantial expansion of our manufacturing base in the 1990s.

The motor industry is a notable example. Having fallen below 1 million cars a year, output is now set to pass 2 million cars a year during this decade. Three major Japanese firms have chosen to base their European operations here in Britain. Does anyone imagine that they would have come here if Labour had been in power? How splendid it is that Nissan will soon be exporting British-built cars back to Japan. In addition, Rover—back in the private sector—is a company transformed. Its Longbridge plant is now producing more cars than at any time in its history and Jaguar is planning to treble capacity. Vauxhall is exporting from Ellesmere Port for the first time in 15 years. Before too long, Britain should be exporting more cars than it imports.

Other major developments bode well for the future. The completion of the channel tunnel will give an enormous stimulus to trade and travel during the remainder of the decade. It has done that even during its construction. About 75 per cent. of the orders at this end of the tunnel and 50 per cent. overall have been won by British firms. The whole enterprise is one of the most massive engineering achievements ever, and I am sure that the whole House will wish to pay tribute to all those involved in the work culminating in the successful link-up last week.

Of course I include the work force.

I now wish to refer to research and development. A rather cynical history master once told me that, even if one is totally baffled by an exam question, one was assured of being awarded one mark out of 10 if one wrote one's name on the paper, copied out the question and added the words, "This is a very important issue". On research and development, the hon. Member for Dunfermline, East does not seem to have got much further than that, although we must award him his mark for recognising that it is an important issue. He gets no marks, however, for his blind faith that what is needed is more taxpayers' money. The amount of research and development carried out by business is a function of industry's profitability. Over the past five years, business spending on research and development has risen by nearly 50 per cent. as profitability has been restored.

Nevertheless, the Government have a positive role to play in stimulating research and development. Britain has been phenomenally successful in academic science. Our scientists have won more Nobel prizes than those of any other major country except the United States. We have won more than Germany, three times as many as France and 13 times as many as Japan. Yet until recently, we have been conspicuously unsuccessful in exploiting that wealth of scientific talent for industrial purposes.

Our failure to do so has certainly not been due to inadequate funding by the Government. We spend nearly £3 billion a year on civil research and development—more, relative to our gross domestic product, than Japan and the United States. The real problem has been the divorce of industry from the scientific community. We have had to bring them together.

When we came to power, only two universities had industrial or science parks.

It seems that the hon. Lady does not even know what industrial and science parks are. Now, 38 universities have them, and many of them have already been immensely successful in converting scientific ideas into new products and businesses. Nineteen more are planned, and I am investigating the scope for more such facilities, to be attached to polytechnics and Government research establishments. In addition, I shall shortly announce details of some new programmes to help small and medium-sized businesses to exploit our scientific talent.

The successful enterprise initiative is to be extended for a final three years, and I shall be spelling out the details in a parliamentary answer today. I reaffirm our commitment to privatise the British Technology Group, which has a proven track record in the commercial exploitation of our scientific discoveries.

I want the House to be clear about the Government's privatisation plan. Does the right hon. Gentleman recall the pamphlet that he wrote last November, in which he stated his view that the Post Office should be returned to the private sector?

The right hon. Gentleman wrote:

"That would still leave in the state sector the Post Office. The presumption in every case must be that they should be restored to the private sector unless there are good reasons for retaining them in the public sector."
Is that still the right hon. Gentleman's view? Will the Post Office remain in the public sector?

Those are exactly the words to which I would adhere.

The right hon. and learned Member for Monklands, East yesterday criticised the planned budget for the Department of Trade and Industry, which he thought reflected a cut in support for innovation. I am afraid that the right hon. and learned Gentleman did not understand the figures, although that is perfectly understandable, as they were complex and as he had little time to study them before the Autumn Statement. The biggest single change in the Department's budget as between this year and next is in the external financing position of the Post Office. This year, the Post Office has been absorbing taxpayers' funds. Next year, it is expected to pay a dividend to the taxpayer. That means a net turnround of £100 million to the taxpayer's advantage.

The second greatest change is in launch aid. The net figure is set to go negative next year, but that is because levy payments from successful past launches are set to exceed even the £80 million of additional launch aid in the budget. What a contrast with the budget of the industrial Department under Labour. It poured out money by the billion, but the cash did not go on research and development: it went to meet the massive losses of nationalised industries. None of it came back to the taxpayer. That Department backed failure, but we back success.

Opposition Members have displayed a commendable interest in the Government's European policy, and it is only courteous that we should reciprocate. I heard nothing of substance in the reply of the Leader of the Opposition to the Gracious Speech so I turned to his recent interview on the "Today" programme. Clearly, there must be a statement of Labour policy somewhere in the transcript, but I found it as difficult to decipher as Linear B, so I shall have to call on the help of members of the Opposition Front Bench Trade and Industry team, who I assume are more familiar than I am with their policy and their leader's involved style.

Perhaps I could ask the hon. Member for Dunfermline, East some simple questions. First, is the Labour party in favour of an independent European central bank? Or do they not know? [HON. MEMBERS: "Come on."]

No, it is spontaneous. Why does not the hon. Member for Dunfermline, East respond? Is it simply that he does not know?

Would it be correct to say that the Labour party is in favour of an independent central bank?

The Leader of the Opposition was unequivocal on the point. It was almost the only clear and precise statement in his interview. He said:

"There cannot be an independent bank."
Secondly, is the Labour party in favour of the Government policy of a hard ecu? Here is an opportunity for the hon. Gentleman to clarify the position, which he says is already very clear. He has not been unforthcoming in venturing his views so far, but he is now strangely reluctant to rise from the Bench. We do not know. The House is left unsure of whether the Labour party is in favour of a hard ecu.

The Leader of the Opposition criticised the hard ecu as wholly beyond the realms of practicality because it would be so successful that it would sweep the board, everyone would use it and it would become the single currency. That was a strange argument from him. He seemed to go on to argue that he was in favour of a single currency. He made his view clear in the interview but then reports began to appear in the newspapers that his office had said that "Neil had not intended to say that." In the memorable word of President Nixon's press secretary, his words were "inoperative". Which statement was right—what he said on the "Today" programme or that with which his office briefed the newspapers? The Labour party has the opportunity here and now to make its position clear, but Labour Members are too confused to do so.

Is it not an absolute disgrace that a party which wants to form the Government of this country does not have the guts to tell the British people whether or not it wants to conserve the self-governing status of the nation? Do we not expect to hear from the Labour party today in clear and concise terms where it stands? Does my right hon. Friend agree that, if it cannot, it is not fit to govern the country'?

My hon. Friend is absolutely right. It is a disgrace, but it is no great surprise. The shilly-shallying of the Labour party is exactly in tune with its history. It opposed membership of the Common Market. It favoured renegotiation—although it was unsuccessful in campaigning on that basis. It stood on a manifesto commitment to withdraw from the EEC in 1983. In 1987, it promised to take actions which were incompatible with the treaty of Rome and would force withdrawal. Subsequently, it has said that it is the most enthusiastic European party in the House. It has left the position wholly unclear, and its present flirtation with Euro-rhetoric will be just as unconvincing to the electorate as its past manoeuvres.

If the hon. Gentleman suggests that I have shilly-shallyed over Europe he is wrong.

Yesterday, my right hon. Friend the Chancellor of the Exchequer made his Autumn Statement to the House. He demonstrated that the finances of the country are in better shape than those of America, Germany, France or any major country except Japan. He showed that inflation will fall sharply next year pointing the way to lower interest rates. He demonstrated that growth will resume before long at a fair lick. Despite a tight overall settlement, lie found funds for higher spending on health, education and transport.

We can look forward to the next decade with confidence, as long as we pursue the sound policies which transformed the economy in the past decade and which are further strengthened by the policies outlined in the Gracious Speech.

10.5 am

Perhaps it is not surprising that the Secretary of State for Trade and Industry spoke for half an hour but failed even to mention the words Bradford and Bootle. I well understand his reticence. In the early hours of this morning—[Interruption.] Conservative Members might listen—we saw an electoral humiliation visited on the Conservative party as a direct result of the mistaken policies of an out-of-touch Prime Minister in a failed, divided, and now discredited Government.

The message from Bootle and Bradford is clear: while the Prime Minister may contrive to win an election victory within the narrow compass of the Conservative parliamentary party, consisting of 369 rather frightened men and women, she cannot win the only election that really matters—the one that will deliver the verdict of the British people.

Will the hon. Gentleman explain how winning 5 per cent. of the vote at Eastbourne proves that the Labour party is going anywhere?

If the hon. Gentleman looks at what has happened around the country during the past two years he will find that in by-elections, local elections, European elections and opinion polls, the Labour party has not only increased but deepened its support. The hon. Gentleman might reflect on the results in Bootle and Bradford. The Conservative party managed to obtain 6 per cent. of the vote in Bootle and 17 per cent. in Bradford—a seat which they previously held. The hon. Gentleman is the last person who should mention Eastbourne, which was a devastating defeat for the Conservative Government.

The reason why the country is passing that verdict is clear. Yesterday more than 1,000 jobs were lost in Scotland. Today as many jobs will be lost around the country. This week three small businesses have gone bankrupt every hour. A job is lost in manufacturing every two minutes. Many small businesses are experiencing not a soft or even a hard landing, but a crash landing. Worst of all, as the autumn statement revealed, the Government's only strategy for the future is to seek a repetition of the mistakes of the past.

The autumn statement made it clear, but the Secretary of State for Trade and Industry did not mention, that manufacturing output is predicted to fall in 1991. Business investment is predicted to fall even further—by 2·5 per cent. Next year, inflation, which the Government said was their flagship policy, and which they promised to bring down to zero, will still be higher, taking the underlying rate—The Government's favoured indicator—than the European average.

If the Conservative party will not listen to us or to the electorate, will it listen to the voice of business throughout the country? The chairman of the Building Employers Federation said only the other day:
"I can see no early prospect of recovery".
The chairman of the Engineering Employers Federation said:
"The prospect is for a substantial further reduction in the total employment in engineering"—
not in 1990 or 1991, but "in 1992." Mr. John Harris, chairman of the National Federation of Self Employed and Small Businesses said:
"Industry has been asked to swallow a cocktail of disasters."
At the CBI conference, Mr. Ron Lander said:
"We are living on borrowed time."
At the same conference, Mr. Roland Long said:
"Inflation is not an act of God … It is caused by economic mismanagement."
If the Secretary of State were doing his job properly, he would be addressing the concerns expressed in every sector of industry about the state of industry as a result of the high interest rate policy of his Government. My final quote comes from Mr. Richard Pickard, a small shopkeeper from Grantham who owns a shop not far from that in which the Prime Minister was brought up. He said:
"Any other management team in such a mess would get the sack. I voted for them but now I cannot wait to get them out."
No wonder that the Foreign Secretary made a telling comment only a few days ago when he said on "The World At One":
"What we need is a period of competence."
I hesitate to say anything that will add to the Government's problems and difficulties, but it is only right that Conservative Back-Bench Members, who may not be aware of these things, should hear me say something about at least one of the business closures that have been such a casualty of the recent recession. This business is close to the heart of many Conservative Members. An interesting little company, centrally placed, well-endowed, with influential contacts, was set up in the heady atmosphere that followed the 1979 election. It addressed carefully identified market niches and was not only part of the Thatcher enterprise culture but was set up explicitly to celebrate it. I refer to the collapse of Blue Rosette Ltd., late of Smith square, Westminster, London. The company was set up to sell to the faithful Tory products in a range that epitomised the iconography of Thatcherism—the dish towels, the ash trays, the ties and the scarves. It was founded in 1979 and is now being liquidated, with all the bargains that come from a liquidation sale. The Tory party coffee mug was £5·25 and is now selling at £3·10. The party's official headscarf was £7·95 and is now £3·95, with free delivery thrown in.

Conservative Members may be interested to know that the "I love Maggie" tee-shirt was £3·95 and is now just £1·95. There are still a few available at knock-down prices. I see that there are no takers among Conservative Members here and I doubt whether there are any takers among the members of the Cabinet. Perhaps if the company had diversified a little, it would be in a better position. Perhaps it should have introduced a "Sir Geoffrey Howe memorial plate" or the "Sir Geoffrey sheepskin rug" or the "Sir Geoffrey doormat". Conservative Members share 800 directorships. There are 20 ex-ministerial recruits to the boardrooms of the City, but they cannot even run the party equivalent of a church bazaar without losing thousands of pounds. If, by their own voluntary efforts, they cannot sell their own products to their own fans without making a huge loss, what can Conservative Members run?

There are two explanations for this failure. Either Conservative Members, despite their much-vaunted business acumen, cannot run anything, or, as the Secretary of State keeps reminding us, one cannot sell the goods for which there is no demand. The market has passed its verdict and the closing-down sale of the Thatcher era has already begun.

Let me tell the Secretary of State what he should have said today. What he should have said about the industrial policies that are necessary for us to get the benefit of membership of the exchange rate mechanism was that the Chancellor, in his autumn statement and subsequent statements, would take action on the skill shortage, with a national training strategy underpinned by the Government. Secondly, he should have told us that there would be action to make Britain once again the technology capital of Europe, with an end to the damaging reduction in the budgets for research and development. Thirdly, he should have told us that, to help interest rates come down, the Government would specifically rule out tax cuts in the forthcoming Budget and concentrate their energies on public investment. Fourthly, he should have said that he would bring in measures to ensure a properly balanced economy in Britain with a commitment to a modern regional policy similar to that of our competitors.

For the benefit of the House and of the shadow Chief Secretary to the Treasury, will the hon. Gentleman tell us whether his calls for additional measures on training, regional development and innovation involve pledges to spend more money than is laid out in the autumn statement?

We are saying clearly that we would not make these cuts. If the Secretary of State is asking me whether a Labour Government wants to spend more on the regions and training, the answer is yes. The resources available to us will depend on the economic circumstances of the time. [HON. MEMBERS: "Ah!"] I cannot foresee all the damage that will be done by the Government, even in the next few months, to public finances and the economy. However, I am clear about one thing. Employers recognise the need to invest in training. The CBI's report on skill shortages and training says that employers should be spending £800 million more, and we need a Government who are prepared to work in partnership with industry to ensure that the money is properly spent.

The hon. Member spoke about the resources that would be available. What boost to industry would be given by a Labour Government legalising secondary picketing?

It is typical of Conservative Members that they return to the debates of the 1970s and have no interest in moving forward to the debates of the 1990s. Our industrial relations policy is in line with that of most, if not all, of our successful European competitors in almost every sector. If the hon. Gentleman feels that we should have a modern industrial relations policy, as I do, why does not he support the social charter of the European Commission, which has overwhelming support from the work forces of this country, and significant support from many companies?

Is my hon. Friend aware that the unions involved in the North sea oil dispute thought that they had an agreement with the employers—the contractors—by which those who were dismissed because they had recently taken industrial action in the North sea would be reinstated? But the contractors went off and then came back saying that they had been directed by the oil companies not to reach such a deal under any circumstances. Is not that secondary action of the worst kind?

The problem in the North sea is that the men have been forced to resort to industrial action because they have no prospect of industrial negotiation. I hope that Conservative Members will join me in calling on the employers to resume talks with the trade unions in the North sea industry so that we can bring an end to the dispute. At the heart of the dispute is the men's concern about safety in the North sea—a concern that will be highlighted on Monday by the publication of the Piper Alpha report.

The problems that we face are not accidents of fate. They are not, as the Secretary of State tried to tell us this morning, common problems shared by all our European competitors. They have been created uniquely in Britain by this Cabinet and this Government. Employment in industry is rising in France, Germany and Italy but it is falling in Britain. Output in manufacturing is rising by 5 per cent. in Germany this year, on the eve of the creation of a single market, by nearly 2 per cent. in Spain, and by 1·5 per cent. in France, but has fallen by £1 billion in Britain in the past three months.

Industrial investment is rising in Europe this year by nearly 10 per cent., but it is stagnating here, and the reason for that is clear: the interest rate bill that industry faced in 1979 was £6 billion, but this year it is £24 billion. Next year —the year before the creation of the single market, when the competitive challenges will be greater than ever before—it is predicted that investment in Germany will be rising by 4 per cent., in France and Italy by 6 per cent., in the European Community as a whole by 5 per cent. while in Britain it is predicted to fall by 2·5 per cent. That will be the worst possible start for British industry in the internal market.

These are disastrous industrial trends, which cannot be blamed on the Gulf crisis, the American recession or the European Commission. They are a problem caused directly by the mistakes of this Prime Minister, this Cabinet and this Government. We have had 11 years of a Government who promised that we would have zero inflation, said that they had created an economic miracle and told us that stop-go economics had been abolished once and for all. Inflation, which the Government promised to reduce to zero, is now 10·9 per cent., higher than that of all our main European competitors. In 1979, the Government blamed the previous Labour Government for the level of unemployment. They said that the Labour Government's policies had not worked, but for many years unemployment has been at least 50 per cent. higher than it was then, and again it is rising.

What about mortgage rates? I hope that Conservative Members are concerned about the problems of home owners. They were facing problems in 1979 because of what the Conservative party described in its manifesto as Government financial mismanagement. The current rate of interest is 14·5 per cent., which the Chancellor of the Exchequer used to call usurious.

If anyone had dared say to Conservative Members in 1979 that, after 11 years of what they promised would be an economic revolution, 11 years during which Chancellors of the Exchequer were variously described as brilliant, marvellous and wonderful, 11 years during which the Prime Minister and her Ministers told us that Germany and Japan had had the economic miracles of the past and that Britain's would be the economic miracle of the present, 11 years during which the Government, uniquely, have had £100 billion of revenues from North sea oil, Britain would have the highest inflation, the greatest trade gap, the slowest growth, the least investment and the worst interest rates of all our major competitors, they would have told us that we were talking about another country, another Prime Minister and another Government.

There is no escape for the Government now. Their failures are clear. After 11 years of a Conservative Prime Minister and Conservative free market ideology, we are entitled to more than promises that things will get better. We are entitled to a full explanation of what has gone wrong. The rate of company liquidations is rising. In many areas the number of liquidations will double this year. What is proposed in the autumn statement? The Government say that we should compound the interest rate problems that companies face by hitting them with further cuts in support services for industry. Having hit industry with the worst interest rates of all the main European economies, the Government are now hitting it with some of the biggest budget cuts. There is to be a 22 per cent. cut in the industrial research and development budget this year. There will be a 40 per cent. cut in the technology transfer budget and a 67 per cent. cut in regional enterprise grants.

Small firms will be hit hardest of all. The Secretary of State mentioned the Government's flagship programme——

I acknowledged the cause of present inflation, diagnosed the cure that is needed and spelt out the costs that inevitably will be incurred in reducing it. The hon. Gentleman could at least answer the question that I posed to him. Does he have an alternative solution for reducing inflation that does not involve a period of slower growth of demand?

The right hon. Gentleman asked, first, for my analysis of what has gone wrong. Three years ago, any fool could have told the Government, who had engineered a consumer boom before the general election and thereafter, that without prior, sustained, long-term investment in the British economy, imports would rise at an alarmingly fast rate after the boom and there would be a widening trade gap. The Government went ahead with the boom and accordingly there were pressures on interest rates, which had to be forced up. In the wake of that came inflationary bottlenecks.

The damaging feature of high interest rates—[Interruption.] If Conservative Members had listened to the Secretary of State, they would know that I was asked for an analysis of what has gone wrong. I shall give the House the benefit of the Labour party's analysis. Anyone could have told the Government that a Government who concentrated on a policy of high interest rates were bound to hit employment, investment and output.

One of the problems is that the Government have barely hit the growth of new credit. They have pursued a consumer boom that has not been accompanied by investment. Their high interest rate policy is further damaging prospects of investment in future. That is why we say that in addition to the macro-economic stability that we propose—we proposed that we should join the exchange rate mechanism many months ago——

Under the terms that we proposed.

In addition to macro-economic stability, Britain needs a boost to investment in industry, and that would be provided by the supply side strategy that we have put forward. It is ludicrous for the Government to cut their flagship programme, the consultancy initiative for smaller businesses. The Secretary of State told us that there would be a written answer dealing with that later today. It might have been better had he brought the figures to the House for his speech. The fact is that this year there has been a 24 per cent. cut in what the Government said was their flagship programme. To cut the industry budget by £250 million in the coming year—a 20 per cent. cut, and one that is greater than that made by any other major Department—the Secretary of State tells us——

If the Secretary of State wants to give the House the figures, I shall give way to him. Perhaps he will tell us what the cuts are.

I did so in my speech. It is clear that the hon. Gentleman was not listening.

The right hon. Gentleman did not tell us of the cut in the budget for the consultancy initiatives. Perhaps he will tell us now. It seems that he is not prepared to do so. I shall help him. The initiative, which started only three years ago, will be cut by 24 per cent. this year. There has been a 7 per cent. cut in the science and technology initiative. These were supposed to be the flagship programmes of the Department. How does it make things better for industry if the Government cut deeper into the budget for services for industry? The Secretary of State will not act when so many businesses are failing, but other countries are taking action while we are doing nothing. When will he act to improve services for business? The tragedy is that he refuses to act because of the ideological constraints that he has imposed upon himself, not because of budget constraints that have been imposed from outside upon his Department.

What needs to be done in the Department of Trade and Industry and in other economic Departments? The United Kingdom is training fewer people to enable them to apply skills than in any other country. Fewer children stay on at school, fewer leave with qualifications and fewer in the work force are trained than in other main European countries. Even with rising unemployment, 25 per cent. of companies are identifying skill shortages. We are short of about 30,000 computer scientists. Market forces have clearly failed to deliver. In other countries, Governments are working in partnership with industry. What do the Government do? It was announced yesterday that there would be a further cut in the training budget, even though the Government proclaim the need for a training revolution.

The Government have failed on training and they have failed on technology. I grant that the Secretary of State gave us many figures relating to technology, but we spend less on civilian research, when considered as a share of the national budget, than do France or Germany, and certainly less than Japan. The Government's contribution is less in Britain than contributions in other countries.

What is the Secretary of State being advised to do on technology and research and development? The innovation advisory board in his Department says that there is
"too high a priority for short-term profits and dividends at the expense of R and D and other innovative investment."
Beyond a speech, the Government have done nothing. The DTI-funded Design Council said that as spending on research and development falls even further, relegation to the second division of industrial countries is a real prospect. Yet the Government do nothing. The Engineering Employers Federation said:
"Government seems to have almost completely abandoned the provision of financial support for innovation."
The Government do nothing.

In the newest technologies, such as biotechnology, the Government's Advisory Committee on Science and Technology—a semi-official committee set up by the Prime Minister—said that
"our potential for leadership in many areas is being eroded",
and that
"major UK developments … are being exploited by competitor multinational companies".
They are not exploited by British multinational companies and the Government do nothing.

On information technology, a Select Committee with a Tory majority has said that the "Government has no strategy", yet the Government do nothing. On technology transfer, the CBI reports that the DTI does pitifully little, with delays, inadequate resources, an inappropriate approach and
"programmes more concerned with the public relations effect than supporting UK industry."
Yet the Government do nothing. It is clear that no last-gasp initiatives in the last year of this Government, no scheme to paper over the cracks and no public relations manoeuvres can undo or disguise the damage that 11 years of neglect have done to our country.

Other countries are working in partnership to build for 1992. France has its regional poles and growth centres, its support for small business and its technology transfer network, ANVAR. Germany has low-interest loans for industry, which are being given priority. There are 100 technology transfer organisations in one Conservative-dominated Lander alone, while we are cutting support for technology transfer. In Japan, the Government provide help for about 185 testing and research centres for small firms and are leading the bold plans for research into energy-efficient technologies, new materials and the next generation of high definiton television technologies, yet Britain is doing next to nothing. Even in America, the federal Government are setting up regional manufacturing technology centres to help small firms—yet the British Government are doing nothing and are being left behind.

We need an export drive, especially into eastern Europe, but what do we have instead? During the past year there have been cuts in support for international trade missions and for export market research, there have been new charges for small businesses and other exporters, and now there is to be the privatisation of the insurance section of the Export Credits Guarantee Department. That will not increase the number of shareholders because it is to be a trade sale; it will not bring in any cash for the Government; according to exporters it will do nothing to improve services for them; and, as I have been told directly, it is especially worrying for the 6,000 small businesses which use that service. Our export priorities should be directed towards advancing the sale of our goods and services abroad, rather than to an obsession with selling the means to service our export services at home.

Nowhere is the Government's do nothing attitude more obvious than in their dealings with industry. When the oil companies are accused of making excess profits, the Government do nothing. When City regulation is an issue, they do nothing. When the steel plant at Ravenscraig closes—as the Secretary of State has confirmed that it will—the Department of Trade and Industry makes a virtue of doing nothing. When the Government have a golden share in British Steel—it is in the possession of the Department of Trade and Industry—when the Department has guarantees from British Steel about its future plans in Scotland, whorl a highly productive work force has done everything asked of it, when the Government are in the North sea market at the Clydesdale plant, which should be making millions for Britain because it is the only British company producing tubes for that market, and without it orders will flow abroad, is not it a scandal that the Department of Trade and Industry is prepared to do nothing, not even to put pressure on British Steel to reconsider its decision?

I used to think that the Department of Trade and Industry, under the previous Secretary of State, did nothing as a matter of deep personal inclination. I know that it does nothing because of the dogma of political ideology. I shall quote what industry is saying about the Department. The Machine Tools Technology Association says that there are no policies
"to help markets allocate resources to investment, innovation and training."
The Mechanical and Metal Trades Confederation says:
"Our members feel there is a need for a strong cohesive DTI."
Mr. John Banham of the CBI says that his
"members believe that too often the DTI is like a spectator on the stands watching the team playing rather than someone who is at least on the touch lines shouting instructions and preferably down on the pitch playing in the right direction."
The Department makes a virtue of doing nothing, even to the point that at the recent CBI conference the Department of Employment, the Training Agency, the Central Office of Information and even the industry department from Georgia, America had stands, but not the Department of Trade and Industry. There must be a reason for that inaction, and it is ideology.

The hon. Gentleman, like me, goes through the appalling ordeal of attending party conferences and being surrounded by absurd stalls that are set out for our edification, and from which we frequently receive free bottles of whisky from corrupt whisky distillers. What good purpose would have been served by the Department having a stand at the CBI conference?

Exactly the same purpose as the industry department from Georgia thought would be served——

My Department has a successful division that attracts foreign business to Britain. We have more American, Japanese and German business investing in this country than is being invested in any other country. It is a little absurd to suggest that we should have a division to attract British industry to Britain.

If the Department had refused to go to the CBI conference in Glasgow so that it could go elsewhere and attract industry to Britain, I might have welcomed what the right hon. Gentleman said. However, the Department turned down an invitation to be the lead exhibitor at the recent trade fair in Hanover. That is the position into which the Department has pushed British industry. It is failing British industry not only at home, but abroad.

The hon. Gentleman promised the House answers to rather more significant questions. Perhaps he will stop knocking Britain and British industry. He said earlier that his party's policies on Europe were clear, and he implied that he would explain them during his speech. We are entitled to some clarity. He appears to be offering regional subsidies and policies that would be in conflict with European rules, and spending commitments that would contradict the disciplines of ERM. I want some clarity. Does his party support or not support the statement by the Leader of t he Opposition——

I still have a great deal to say, and I had intended to deal with that point later. However, as the hon. Gentleman is pressing, I shall deal with it now. My right hon. Friend the Leader of the Opposition and my right hon. and learned Friend the shadow Chancellor said that greater economic integration within Europe is not only inevitable but desirable. They said that the Labour party is prepared to play its part in constructive and positive discussions. We support the implementation of the social charter and majority voting on social and environmental issues. On the question of economic and monetary union, we have made it clear that while we do not support the Delors proposals for fiscal harmonisation, for set public expenditure ceilings or for a central bank that is not politically accountable, we are prepared to join in the present discussions and help them to reach a satisfactory conclusion.

I shall tell the hon. Gentleman the difference between his party and ours. His party, under the Prime Minister, in performing a backward-looking, obstructionist and isolationist role, is doing enormous damage to Britain's interests. My right hon. Friend the Leader of the Opposition has made it clear that a Labour Government will play a forward-looking, positive and constructive role, desirous of achieving the maximum economic co-ordination.

I have fully answered the hon. Gentleman's questions and I must now get on with my speech.

I have answered the hon. Gentleman and I think that Mr. Deputy Speaker will accept that I cannot give way again. I have fully answered a point that I intended to deal with later in my speech.

The tragedy is that the Department is failing to support British industry, not because of budgetary constraints but because of ideological constraints. The Department has a Secretary of State who is the leading member of the No Turning Back group. The Minister of State is the philosopher for the group. The Under-Secretary, who has just joined the Department, was the spokesman for the group only a few weeks ago.

For the benefit of Conservative Members, I shall explain what it is. That group proposed the implementation of the poll tax, the abolition of the top rate of tax, a reduction in capital taxes—to be funded by cuts in public services—and the abolition of the national health service and the welfare state as we know it. It appears from its publications that its industry policy is opposed to any training or regional policies in Europe. Its only policy that might affect the future of industry is a major proposal for the economy that flies in the face of experience and common sense—it wants to declare Britain a free port.

I shall quote from the group's recent policy document. It states:
"If all our eleven partners sign up to a single currency, we should deploy our prized freedom to advance the concept of the UK as a kind of free port linking Europe and the world in accordance with our aims for domestic policy. We can draw inspiration from the examples of Hong Kong and Singapore and other flourishing Asian states."
In that the future for Britain—not selling its skills, inventiveness, products and innovations in manufacturing goods, but a state without regulations or standards, like the free ports of a century ago?

I must tell the No Turning Back group that free ports were tried in 1979. There were six, but three no longer exist. The only free thing about them was that they were free of any industry. As the Treasury said, the free zones attracted very little additional activity to the United Kingdom—probably only 150 jobs, and few of them were additional to the United Kingdom as a whole.

Are we to believe, with the evidence of those failed free ports, that this nation should put its entire national economy at risk by making the Britain of the 1990s the equivalent of the Tangiers or Shanghai of a century ago? That is a high road to nowhere, heading straight into the wilderness. The tragedy is that the Government are taking our trade and industry with them.

I dwell on the views of the No Turning Back group because the choice that will exist at the next general election is already clear. When more than ever we need positive and constructive economic co-operation across frontiers, we have a Conservative Government who are locking themselves into dogma and lurching towards a free market isolationism that can only damage Britain. When more than ever we need a proper partnership with industry, to develop skills, technology and investment strength for the future, we see a Conservative party hijacked by a faction that proposes yet more reliance on the hazards and uncertainties of free market forces.

Look round Britain this month, and at the state of its economic and social fabric. We see patients who have been told by their health authorities to bring their own bandages. We see youngsters living in cardboard cities in the centre of London. We see mothers unable to send their children to school because they cannot afford to buy shoes for them. This is the Government of the opt-out school, the opt-out hospital, and of poll tax, and they have abandoned any concept of social cohesion.

As we see unemployment rising, output falling, industrial capacity shrinking, investment stagnating, and our competitors moving ahead at an alarming rate, it is clear that the Government have failed to build an economy for the future. If this country is to have the social justice and economic prosperity that it needs, it will have to look to Labour.

10.42 am

Before I address the subject of trade and industry, I want to raise an issue that concerns me greatly as a Member of Parliament representing a Greater Manchester constituency. Greater Manchester Buses is a company run by the Greater Manchester transport executive, and over the past two years it has operated at a loss of £10 million. Free enterprise competition is being driven out of business, yet the company is refusing to raise its fares. That is a disgrace, and is contrary to the free enterprise initiative under the Transport Act 1985. I ask my right hon. Friend the Secretary of State for Transport to address himself to that urgent problem.

I am most grateful to my right hon. Friend.

I am grateful for this opportunity to address the House, because it is the first time that I have caught your eye, Mr. Deputy Speaker, since my resignation as Parliamentary Private Secretary to my right hon. Friend the Chancellor of the Exchequer, which position I held for more than four years. Four years is long enough as a Parliamentary Private Secretary, as any of my right hon. and hon. Friends will appreciate—and in my case, perhaps particularly so. That is not to say that I did not enjoy every moment of working for a man who enjoys the respect of every right hon. and hon. Member, regardless of his or her political persuasion. He is the most decent, honest and able man for whom I have ever had the privilege to work. I enjoyed every moment of those four years. I was delighted to hear him say yesterday that the economy will soon be on course. It could not be in better hands than those of my right hon. Friend the Chancellor, and I was particularly glad to hear his comments yesterday, because I have a majority of 2,800.

I have. I speak to him regularly.

I am also glad of the opportunity to speak in this debate because it is the last on trade and industry and on the Loyal Address before the 150th anniversary of the arrival in the House of Stockport's most illustrious representative. He was a giant among parliamentarians. He was a Liberal, and I speak of Richard Cobden. The hon. Member for Gordon (Mr. Bruce) might have some comments to make about Richard Cobden, but I shall say something first.

Richard Cobden would find extraordinary the Liberal party as it is today, and be astonished by the changes in that once great party. Richard Cobden was a free trader who would have found it difficult to argue with most, if any, of the policies of my right hon. Friend the Prime Minister. He was opposed to protectionism in any form, tariffs, and excessive Government spending—but in favour of a reduction in Government debt. All four of those policies have been pursued by my right hon. Friend the Prime Minister and her Government.

Richard Cobden made his final speech to the House on 22 July 1886, when he introduced a motion to prevent the Government from manufacturing themselves articles that could be obtained from private producers in a competitive market. Richard Cobden would have been welcomed on these Benches, and I dare say in the No Turning Back group, of which I am a member.

Richard Cobden's most famous act was to fight for eight years against the corn laws. He was a founder of the Anti-Corn Law League, and deplored the protection of wealthy landowners against competition from abroad. He would have been appalled by the shenanigans that we recently witnessed in connection with the common agricultural policy and by the argument that world free trade should be placed in jeopardy to support Bavarian farmers.

It would not be difficult to imagine on whose side Richard Cobden would be in the emerging debate between M. Delors and my right hon. Friend the Prime Minister over their visions of a future Europe. His principles were encapsulated in a single great phrase:
"The maximum of intercourse between nations, the minimum of connection between Governments."
My right hon. Friend the Prime Minister is totally opposed to a united states of Europe, and I am certain that Richard Cobden and the Manchester Liberals would have shared her view.

The Rome summit proposals include a single currency, and European control over taxation, the environment and social affairs. The hon. Member for Dunfermline. East (Mr. Brown) now appears to be opposed to the use of a veto against Community proposals for taxation, environment and social affairs.

There would not be much left for this House to do. Richard Cobden would also have been appalled by removing such powers from this Parliament and giving them to Brussels.

One must remember what others of our partners have been saying recently. The Danes once fervently opposed any increase in European control, but now say that they are in favour of European money control, a central bank, a single currency, and European control over matters affecting culture, health and education. In other words, a united states of Europe. Some hon. Members suggest that we should board the Eurotrain not knowing where it is going. It is clear in my mind, that of the Prime Minister and, I venture to add, in the minds of the Secretary of State for Trade and Industry and the Secretary of State for Transport, where the people who have control of the Eurotrain are determined that it should head: for the united states of Europe.

At the first get together of the Christian Democrat party after German reunification, Chancellor Kohl said that European unity and German unity were two sides of the same coin. It is quite clear where he thought that the European express was heading. Earlier this year, President Mitterrand said that the Community has a "federal finality". That is not what people in this country voted for in a referendum. They voted for the breakdown of barriers between Community countries. They were certainly not voting for a federal state.

I do not think that any Conservative Member would argue with the 1992 proposals. Nor would the Manchester Liberals, because the free movement of goods, people, services and capital are wonderful things and we are in the vanguard, working for those proposals.

My right hon. Friend the Secretary of State for Trade and Industry talked about free trade, the prosperity that it brings and the way in which it draws nations together.

My son went around Europe in the summer using an Inter rail ticket. It was a marvellous experience. He went to Community countries and to eastern Europe. I do not think that he had any idea whether he was within the Community or outside it as there were no barriers between them. When he came back he talked about the friendliness of the people whom he met, their diversity and individualism. I envy him. He even went to the reunification celebrations in Berlin.

The free movement of goods, people and services is wonderful and we should not put it in jeopardy, but I believe that by trying to make one nation out of 12 we would jeopardise all the good things that the European Community has achieved.

As the hon. Members for Gordon and for Livingston (Mr. Cook) know, it takes a long time to mould two countries together, and here we are talking about 12 countries. The Act of Union was passed in 1707—almost 300 years ago—but at Scottish Question Time we still hear a constant Scottish moan about Westminster's lack of understanding of what is going on in Scotland, or about the lack of a voice for people in Scotland. There are some independent Members who represent Scottish seats and there is still an independence movement within Scotland. Yet, we live in one island, we have intermarried, we speak one language, we have free trade and a single currency. We have fought and beaten dictators such as Napoleon, Hitler, and Galtieri. We have won and lost an empire together and yet there are still strains. So, what on earth is the chance of Greece, Ireland, Britain and Denmark working together as one nation, as is suggested by the European federalists? It will inevitably end in tears. It will be a disaster and it will put at risk so much that is good and so much that the British want; a free market for goods, services, people and capital. A marvellous thing will be destroyed by trying to achieve the impossible.

10.53 am

When I saw the Conservative party chairman on television last night, I began to think that the Tory party was getting desperate. The hon. Member for Stockport (Mr. Favell) prays in aid Cobden as a great Tory, which shows that they are truly desperate. They are going further and further back into history to try to justify what is happening today.

One of the problems is that, instead of making a speech which tried to analyse the problems we face, to chart some way ahead and to explain how the real difficulties that the country faces might be solved, the Secretary of State for Trade and Industry chose to indulge in a little parliamentary knockabout, as though the economy were of little account. The trouble is that the same thing happened yesterday, when we heard a speech by the Chancellor, in elegant Treasury prose. It was nicely read out. But he could not bring himself to deal with the real problems. He could not bring himself to pronounce the word "recession", but instead spoke about "weak activity".

A few weeks ago when he was questioned about the problems arising from recession, the Chancellor said that people who speak like that are "over-indulging in reality". What on earth does that mean? It is a wonderful phrase, but it is wholly misleading, and a retreat into fantasy.

As we all know, the problem is that the economy is in great difficulty. This morning, the Secretary of State spoke about short-termism. He sought to chide the Opposition for being more concerned with short-term than long-term issues. The history of the Government has been one of short-termism. In the past 11 years, all we have been offered are palliatives.

I saw a newspaper report the other day that the Chancellor has a tooth abscess, and I commiserate with him. I am genuinely sorry, as it can be very painful. His office said that he could not have the abscess treated for some weeks, but was taking oil of cloves to deaden the pain.

Yes, whisky is better. As an aside, I hope that when the hon. Member for Crawley (Mr. Soames) goes to Conservative party conferences and gets bottles of whisky he will invite me there, or send them to me because we certainly do not get any at the Labour party conference.

The Chancellor said that he could not deal with his tooth abscess and has to take oil of cloves. The Government will never face up to a problem but always provide a parliamentary paracetamol in the hope of deadening the pain, when we ought to be dealing with the root causes of the problems and not simply the symptoms. Frankly, the root cause is that the Government will not invest or plan—they are incapable of doing either.

Some of my hon. Friends know far more about the steel industry than I do, because it is in their constituencies. The steel industry is a prime example of failure to plan or invest. A few months ago we were told of the problems at Ravenscraig and the jobs that would be lost when the strip mill was closed. Yesterday we were told that the Clydesdale works is to close and that 1,200 jobs will go. It seems ridiculous that British Steel should be shutting down a plant which has great potential for work. There is no shortage of demand for its goods, either in the North sea, which is an important market, or worldwide.

The Government have refused to act and have stood by and watched the butchery of the steel industry. They gave the steel industry a short-term remit and said, "Fatten yourself up ready for privatisation. Buy cheap, sell dear, don't worry about manufacturing, just worry about buying and selling to make a profit."

The problem is that the Government say one thing but do something else. They tell us that they want expansion of trade and manufacturing, but that is always followed by their failure to do what is necessary to get expansion.

A small example in global economic terms, but one which will have wider repercussions was drawn to my attention some weeks ago, when the Prime Minister said that she wanted to expand trade with the USSR, in our own interests—obviously we want to expand trade—and to assist Mr. Gorbachev with his economic reforms.

The Scottish Pelagic Fishermen's Association applied for ECGD cover for its herring trade with the Soviet Union. It was told that it had been withdrawn, that nothing could be done and that it must stand the risk itself. When the association told me about this, I took the matter up with the Secretary of State for Trade and Industry—he is obviously not interested in the debate, but that does not surprise us in the least. It is normal courtesy for the Secretary of State not to turn his back and gossip with those behind him when a serious debate is taking place; however, that is typical of an upper-class education and the total arrogance with which he deals with other hon. Members.

I received a reply from the Parliamentary Under-Secretary of State for Trade and Industry, who said that I must understand that the Government had not withdrawn ECGD cover entirely from trade with the Soviet Union. He said that it was a particular problem with the herring industry, because the state purchasing board was unable to guarantee that central Government would meet its funds; the risk was therefore too great for the ECGD to take, and it would not intervene.

I do not know what will happen to the herring industry if that cover is not restored. Instead of reacting in a positive way, going to the USSR and trying to solve the problems that have arisen because of a shortage of hard currency, the Government merely say that it is too risky a business—that they are withdrawing the cover and doing nothing about it. That will have serious repercussions for our trade. It simply will not do.

Recently, the Government have been complaining—perhaps with some justification—about the education system not being too good as regards reading, writing and arithmetic. I hope that the Secretary of State for Transport has been back to school and had his geography brushed up. Perhaps he will now have learnt—we must keep dinning into him if he has not—that the east coast main railway line runs not from London to Edinburgh, but Aberdeen to London and vice versa. It has always been the link between Aberdeen and London; it does not stop two thirds of the way at Edinburgh.

We must deal with electrification and rail freight. All the evidence suggests that British Rail is yet again thinking of cutting its rail freight distribution system in Scotland. That is appalling. The headlines trumpet about the channel tunnel finally being joined up, even though it is only a borehole a couple of inches wide; the Secretary of State has told us that it will provide a marvellous boost for the economy, and will benefit not just the south-east of England but the whole of the United Kingdom. However, when it comes to ensuring that there is a proper rail infrastructure, and that the regions benefit from the channel tunnel and have a chance to boost their manufacturing and exports, the Government do nothing: they merely stand by.

It is no use saying that the Government make the money available and it is up to British Rail to decide what to do. We know that—apart from official contacts and the exchange of letters—there is real contact with the people who run British Rail, and we know that they listen carefully to what the Government have to say.

I now wish to refer to a matter which is of great importance and becoming even more important. Last Saturday, I wrote to the Leader of the House to welcome him to his new job—it was a genuine welcome. I said that he might have thought that he was leaving the hot seat of education and coming to a quiet backwater. That is not so. The right hon. Gentleman has an important task to perform: he must grasp the nettle and establish a Select Committee on Scottish Affairs. We have pressed for that for a number of years—indeed, ever since this Parliament came into being.

Paragraph 270 of the report of the Select Committee on Procedure, published on 23 October 1990, states:
"The reasons for this are at one level straightforward—the unwillingness of sufficient Conservative Members representing Scottish constituencies to serve on the Committee."
It goes on, in paragraph 271:
"We would observe, however, that the inability of the House to agree upon the membership of a Select Committee which its own Standing Orders state 'shall be appointed' is regrettable. Moreover, the absence of a Scottish Affairs Committee leaves a major Government Department unscrutinised and thus constitutes a deficiency (some would consider a serious deficiency)"—
We all agree with that—
"in the departmentally related Committee system. We agree in principle with the Chairman of the Liaison Committee that 'the cause of this problem is political and so must be its solution.' Nevertheless the power of initiative in this matter, as in many others, lies with the Government and the House is therefore entitled to look to the Leader of the House to continue the search for a solution, which may require compromise on all sides."
When the very powerful Procedure Committee is prepared to make such a statement, the Leader of the House really must act.

Many things should have been examined, but even now still require urgent attention. The steel industry, the fishing industry, the rail infrastructure, investment, the education system and the health service all need probing if we are to discover whether the Government's solutions—such as money going into the health service—are working. We also need to know whether housing issues are being dealt with.

The housing problem is growing week by week. Every time I have a constituency surgery, more young couples come to me saying that they have had to sell their house—that they could not afford the mortgage payments any more, that the high interest rates have killed them and that they have had to give up something that they desperately wanted. They tell me that they must have a house from the council. I tell them that they are entitled to a house from the council under the Housing (Homeless Persons) Act 1977. Often they say that they were offered a house, but that it was pretty grotty because no repairs had been carried out. The whole housing fabric is collapsing, as is the Government's home ownership policy.

The problem with the Prime Minister and the Government is that they do not really want a debate about Europe. There are big issues to be discussed about the role of the central European bank—about how it should come into being, if indeed it should, and about how we can harmonise policies and the benefits which can flow from that. Studies done a few years ago show that, if all the countries in the European Economic Community were to reflate at the same rate in a planned direction, the benefits would not relate directly to the number of countries in the Community; it would be 10 times greater. There would be an immense expansion in jobs and manufacturing if we all worked together.

The problem is that the Prime Minister says that she is against this, she is against that, and she will not have certain things at any price; in the end, however, she has to sign on the dotted line and meekly accept what the others have decided for us. She then has another tantrum about how bad it is.

I must confess that I have changed my mind about Europe. I was a rampant anti-marketeer and voted against joining the EEC. I campaigned against my own Government at the time of the renegotiation, because I did not believe in the Common Market. However, I have come to accept, perhaps reluctantly—I am no enthusiast or zealot on these matters—that we are in the EEC and that we are not coming out. We must play our part and ensure, not just in our own interests but in the interests of our European partners, that we react constructively.

It is no use the Prime Minister wrapping herself in a union jack and thinking that it is some type of shield to ward off evil.

Nor is it any use if the Scottish National party, whose Members of Parliament are absent today, wraps itself in the tartan flag and thinks that it is some sort of shield that will protect all our people from the ravages of Thatcherism. It is no use, either, making rhetorical statements about the need to defend the steel industry if the SNP does not take part in debates, on the ground that it has a little tartan shawl that it can put on to protect it from the cold and that it will be a shield to ward off all evils. There is more in common between the Treasury Bench and the SNP than one would imagine.

The Government face a great task. They must face up to our economic problems and to future constitutional developments. Everyone knows, however, that they are failing the people of this country. Part of the message was received last night in two constituencies. The sooner we get rid of the Conservative party in every constituency and have a change of Government, the better it will be for us all.

11.10 am

I am grateful for this opportunity to speak in the debate on the Loyal Address. I admire the hon. Member for Aberdeen, North (Mr. Hughes) for having changed his views on the European Community. We all have our own views about it. I do not know whether he heard the speech of the right hon. Member for Plymouth, Devonport (Dr. Owen). It was one of the best speeches that I have heard him make. He is a distinguished speaker. He said that at times he despairs at the way in which the country deals with fundamental issues.

I make no comment about what the hon. Gentleman said, but it is extraordinary that my right hon. Friend the Prime Minister should have been unable to go into the recent negotiations without the whole hearted support of the House of Commons in order to secure for our people, in difficult circumstances, their rights and the protection of their most fundamental interests. These issues ought not to be trivialised by ordinary cross-party banter.

No, I should like to continue with my speech, if I may.

There is considerable agreement on both sides of the House about the issues. We cannot afford to allow ourselves to drift into the extraordinary morass proposed by Mr. Delors. He is an out-and-out federalist. The nation state faces real danger from federalism if it ploughs on regardless and gets sucked into it. We are not prepared to allow that to happen. That does not alter our real desire, as set out by my right hon. Friend the Foreign Secretary in the last few days, to play a proper, constructive and creative role in Europe.

What is so sacred about the concept of the nation state? The nation state grew out of a series of amalgamations of principalities and kingdoms. Why do we stop at the nation state? Why do we not go further? The hon. Gentleman does not feel that history has suddenly come to a halt, does he?

No, I do not, but I believe that the nation state gives character, courage, strength and form to a people. That is not always completely understood by our European partners. Ours is an entirely different experience from theirs. The nation state does matter. I understand what the hon. Gentleman says but I have respectfully to disagree with the inference that he draws.

I welcome my right hon. Friend the Secretary of State for Trade and Industry to his post, and congratulate him on the startlingly splendid start that he has made. He carries with him the good will of the House as he embarks on his important job.

I warmly welcome the fact that the Gracious Speech includes the measures that my right hon. Friend the Secretary of State for Transport has decided to implement to reform the law relating to the punishment of people who are convicted of drunken driving. In the last few years, two families in my constituency have felt deeply let down by British justice. In the first case, a young man was run down by a drunk driver on a zebra crossing and killed. The criminal was fined £250 and banned from driving for 18 months.

That was a contemptible and disgraceful dispensation of the law. Therefore, I am glad that a new offence, following the recommendations in the North report, is to be created that will carry a mandatory prison sentence of up to five years. It will catch those who are guilty of what is no more and no less than murder. I am delighted that that measure will put right a grave omission in the body of our law. I am sure that the whole House welcomes it.

I am delighted that there is to be legislation to deal with public utilities that dig up our roads, thus causing those of us who have to move around our towns and cities such dreadful inconvenience.

The inter-city services are becoming remarkably good. It is a pleasure to travel on British Rail at its best, although it is a swine to have to travel on it at its worst. At its best, British Rail shows what it can do when it puts its mind to it. Nevertheless, the commuter is still poorly served. My constituents enjoy a better service than those who travel on other lines into London, but even my constituents have to put up with disagreeable conditions. When they reach London, they have to travel on an underground which, even at the most charitable, can only be described as a disgrace.

The Government have invested massively in London Underground and enormous sums are to be invested. Nevertheless, the Government ought to be aware of the deep and abiding resentment of all those who, every day, have to make a very unpleasant and disagreeable trip on the underground. It is not a fit system for a great capital city. I congratulate my right hon. Friend on the steps that he is taking to improve it. The Government should be under no delusion, however, as to the seriousness of the system's deficiencies.

I refer also to the airline industry, since Gatwick airport lies within my constituency. I am therefore disappointed that the Queen's Speech contains no reference to that industry. It is a truly British success story. It receives no subsidies, yet it contributes mightily to the British balance of payments. It is regulated by a competition policy that is largely a sham. It does not receive the Government assistance that it needs if it is to fight international competition. The airline industry needs the Government's vigourous and robust support in its fight for access to overseas markets, just as overseas interests are fighting daily to secure access to the United Kingdom market. The Secretary of State for Trade and Industry is as intimately involved in this issue as the Secretary of State for Transport. Of course they fight our corner.

I hope that the Government are aware of the major commercial battle that is raging in Europe, which will determine whether London will continue to remain Europe's principal gateway for long-haul traffic or be displaced by Paris, Frankfurt or Amsterdam. If London is to preserve its position, our airports must be organised to meet the needs of airlines and their passengers, not as supermarkets and property companies. I shall have something to say about the BAA later in my speech.

If London is to continue to compete with Paris and Frankfurt, passengers must be able to reach the airport in comparable time and comfort. Our competitors are expending huge sums in improving their surface access systems. It is imperative that, without delay we get on with the Heathrow—Paddington rail link and make getting to the airport a normal journey instead of the obstacle race that it is today.

It is of the highest urgency we extend the link to Liverpool Street, so that the City and the west end are brought within reasonable reach of Heathrow. We must proceed with the construction of terminal 5 at Heathrow, and bring the City airport into fully effective operation. It is quite extraordinary that a capital city of the importance of London does not have a proper, fully integrated helicopter facility linking it with Heathrow and other destinations. Environmental and other considerations must be taken into account, but it is extraordinary that a city of this importance does not have that facility. The decision-making process must be speedy and effective. We must have decisions, not endless procrastination and debate.

Heathrow is a major two-runway airport. Gatwick is a single-runway airport, and I am glad—I say this in the presence of my hon. Friend the Minister for Public Transport—that the Government have acknowledged that they do not wish to construct another runway at Gatwick, which would be physically impossible. Stanstead is a single-runway airport. If an additional runway is needed early next century, it would be madness to consider a fourth London airport with only one runway.

The more pressing need is for terminal capacity at Heathrow, tied to which is the need for the rail link which is grinding its slow way through the House. That is just the start. Of course we welcome the cross-rail link but what about railway links to the midlands, the north and the west? What about the channel tunnel? Would it not make sense to decide now that we need a rail link from the channel, linking Gatwick and Heathrow with the mid lands and the north? Every other major airport in Europe Is tied to the network. Paris airport and Amsterdam are on the channel tunnel line. If we are serious about maintaining London's status as the major intercontinental gateway, we must provide the necessary infrastructure and terminal capacity where passengers want it.

Alone in Europe, our industry is completely in the private sector. Our aircraft manufacturers, airlines and airports are all shining examples of the remarkable benefits of privatisation. We are heading towards the single European market, but let us make no mistake our European partners are also our most serious rivals and competitors.

I pay tribute to the Department of Transport, which has pressed ahead with liberalising measures. Too many European Governments still protect their national carriers from the rigours of international competition, which is bad for the customer and for the airlines. The Government must maintain their pressure on European Governments.

In the presence of my right hon. Friend the Secretary of State for Trade and Industry, I should like to mention competition with our American friends. They may have invented domestic deregulation, but they are highly protectionist in international aviation. No foreign airline is allowed access to their domestic routes or even meaningful investment in a United States airline. That is a wholly unacceptable state of affairs, and my right hon. Friend will have close regard to the interests of Britain's carriers in the future negotiations on United Airlines' and Pan Am's slots at Heathrow. He will ensure that British interests are properly considered.

I am only a partial fan of the British Airports Authority. Its technical expertise is outstanding, but any organisation that allows people to travel from, and be kept in, the conditions that prevailed at terminal 1 at Heathrow throughout the summer is a disgrace. I hope that my right hon. Friend will consider a possible reference to the Office of Fair Trading or the Monopolies and Mergers Commission to ensure that the British Airports Authortity does not abuse what is undoubtedly a monopoly. It is unacceptable that passengers who wish to travel in the United Kingdom are treated like cattle. Much more needs to be done to ensure that our people are properly looked after. The Government are making, and have made, mammoth investment in road building, and there are further substantial increases to hand, but travel on Britain's main roads and motorways, particularly on the M1 and M6, has become a nightmare. In the 1990s, it is unacceptable for people to be stuck for hours on end on a motorway without any information, help or succour while appalling accidents or chemical spillages are sorted out.

The Government must, as a matter of the greatest urgency, secure far greater and better information systems on motorways, which would prevent people from taking slip roads if 10 miles further down the motorway there is a 15-mile queue. That would not be difficult to achieve. it would not be expensive and the Government must act. Transport costs are unacceptably high and traffic delays are totally unnecessary.

I am sorry to have detained the House for so long. We increasingly have, under my right hon. Friend the Secretary of State for Transport, a much better and more cohesive transport policy. I broadly and wholeheartedly welcome the transport developments in the Queen's Speech and look forward to the swift enactment of the proposed legislation.

Order. Hon. Members will recall that Mr. Speaker said at the commencement of our proceedings that he intended to apply the 10-minute limit on speeches between 11.30 am and 1 pm but that it might be relaxed in the light of progress. Given the progress that we have made, it will be unnecessary for me to invoke the 10-minute limit, but I very much hope that hon. Members will not take this as a licence and will recognise that we shall still need some restraint if every hon. Member who is seeking to catch my eye is to be called.

11.27 am

I shall endeavour to follow your strictures, Mr. Deputy Speaker.

The simple messages from the by-election results that are relevant to our debate are that the Government have been seen, first, to be deeply divided on a fundamental issue and, secondly, to be substantially mismanaging the economy. They have lost the confidence of people who have supported them over the past 10 or 12 years. Unless they are prepared to respond to that, they will suffer a humiliating defeat. If they choose to reject the constructive comments of Opposition Members and of people outside, they will pay a high price. They must listen to what people are saying and consider the practical implications.

The Liberal Democrats have always believed in a free-enterprise, market-based economy. We have that in common with the Conservative party, and to some extent it divides us from the Labour party. We acknowledge that the Government have a clear responsibility within such an economy to promote investment, research and competition and to regulate monopolies. In that regard, the Government have been conspicuously unsuccessful and unwilling to tackle the problems, possibly because they draw their finances from large companies which benefit from their ability to operate monopolies to their advantage.

We are now witnessing the consequences of a series of mega-mergers that have taken place over the years and that should not, in the interests of competition, have been allowed to go ahead. Scandals have occurred, as we saw in the recent Guinness trials and in the Polly Peck affair. They are the consequences of the climate created by the Government, who have aggravated the situation by their policy of privatising state monopolies with wholly inadequate measures to ensure competition or effective regulation.

The hon. Member for Crawley (Mr. Soames) complained about a lack of competition in airline policy. Many people associated with British Caledonian feel bitter about the way in which that issue was handled and about the disgraceful conduct of the Monopolies and Mergers Commission, which rejigged the whole bid and came out with an approved bid that was different from that which was referred to it in the first place. That was a disgraceful operation, which worked against the interests of the consumer.

I will, as one who flies regularly on British Airways, give two examples of how BA operates in monopoly terms. When I was a new Member of this place, I made representations to the chief executive of BA because the company operated its shuttle services to Glasgow and Edinburgh at mealtimes with no mealtime service. When I remonstrated with the company about that, I was told that I did not know anything about running an airline, that there was no customer demand and that it had no intention of providing such a service. When BA found that British Midland was operating competitively in that area and was offering a mealtime service—and that BA was suffering a major customer haemorrhage—it revamped its whole operation and provided a mealtime service on those runs.

But when I fly from Heathrow to Aberdeen, where there is no competition, I find that, while the catering is reasonably adequate, when, for whatever reason, there is a shortage of aircraft, the tendency is to pull the Aberdeen service rather than those services where BA faces competition.

That means that the last flight to Aberdeen is sometimes withdrawn and Aberdeen passengers are abandoned. The response of BA's chief executive is, "If foreigners are stranded at Heathrow, they have nowhere else to go." Where are Aberdonians supposed to go at Heathrow when they have missed the last flight? They cannot take Air France to Paris. The nub of the issue is that there is no choice and no competition.

The situation has been aggravated not only with airlines but with British Telecom, British Gas, the way in which the electricity industry is being privatised, and with British Steel—which brings me to some remarks of the hon. Member for Aberdeen, North (Mr. Hughes). British Steel's current method of operation is a classic example of short-termism in the climate that the Government have created. Without doubt, British Steel is pursuing short-term profits and is sacrificing medium-term and long-term markets. That is against the national interest, and because British Steel can operate as a monopoly in the domestic market—knowing that no other company can move in, so that it can effectively vandalise its own assets if it is not prepared to use them—it can treat the Scottish industry in the way it is currently being treated.

Leaving aside assurances given to the Government and hon. Members, it is clear that British Steel is determined to phase out the entire steel industry in Scotland. The hon. Member for Langbaurgh (Mr. Holt) is usually here on these occasions and pours scorn on what he describes as moaning Scots. Our objection to what is being done to the Scottish steel industry is based on the fact that the Ravenscraig operation has been profitable and that it has contributed substantially to British Steel's turnaround in profitability because of the productivity of the work force there, as has been admitted by the chairman of British Steel. Similarly, the Clydesdale tube works is closing simply because of the failure to invest in modern technology to enable the works to compete.

British Steel has an appalling record of abandoning our steel markets to foreign competitors, to the aggravation of our balance of payments and our national market share. We are entitled to expect the Government to intervene on competition grounds and to explore, realistically and actively, the possibility of creating an independent private company to provide British Steel with the competition that it needs and deserves. The Government should test out the possibility of getting proper investment into the Scottish steel industry, possibly with new plants and locations.

The business climate in general affects businesses in every constituency. Although I was not able to spend time in Bradford, I am sure that the responses given were similar to those that I heard in Eastbourne, where many business men and women who had supported the Conservative party said that their enterprises had been crippled by the consequences of the Government's failure to control inflation and of high interest rates.

The state of affairs has been compounded by the uniform business rate, which has been set at the top level of inflation, at 10·9 per cent. If the Chancellor's forecasts of inflation turn out to be correct, what will he do for small businesses that have faced the top levels of inflation and have had to absorb their costs? What consolation can there be for businesses that fail as a result, even though inflation may subsequently be brought under control? They will have failed as a result of being excessively penalised.

The North sea oil and gas industry is of particular concern in my constituency. I have had close though indirect, association with the industry for about 15 years and I have great admiration for the technological achievements of the industry in finding and bringing ashore the oil and gas. About 20,000 of my constituents are employed in the industry, and major oil company operation headquarters are located in my area.

I am concerned over the feeling among those working in the industry about current offshore safety practices. The recent dispute arose from a bubbling over of frustration and resentment. It was not the best way to get the matter resolved, and we do not have a happy situation. We should not sit back and accept what has occurred. The Government should accept some responsibility and be concerned about the implications of the dispute.

The hon. Member for Aberdeen, North and I, among others, attended a meeting in Aberdeen recently where we heard some disturbing things from representatives of the workforce. The idea that the oil companies can tell contractors, "We will not allow you to employ, as part of your contract, workers who were involved in the industrial dispute and who refused to leave the platform," is, I argue, secondary action by employers that would be illegal if it were carried out by employees. It is difficult in such circumstances for offshore workers to conduct an industrial dispute or strike in an attempt to bring pressure on an employer.

In the context of yesterday's results by the oil companies, it must be acknowledged that the separation of retailing from production should not readily be accepted as a justification for oil company policies. When I was a member of the Select Committee on Trade and Industry there was an investigation into petrol retailing, with a reference to the Office of Fair Trading, which declared that there was no malpractice.

That happened because it approached the issue in the wrong way. It accepted the oil companies' argument that petrol retailing was a separate business that lost money, and that that justified the companies passing those losses on to the consumer. But that is to ignore the fact that huge multinational integrated oil companies gain the benefit of windfall wholesaling and production profits. It is wrong to say that consumers must absorb losses on retailing and that producers can pocket the producer profits with no benefit to the consumer.

In those circumstances, when oil companies measure the cost of increased safety in the North sea against the profit background, it is difficult for them to say that they cannot afford such measures. There has to be a cost-competitive recognition of the environment in which the firms operate, but safety cannot be compromised to that extent against the background of those profit levels. I understand that the drop in production in the Brent complex has so worried Shell's partner, Esso, that it is taking a much more direct interest in the management of that field and is concerned about safety and production problems that may arise if the present dispute is not resolved.

My next two points relate to transport issues of direct concern to me. The Government have pursued a policy of responding to increased traffic pressures on the roads by increasing the spending budgets on the roads to the detriment of railways, in particular. That is a mistake, and I do not believe that the Government will solve the fundamental traffic problems in that way. All they will do is attract more cars to create more jams.

Some radical measures may be necessary, and I do not dispute the case for road improvements. I freely admit that I campaigned for some in my constituency, partly because we were neglected when previous investments were made. That was proved by the statistics that the Scottish Office published in response to my questions. It is simply unacceptable for the Government to say that the east coast mainline will effectively stop at Edinburgh and Edinburgh to Aberdeen will be treated as a branch line, which cannot justify the investment if it cannot prove an 8 per cent. rate of return.

Leaving aside the correct estimate of return, which seems marginal, either the London-Aberdeen route is the arterial rail line of the United Kingdom or it is not. Clearly, the decision taken by British Rail and supported by the Government is that it is not, which we find unacceptable.

The Minister for Public Transport may want to argue that strict criteria of economic return are applied to British Rail, but there are also strict criteria on how road developments and improvements are calculated. If he checks with the Scottish Office, he will find that the decision to upgrade the A74 to motorway status does not meet those criteria. I am not opposed to that upgrading, but a clear political decision was taken by the Government because they believed that they had to respond, and the same political decision should be taken on the Aberdeen-Edinburgh electrification link.

The quality of service between Aberdeen and Inverness is appalling. The frequency of service on routes south of Aberdeen is inadequate and indicative of the rundown planned by British Rail. Only yesterday, we heard that another London service is to be diverted to Poole. Apparently there is a great demand for travel from Aberdeen to Poole—I do not believe it, I think that the traffic is south of Aberdeen. We also lost one sleeper earlier this year. Those attitudes are simply disastrous for the economic infrastructure of districts such as the north-east of Scotland.

The signs are that rail freight will effectively disappear from the north-east of Scotland once the present review is completed. I spoke to representatives from a paper mill in my constituency that at present imports chalk by rail from English China Clays. They said that, if the rail freight service is discontinued, they will import the chalk, and English China Clays will lose the business. That is the sort of consequence we face. If we are to talk about a single market, those of us in the north-east of Scotland, representing districts with a great record of successful exports to the continent, are entitled to be part of the national and international network. The Government's failure to recognise that will be strongly held against them. It is not in the interests of the local or national economy for them to behave in that way. I urge them to recognise the strength of feeling being expressed and their responsibility to respond.

11.44 am

In the absence of my right hon. Friend the Secretary of State for Trade and Industry and the Opposition spokesman, the hon. Member for Dunfermline, East (Mr. Brown), I congratulate my right hon. Friend on his sterling performance and generous remarks about the Opposition. I also congratulate the hon. Member for Dunfermline, East, who used every opportunity to exploit the position held by any Opposition spokesman at present. He reminded me of one of my constituents, who I am sure would have said, "I admire that Mr. Brown. He tells me what he is going to tell me, and tells me, then he tells me what he told me, but the trouble is, he never tells me what it will cost." The hon. Gentleman's speech was littered with examples of how one can pull down the country and criticise it in a range of ways without costing any of the measures. His proposals would have led to a remarkably inflationary economy way beyond what we have now, had they been enacted.

In the hon. Gentleman's absence, I suggest that if he looks back at the period up to 1979, when the Labour party was in power, he will see the adverse effects that regional aid had on the west country, and how vast sums were spent to try to persuade companies to come to Cornwall that would not otherwise have come because of the economic disadvantages for those companies. They were advised to go against economic and financial sense and, as a result, there were several dramatic collapses that ruined the lives of many people who were drawn into companies that should never have been set up in Cornwall in the first place.

Since 1979 there has been a dramatic increase in investment in roads and infrastructure by the Government. That has provided a real attraction for industry to come to Cornwall and many more companies have set up down there. It has led to much greater employment and had a beneficial effect on wages for local people who have had to compete for labour. It has been splendid news for the county. I spoke in exactly the same terms when I made my maiden speech in 1979; regional aid can have a distorting influence on a district such as Cornwall and will not benefit it.

For the Opposition to press the case as they do is to ignore the practical implications that companies and businesses consider when they are looking to set up in constituencies and districts such as mine.

I dispute the hon. Gentleman's argument about regional funds. I wish to give an example that is relevant to transport. The public subsidies of the section 8 grant were used in an innovative way for the china clay business. The subsidies were used not only for the rail lines but to provide wagons, which sustained the china clay business because it allowed the clay to be taken to Scotland by rail. That is good not only for jobs in Cornwall, but for the country and the environment. Does not the hon. Gentleman agree that that is a profitable use of public money?

The great majority of china clay produced by English China Clays in Cornwall is exported by ship. Much of it is taken to various ports serving the country. The hon. Gentleman must address the fact that if there is a marginal loss in any business—British Rail should be no exception—and it has a number of diversified activities, it should consider whether to bear one marginal loss against profit in other sectors. The hon.Gentleman should know—if he does not, he should look at the figures—that British Rail's freight transport is in a desperate state in terms of the loss that it sustains. Any Government and the board of British Rail must address that problem.

In the autumn statement yesterday the Government gave the welcome news that they are increasing investment in British Rail and roads. As my hon. Friend the Member for Crawley (Mr. Soames) said, when service on British Rail is good, which it often is, it is exceptionally good. Only a few days ago I had cause to travel from Euston. The station is in excellent order: it is clean and attractive. My trains left and arrived on time in both directions. I must say that I was rather startled at British Rail's generosity, however. I should hate it to be thought that I travelled without a ticket, but I certainly succeeded in travelling in both directions without my ticket being inspected at any point. I arrived with it intact.

I wish to address one angle of road safety, which is road use. I echo the plea made to the Secretary of State by my hon. Friend the Member for Crawley concerning information systems on motorways because that is an exceptionally important matter. I also wish to highlight the frustration that arises from long delays caused by coning in areas where only one or two people or perhaps none are working. I know that my hon. Friend the Minister is extremely diligent in those matters and I would ask him also to bear in mind the problems that arise when contractors who have taken steps to remove cones during periods of heavy traffic nevertheless leave the signs in place. All the traffic then slows down, only to find that there is in fact no hold-up. I use the motorway system a great deal. I usually travel by car to my constituency in the west country and I know that there is a whole range of ways in which the use of our motorway system could be greatly improved. The removal of such signs is one of them.

I understand that is is intended to introduce much stiffer penalties for overtaking on the inside on motorways, which is a very dangerous manoeuvre. But I hope that my hon. Friend the Minister will examine the reasons why motorists do that. As my hon. Friend the Member for Crawley suggested, it is largely because of the lack of information and guidance telling them to stay on the inside unless they are in the process of overtaking.

My hon. Friend has been kind enough to inform me that he has to catch a train to his constituency and may not be able to stay for the whole debate. The Government agree not only with him but with my hon. Friend the Member for Crawley (Mr. Soames) about motorway information services. The road traffic Bill that we hope to present shortly will contain specific provisions to deal with that matter. We intend to take clear action to ensure that motorists are aware of problems that may arise later in their journey so that they can take avoiding action.

I am sure that hon. Members and motor vehicle users alike will welcome such provisions with open arms. They will be very useful.

As a regular motorway user himself, the hon. Gentleman will no doubt share my hope that the illuminated signs on motorways, which often give incorrect information, are made to give the correct information of which motorists can then take note.

I appreciate the hon. Gentleman's point and I am sure that my hon. Friend the Minister will take it on board. I know that my hon. Friend the Member for Eltham (Mr. Bottomley), who has also been involved in these matters and who has dealt with them very ably, will confirm that it is not always as easy as it sounds to provide information systems, although a great deal could be done to improve them.

The Gracious Speech contained some welcome news about transport matters, including the proposal that we should go out to the private sector for the construction and operation of toll roads and motorways. I have long felt that that is the direction that we should take, especially where there is gross overcrowding on the existing motorway network. The opportunity is there for the private sector to play a part. But before the publication of that Bill and, linked with it, the planning Bill, there are two or three points on which I wish to caution my hon. Friend the Minister. I hope that he will be able to address them now if he had not done so in the Bill.

It is intended that there should be some form of competition in respect of the schemes and that the contenders should produce plans for them. That is understandable but I suggest that, unless the brief is very clear, some major contractors will say, "We have a one-in-four chance of success. The cost of producing the plans is too high for us to entertain so we shall sit this one out." My hon. Friend must either limit greatly the number of contenders whom he approaches in respect of a scheme or he must be careful to explain exactly what the Department is looking for, to cut the cost of preparing the design.

I hope that my hon. Friend has clear guidelines in mind to deal with the question of development gain. If private operators are to produce competitive road schemes and if charges to the consumer are to be kept down, much will depend on what the operators can do with the land adjoining the motorway or road that they are constructing. That gives rise to questions of planning and compulsory purchase.

We must examine carefully the planning inquiry system in so far as it relates to our infrastructure projects. I happen to think that we should look at the system in respect of all our major projects, including power stations or whatever. We need a public inquiry system that requires local authorities and all interested groups to make submissions to an inquiry and under which that inquiry's decision is final. Without that, we shall not succeed in encouraging people in the private sector to move into such schemes. If private operators know that they must go through the public inquiry system and the planning permission system, with all that that entails in terms of the length of time involved, there will be little to attract them.

Toll roads and private sector involvement are an excellent idea and it is courageous of the Government, and of Transport Ministers in particular, to propose such a scheme. If Ministers deal with those points—among the other points that I know they have in mind—there is every chance of the proposal producing more investment and better road systems for our motor vehicle users.

11.58 am

Let me start by commenting on the welcome remarks of the hon. Member for Crawley (Mr. Soames) about British airports. For a long time now, I have been campaigning for the improvement of provincial and regional airports. In particular, we have been campaigning for some time for an adequate road and rail link to the Cardiff Wales airport to serve the community and the local economy. I am glad to say that that is shortly to be the subject of an evidence-taking exercise by the Select Committee on Welsh Affairs. I hope that, during that exercise, we shall be able to give the matter a thorough airing, so there is no need for me to raise the subject in today's debate.

I welcome the measures on road safety in the Gracious Speech. I was delighted to see that the Government propose tougher measures against offending drivers, particularly drunk drivers. That is overdue. The Government should be congratulated on taking measures in that connection. I am also delighted that we shall make use of new technology to detect offences on our roads. That is to be welcomed.

We should remember that increasing the punishments alone will not necessarily result in large improvements. We must change attitudes to driving, especially drinking and driving, which causes terrible carnage on our roads. But that should be balanced with improved detection. We already have stiff penalties, but we have not seen a continued dramatic improvement in driving standards. Therefore, I and many other people were disappointed not to see a reference in the Gracious Speech to introducing controlled random breath tests. I hope that the Minister will comment on that at some stage.

The record on road accidents in Britain is bad. I am informed that, during the five hours of today's debate alone, 350 people will be seriously injured or killed on our roads. Over 5,000 people were killed and roughly 350,000 were injured on our roads last year. The House may be surprised to hear—it is a feather in the British cap—that even that bad record is one of the best in Europe. We have a comparative road safety record to be proud of although, there is a fly in the ointment. Our record on accidents involving pedestrians and children is not good. However, overall road safety in Britain is good compared to other European countries. There is room for enormous improvement, and random breath tests are one measure that we could take. We know from experience in other countries that they work.

We should also commend the Department of Transport for setting its laudable target of reducing the accident rate by 30 per cent. by the year 2000. Many hon. Members will agree that we must take measures soon to ensure that the target is realised. Several effective, low-cost measures could greatly assist us in achieving the target, one of which would cost nothing. An early-day motion supported by over 100 hon. Members from both sides of the House supports the early introduction of draft regulations in the current Session to make wearing rear seat belts compulsory for adults.

That would prove an exceptionally effective method of reducing death and injury on our roads, particularly the horrifying injuries which result when adults are catapulted from the back seats of cars. The introduction of front seat belts had a dramatic effect and the introduction of compulsory wearing of rear seat belts for children under 14 will have a dramatic effect. Once again, the evidence from other countries suggests that the wearing of rear seat belts by adults can greatly reduce accidents.

It is worth bearing in mind that each road death in Britain was recently estimated to cost the community £0·5 million in health costs, emergency services and support for the family of the deceased. Forgetting about the human misery that can be caused, the cost-effectiveness of reducing the number of road accidents is demonstrated by the cost to the community—currently about £6 billion a year. That is the price we pay for the toll of death and injury on our roads.

A second measure would be effective. We hope that the Department of Transport will make a statement shortly on the amount of money that it intends to allocate to local safety schemes such as small engineering road schemes which have a superb track record in reducing accidents. They include improving lighting and sometimes merely a spot of paint on a street corner gives a warning. Such schemes also include pedestrian crossings, and so on. We know that the Government have a commitment in principle to such schemes but we should like to hear how much will be allocated. We hope that it will be adequate.

We are making progress on road safety compared with our European counterparts, but many hon. Members will be disappointed that there was no reference in the Gracious Speech to other forms of transport, and to transport safety in particular. There was no mention of aviation or our not-so-good record on railway safety. Compared to many of our European counterparts, our record on railway safety is not good; and this year, it was particularly bad. The month of August was the worst month ever for train accidents involving large numbers of casualties.

Many hon. Members will be disappointed that there was no reference in the Gracious Speech to resolving the dilemma that seems to have emerged in British law which does not allow us to allocate corporate responsibility for the dreadful neglect of safety standards, particularly in public transport. Cases collapsed recently when no corporate responsibility could be placed on those who owned or managed large companies which appeared to be responsible for dreadful disasters which had caused death and destruction.

After the Clapham crash, there was no attempt to place corporate responsibility on British Rail or those responsible for financing British Rail. Yet this year, history was made when a train driver, Mr. Robert Morgan, was sentenced to six months in gaol—18 months, with 12 months suspended. The sentence was later reduced by the Court of Appeal. It was the first time ever that a British train driver had been given a custodial sentence for overshooting a red light—which he courageously admitted—when he was neither drunk nor proven to be acting in an absolutely reckless manner. It was a mystery to some of us why Mr. Morgan pleaded guilty to manslaughter. Anyone like me who has driven in the front of a locomotive and seen the nature of a train driver's job will know that it is tedious and boring. Drivers shoot through warning signs and yellow signs and knock off the Klaxon that comes on in the cab almost instinctively and automatically.

From my limited experience I can see how easy it is for someone to make a mistake That man made a mistake—no one seeks to deny it—in the course of his work, which destroyed his life and affected his family. He paid a high penalty for that one mistake. The house should carefully consider an anomaly. In most other European countries, such an incident and error could not have happened, because fail-safe devices have been introduced which prevent the ludicrous possibility of somone overshooting a red light through an error of judgment. A driver of a forward moving train has 250 yards in which to stop it before it cuts across a main line carrying a 90 mph express. Practically every other railway system in western Europe would have a fail-safe emergency stop in such a situation. The driver took the train through one warning light without slowing down, through a second yellow warning light without slowing down, because of the tedium of the job or whatever, and then through a red light. The train could not have stopped in time at that point, because it was going too fast.

Such accidents should not be allowed to happen. We should have a system of rail safety that ensures that, when human fallibility comes into the equation and honest and decent people make mistakes in their work, those errors do not result in carnage and disaster—as they did on that occasion, and may do again. We should remember that, after Mr. Robert Morgan was charged with manslaughter, the number of accidents and incidents over the following year increased dramatically in British Rail.

Passing such a sentence on a person like that smacks of making a scapegoat of him. Any objective analysis of the circumstances leading up to the incident can only lead one to that conclusion. I do not blame the judge or the court, because Mr. Morgan pleaded guilty to manslaughter, although I find it hard to believe that he should have done so. One person has been made a scapegoat when public transport in general and British Rail in particular have a record of falling way behind our European counterparts in safety.

Many of us would have liked to see something in the Gracious Speech about introducing corporate responsibility into the law and ensuring that it is applied effectively. We should also introduce statutory regulations so that British Rail has responsibility to ensure that the fail-safe mechanisms used in other countries are introduced.

The hon. Gentleman will appreciate that safety measures and expenditure on safety, while tremendously important, are not subjects appropriate for the Gracious Speech. The day after the speech was made, my right hon. Friend the Chancellor of the Exchequer, in his Autumn Statement, made it clear, as did my right hon. Friend the Secretary of State for Transport, that British Rail and London Underground would be spending £700 million over the next three years on safety measures.

I am delighted to hear that. I hope that the Government will set down some guidelines for British Rail to ensure that it updates its railway network, so that safety is an integral part of it and that human error does not result in disasters such as those that we have seen recently.

12.12 pm

I shall concentrate most of my remarks on the transport section of the Gracious Speech and particularly on how it relates to the London area and my constituency. However, in more general terms, I welcome the balanced and interesting programme of proposed legislation, with 15 major Bills, which I am sure will also be welcomed by the public. The Bill dealing with criminal justice contains provision for much heavier sentences for serious crimes, particularly rape—a crime that we all abhor.

I also welcome the greater local emphasis on planning that will be brought about by the planning and compensation Bill, which we look forward to seeing soon. The social security measures, particularly those dealing with enforcement of maintenance for children and deserted spouses, will be welcomed. There is much to be welcomed in the sections in the Gracious Speech dealing with education and measures to tidy up various lacunae in the community charge legislation passed a couple of years ago.

The section on transport will be particularly welcomed in London and in my constituency—the road traffic Bill and the highways Bill very much so. The highways Bill has provisions for dealing with those most awkward and repetitive holes in the road caused by works conducted by public utilities. I am pleased to see that my hon. Friend the Member for Eltham (Mr. Bottomley) is here. When he was Minister for Roads and Traffic I wrote to him about a most appalling traffic jam, which stretched for five miles from a hole that had been dug somewhere on the Wandsworth one-way system, along the whole of the A3 and into the royal borough of Kingston upon Thames, thereby inconveniencing my constituents. That was the most ludicrous and avoidable traffic jam.

My hon. Friend told me—this must be a couple of years ago—that the Government proposed to deal with that sort of incident. At last, time has been found in the legislative programme for a highways Bill, which deals with a great deal more than just this. I am sure that there is agreement on both sides of the House about how regrettable it is that public utilities are prepared to behave in this way. The road is dug up one day to deal with an electricity problem, the tarmac is put back, and then two or three days later it is dug up by the gas board and then put back again and, if we are unlucky, it will then be dug up yet again by the telephone engineers. That is ludicrous, and the Government are right to tackle the problem.

I also welcome the provision, set out in the briefing material that has come our way, that, when the carriageway is reinstated it will have to be reinstated in the safest possible form. The number of cyclists is growing, and that is good. Not only do they improve their health, but because they are using bicycles instead of cars, they reduce congestion and lead pollution. If we want to encourage cyclists, we must make it safer for them to ride on the carriageways, so this provision is welcome.

Congestion is a problem in central and inner London. The road traffic Bill will make provision for what are called the red routes. I am one of the first to welcome the idea of removing illegal parkers and tightening the law to prevent illegal parking. I am glad to see it happening in central London, and I understand that my hon. Friend the Member for Battersea (Mr. Bowis), who unfortunately cannot be here today, is credited with much of the campaigning to persuade the Government that the red route solution is the best way forward. My hon. Friend is right: this will be a way to prevent parking that holds up the passage of buses, creates congestion, prevents efficient deliveries and so on.

However, I was alarmed, as were hundreds of my constituents, to see that the red route network as originally planned in the consultation document stretched out into my constituency, and the edge of London, and took in the A243, which runs from the M25 intersection up to Hook at the intersection of the A243 and the A3. It is not a road on which there are constant problems from illegal parking. The problem is simply that the road carries too much traffic. Motorists who are travelling on the M25 see the intersection as an opportunity to nip along the A243, through urban areas, a village and urban area in my constituency and past green fields, to arrive at the A3. The problem is one of volume; there is rarely excessive parking on the road.

When the red route idea was first mooted, my constituents and I rose up in arms. A public meeting was held and the doors had to be closed because so many attended to criticise the proposal. Since then, I have passed on hundreds of letters to my right hon. Friend the Secretary of State for Transport from my constituents in Chessington about this matter. The idea seems, however, to remain in the Government's proposals. I accept that my right hon. Friend told me that there will be full consultation with my constituents in Chessington before the idea is taken any further, but I hope that, as a result of that consultation, he will drop this part of the red route proposals, which is so far out of London, so far out of the congested centre of London and so much on the edge of the conurbation. Red routing is not the most appropriate policy to pursue in such an area.

Hundreds of my constituents wish me to put that reservation on record. For the population of inner London or central London, however, red routes have not come too soon. I hope that my right hon. Friend the Secretary of State will ensure that the London traffic director will make certain that removal squads take away illegally parked vehicles from main roads where they are causing congestion and that, to increase their productivity, they do not nip round the back streets and remove the vehicles that are not causing congestion.

If there is proper policing of the red route scheme, vehicles will be forced off main roads into many side streets, which are residential. The scheme will merely shift the problem somewhere else. More co-ordinated attempts must be made to deal with the problems of London's traffic, rather than coming up with one idea which, in my opinion, will only shift the problem somewhere else.

I am in considerable agreement with the hon. Gentleman. Surely the traffic director will be the man who must mastermind the implementation of the various schemes proposed. From what I have seen of the provisions in the Bill, wardens will be provided with extra powers to clamp and to initiate removal where vehicles are causing considerable problems.

As I was saying, vehicles must be removed primarily from main routes. The hon. Member for Newham, North-West (Mr. Banks) has campaigned with many of us who represent London constituencies—this has been a cross-party effort—to free main roads for buses. We must take that further if we are to encourage people to use bus services. They will not use them if it means sitting in a constant traffic jam.

As my hon. Friend the Member for Crawley (Mr. Soames) said, our main-line railway services are extremely good. I travelled on the railway in France during the summer and I can say that many of our services are up to the same standard as, or are even better, than, many services in France. During the summer, I encountered several delays while using French trains, which are so often presented to us as a perfect example of rail transport. Our main-line services are fine, and it is the suburban services to which I wish to draw attention.

In the south-west of London and in Surrey, within Network SouthEast, British Rail has taken the extraordinary line that it has removed services to improve efficiency. That information was received with much derision by my constituents and those of about a dozen of my Conservative colleagues who represent constituencies in the south-west of London and in Surrey. We have since been raising the matter with British Rail's management.

The Government are making the greatest investment for 29 or 30 years in British Rail. As that investment is being made, we wish to see services managed in the best possible way. In the past two or three months, services on the Chessington line, which runs through my constituency, through Tolworth, have been reduced by the removal of 23 trains. That is unacceptable.

Some of the 23 services have been reinstated. We were told by British Rail that they would all be reinstated by the beginning of October, but I understand that there is a problem in training drivers and rail crews generally, as well as some recruitment problems. However, when we are making record investment in railway services on Network SouthEast, we expect the management to make certain that our constituents have the most efficient service they can expect. If we are to reduce congestion and remove unnecessary car travellers from the roads, travellers should be encouraged by a high standard of efficiency to use the railway or to opt for bus services. We shall not do that by removing services as an alleged means of improving efficiency.

12.27 pm

I shall not take up the remarks of the hon. Member for Surbiton (Mr. Tracey) on the details of inner London's traffic problems. All of us who visit this great metropolis in the course of parliamentary duties have a personal interest, especially in clamping and parking problems. We are also interested in commuting and in tube networks.

The hon. Member for Aberdeen, North (Mr. Hughes) referred to the position of the Scottish National party on the steel industry. He alleged that it is similar to that of the Conservative party. I refer the hon. Gentleman to the private notice question on the Clydesdale steel works. If he reads Hansard, he will see that my hon. Friend the Member for Banff and Buchan (Mr. Salmond), the leader of the SNP, was criticised by the Secretary of State for Scotland for having policies which he described as wanting
"the steel industry to be controlled by Governments and by the state."—[Official Report, 8 November 1990; vol. 180, c. 115.]
There is a substantial divergence between the policy of the Conservative party and that of the SNP. Perhaps the problem is that Labour party policy on the public sector aspect of the British steel industry is similar to that of the Conservative party.

I want to set the record straight. I did not say that their policy on the steel industry was the same. I said that the Government wrap themselves in the Union Jack and pretend that that solves all the problems, and that the SNP wraps itself in a tartan cloak and thinks that that solves all the problems. On the one hand there are little Englanders, and on the other little Scotlanders.

I do not want to be drawn too much further on this point. As I understand SNP policy, it also wraps itself in the flag of the European Community. Its policy on independence in Europe advocates direct relations between Scotland and the European Community.

Does the hon. Gentleman agree that if the SNP really wanted to put the case for the Scottish steel industry, it would have a spokesman in the Chamber today?

The hon. Gentleman is well aware that the SNP and Plaid Cymru have a fraternal relationship, and that in debates such as this we rotate as a joint parliamentary group. That facilitates both our position and that of the Chair. I do not speak on behalf of the SNP about the state of the Scottish steel industry; it would not be for me to do so as I come from a country whose steelmaking capacity has been largely retained.

I wish to devote my remarks to the major issue raised by the Secretary of State when he opened the debate, which is the Uruguay round, the multilateral trade agreement and, especially, the implications of GATT for the major industry that affects 80 per cent. of the land mass of the United Kingdom—agriculture and forestry. It is a basic industry, and the policies that affect it have implications not only for food processing and consumption but for the shape of the environment in the hill and other areas throughout the counties of Britain. It also has important implications for the rural economy and the structure of the countryside.

Those matters have so far been neglected in the debate on the Uruguay round, which has concentrated mainly on the free market emphasis of the Government's policy. The Government support, or at least are moving towards supporting, the American position on the amount of agricultural support cuts that they believe to be necessary. They have pioneered an attitude in the European Community negotiations that is rather different from the less pioneering and less innovative attitude that they have shown in other policy areas. In this area, the United Kingdom is communautaire par excellence, whereas in other areas it is lagging behind. The Government's line is that they are taking the lead in a policy to reduce agricultural support, liberate markets and promote free trade. They have entered the Uruguay round with a position similar to that of the United States.

The agriculture industry and the socio-economic implications of agricultural support have been left to the French and German Agriculture Ministers. They have argued, in protracted discussions, about the socio-economic impact of any reductions that the Government want to make. The publicity from the Government, the Community and the Commission following the final agreement among farm Ministers does not clearly state the implications of an overall 30 per cent. cut in agricultural support for the sectors in each part of the agriculture industry, and especially the implications for the overall income in the hill, livestock and other sectors.

I speak mainly for the sort of agriculture that takes place in the part of the world that I know best and the hill farming area in which I live and work when I am not here. Our concern is that the decisons about agricultural support cuts have been taken without proper consideration of the implications. That was made clear at a meeting that I and my hon. Friend the Member for Ynys Môn (Mr. Jones) had with officials of the agriculture directorate of the Commission. The figure discussed by Ministers was based on global support and there was no analysis of sector implications.

The Secretary of State for Trade and Industry, in response to my intervention, repeated a point made by the Minister of Agriculture, Fisheries and Food after the agreement was concluded—that the reduction of 30 per cent. was across the board and backdated to 1986, so that the actual reduction would not be substantial. There has been a significant increase in the sheep flock since 1986, and certainly in the CAP expenditure on the sheep meat sector, so a 30 per cent. cut backdated to 1986 could be the equivalent of a 50 per cent. cut.

We have been told that there might be an overall cut of just under 5 per cent. in the livestock sector generally. I want to put that in the context of farmers' incomes. In the United Kingdom as a whole, they have already suffered a substantial decline of nearly 10 per cent. in real terms—after allowing for inflation—since the early 1980s. Over that same period, there has been a 30 per cent. decrease in employment and a major cut in investment. A recent study by agriculture economics experts at Aberystwyth university college showed that 50 per cent. of Welsh farmers have an income of £10,000 a year or less, which clearly shows that the industry cannot tolerate a further reduction in incomes.

What are the implications for the livestock sector following the crises that confronted it this year? I refer to the much-publicised conflict with French lamb producers, low market prices in the late summer and early autumn, the dislocation in transferring from the sheep variable premium to the annual premium, the knock-on effect of bovine spongiform encephalopathy on interchangeable meat such as lamb, the droughts in both France and Britain, and the problems of feeding in the United Kingdom. All those factors squeezing through together, combined with the effects of high interest rates on agriculture and all other industries, may imply further reductions in farm incomes as a consequence of the latest GATT round. What policies will the Government and the Community follow to maintain farmers' incomes in that situation?

Whatever arguments there may be for reducing export subsidies and for liberalising agricultural trade worldwide, the arguments remain for maintaining the already low incomes of hill farmers. Neither the Government nor anyone else in the Community has responded to the problem.

The Agriculture Commissioner, Mr. MacSharry, made the general statement that no reductions in incomes will result from the Uruguay round, but how is that pledge to be fulfilled by the Commission and member states? What attitude will the Government take in further negotiations on reforming the CAP? Reference is clearly made to that in the Gracious Speech, in the context of the Uruguay round. I accept some of the criticisms made today about the direction in which agricultural support is going and how little of it reaches the farm gate and producers themselves, but we must have assurances that farmers' incomes and livelihoods will not be adversely affected, after the crises they have already faced this year, by further cuts—led by a Government who are so committed to free market forces and to reducing public expenditure.

There is an important link between that and the rest of the Government's policies. They cannot favour enterprise generally, yet denude the countryside of the same opportunity—which the existing fabric of farming, by diversifying into other industries and services, can exploit.

Similarly, if the Government have green policies, it makes no sense to have national parks but not to have enough sheep to graze them so that they continue to look the way they do now. It makes no sense not to maintain the fabric of the countryside, such as dry stone walls, which is maintained by agriculture. A green policy requires an agricultural policy, and the maintenance of the countryside's economy and society. It requires 80 or 90 per cent. of land to be farmed in an attractive and ecologically sound way.

For those reasons, farming organisations such as the Farmers Union of Wales and the National Farmers Union welcome the Government's extensification proposals to reduce stocking rates. They welcome the strong environmental component in the hill livestock compensatory allowance and are looking forward to strengthening that component in discussions on the allowance, but there must be a balance between the environmental objectives of agriculture and the maintenance of viable production units through an end price, albeit at a lower level of production, which will give incentives, especially to the young farmer, to produce quality stock through good breeding practices and effective use of land.

This is a good time for the Government to take stock of agriculture in relation to the fabric of rural society and in the context of European Community proposals, and the Commission's document on the future of rural society, which was published in 1988. It is important for the Community to ensure that the overall objectives on GATT and free trade do not cut across its declared socio-economic objectives for rural society, as set out in that document.

The Government have an opportunity to show concern. I am well aware that they have emphasised the role of free market forces and have difficulty relating to subsidies or maintaining a market through planning and ensuring supply mechanisms which control the level of production. However, in agriculture a free market cannot operate in the interests of the countryside, the farming community, consumers or the maintenance of the environment. For those reasons, the Government have to ensure that their agricultural policy is not dominated by free market thinking.

The responses that I have so far received from Ministers to questions on this issue have not been satisfactory. I assure the House and Agriculture Ministers from various parts of the Kingdom who may read the report of this debate that we shall pursue this matter until we have a clear response from the Government about their intention to maintain the fabric of rural society and our agricultural industry and not to allow free market philosophy to turn our countryside into a desert.

12.42 pm

I represent an inner London constituency, and like my hon. Friend the Member for Surbiton (Mr. Tracey), who represents an outer London seat, I welcome the emphasis given to transport in the autumn statement. In a recent press release I learnt that total investment will rise to nearly £16 billion over the next three years, which is an increase of £1·5 billion over last year.

Like other Conservative Members, I have sometimes been confronted at public meetings with the statement that the Department of Transport is run by the road lobby. The hon. Member for Gordon (Mr. Bruce) mentioned that. I was so incensed as a result of a recent meeting that I asked a parliamentary question in July about Government investment in public transport and, with the help of the House of Commons Library statistical section, I got some interesting answers, which I shall reveal to the House.

At 1990–91 prices, the annual average spent by the Labour Government from 1974 to 1979 was £1,084 million. The annual average for the Conservative Government in the past 10 years is £1,021 million. Rightly or wrongly—I am not making any judgments—the Conservative Government have spent less than did the previous Labour Government on roads. Regrettably, they also spent less on British Rail. Labour spent an annual average of £629 million; the Conservatives have spent £566 million. However, as a London Member, I am delighted to say that this Government spent much more on London Underground: the Labour Government, between 1974 and 1979, spent an annual average of £147 million, while the Conservative Government have spent £220 million.

I am very glad that the hon. Gentleman has drawn these facts to our attention; however, he is talking in cash terms.

Let me say again that these are 1990–91 prices. The statistical section in the Library—to which I owe a great debt—worked out the figures for me: I could not possibly have done it myself.

The Department of Transport's predictions for spending on roads in England in 1990–93 show an increase in spending from £1,021 million to £1,755 million on an annual average—up by two thirds. British Rail spending is forecast to increase from £566 million to £1,188 million—to double, at constant prices. The figure for London Underground warms my heart: an annual average of £220 million is forecast to increase to £658 million—up three times.

This brings me to what—as my right hon. Friend the Secretary of State will know—is one of my most earnest: to bring the Northern line to Streatham. That proposal was in the recommendations of the consultants, and I hope that, with such a vast increase in spending, it will not be long before my right hon. Friend can make an announcement. Earlier this year I had a helpful meeting with Mr. Tunnicliffe, the managing director of London Underground. What he told me at the time made sense. He said that it would not be possible to take on any new clients—for instance, to build the extension to Streatham—until we had reduced the congestion in the centre. We can all understand that, especially as the Northern line would be involved. That is why I welcome so much my right hon. Friend's statement about the funding of the east-west cross route and the safeguarding of the Hackney-Chelsea north-south route. I hope that my right hon. Friend agrees that that will reduce congestion, thus opening the door for the arrival of the Northern line in Streatham.

I had some discussions with a helpful British Rail underground executive, who told me that, after those two massive tasks had been undertaken, Streatham would rank equal third with something else—although he refused to tell me what that was. He did tell me that the feasibility study on bringing the line through to Streatham and on to Crystal Palace—I would prefer Croydon, but I would settle for Crystal Palace—was being updated, and would be ready by the end of this year. I shall await the end of the year with great interest, hoping for a Christmas present.

I cannot accept that limitations should be placed on the use of the motor car—except, perhaps, in 20 or even 50 years' time—but, for environmental reasons, we must provide a better choice of public service transport. I cannot stress that too strongly. The way to stop people using their cars is to give them jolly good underground and bus services. If my right hon. Friend comes to Streatham and sees all the cars travelling both north and south—whose panting owners wish that they were on the underground—I am sure that he will meet my most earnest wishes.

Let me now take the opportunity to raise some urgent local issues—of great interest to Streatham, although I fear that they are of less interest to other hon. Members. When my right hon. Friend the Secretary of State for Transport made his excellent decision not to proceed with road building plans in my constituency, the junction improvements and road widenings that were also contained in the recommendations were left in limbo. Consequently, Lambeth council, rightly or wrongly, has served blight notices on all the houses within 200m of the south circular and the A23 through Streatham. This has caused deep consternation and great concern to many of my constituents.

I wrote to my hon. Friend the Member for South Ribble (Mr. Atkins) in July when he was a Minister in the Department and asked him to resolve the matter quickly. I shall not conceal the fact that I have received no reply to my letter. Since then I have telephoned the office of my hon. Friend the Member for Southampton, Itchen (Mr. Chope), but I have still had no reply. The matter is urgent. I hope that it will be dealt with soon.

I wrote also about a proposal for a development line down Streatham high road. This may hinder the rebuilding of Pratts, our most famous store, which has closed. Again, I have received no reply.

I understand that the Department of Transport advised Lambeth council in April that it is to end the agency agreement whereby Lambeth carried out work for the Department. The Department will carry it out directly. I have no view about that; I heard about it only indirectly. Nevertheless, I hope that consultations will take place. But the Department's wish to close the gaps in the central reservation down Streatham high road is causing consternation. In due course I shall write to the Minister about it and let him know the views of some of my constituents, to which I am sure he will pay attention.

I welcome the autumn statement. I welcome also what my right hon. Friend said about the east-west cross route and the north-south route. Once again, I ask him to ensure that an underground line to Streatham is constructed.

12.51 pm

I make no apology for returning to economic and industrial matters. The Government have failed in their duty. Although they benefited from North sea oil revenues and from the privatisation of the nation's publicly owned assets, the country faces a recession, though the Chancellor dares not speak its name. So much for the Government's economic miracle. The latest verdict on their economic miracle was given during the early hours of this morning. I refer to the by-election results in Bradford, North and Bootle. We look forward to that verdict being repeated in the by-elections at Paisley.

The Government's economic miracle is based on fraud. They try desperately to convince us that they are in control of the economy. Nothing could be further from the truth. Past Conservative Governments had integrity and standing, but the present Government lack both those attributes. For example, on the last day of the Labour party conference the Government announced a major new economic policy. It was a desperate attempt to steal the headlines and make a party political point. Moreover, the right hon. Member for Blaby (Mr. Lawson) revealed that for five years he had urged the Cabinet to agree to entry into the exchange rate mechanism. The Government's economic miracle is also shown to be a sham on account of the resignation from the Government of the right hon. and learned Member for Surrey, East (Sir G. Howe). His resignation was due to a split over a particularly important issue. These are not party political points but signs that the economy is adrift. The Government are cornered and are struggling, but they do not know what to do. They have no strategy or philosophy, and the country is paying the price.

A series of economic indicators show that the Government are in trouble. They promised to pursue firm financial policies designed to reduce inflation and facilitate the growth of employment. What have they delivered? They have delivered a recession. Inflation is 10·9 per cent., unemployment has risen for six consecutive months and there is a current account trade deficit. If a Labour Government were running a fraction of the current trade deficit, there would be gloom and doom in all the financial papers and much talk about Labour's so-called economic incompetence.

The current account deficit for 1989 was £19·1 billion. The Chancellor's forecasts show that our trade is badly out of balance. I have noticed recently that many Conservative Members quote various economic indicators from 1981 to date. They conveniently omit the two years between 1979 and 1981, when the Government destroyed our manufacturing base, and we have never recovered from that. It is a problem that will take a long time to correct, and there is no sign that the Government will do so.

Unemployment is rising fast, inflation is high and, as if that were not bad enough, investment is falling and output is stagnating. A recent CBI survey showed that business confidence is at its lowest for 10 or 11 years, and that the rate of investment is at its lowest for many years. Manufacturing investment in the second quarter of 1990 was lower than in the previous quarter. We are in recession, but the Government do not seem to be taking any action to rectify it.

My constituency has suffered quite considerably under the Conservative Government, especially from the attack on manufacturing industry. The Hoover plant at Cambuslang, where I worked, used to employ more than 5,000 people. It was a busy, successful factory that made goods for sale and export, but the Government's blitz on manufacturing industry between 1979 and 1981 did not help. It now has a work force of a little more than 1,000, and the current policy of high interest rates is hitting the sales of Hoover goods, thereby causing recession and difficulties for the company and its work force.

The Clydesbridge steelworks in my constituency employs about 150 workers, compared with 2,000 or 3,000 in its heyday. Nevertheless, it is an important, integral part of the Scottish steel industry. Its highly skilled work force produces high-class goods. I am sure that my hon. Friend the Member for Motherwell, North (Dr. Reid) will deal more than adequately with British Steel's announcement affecting Clydesdale tube works. The Scottish steel industry is of interest to us all, and the lack of Government support is disgraceful. They are condoning British Steel buying steel tubes from abroad, thereby worsening the balance of payments deficit. British workers will be paid off, with consequent rises in social security payments.

Unemployment in my constituency varies from 10 per cent. in the so-called good areas to 14 per cent. in the bad ones. In other words, while we hear about an economic miracle, there are no signs of it in my constituency.

I regret that the Secretary of State for Trade and Industry is not here—I accept that it is a long day for him—but I have no hesitation in saying in his absence that we have in his job a man who is dogmatically opposed to any involvement by his Department in key sectors of British industry. He is taking a hands-off approach. As has been said, he is standing on the sidelines watching the game. My hon. Friends and I fear that the right hon. Gentleman is in the job only so that he can be a yes man for the Prime Minister, helping to keep the wet and dry balance in the Cabinet, and to cast a vote for the Prime Minister when she is in any danger in that forum.

The CBI is establishing links with organisations throughout the British political spectrum, rather than just within the Conservative party, and that is as it should be. The CBI has expressed extreme unhappiness with current Government policy. At its recent conference in Glasgow, it made some devastating comments about that policy, which we in the Opposition cannot dismiss simply as party political attacks, bearing in mind the quarter from which they came.

That and other criticism must focus attention on the Department of Trade and Industry because while for many years, indeed since the last war, the DTI has been crucially involved with industry, we are now seeing that Department withdraw from the industrial scene. For example, the Department will spend £1·5 billion in the coming financial year. Since 1987, its expenditure has fallen by almost a third as the result of a reduction of nearly £700 million given in support to aerospace, shipbuilding, steel and vehicle manufacturing. Clearly, the DTI is narrowing its focus as it views its role in British industry. The economy needs a thrusting Department of Trade and Industry which, without dogma, gets itself involved with any aspect of industrial and manufacturing life that benefits the nation.

There can be no doubt that the United Kingdom economy faces a difficult year. The recession is here and the full inflationary pressures have yet to be felt. The task of striking a balance between those aspects will be more difficult, and I accept that life has been made more difficult for the Government by the rise in oil prices. I hope that that rise will not constantly be trotted out as the great excuse for the state of the economy.

All forms of transport should be linked and one should not be discriminated against. We are told that £4 billion will be spent to improve London's rail services. Bearing in mind the fact that each hon. Member must represent his or her own corner, I question why no money is available to upgrade the killer Al and A77 roads in Scotland. I may be told that that is a matter for the Secretary of State for Scotland. I accept that some work has been done to upgrade the A74 to motorway status, but more must be done.

As my hon. Friend the Member for Aberdeen, North (Mr. Hughes) said, we are told that no money is available to electrify the Edinburgh to Aberdeen rail line and that funds are not available now for the much-vaunted high-speed InterCity rail link between Scotland and London. The Government make great play of the money that they are spending and say that in relation to need, everything must be considered in balance. The Secretary of State for Transport should get together more closely with the Secretary of State for Scotland to ensure that any money put into transport is fairly spread throughout the United Kingdom with Scotland at the forefront.

1.5 pm

I congratulate my hon. Friend the Member for Stockport (Mr. Favell) on going through the departure lounge as a Parliamentary Private Secretary with more publicity than I have as a PPS and a Minister combined. His expression of support for the Chancellor, even though he has stopped being his PPS, is a sign of solidarity within the Government that may or may not be copied by others.

The hon. Member for Meirionnydd Nant Conwy (Dr. Thomas), talking on behalf of the Scottish National party about the steel industry, has shown how disgraceful it is for the Scottish nationalists to claim to be the Scottish National party, let alone a national party, when they are not present for a debate on industry, given the sad news about the steel industry in Scotland.

When I was working in the British Steel Corporation, there was a tension between Wales and Scotland over strip mills, which has been there ever since the decision was made to split the strip mills. It is peculiar that the nationalists can agree to have a Welshman speak for the Scots on a day like today.

I shall say very little about roads and transport, because I hope that next week I shall be called to speak early in the debate on road casualty reductions. I greatly welcome that debate.

I am pleased to speak towards the end of this debate, because it allows me to make suggestions that people in various Departments may come across as they scan Hansardto see if there is anything relevant to them.

It gives me an opportunity at the beginning of the parliamentary year to make some overall points. First, we must take the family perspective and life cycle into account in more of our policies. Family policy is not just about money or social security, although money is important for those in poverty. It is about trying to ensure that our education and health systems and our anti-crime proposals take account of generational changes and responsibilities of one towards another within families and within communities and between generations.

The hon. Member for Meirionnydd Nant Conwy rightly talked about rural districts. Rural action projects in Northern Ireland show how, in all the less favoured parts of the United Kingdom, we must be concerned not just about farmers' incomes, but about the well-being and the quality of life of people, especially women. Too often when developing policies, we consider how they affect men and their working lives, rather than those women who generally carry the burden of caring for dependants. By trying to raise family confidence and competence we can ensure that other caring services mesh in, with self-interest but without selfishness.

When I stopped being a Minister, I was greeted by descriptions in various newspapers of exactly what certain journalists thought about me. If trying to cut casualties on the roads and trying to overcome transport problems for people with handicaps exposes me to scorn, my shoulders are broad enough to carry it. I was surprised when one newspaper gave an extra half-page to one of its journalists who had hurt his back for a time for his description of how difficult it was to get around, when I had had remarkably little support from the same newspaper and others in trying to overcome the difficulties that many people have, sometimes for a lifetime or for decades.

It is important to take a robust attitude in Europe when the Community starts making proposals expected to be against the interests of people in this country, let alone other European countries. I make passing reference to the European Commission's proposal that the voluntary driving of minibuses should be banned. Its proposal was that everyone driving a minibus, especially a community minibus, should have a public service vehicle licence.

The reason that that proposal matters more in the United Kingdom is that people here could drive minibuses with an ordinary licence. We had 65,000 more minibuses than our European partners and for every minibus we had six to 10 volunteer drivers, which meant 10 million or more welfare journeys a year for the elderly, children, disabled people, students, affinity groups and people going to work together. Sadly, on that issue we received little help from people outside a small core group.

I pay tribute to the Department of Transport's disabled transport policy advisory unit and the small team within the Department who have helped to ensure that the United Kingdom leads the world in many ways.

I do not want people to think that it is only legislation that makes a difference. We need the commitment to try to fill the gaps in provision and so to improve people's standard of living. I am talking not just about material improvements but about improvements in people's quality of life.

It is good to see the low-cost accident remedial measures coming into force around the country. It is also good that we have been trying things out and extending their application if they work.

The same must apply to the idea of a common currency throughout Europe. I have been interested to note that, since my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) resigned as deputy Prime Minister, the Labour party has spoken with two voices—sometimes even on the same day. The shadow Chanceller of the Exchequer says that he is against movements towards a common currency, while the Leader of the Opposition says that he is in favour of it.

Our occasional debates about leadership in the Conservative party make me wonder how it is possible for Labour Members and their supporters to put up with their existing leader, when everyone knows that their deputy leader would be rather better at doing the job. That is one of the difficulties that Opposition Members must sort out for themselves, and it need not concern us in our debate on the Queen's Speech.

The two by-election results yesterday may have shown the Conservative party to be somewhat out of fashion, but I suspect that having reached the low-tide mark, as we rise up we shall witness the debates within the Labour party becoming rather more articulate and clear—which is more than can be said for the speech of the hon. Member for Dunfermline, East (Mr. Brown). Despite having been given repeated opportunities to address them, he managed to duck the important European issues.

I want to deal with environmental protection. The Department of Transport deserves credit for having produced at least two editions of its booklet "Transport and the Environment".

It was my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) who originally had the idea.

We must persuade people to consider the consequences of having better railways to give them the choice of leaving their cars or of having better roads to keep traffic out of residential areas. We must seek to reconcile some of the important arguments in the debate and then examine the results. If we do that, we shall be able to have a better informed debate. Okehampton was a good example. We had decades of delay and then, when the decision was eventually made, all the commentating media stopped taking an interest because it was obvious that the right decision had been made. The arguments had all been the wrong way, but no one would admit it.

The way in which it was possible to fit in a road between Maiden Castle and Dorchester provides another good example of how environmental interests have been taken into account.

The environmental impact matters to a road scheme in my constituency—the approach road to the east London river crossing.

While on that subject, I must say that the Labour party has not changed its spots. It is curious that, when local councillors in Greenwich wanted to reappoint a barrister to the inquiry on the bridge—which I understand is greatly welcomed by Labour authorities to the north of the Thames although it is objected to by Greenwich council and of no help to my constituents—the announcement was made by two prospective Labour candidates. Of all the councillors who could have been chosen, the two prospective Labour candidates were picked. It looks as though we are talking about £67,000 in their favour.

Similarly, when Greenwich last had the chance of appointing members to the health authority, it did not just appoint those same two prospective Labour candidates; it also appointed Nick Raynsford, Labour's prospective candidate for the Greenwich constituency. That is the kind of political bias that one may expect from the next Labour Government.

I remind the House that I was elected a year after the last Labour Government came to office. People discovered then that we were not having milk and honey all round.

That may be so. The hon. Gentleman should intervene on his hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) if he wishes to make his point.

We may have a robust debate on these matters, and that is to be welcomed. The Queen's Speech refers to some of the international problems. It is absolutely clear that we should extend our brand of flexible politics, in which we can have ups and downs in the polls and in votes as well as having a flexible economic process, so that we do not find the shelves bare. We shall find that there are fewer wars within countries and fewer battles between them. It is a long time since democratic countries last fought each other. It is a long time since countries that allowed more than one political party resorted to civil war because of the result of an election.

Twelve years ago, I was taken to El Salvador to try to help delay the assassination of an archbishop and to try to reduce the risk of assassination of the Jesuits who run the central American university. Sadly, there was not a great deal of success, but at least it showed that Britain took an interest in human rights and in undemocratic regimes. We sometimes underestimate the influence of the United Kingdom, this Parliament and individual Members travelling overseas to show that it is not just the BBC that matters but the political process and some of the economic freedoms that we have managed to enshrine in our system.

One of the messages that will go out from the Queen's Speech debate—beyond Iraq and Kuwait, terrible as those events are—is that, by spreading the idea of democracy, open society and robust debate and disagreement, we shall do a great deal more for future generations around the world than if we confine ourselves solely to the material standard of living in Britain. I look forward to speaking in further debates during the year on items in the Queen's Speech.

I hope that together we shall find ways of reducing avoidable distress, handicap and disadvantage, and that the Labour party will join in with support for more Tory policies as we move towards the next election.

1.15 pm

As the House will expect in view of yesterday's announcement, most of my speech will deal with the steel industry. However, I shall make a few observations on other matters. Today's debate has ranged wide—from the evils of the Commission in Brussels to the undoubted virtue of the cracks in Streatham high street.

Perhaps I should begin by referring to the missing fighters for the Scottish steel industry. I am much too polite and it is not my style to mention that some Scottish National party Members are missing. I realise that we are all busy people. But as the matter was raised by the hon. Member for Meirionnydd Nant Conwy (Dr. Thomas) I feel entitled to make some comments. In the last few years I have been told by the Scottish nationalists that the Labour party cannot possibly throw all its weight behind the Scottish steel industry because we are led by a Welshman. So to learn today that because of reciprocal arrangements the official SNP spokesman on the Scottish steel industry is a Welsh nationalist came as a shock. The two parties intend to fight to the death for the Scottish steel industry. I promise the House that I shall do my homework and immediately read all the documents on the Scottish steel industry issued by the Welsh Nationalist Party. It should make interesting reading.

The hon. Members for Crawley (Mr. Soames) and for Stockport (Mr. Favell) raised the national question of the development of the market and so on. I shall make only one observation. As my hon. Friend the Member for Newham, North-West (Mr. Banks) said, nation states came about by a collection of principalities, cities or, as in the case of the United Kingdom, nations coming together. The dynamo that drove the emergence of nation states during their great period of development and the cement that held them together even when the nation state included different countries was the market. In Europe now we are seeing precisely the same emergence of political structures, some more embryonic than others, as a result of the development of the market. Commitment to the market in Europe and the need for superstructural political response to intervene on occasions at that level in the market are called into question. The emergence of that crucial element of the political dimension of Europe is swimming with the tide of history and ultimately the Prime Minister's views on the social charter and on Europe will be washed up on the shores of history like the anachronism that they are.

The hon. Members for Crawley and for Eltham (Mr. Bottomley) tended to implicate the Labour party in some of the unfortunate events of the past fortnight in Europe. On one occasion we were accused by the hon. Member for Crawley of dividing the unity of the House behind the Prime Minister in her negotiations in Europe. But the lack of unity in the Government undermined her. The Prime Minister does not believe that. Every time I ask her why someone resigned she tells me that it is because they agreed on everything and there was agreement on policy.

It should be noted as a historical fact that it has become a peculiar characteristic of the modern Conservative party that, whenever a spirit of universal agreement breaks out, it manifests itself in mass resignations. Next week, we should watch the space that has been left by the deputy Prime Minister because it will be interesting to see who fills it.

The hon. Member for Stockport ditched Adam Smith as his ideological buttress, presumably because he is a whingeing Scotsman, and called to the aid of the party Richard Cobden. Cobden may have been right in 1845, but that does not make him right in 1990. Those who are locked into the free trade movement of the 19th century, and neolithic Marxists who think that the solutions of 1848 must be correct in 1990, are both wide of the mark and devoid of any realistic or relevant analysis of the modern condition.

Yesterday's decision to lay off 1,200 workers and close the Clydesdale tube works is a devastating blow to my area. However, it did not come as a bolt from the blue. In my maiden speech, I warned about the dangers of privatisation and the consequences for Clydesdale tube works as well as for Ravenscraig and Dalzell. After the so-called guarantees of 3 December 1987 from the then Secretary of State for Trade and Industry, I warned that not only had there been no mention of Clydesdale, but that we had had not guarantees for a few years but a timetable for the execution of the steel industry in Scotland. When the Act privatising the steel industry was passing through the House, I, my hon. Friends the Members for Motherwell, South (Dr. Bray) and for Dunfermline, East (Mr. Brown) and others warned of what would happen if the steel industry were privatised. Motherwell district council commissioned a report, the Arthur Young report, which I commend to any hon. Member interested in the steel industry in Scotland, which predicted almost to the month what would happen.

Ministers cannot say that they did not know—they did not want to know. They were driven on by ideology in hot pursuit of the aim, come hell or high water, of privatising the steel industry. The tragedy is that the hell will be not for the Minister but for the people around Motherwell and in Lanarkshire. It was not just ideology either. The suspicion lingers that the Government wanted to rid themselves of those turbulent priests, the defenders of the Scottish steel industry, who had defied the Prime Minister and Sir Robert Scholey for almost a decade, and kept Ravenscraig open. Privatisation was the vehicle that allowed the Government to achieve, after 10 years, a relaxation of pressure from the political defence of the steel industry in Scotland. This great tragedy was predictable but not inevitable. If the Government had been interested, had listened or had acted, the closure could have been avoided.

That hammer blow to the steel industry yesterday means 1,200 jobs lost. It means 1,200 families in Lanarkshire who will have enforced idleness as a Christmas present, courtesy of Sir Robert Scholey. Instead of white Christmases, they will have black Christmases, courtesy of Black Bob. When Conservative Members talk about whingeing and moaning Scots and the Evening Standard talks about subsidy junkies, we have to ask ourselves what kind of people they are talking about. These are hard-headed, hard-working, realistic people.

Representatives of the work force met the Secretary of State on Monday. Instead of the £100 million of investment that is needed, they asked for only £10 million to £12 million, a drop in the ocean for British Steel but enough to have retained the competitive edge of the tube division of British Steel. It is a work force which has increased quality, productivity and delivery times over the past three years. By its own efforts, it has increased the yield of clapped-out mills from 72 per cent. to 82 per cent. If there had been an investment of £10 million, the figure would have been 90 per cent. Anyone who knows anything about the steel industry will realise that that is a fantastic figure, even with modern equipment. Despite four years of effort, market share declined. Why was that? The answer can be given in two words—investment starvation. The commitment and effort of the work force was not matched and reflected by British Steel's top management. That is why there is a feeling of betrayal.

British Steel added insult to injury yesterday when it gave as an excuse for the closure of the tube mills that it was cheaper to buy pipes from abroad. Why, I ask the Government, is it cheaper to buy them from Manussman in Germany, Dolmini in Italy or Valourec in France? It is cheaper because the efforts of the work forces in those plants have been matched by the investment of their companies and the research and development of their Governments. My hon. Friend the Member for Dunfermline, East referred to investment and research and development earlier in the debate.

The original crime of British Steel of neglect and lack of investment becomes the very excuse for the crime of closure of the Clydesdale plant which was announced yesterday. There will be 1,200 families involved initially, but the scale of devastation will be much worse than that. More than 700 more will be affected in April at the Ravenscraig strip works. That is a work force with a productivity claim of 2·33 man hours per tonne. It is not just the best in Scotland or in Britain, but the best productivity figure by that standard in Europe.

All the members of that work force are being ditched and the Secretary of State for Scotland is doing nothing. The right hon. and learned Gentleman should be ascertaining the identity of the prospective purchasers to whom British Steel was talking. Secondly, he should be demanding information from British Steel to enable him, the Scottish Office and Locate in Scotland to contact them. Thirdly, he should be facilitating an exchange of views on potential purchase. Fourthly, he should be making it plain to British Steel that if that results in a potential purchase of the Clydesdale tube works, it will be forced to sell that as a going concern. If not, the monopoly position of British Steel will allow it to abuse the market and to close a works which could be profitable and which could be purchased. If the Secretaries of State for Scotland and for Trade and Industry do not do that, they will be colluding with British Steel in closing a potential producer for the North sea market and throwing hundreds or thousands of people on to the dole queue, and many into misery.

Once again, as they have done for 10 years, the Government are crippling the balance of trade by ensuring that the extension of works in the North sea will take place not with the products of British steel plants but with those of our major industrial competitors.

1.27 pm

My hon. Friend the Member for Motherwell, North (Dr. Reid) need not have apologised to me for taking a little more time than he said he would need. The problems which he outlined are great ones for his constituents and for the works at Clydesdale, and he presented us with a graphic picture. It is clear that, in recent years, workers, no matter how much effort they have expended, have been betrayed by the Government. So much for the problems of success that economic Ministers are always telling us we have to deal with nowadays.

I must apologise to the Secretary of State for Trade and Industry for missing his opening speech. I had problems with London Transport. I am not making it up as I go along. Unlike the hon. Member for Crawley (Mr. Soames), I was not wandering up and down a District line underground train looking for the restaurant coach. I was experiencing the usual signalling delays in the Whitechapel area, which everyone who uses the District line experiences.

I waited three quarters of an hour on Forest Gate station for the Network SouthEast service from Gidea park to come through. No announcement was made. Nothing was said until it was obvious that the train was going to be half an hour late. We waited 27 minutes before we were told that there would be a delay. When I spoke to the staff, they said, "We are sorry, but no one told us. There is a VDU at Forest Gate station, but it is not in use because there are no qualified staff."

The Minister is coming to Stratford station on 23 November—which I welcome—and I intend to ask him many questions about the service from Southend and Gidea Park to Liverpool Street station. It needs many dramatic improvements. It is nonsense that, while people are waiting at Forest Gate station whose trains have been cancelled, other trains whisk through on their way to Liverpool Street. There is no flexibility in the system for those trains to stop and pick up those people and take them to Stratford or Liverpool Street. Whether it is incompetence, inefficiency, poor resources or bad management, I do not know, but I gave the waiting passengers at Forest Gate station the benefit of a much longer speech even than I would make now if I had the time to do so. They asked me to pass on to the Secretary of State for Transport their extreme anger about what happened this morning and to point out that it happens regularly to passengers who have to travel to central London.

Transport efficiency assists industrial efficiency, so it is right that the two subjects should have been linked today. The CBI has pointed out that congestion costs industry and commerce in London about £7·5 billion a year. It is an enormous waste of resources within our capital city. It is not surprising that London's transport system is in near to chaos. It is overpriced, overcrowded, under-resourced and under pressure.

London has the highest fares in Europe, which lead people who have access to private vehicles to bring them on to the roads. It also leads to an upsurge in commuter coaches, which contribute to the problems in central London. Privatised bus routes are dipping around side roads—rat-running and bringing even more problems.There is insufficient road maintenance and unco-ordinated road works. All those factors reduce London traffic to moving more slowly than it did at the turn of the century.

I welcome the Bill announced in the Gracious Speech that will implement the Horne report. It is much overdue. Horne reported in 1986 and made 73 recommendations, so it is about time they were implemented. Of course, we will have to read the small print, but I am sure that the Government can expect a great deal of support for that measure.

I recently read that 600,000 holes are dug in London each year, but I do not know who went around counting them. It reminds me of the old Beatles song about how many holes it took to fill the Albert hall. If someone could go around counting all those holes, surely it is possible for someone to co-ordinate all the work that leads to 600,000 holes being dug in London each year. I welcome improvements in London's infrastructure, but not in the unco-ordinated way in which it is undertaken.

London presents a dismal picture—it is unplanned, unco-ordinated and unpleasant. The quality of London life has deteriorated dramatically during the past decade. The Association of London Authorities recently commissioned the Henley centre for forecasting to study the problems of London, especially in the light of 1992 and the opportunities and problems that the Single European Act will present for the capital city. The centre highlighted London's poor transport infrastructure as a major constraint on the capital's economic growth and cultural attractiveness. It stressed the unco-ordinated framework of transport in London.

We keep returning to the co-ordination of transport. The Henley centre asked Mass Observation to conduct a poll of Londoners, and it was not surprised to discover that 93 per cent. of London's citizens felt that traffic congestion had worsened during the past 10 years. More ominously, 77 per cent. believed that it would get worse in the 1990s. Some 67 per cent. wanted more restrictions on the use of private cars in London and, I am glad to report 64 per cent. believed that there should be a strategic planning body for the whole of London, along the lines of the old London county council or the Greater London council. It is a great pleasure to say that the Labour party is officially committed to the creating of a new Londonwide strategic local authority for the capital city.

Nowhere is there a more vital and obvious need for co-ordination and planning than in transport, but the Government despise planning and strategic thinking. Why is London's transport in such an appalling state? I believe that it is because the Government take no overview of it. If one wants to examine models of London's transport structures, one must go to Olympia and York, because they have in effect taken over as the capital's planning authority, which is disgraceful.

For the people of London, who are so hard-pressed as a consequence of the Government's unco-ordinated transport policies, relief will come only with the election of a Labour Government. One is delighted that that day has been hastened by the by-election results last night in Bradford, North and Bootle. The skids are under the Government, and Londoners will rejoice when they are thrown into the dustbin of history.

1.35 pm

I am most grateful to my hon. Friend the Member for Newham, North-West (Mr. Banks), who took less time than I expected, but who I am sure had much more to tell the House about the real problems of London's transport.

Although today's debate is concerned with both industry and transport, I shall concentrate on the latter. I am sure that, like myself, the Secretary of State has much to say on a whole range of issues, but there is not sufficient time to debate them all today, even with my hon. Friend's generosity in resuming his place so quickly.

In examining the transport crisis, I want to look for areas of agreement rather than disagreement, and thus further confound the Secretary of State, who discovered, when we appeared together on a television programme recently, that there was some agreement between us in respect of safety, but who predicted that it would not last more than 12 hours. I assure him that it will.

Clearly there is a crisis facing our transport system, however it is measured, and most of the bodies that have reported on it—the Church, the Trades Union Congress, the Confederation of British Industry, consumer groups, local authorities, the Select Committee, and the media—conclude that the system is inadequate, for whatever reason. That is a matter of general agreement.

There is general agreement also that it is the most congested transport system of any developed nation in Europe, as well as being the most expensive and environmentally damaging. There is concern about the quality of service and the safety that it provides. It is underfunded, underinvested and underperforming. I have sought to justify those claims in previous debates, and I shall not reiterate those arguments now.

Transport has become a major political issue, not because of what politicians are telling the public, but, despite their reassurances, because of the public's daily experiences on the Underground, at airports, on trains or buses, or even travelling in their own cars. The public just believe that Britain's transport system could be better than it is.

The Secretary of State rightly claims record levels of investment, and it is true that, in both absolute and real terms, there has been a tremendous increase. But that comes after 10 years of underinvestment, and the country's transport stock has grown a great deal older. Most of the stock on Network SouthEast is 19 years old.

One problem is that the Treasury has been running our transport system for too long—under both Labour and Conservative Administrations. It is time for a change of thinking. Long-term transport investment cannot be fitted into the two-year span required by the Treasury, regardless of whether the Treasury, under any Government, can get its projections right—and that has been a matter of contention in our other recent debates.

The public's daily experience has relevance not only to this debate but to yesterday's by-election results. When I visited Bradford, I found that the people there are concerned that their city is not served by an electrified route. Instead, the line is electrified as far as Leeds, but there trains must have a diesel locomotive shunted on to them to take them to Bradford. The people there are quite right to think that electrification should be extended. The people of Bootle are equally concerned about the decline of the shipping and port industries, and are worried about connecting freight routes to the Channel tunnel. The great uncertainty about transport issues was reflected in the by-elections. I am delighted with the results and I hope that transport had a part to play in them. Clearly those issues keep transport to the fore.

Everyone's experience of the public transport system makes it a major political issue. A lot of the problems are due to the policies that the Government have pursued: deregulation, competition, privatisation, cuts in public financial support and the encouragement of private transport have undermined the public transportation system.

The hon. Member for Crawley (Mr. Soames) said it is good to go on the best of British Rail, but my experience is not as good as his. I use British Rail often. I identify the best of British Rail as its new electric traction. I shall not reiterate the story, which was given ample coverage in the press, about the toilet system and whether it can flush up instead of down. I was surprised that a new train for the 20th century should have such problems. When I went to Bradford yesterday and waited for the same train, it left the station 15 minutes late. It is a brand new train. It is new stock, which goes at 140 mph. It is one of the 21st century trains that we have been talking about and is supposed to be comparable with the TGV. It was late because the doors could not be made to shut or open properly.

When I joined the train at Leeds at 6 o'clock this morning it was 25 minutes late on the section between Leeds and Doncaster because the brakes kept sticking. Those are new trains, which incorporate new engineering and new concepts. They do not have such problems on the continent and they did not have them with the TGV. The daily experience on the railways for an awful lot of people is not good and not adequate.

Nevertheless, does the hon. Gentleman accept that one of the outstanding improvements in British Rail is in the attitude of service to the general public? Previously a frightful, unkempt fellow without a tie, with no hat and his false teeth hanging out, was reluctant to tell one to which platform to go, to catch a train. At least they make a major effort now. It is wrong to say that there has not been a dramatic improvement on InterCity routes.

Of course, there will always be different experiences due to personalities. We want to encourage the best. What is unfortunate about the British Rail system is that the staff have suffered cuts and reorganisations, and are losing confidence in the railway system. That is their worry. When I ask why a train has broken down, they are ashamed that even the new stock is not performing well. It undermines their confidence, which is reflected in their relationships with customers. There is a long way to go, but we all welcome the new stock and the improvements.

I welcome every penny that the Secretary of State is able to get from the Treasury to improve the system, which is old and dilapidated. Some of it is in a dangerous state and needs to be replaced as soon as possible.

I congratulate the Secretary of State and the Government on making the right decision about the two underground lines. I refer to the King's Cross London link, and I hope that the Hackney to Chelsea line will also be built. I disagreed with the Government about the Jubilee line as I do not think that it was the highest priority. We can have an argument about that. I think that the central rail study review upholds my view.

Now we are making decisions about major investments—in the region of 1 billion for each project. Those are the sort of choices we have. A lot of money will have to be found for the Channel tunnel. Whoever has the job of Secretary of State, and I hope that I shall have that opportunity shortly, needs to decide priorities.

How does one manage congestion and deal with the problems and the priorities? Does the Queen's Speech address those problems? The debate has reflected many of the concerns. I shall wait to see the total amount of public expenditure that the Secretary of State has managed to get. All too often targets have been given and amounts stated, but when one takes inflation into account, and one finds that that is twice or 50 per cent. greater than expected, the improvement in real terms turns out to be nothing. There has been a history of that in the past two years and I shall not dwell on it. We shall have to wait and see.

We must wait and see what British Rail has to say in its corporate plan, which is getting to be like its trains—later and later. At least one used to be able to rely on getting an autumn statement from British Rail to find out its priorities. The importance of that is that ever since the Secretary of State's announcement about the amount of money available, I thought that we were being given an assurance that new types of investment, such as that in Network SouthEast, were not to be delayed. The west coast line, which was announced and then delayed, would be relieved by new sources of funds. Apparently British Rail is now saying that the delay will continue. We must wait to see what the new chairman says in the spring, and what the Department of Transport says in later statements.

The money made available to British Rail should be used for the improvement of the safety of the system. The amounts now being returned to British Rail and the underground system are about the same as the amounts that the Government have taken away in reducing the public service obligation levels. The Government are trying to cut corners on safety. Inquiry reports have referred to that. I hope that the money that is needed for safety measures will be provided; we recognise that that is essential.

A report says that, even given the money available, the Government still intend to reduce the PSO level—for instance, on Network SouthEast. That can only mean ever-increasing fares on what must be the most expensive railway system in Europe, although it offers the poorest quality. It offers no hope for the people of the south-east. They are uncertain about the Channel tunnel connections and about the modern stock. The only certainty is a higher price for what service they do receive. That will be unacceptable—a mere breadbasket of support for the south-east.

My major criticism of the Queen's Speech does not relate to resources—although we must wait for the proof of the pudding. I welcome the direction, but I am concerned about the approach. As I say at most of my transport meetings, I am genuinely sorry that in Britain an ideological difference still exists in regard to transport policy. Only in Britain is there such a difference—about whether Government should have a role in planning, intervention and the use of public money.

Governments of both left and right in Europe are quite prepared to use such mechanisms to provide an integrated transport system that not only provides the best and most efficient service for people and for the movement of goods, but begins to address itself to the two fundamental questions: what can transport do to reduce the massive congestion cost, and how can it stop the environmental damage that is threatened? That is the challenge for the transport system. It is uniquely placed to make a special contribution.

Market systems cannot provide the best solution; by the very nature of the philosophy of competition between the modes of transport, we cannot get the best from their integration. Europe has recognized—and it is tragic that we do not recognise it in Britain—that there is a role for Government planning and intervention, and a role for public money.

I was saddened to read a speech made by the Secretary of State for Transport and reported in The Times—I am sorry that my photocopied page does not give the date. The article is headed
"Parkinson blames 'myopic' planners for traffic chaos",
and continues
"The post-war new town planners had failed to predict correctly the demand for transport, which is largely responsible for the transport difficulties confronting London and the south-east, Mr. Parkinson said."

It may be quite right that the Secretary of State said it—indeed, that is not in doubt—but is it true? When I read that, it reminded me of the Buchanan report of 1963. Then, the planners looked at the predictions for transport—I do not think that they involved anyone in the right hon. Gentleman's office—and the increased use of the motor vehicle. They concluded that if we did nothing about the growth of the motor vehicle, the result in the 19809s would be the problems that we are witnessing now.

I asked the Library to look up the figures for light goods vehicles and motor cars in 1962. There were then 6·6 million such vehicles, with a projected growth by 1989 to 19·6 million. It was predicted that by 2010 the figure would be 26·4 million. I asked the Library to take account of the Department of Transport's predictions, and it came up with a high prediction of 31·4 million, or 27·8 million. That is smack in the middle. Such accuracy has been unerring for 40 years. A person in the Treasury would have a tremendous job to achieve such accurate figures.

That annual compounded rate in the growth of vehicles was predicted. However, the trouble is that the politicians ignored that advice. We cannot blame the officials. We were not prepared to take into account how those difficulties could be avoided.

What are we doing about it, since we know that that is patently and damagingly true? The Queen's Speech has to be judged by that question. The Secretary of State says that he intends to increase the public service obligation levels, the external financing limits and the transport tax. Transport tax resources have more than doubled—from £7 billion to £15 billion, but we spend only 25 per cent. of that amount on our transport system. Under the previous Labour Government, 35 per cent. was spent on it. In Europe the average amount is 50 per cent. The m oney that goes to the Treasury is not used fully to improve transport. More money ought to be made available to it.

The Secretary of State referred to providing more resources for British Rail. However, the Government reduced British Rail's external financing limits. They also reduced British Rail's subsidy. About £953 million was provided in 1983. The Government claim that by reducing that figure to £488 million they have scored a success. Figures provided for me by the Library suggest that, at 1983 prices, over £2 billion has been withdrawn from British Rail. At today's prices, that is over £3 billion. British Rail's borrowing level has also been reduced by £2 billion.

Many demands have been made in our debates for investment in British Rail. Money could have been invested in it, but the Treasury reduced British Rail's external financing limits and its expenditure. No other railway system in Europe has been denied such huge financial resources. The quality of our system has been considerably affected; that has not happened anywhere else in Europe. No country can run a railway system by means only of fares. Public money must be invested in it. A balance has to be struck between the two. The Secretary of State often refers to that balance. At present, the balance between the two is wrong. British Rail has to work within an impossible financial framework.

The Government now intend to provide more money for public transport. They realise that they have made a mistake. However, they are 10 years too late. There have been 10 years of misery. Our transport system has been undermined. I am grateful, nevertheless, that the Secretary of State appears to have satisfied the Treasury that more money is needed. The Treasury may have been influenced by what people say about public transport and by the fact that the poor old Secretary of State was the only person who did not receive a standing ovation at the Tory party conference.

Whatever the reason may be, today the Secretary of State can claim that his Department is to get more money. The Opposition have claimed for many years that more public money is needed for transport. For the Government to say that more public money should be used for transport represents an advance. The PSO levels and capital grants will have to be increased. We await the final details, but at last we are starting on the right road. The problem is that we embarked on the wrong road and the wrong policies. Passengers have had to shoulder most of the burden. They suffer from lower quality and higher fares.

The Government intend to introduce the same policies for the roads. They are to introduce toll roads. Sufficient money is already being raised from road users. However, the Government intend to place another burden on them. Only £1 out of every £4 raised in taxes is used for transport purposes. Toll roads will lead to even greater expense for the road user. They will cost more to build and there will be even greater delays, as happened with the Birmingham north relief road. That could have been started 12 months ago. Congestion will increase, as we have seen with the Dartford tunnel. Toll roads have their price. Moreover, they will lead to the development of first and second-class road systems. To me that is anathema. Companies will pay for passes and Members of Parliament will be given free passes when they are on the business of the House. Such considerations will no doubt apply. However, most nauseating is that as it takes 20 or 30 years to pay for a toll road, the road that it is relieving will have to be kept congested to encourage people to take the fast route on the toll road. The public road system cannot be run like that.

Even if the Government decide not to proceed in that way, they may decide to route roads through the best green belt land and into attactive areas. The old arguments about the M25 apply to that. The development of land determines the route, not the transport requirements and the infrastructure. It is motivated and led by land values. I should have thought that we had learnt enough from the London docks about what happens when a route is determined by land prices.

The only reason for the privatisation of the trust ports is to allow the Government and the Treasury to gain access to the land around our 110 trust ports. What if some of them do not want their trust status to be removed? Will the Government force them into a privatised state? It is all about taking money from selling off more land. The Chancellor said yesterday that he estimates to receive more than £5 billion a year from privatisation, so he must get more assets to sell off.

We heard from hon. Members about the red routes. In principle, traffic management is an important point, which I fully support. However, the problem with red routes is that getting vehicles faster into the centre leads to more congestion in the centre. Stopping parking in one street moves the problem to another area, where most of the buses are operating. Therefore, public transport is delayed, but people are saying, "Improve public transport," so that they have a genuine choice when travelling.

I very much welcome the Horne report. It says that 3 million holes are dug a year, and 1,000 deaths are associated with that. I congratulate the Government on implementing the Horne report, which was concerned about confusion between different Departments. It must have been staggering, but almost fitting, to find the Department of Transport totally confused. On 7 January it announced the start of the red routes, but three weeks later it said that it was tearing up the road for road works. Does that mean that the scheme will be delayed, or did one part of the Department not know what the other part was doing? Confusion apparently exists even in the Department itself. Perhaps the Secretary of State will say whether it is intended to proceed with the scheme.

The red routes are about traffic management. It is important to give buses priority and more space on the roads. The car may be hindered more, but we should provide a fast and frequent bus service on which people can rely. A bus has much to offer and we can use it effectively. It can be set free only if we regulate it and give it priority over the car. Let people decide whether to use the bus rather than the car, but that is not an ideological problem. That is what must be done, not only to give people better choice but because it is the best solution for relieving congestion and dealing with the environmental targets that we have accepted internationally. If that: is not done, it will not be possible to achieve those targets. This is a move forward, but it is not enough because it is not a comprehensive concept for transport.

We are not anti-car, but many people want to transfer to public transport, and cheap fares offer them the chance to do that. It might not be necessary to pursue cheap fare alternatives. If we provide a regular, frequent service that can be relied on, people will automatically choose to transfer and we must intervene to achieve that.

The most pleasing aspects of the Queen's Speech are the commitment and endorsement of the Secretary of State's desire, of which he has spoken several times, to reduce the number of accidents and deaths on the roads. I pay tribute to the hon. Member for Eltham (Mr. Bottomley), who as a Minister at the Department of Transport spent much time trying to reduce the number of deaths and accidents. The Department is right. We have a better record than other countries, but far more people are killed on our roads than in many of the tragedies that have occurred recently. I am delighted that we are giving greater attention to those issues.

I am also delighted that we are considering the proposals of Dr.North. They will undoubtedly help to reduce the numbers killed and injured on the roads. Let us not forget that the majority of those accidents occur in urban areas and affect primarily youngsters and old people. That shows that we must do something about traffic control as well as speeding traffic through the cities. In other words, we must achieve a proper balance.

As I do not doubt that the Secretary of State wishes to reduce the number of deaths and accidents on our roads, I fail to understand why he does not take certain steps now, for example on random breath testing and rear seat belts. In recent weeks I have been examining the arguments and statistics on those issues.

It is argued that only 6 per cent. of people are using rear seat belts and that in every 25,000 accidents, four people are killed. It is estimated that if rear seat belt wearing were made compulsory, the number of deaths could be reduced by 70 per cent. That would represent a great saving of life, of over half the total number killed, perhaps 2,000 people.

Hon. Members generally support the idea of random breath testing. The case for it is overwhelming. The evidence in other countries that have random testing shows that to be so. I am sure that the same will apply in areas of Britain that undertake random testing, even though there is no law to support such tests. Parliament has not laid down conditions in that respect, so random testing is now done at the discretion of individual chief constables. In other words, one might be stopped for a windscreen wiper offence and find, the policeman having smelled one's breath, that one is breathalysed.

Parliament should not have shied away from that problem, leaving it to chief constables, who know that they can save lives by increasing the deterrents. Apart from increased penalties, the greatest deterrent is the possibility of being caught. After all, one is more likely to get away with it if one happens to be in an area where the chief constable does not believe in random breath testing.

The evidence in, for example, New South Wales, shows that when random breath testing is introduced, the public are overwhelmingly in favour of it. The same sentiment has been expressed in polls in this country. The evidence shows that random testing results in the number of deaths being reduced by a third. So if we add one third of the 1,000 people killed as a result of drink driving to the other avoidable deaths of which we have been speaking, we see that about 50 per cent. of deaths could be avoided, if there were fewer accidents.

I intend to give the House a chance to vote on the random testing issue. Although that will occur in a non-partisan way, I am pleased that my party has supported it, and it appears in our policy document. Allowing for all the civil liberties arguments that arise, we must now take the random testing argument further, as we did with compulsory seat belt wearing. That means Parliament laying down the conditions applying to random testing, with all the protections that may be necessary. We must lay down the how, why and wherefore of it all and thereby take a major step towards improving safety on the roads.

It is worth noting that the proportion of dead drivers above the legal limit has dropped faster in this country than in New South Wales. Nobody discussing the issue next week should necessarily assume that the hon. Gentleman's proposal is the best.

What the hon. Gentleman says is true and we welcome the figures, but much depends on the way in which the testing is implemented. As it is not a legal requirement on the police, we cannot say that it applies throughout the country. That is why I am anxious for us to lay down a standard and the necessary protections and to recognise that we can do something to reduce the number of deaths and accidents on our roads. That being so, Parliament should have the opportunity to act. We shall give the House that opportunity. Members in all parts of the House are united in wishing to reduce the accident rate. By implementing the simple measures to which I referred, we can make that reduction.

I have explained how we could take steps to improve the legislation that the Government propose. We want to see more resources made available to the transport system generally—for rail, buses and for safety—and we are glad that the Government are committed to finding extra resources. In conclusion, I shall ask the Secretary of State a question that I have asked him before and on which I have chased him with correspondence. To be fair, I wish to place the question publicly.

Points have been made in the debate about Kuwait and the hostages. The House will recall that a British Airways plane landed in Kuwait on 2 August with 367 passengers on board. I have always wondered whether that plane could have been stopped and the hostages prevented from being delivered up. Relatives and crew members have told me that they are extremely concerned that the incident could have been prevented. There are rumours about whether Special Air Services staff from our own embassy were on the plane. All those rumours make the difficulties more contentious.

There has been correspondence between the Prime Minister and me on this matter, which is not open to argument. The plane landed at about 4 o'clock local time. We know that the takeover of the airport, the aeroplane and the crews occurred at about 4 o'clock. We know from other sources, particularly in America, that the invasion took place at 2 o'clock. As the Secretary of State in his letter, the Prime Minister and no one else will answer the question, will the Secretary of State now say when Britain first realised that troops had crossed the border? If that occurred at 2 o'clock, why did not we take essential action to prevent that plane landing and those people being delivered up as hostages? As my correspondence has failed to gain an answer, I ask the Secretary of State to answer the question in the public forum. Does he know when the invasion took place and was there a period in which the plane could have been prevented from landing?

2.7 pm

Unlike anyone else in the world as far as I am aware, the hon. Member for Kingston upon Hull, East (Mr. Prescott) persists in ignoring the fact that Saddam Hussein made an unprovoked and unexpected attack on a helpless country. At that time, a British Airways plane was on its way to Kuwait. As has been explained to the hon. Gentleman, before the plane left London, the pilot checked with Kuwait airport, which checked with the ambassador, who said it was perfectly proper and sensible for the plane to leave.

When the pilot was flying over Egypt, he passed another British Airways plane coming from Kuwait. He checked with its captain whether there were any difficulties in Kuwait and that captain said no. When the pilot reached Kuwait he radioed to the ground crew, who said that it was perfectly safe to land. He then circled the airport to check for himself whether the ground crew might be in some way constrained in giving him the right answer, but he saw that it was safe to land and did so. He handed over the plane to the outgoing pilot, who set about checking it. Unhindered, the incoming pilot caught a taxi into Kuwait City, went to bed and was woken up a couple of hours later by a telephone call from London saying that there had been an invasion.

Every conceivable precaution had been taken and, having taken precautions, the captain landed the plane, satisfied that he was doing the right thing, which he was. There was no hindrance to him; he was able to take a taxi with the rest of his crew and travel to Kuwait city.

I hope that the hon. Member for Kingston upon Hull, East, who clearly has a deep but rather strange interest in the subject, will drop it. It is clear that British Airways took what precautions it could, the ambassador gave his advice in the best possible faith, and the captain took extra precautions and was able to land the plane safely. The plane almost left, but was delayed by a few minutes and while it was being finally checked, the crew were told that the airport was closed. I regard the hon. Gentleman's action as a cheap stunt and I hope the House feels that I have now given him the facts, which I previously gave him in letters.

I do not want too much time in every debate here to be spent on Saddam Hussein. However, my hon. Friend the Member for Kingston upon Hull, East asked the Secretary of State whether, when the plane landed, Iraqi troops had crossed the border into Kuwait. That is the important point. Had they already crossed into Kuwait when the plane landed? It is a simple question.

That point is not clear. What is clear is that the airport was open. The captain had taken every precaution and our embassy had given him the best advice that was available to it.

Several hon. Members, including the hon. Member for Kingston upon Hull, East complained bitterly about our transport problems. The hon. Member for Dunfermline, East (Mr. Brown) asked whether Britain had had a decade of sustained growth and improved performance. But most of our traffic problems stem from precisely that fact. There are nearly 7 million more cars on the roads than there were when the Government came to power. Some 32 million more people are using our airports and going abroad from them. We have 80 million tonnes more freight going through our ports. All those facts are evidence of the increased prosperity and economic growth whose existence the hon. Member for Dumfermline, East questioned.

We enjoyed almost a decade of growth, improved productivity, increased production and exports and hugely increased investment. What brought that period to an end was the decision, made after the stock exchange crash in 1987 and referred to by my right hon. Friend the Secretary of State for Trade and Industry, to accept that, as the then Chancellor said, the prospect of depression and slump was less acceptable than the risk of increased inflation. The Government made the decision to give the economy a boost, which led to overheating and gave rise to our current inflation. It was a mistake and we are paying for it, but we will put matters right only by pursuing our present policies. I noted that when the hon. Member for Dunfermline, East was asked whether he knew of a way of reducing inflation that would not involve a slowdown in the economy, he studiously avoided answering the question, just as he avoided most of the major questions that my right hon. Friend put to him.

The reduction and control of inflation will lead to the renewal of growth, the controlled expansion of the economy and an increase in manufacturing and investment, all of which the hon. Member for Dunfermline, East says he wants. All that the hon. Gentleman proposed was a series of placebos, whereas we propose to tackle the problem at its roots. If we can get the economy growing on a sound basis and if we ca. n get inflation under control, the Government will not need to give people incentives to invest. Investment grew without those incentives because the economy was growing. The proposals of the hon. Member for Dunfermline, East deal with the symptoms, whereas we are dealing with the root cause of the problem. The hon. Gentleman is supposed to be the bright young hopeful of the Labour party, but as I listened to him he seemed to be firmly rooted in the corporate state of the 1960s and 1970s—a concept that is utterly irrelevant to the problems of the 1990s.

I was about to deal with the points made by the hon. Gentleman. He asked whether Cobden was now out of date. Cobden and the open trading system in which he believed have been the source of the growth in world prosperity since the war. There has been an explosion of trade in manufactures based on the very simple principle of lowering tariffs, removing barriers and encouraging trade. The renegotiation of the general agreement on tariffs and trade that is under way at present will extend to farming and services the rules that have proved so successful with goods. That is vital to the development of the world trading system. There is nothing more important to developed and developing countries than the removal of those barriers against goods and the establishment of the law of comparative advantage as the basis of our trading system.

The Secretary of State must not try to make truisms sound like profound revelations. I imagine that he is talking about the extensions of world trade in commodity production. That has been under way not since the war but since before the Napoleonic wars—since 1780. The hon. Gentleman mentioned inflation and said that he was getting to the root of the problem. If that is so why, after 11 years, is inflation higher now than it was in 1979?

If the hon. Gentleman had listened to my right hon. Friend this morning, he would have understood why. On that occasion we followed policies which his colleagues criticised because, in their view. they were not lax enough. We gave the economy a boost. Their criticism was that it was too little. As it emerged, the problem was that we gave the economy too much of a boost. The advice of the hon. Gentleman and his hon. Friends was totally and utterly wrong. We admit to an honest mistake and we are putting it right. The hon. Gentleman would have compounded that mistake. Indeed, the whole basis of the Labour party's policies when it was in government was consistently to go for growth, run the economy into the ground and hand over control for economic affairs to outside agencies such as the International Monetary Fund.

My hon. Friends the Members for Surbiton (Mr. Tracey) and for Streatham (Sir W. Shelton) raised detailed questions about their constituencies and I shall write to them personally within the next week.

Twice in the past two days the Government have given evidence of the high priority that they attach to transport and of the practical and purposeful way in which they are dealing with our transport problems. Those two occasions were in the Gracious Speech and in the autumn statement. On the first, the Government announced their plans for four major and worthwhile Bills. That is the largest number of Department of Transport Bills that have been in the programme for many years. On the second occasion, the Chancellor revealed spending plans under which the Department will preside over its biggest-ever investment programmes.

I shall give the House the scale of the figures. In the three years which ended in April 1990, £8 billion was invested. In the three years beginning in April, as a result of the agreement with the Treasury last year, the figure was increased to £14 billion. As a result of the latest round, in the three years beginning next April, £16 billion will be invested in programmes for which my Department is responsible. Those figures are made up of record investment programmes across the board on rail, underground, public transport, local and national roads and air traffic control. I might add that, at the same time as public programmes are under way, the private sector will invest in airports—which have been privatised as BAA—the second Dartford crossing, and in our railways, where privately owned assets which use our railways now total a staggering £3,000 million worth.

The legislative programme has three aims, the first of which is to improve road safety. I thank the hon. Member for Kingston upon Hull, East for supporting that part of our programme. I agree with him that the North report identifies some useful answers to a horrific problem. We have the safest roads in Europe, but even so, 100 people every week are killed and thousands more are injured. We have the equivalent of three Clapham train disasters on our roads every week. One of the most unfortunate aspects of that is that while our record is better than that of most other countries in every other respect, on child pedestrians we are among the worst. So we need to strengthen the law to deal with the dangerous and drunken driver. That is why our first Bill, which will implement North, will introduce tougher penalties for people who drive dangerously and drink. It will enable us to use modern technology to catch up with those who break the law and it should lead to better measures to tackle those who heedlessly kill and maim other people. I am glad that the House supports that measure.

The second aim of the legislative programme is to get better use out of our existing roads. This is tackled in two of the Bills; one on traffic and the other on new roads and street works. The road traffic Bill will introduce the red route scheme whereby 300 miles of arterial roads in London will become red routes, effectively parking-free or tightly controlled parking areas. The hon. Member for Newham, North-West (Mr. Banks) spoke about the problem of Islington and the arterial route there. As he probably knows, Islington is our agent in handling the roads in its borough. It was asked to resurface this stretch of road in the spring of this year. It has only just come forward with its proposals, despite a lot of pressure. It is effrontery of a high order for it, having failed to carry out its duty, then to criticise us, because the fact that it is nearly a year late doing its job means that there will be a delay on the red routes. A period of decent silence, rather than using this as an excuse to attack the Government, would not have come amiss. That is a good argument for not continuing to use Islington as our agent.

The Bill will have a proposal for a traffic director for London who will manage and control the red routes and advise about parking. Part of the plan is to transfer to the borough responsibility for legitimate parking—meters and so on—leaving traffic wardens and police free to enforce the rules on criminal parking, particularly on the red routes. We intend, having made more capacity on those 300 miles of roads, to ensure that buses get their fair share of that extra capacity because we recognise that buses are our only underused transport facility.

The new roads and street works Bill will, we hope, command wide support. I was glad that the hon. Member for Newham, North-West mentioned it. Better coordination of the digging up of our roads, making sure that they are reinstated properly and promptly to a high standard, avoiding unneccessary works and penalising the utilities that are dilatory and inefficient will enable us to get better use of our existing system.

Our third aim in the legislative programme is to increase the scope for private sector investment in the transport system. In the roads and street works Bill, we shall have proposals to enable the private sector to finance, build and operate new roads and to charge tolls. There is a place in the system for such investment, but one important point needs to be made. The Government have made it clear from day one that any funds attracted into the road system in this way will be in addition to, not a substitution for, our public sector programme. They will bring extra resources into an area where we need them badly.

Will the Bill make provision for allowing existing roads to be privatised along the lines of the system in the United States? Could people in Hampstead get together and have their road declared a private road and then operate it as a private road?

That is not part of our plans, but we may need to link public roads to the proposed private roads. This will happen only as part of the process of linking privately financed roads into the road network, not as part of implementing any general principle.

The Bill will enable us to attract more private money into the financing of improvements to our road system. For example, we plan to attract more private money into the financing of the Severn bridge. The scheme has been let and the new Severn bridge will get under way when the House approves the Bill that the Government will introduce. As part of the aim of improving private sector investment, we plan to produce a Bill to enable trust ports to come forward with schemes for their privatisation.

We believe that that is a vital part of improving our port structure. I think that the entire House recognises now that getting rid of the dock work labour scheme led to a major improvement in our transport system. The trust ports are now hampered, however, by their own almost mediaeval structure. It is difficult for them to enter into joint ventures and to raise the money that they need to develop themselves. It is as part of the process of modernising our ports and improving them that we are coming forward with a trust ports Bill.

Within our legislative programme will be the planning and compensation Bill, which will be introduced by my right hon. Friend the Secretary of State for the Environment. It will enable additional compensation to be paid to those whose homes are blighted as a result of road or rail schemes. I believe that the Bill will be welcomed generally, and especially by my hon. Friend the Member for Wanstead and Woodford (Mr. Arbuthnot) and my right hon. Friend the Member for Worthing (Mr. Higgins), both of whom have campaigned hard for such a measure for some time. I hope that they are pleased that the Government will be recognising the rightness of their case by introducing the measure.

That is only part of the story. Yesterday my right hon. Friend the Chancellor of the Exchequer revealed the Government's public expenditure programmes for the next three years. As I have said, we plan to spend £16 billion over that period. For the benefit of the hon. Member for Kingston upon Hull, East, who spends most of is time living in a dream land and making imaginary investments with non-existent money, I repeat that £16,000 million will be invested over the next three years. That is an all-time record for my Department. It will see an improvement across the spectrum of transport investment. The hon. Gentleman is always wrong when he talks about figures. Last year's investment programme for British Rail was the highest for 25 years. We have had continually growing investment programmes in transport as the economy has strengthened. We have now made a step change and we are moving forward into a huge investment programme across the spectrum.

The rail investment programme will rise to more than £4 billion, the highest for more than 30 years. It will be 58 per cent. higher in real terms than the programme for the previous three years. Of the £4 billion, £1·4 billion is to enable British Rail to prepare for the Channel tunnel, including £330 million of investment in freight facilities. The balance of £2·6 billion will be spent on improving the existing railway. That includes the completion of the east coast main line electrification programme to Edinburgh, massive investment in the regional network and the gradual introduction of new trains so that by 1993–94 virtually every train in the provincial fleet will be modern diesel or electric multiple units.

In network SouthEast we have a massive investment programme. The bad news for the hon. Member for Kingston upon Hull, East is that new trains will be delivered in increasing numbers, starting very early in 1991. Modern trains will be running over huge areas of the rail network in 1991 and 1992

The programme for the underground system has been expanded to over £3 billion. The hon. Member for Kingston upon Hull, East goes on and on about the public service obligation grant reduction of £80 million for Network SouthEast. Alongside the £80 million we shall be investing £1,200 million in modern stations, new trains and greater capacity so that Network SouthEast will be able to attract more customers. It will be able to reduce its costs beause it will be operating modern trains. That is how a gap can be bridged without increasing fares unduly. The hon. Member for Kingston upon Hull East can think only of subsidy. When the Labour Government were in power and subsidy was at its highest, British Rail's investment programme was at an all-time low. We should prefer the money to be invested in improving the system and attracting customers, rather than in bribing the customer and subsidising fares. More than £3 billion will be spent on the underground over the next three years. There will be two new lines. The docklands light railway will be extended and there will be a huge investment in the existing network to increase its capacity by about 20 per cent.

Both national and local roads will have increased programmes—national roads of £6 billion and local roads of £2·4 billion. We watched with interest the manoeuvrings of the Labour party. The hon. Member for Dagenham (Mr. Gould) began by saying that he would abandon the programme. He then said that it would be reviewed. The hon. Member for Kingston upon Hull, East then intervened. The Leader of the Opposition has made a sensible decision—he has put the hon. Member for Dewsbury (Mrs. Taylor) in charge of knocking their heads together and trying to get them both to talk sense.

It being half-past Two o'clock, the debate stood adjourned.

Debate to be resumed on Monday 12 November.