House Of Commons
Monday 6 July 1992
The House met at half-past Two o'clock
Prayers
[MADAM SPEAKER in the Chair]
Oral Answers To Questions
Social Security Appeals
Appeals
1.
To ask the Secretary of State for Social Security if his Department proposes to take new initiatives to speed up the appeals procedure arrangements involving his Department.
I understand from the chief executive of the Benefits Agency that several initiatives are under consideration or being piloted in conjunction with the Independent Tribunal Service to speed up the appeals procedure. In addition, the chief executive has set clear targets for the clearance of both locally and centrally prepared appeals.
Does the Minister accept that many people are suffering hardship as a result of waiting for appeals to be settled and that there is still too long a delay in dealing with appeals? Matters have not improved, so will he ensure that there is an improvement and that the same applies to independent appeals, because the situation is far from satisfactory?
I thank the hon. Gentleman for his question, and his remarks are well directed. I am disappointed with the present state of appeal delays, but the initiatives being brought in by the Benefits Agency are likely to have a considerable effect: the simplified appeals submission, pre-listing and the abbreviated notice of award so that successful applicants receive any benefit awarded much sooner are all designed to have an effect. In addition, Benefits Agency targets will be made public. I hope, therefore, that the hon. Gentleman and I will be able to monitor an improvement in appeals over the coming months and years.
Does my hon. Friend agree that more appeals on disability benefits should be held locally and that, if they were, that would improve clearance times out of all recognition?
My hon. Friend is absolutely right. The move to locally held appeals is already going ahead and should also have some effect on waiting times.
Is the Minister aware that, because of delays in processing disability living allowances, as of two weeks ago not a single disability living allowance appeal had been heard? Does he really think that that is satisfactory?
The comments that I have made about improvements in appeals will also apply to disability appeals in future. The House will have an opportunity to say more about disability living appeals later this afternoon.
Attendance And Disablement Allowances
2.
To ask the Secretary of State for Social Security whether he has any plans to speed up the decision-making process in respect of attendance and disablement allowances.
New arrangements were introduced in April to speed up decision making in attendance allowance and disability living allowance, principally through self-assessment and enhanced computer process-ing. The changes were widely welcomed by outside organisations with which there was close consultation. We knew that introducing those changes would require a major effort, but an early surge in claims has led to backlogs. I regard that situation as unacceptable and firm action is being taken to accelerate the handling of cases.
Why do not the Government admit that these delays are deliberate—that they are all about saving the Government money? The same applies to under-staffing. Is the Minister aware that nearly every Labour Member has had complaints about lost papers? Is it not remarkable that the papers are somehow found when Members of Parliament get involved? It is time that the Government stopped this squalid manoeuvre and stopped penalising people who need the money. It is a different story when they come to collect income tax and the poll tax —they find the right computers then.
I am afraid that I have become immune to the ill-directed tirades of the hon. Gentleman over the years. He is manifestly wrong on several counts. First, there is no question of the Government saving money as a result of this; nor does any claimant lose money. If a payment is delayed, it will soon be backdated to the date of the claim. Far from saving money, this benefit has been introduced at a cost of about £250 million to give extra help to disabled people. Any suggestion to the contrary is quite scandalous.
Does my right hon. Friend agree that since 1979 the Government's spending on the disabled and long-term sick has increased by 173 per cent? Is that not evidence of the Government's commitment to help those people and is that not more than the Government of which the hon. Member for Bolsover (Mr. Skinner) was a member ever did?
Yes, indeed, and it is better than anything done by anyone who supports the Labour party. Those people know as well as I do that this Government's record in providing benefits for the long-term sick and disabled far outmatches anything achieved under previous Labour Governments.
Is the Minister aware that I spent the entire morning ringing the telephone number that he gives the public—not to Members of Parliament—to try to get through to query three separate cases that arose in my constituency at the weekend? If he believes that that is anything to be proud of, I am astonished and ashamed for him.
I wish to make a couple of points to the hon. Lady whom I respect greatly, as she is aware. First, the chief executive of the Benefits Agency is writing today to every hon. Member, setting out the steps that are being taken to reduce the delays. Enhanced use of telephone lines is being introduced so that agencies and the public can get a better service. Mr. Bichard's letter today to all hon. Members will include information about an extra 10 lines that will be specially dedicated so that Members of Parliament —
What about the public?
If the hon. Lady will listen, she will understand. Those numbers will be given today so that hon. Members can get special service for any particularly difficult cases.
Has my right hon. Friend had an opportunity to see the excellent letter from Mr. Sam Gallop, the chairman of Opportunities for People with Disabilities, in which he praises the operation of the benefits inquiry line and states that he has always been treated with courtesy, friendliness, patience and effective concern? Will my right hon. Friend pass on the thanks of Mr. Gallop to the Benefits Agency?
Mr. Gallop was kind enough to copy his letter to me when he wrote expressing his satisfaction. That raises a slight doubt in my mind about the motivation of some of the approaches by the Opposition.
Will the Minister stop being so complacent? Is he satisfied with the report by the National Audit Office a month ago which found that some of our 250,000 war pensioners have to wait two years for their claims to be processed, including a one-year wait for medical checks? Is he satisfied at the fact that the Department of Social Security now takes 50 per cent. longer to process claims than it took seven years ago and that the average wait is now eight to nine months? Is that the same Tory conquest of bureaucracy which means that, after 10 years of Toryism, each case moves at least 30 times between desks and spends four days in each in-tray? Would not the Secretary of State better spend his time not cutting benefits for young people but in cutting delays for pensioners?
Obviously, a considered response to the National Audit Office report will be made in due course. That is the procedure in those cases. My hon. and noble Friend the Parliamentary Under-Secretary of State is taking urgent steps to deal with war pension delays, which also were caused by a tremendous surge in claims. With regard to DLA, the subject of the question, we are now employing more than 400 extra staff to deal with the surge. Extensive overtime is being worked during the week and at weekends and 115 extra adjudication officers are being trained. We are also redeploying staff from other parts of the Benefits Agency to speed up claims to the maximum extent.
Cold Weather Payments
3.
To ask the Secretary of State for Social Security whether Her Majesty's Government propose to review the system for cold weather payments.
Following a review, substantial improvements were made to the cold weather payments scheme last winter, and these resulted in almost 4 million payments being made, at a cost of almost £24 million. The scheme is kept constantly under review and we are currently evaluating those changes.
My hon. Friend the Minister will be aware that the scheme is targeted towards the most vulnerable in society, including pensioners and those with children under five. I am therefore very grateful to him for agreeing to keep the matter under review. Now, during the hot weather, is the time to ensure that the scheme is in the right order and sensibly composed. I am grateful for my hon. Friend's commitment to that.
I thank my hon. Friend. I am aware of his long-standing interest in the scheme. We made a number of reforms to it last year. We believe that we have ex tended and modified the scheme so that it works much better than it used to—certainly better than it did before 1979—and the improvements will be kept constantly under review.
Is the Minister aware that, next winter, between 20,000 and 40,000 more people will die than in the summer months? Is he aware that that means that we stand at the top of the European cold winter deaths league? Does he therefore agree that there are no grounds for complacency and that now is the time to think through the matter with other Departments so that we can stop the annual cull of our eldest and best each and every winter?
The hon. Gentleman's point might have been put just as effectively without some of his emotive language. Sadly, there are many causes of death throughout the winter, and they are totally unconnected with cold weather. Obviously, that matter is a constant problem. The system is examined extensively to make sure that it works properly. No claim is necessary; the procedure is automatically triggered. We have also removed the capital requirement, which has made another 400,000 people eligible for help under the scheme. Those are the extensions and modifications that we have made. There is no complacency. The scheme is more extensive than it was before. Every time that I hear the Opposition whinge about it, I know that that is a collective gasp of guilt about a scheme that they had neither the wit to devise nor the money to sustain.
As so many people are eligible for cold weather payments and as last year's changes brought more into the scheme, does that not show the Government's commitment to ensuring that benefits are targeted towards the sick, the elderly and the disabled, so that those in need get the money that they require?
Targeting is important in such a scheme, but it is also essential to keep it under review as much as possible to make sure that money goes where it is needed. The Government are committed to doing that.
Youth Benefits
4.
To ask the Secretary of State for Social Security what new proposals he has to improve benefits for 16 and 17-year-olds.
The Government believe that 16 and 17-year-olds should be encouraged to continue in education, obtain a job or undertake training rather than enter the benefits culture straight from school, although support is available for those who are unable to work or obtain a training place and those who are at risk of hardship.
Is the Secretary of State also immune to the universal view of all independent bodies which report that the present exclusion of 16 and 17-year-olds from income support is cruel and unnecessary? Has he seen the evidence that was given to his own Social Security Committee which says that the problems of adolescents, the most vulnerable group of young people, are being added to by the system? How much longer will he persist with a system that is cynical, mean and cruel?
The hon. Gentleman spoils his case by gross overstatement. He should know that young people aged 16 or 17 are not excluded. Help is available if they are at risk of severe hardship. More than 85 per cent. of those who apply receive that help, and 90 per cent. receive a decision within 24 hours of making a request.
My right hon. Friend will be aware that too many people are becoming dependent much too young and that that is widely recognised by social workers and others. However, there are also a small number of 16 and 17-year-olds for whom it is proving difficult to deliver the workplace guarantee. Will my right hon. Friend take special measures to ensure that they do not lose out?
I recognise the importance of my hon. Friend's point, as does my right hon. Friend the Secretary of State for Employment, who is taking every possible measure to ensure that we fulfil the guarantee of a youth training place for young people of that age. The number of people waiting for such places is declining month by month, I am happy to say.
Is the Secretary of State satisfied that the careers service knows of 50,000 young people who are registered for youth training but without a place who are denied income support, of whom, contrary to what he said, fewer than one third receive special hardship allowance, leaving more than 30,000 destitute, without money at all to survive on? Is it true, as has been reported, that the right hon. Gentleman now proposes that, for young people who go on youth training scheme courses, the £35 a week training allowance should be scrapped and replaced by the equivalent of child benefit of £9·65 a week for their parents?
Is not this vendetta against young people a huge disincentive to go on training courses? Is it not an insult to them, when the country desperately needs much better-trained young adults?Financial help should be available for everyone who does not have support from his or her family. As I said, 80 per cent. of those who apply for the severe hardship allowance receive it. The hon. Gentleman is talking about people who live at home, who, of course, have the support of their parents. Only if their parents are not able to help is additional support given.
I am not surprised that the hon. Gentleman automatically looks to the benefits system in these circumstances. In 1978, the Labour Government supported only 7,000 training places. There are 300,000 such places under the Conservative Government. As for stories in the press about the public expenditure round, the hon. Gentleman may be sure that I and my Department do not talk to the press about the matter. We shall talk to the Chief Secretary when the moment arrives. The hon. Gentleman may be sure that there will be stories almost every Sunday between now and the autumn. He will believe them, even though the vast majority will turn out to be fallacious.Will my right hon. Friend confirm that the vast majority of 16 and 17-year-olds either go on to training or into work and that there is a severe hardship allowance for people who are unable to go to work or receive training? Such people receive income support and the Government will continue to provide support for people who are unable to obtain training or work.
My hon. Friend is right. One of the Government's successes is the increase in the number of young people either staying on at school for extra education beyond the age at which schooling is compulsory or going on training courses. Only 40 per cent. did so under the Labour Government. The figure is now nearer 70 per cent. That is a vast improvement.
Pensions
5.
To ask the Secretary of State for Social Security what was the pension for (a) a couple and (b) an individual in 1979; and what is this figure uprated in line with (i) inflation and (ii) with earnings.
The current rate of retirement pension, uprated in line with prices since 1979, is £54·15 for a single person and £86·70 for a couple. If uprated in line with earnings, the pension would now be about 29 per cent. higher. This would have cost the national insurance fund more than £40 billion since 1979, implying an extra £10·50 per week on the national insurance contributions paid currently by a man on average earnings and by his employer.
Does not the Minister's reply reveal that many old-age pensioners are at a disadvantage compared with other income groups? In view of her answer that pensioners are at a 29 per cent. disadvantage compared with the position under the Labour Government, is it not time that the Minister decided that pensioners were entitled to some further consideration? When does the Minister intend to do something about the pensioners, instead of using rhetoric about what it would cost the Government, given how much they spend on unemployment benefit?
If the hon. Gentleman is not receptive to rhetoric about what it would cost the Government, perhaps he is receptive to rhetoric about what we have done for the pensioners. Perhaps he is receptive to the fact that pensioners' incomes have increased by 34 per cent. since the Conservatives came to power whereas they rose by only 3 per cent. under the Labour Government. Perhaps he will reflect on the large increase in home ownership and consumer-durable ownership among pensioners and the fact that incomes from savings have doubled. That is what we have done for pensioners and it is worth more than the Labour party's rhetoric. That rhetoric lost it the last election and will continue to lose it elections so long as Labour Members make wild promises.
Will my hon. Friend confirm that since 1989 income-related benefits for pensioners have increased by £700 million? Does she agree that that shows the Government's commitment to increasing benefits for those who are most in need?
It is an essential part of the Government's policy to target benefits, as far as possible, on those most in need, and that is why there have been substantial increases for those in residential and nursing homes and for those pensioners on income support. We shall continue to direct extra resources towards those in need while maintaining the value of the basic state pension.
Will the Minister accept that although the Opposition are greatly concerned about the erosion of the pension, we are concerned also about the abolition of the pension for women aged 63 or less? We are reading press reports that say that the Government are considering increasing the retirement age for women to 65. Is that what the Government propose, or are they preparing the ground in order to back down so that the pension age for women goes up only to 63? Of the 3,000 representations that the Minister and her colleagues received on this matter, how many asked for an increase in the retirement age for women?
The trouble with the hon. Gentleman is that he believes not only his own propaganda but everything that he reads in the press. As he well knows, the Government have not reached any conclusion on how to equalise state pensions, beyond our firm commitment to do so. We issued a discussion document and, as he will be aware, the period for discussion has only just ended. That set out four main options and went well beyond the narrow range that the hon. Gentleman identified. In due course, we shall come to a decision and we shall announce it, in the proper way, to the House. Until then, it would be improper for anyone to speculate, and I suggest that the hon. Gentleman stops alarming prospective pensioners by speculating without reason.
Benefits (Itinerant People)
6.
To ask the Secretary of State for Social Security what arrangements are made for itinerant people to claim social security benefits.
Itinerant people who claim social security benefits are entitled to benefits under the same conditions as other people. Those who claim benefits for unemployment are required to be available for work with an employer and to seek such work actively.
I thank my hon. Friend for that reply. Will he explain how it is that people who call themselves travellers, gipsies and didicois, or who are just a thundering nuisance, seem able to move around the country getting benefits wherever they stop, whereas my constituents are, quite rightly, required to report regularly to a social security office or to a Jobcentre, where they have to show that they are actively applying for jobs so that they can receive benefits? Furthermore, if they take just a few days holiday with their families, they lose benefit.
As I said to my hon. Friend, itinerants have to fulfil the same conditions as other people. If my hon. Friend or any hon. Member has evidence that they are not doing so, that would be a matter to follow up in the normal way.
Would the Minister care to visit Centrepoint and talk to 16 and 17-year-olds who have travelled to London from towns and cities to the north and find themselves without a job and a home? They have to wait a long time before receiving any help or cash income from the Government and in the meantime they live in cardboard boxes.
Last week, I visited one of the benefit offices dealing with itinerant people and they recognised the improvements in the conditions that we have created for them.
Disabled People
7.
To ask the Secretary of State for Social Security if he will make a statement about the impact of recent technological developments on disabled people.
Recent. current and future technological developments are making and will continue to make an increasing impact on lives of disabled people in this country. They will enable many disabled people to live independently, to have opportunities for education, employment and leisure. They will also play an important part in the detection, prevention and amelioration of disabling conditions.
Will my right hon. Friend take this opportunity to welcome typetalk, the joint venture between British Telecom and the Royal National Institute for the Deaf that enables deaf people to talk to each other and to hearing people on the telephone? Will he confirm that the Department provides funds to the institute and supports projects such as typetalk?
I can confirm that, and it has been my privilege to have been involved with typetalk since its inception and to be present at the launch of the scheme just before the general election. It is beginning to do a marvellous job on behalf of deaf and hard-of-hearing people, not least by enabling them to have access to employment.
Is the Minister aware that disabled people in my constituency are complaining about the technological developments in the Benefits Agency that have altered the administration of their benefits'? As a result many of them cannot afford to renew the MOT on their car, on which they depend for mobility. They face delays of six months and more in the administration of their benefits because of the new technological developments in the Benefits Agency.
That has nothing whatever to do with the introduction of new technology for the administration of benefits. The Benefits Agency is coping with twice as many claims for attendance allowance and disability living allowance as in the same period last year, and it is doing so successfully. If the hon. Lady knows of any particular cases where she believes that access to the motability scheme is affected by these delays, I hope that she will contact me immediately about them.
While I welcome my right hon. Friend's recognition of the important opportunities that new technological developments open up for disabled people, what plans does he have—in consultation with his colleagues at the Departments of Employment and for Education—to improve the availability of expert advice and counselling for individual disabled people, so that a judgment can be made about what technology would be of most help to them personally, and the availability of expert purchasing to ensure that the money goes further and more disabled people can enjoy the benefits of new technology?
As my hon. Friend will know, a number of Government Departments and other agencies fund new technology to help disabled people. I should like to see more co-ordination and a more seamless-garment approach to the advice available to them and to its accessibility. The Department of Employment already spends about £300 million a year on enabling disabled people to obtain employment or on maintaining them in employment. That is immensely important. Certainly, the national disability information project, which is a pilot scheme now and is likely to go national in the not-too-distant future, will greatly enhance the power of disabled people to make choices about the use of technology for their own needs.
Courage Brewery Pension Fund
8.
To ask the Secretary of State for Social Security what representations he has received regarding the Courage Brewery's pension funds; and if he will make a statement.
I have had no representations regarding the Courage Brewery's pension funds.
Well, I have—from many of my constituents who were worried when they read about the Harlin write-down. Is it not true that the regulatory system relies entirely on the honesty of the trustees and that if they prove not to be honest, the whole system collapses? When will the Secretary of State introduce regulations that give guarantees and security to pensioners? Is it not time that the Government took responsibility for some of the farces in the past?
If the hon. Lady is questioning the honesty of any of the trustees, I hope that she will do so publicly. I do not know of any reason to do so. The Transport and General Workers Union has made a complaint and it is being investigated by the Investment Management Regulatory Organisation, whose responsibility that is. It will recommend whatever action it deems appropriate. I understand that the pension fund is in a healthy state and recently enhanced the benefits that if offers to its pensioners. Elected representatives from the membership sit on the committee of management, which has day-to-day control of the fund's administration. An investment sub-committee had been set up to scrutinise investment policies and an independent trustee to head that sub-committee has been appointed. Obviously, if the hon. Lady has any evidence that she want to submit to the regulatory authorities, she should do so.
Does my right hon. Friend agree that considerable reassurances could be given both to Courage Brewery pensioners and to members of other occupational pension schemes, not least the many hundreds of Maxwell pensioners in my constituency, if the Securities and Investments Board were now to publish its report on the Maxwell scandal or, at the very least, those aspects of it which could be made public without prejudicing criminal proceedings? In that way, hon. Members on both sides of the House can know what went wrong with the regulatory arrangements, and we and our constituents can have an informed debate about what needs to be done to put things right.
Yes, I agree with my hon. Friend. The Securities and Investments Board has said that it wishes to publish as much as possible, subject only to the legal advice that it receives on the risks of prejudicing a fair trial. Obviously, the Government concur with that.
Share Fishermen
9.
To ask the Secretary of State for Social Security what proposals the Contributions Agency has to safeguard the special position of share fishermen paying their special contribution when unemployed under days at sea limitations.
We have no plans to change the special arrangements which have been made for share fishermen.
That answer is appalling. Does the Minister not accept that, as the Government are about to impose a limit on the number of days that fishing vessels can put to sea, fishermen who pay the special share fishermen's stamp will be unable to collect the benefit to which they are entitled and unable to exist unless some special exemption is made for them in the new situation? They will be vulnerable and trapped between a Government decision that they cannot carry on with the job and another Government decision that they cannot collect benefit because of the weekly earnings rule.
The payment of a special contribution has been introduced specifically to protect share fishermen, to make sure that they become eligible for unemployment benefit. Qualifying for two weeks or more for unemployment benefit will cover the additional costs, since the vessels of the majority of share fishermen are laid up for more than two weeks. Our arrangements are fair and equitable.
Pensioners
10.
To ask the Secretary of State for Social Security if he will make a statement on targeting help towards particularly needy pensioner groups.
Since 1988 we have increased annual benefits for pensioners on income support by some £700 million over and above inflation—not least for the pensioners of Basildon.
Will my right hon. Friend confirm that many senior citizens in Basildon have benefited from the extra Government help, which is over and above the normal upratings? Does he agree that that clearly demonstrates the Government's commitment to helping vulnerable pensioners and that the inflationary policies of Opposition socialist parties would crucify senior citizens?
As always, my hon. Friend is absolutely right. Under this Government pensioners' income has risen by about 34 per cent. in real terms. That is five times as fast as the meagre increase that they enjoyed under a Labour Government when incomes from savings were cut because of inflation. They remember that.
One needy group of pensioners are those with disabilities. While the Benefits Agency customer charter trumpets claimants' rights to a more accessible service, pensioners who apply for disability living allowance have first to fill in a form with two sections and 12 different parts, totalling 34 pages. How can that credibly be described as a more accessible service? Is not the real purpose of these bureaucratic black holes to ensure that the minimum number of claimants can find their way through them so that the Government can save on their social security budget?
That is certainly not the intention, and that is clear from our record which shows a substantial increase in the number of disabled people to whom we have given help. Our introduction of the system of self-assessment rather a requirement for a medical certificate shows that we were anxious to extend benefits to all disabled people in need. It is also clear that a significant proportion of the £700 million increased entitlement for elderly people to which I referred is going to the disabled. There was an increase in April and there will be a further increase in October. I am surprised that the hon. Gentleman does not have the grace to recognise and welcome that.
What is my right hon. Friend's Department doing to debunk the Labour myth that pensions were tied to earnings throughout the five years from 1974 to 1979? Does my right hon. Friend recall, and will he ensure that it is publicised, that at one stage the Labour Secretary of State changed the date on which pensions were calculated from a November base to an April base, some seven months —
Order. The hon. Gentleman is going wide of the Minister's responsibility on this question. The Minister will please answer the first part of the hon. Gentleman's question.
My Department would like to perpetuate the tenure of office of the Opposition spokesman, the hon. Member for Oldham, West (Mr. Meacher), as he was a member of the Labour Government in the Department of Social Security at the time. He is a standing monument to that Government, who not only broke the earnings link to which Labour Members now refer as though it were inviolate, but failed to pay the Christmas bonus. The hon. Gentleman was there to tell the tale.
Does not the Secretary of State realise that one of the most vulnerable groups of elderly people is the over-80s? Is it not an insult to them that the additional benefit that they receive is a meagre 25p a week—less than the amount needed to buy a loaf of bread? Will he immediately review the increase for the over-80s to ensure that they receive a retirement pension that enables them to lead a happy, healthy and secure retirement?
The hon. Gentleman ignores the fact that over-80s on income support received an extra increase of £1 for single people and £1·50 for couples in April. This is to be followed by a £2 and £3 increase in October, and is geared and targeted to those most in need. I understand that the Opposition Front-Bench team is thinking of doing away with the universal retirement pension and targeting it instead. We would be interested to know how they intend to carry out that policy.
Attorney-General
Serious Fraud Office
31.
To ask the Attorney-General if he will make a further statement on the work of the Serious Fraud Office in 1992.
The current caseload of the Serious Fraud Office is 59 cases, of which 28 are being tried or are awaiting trial, 13 are awaiting committal or transfer and 18 are under investigation.
Is the Maxwell scandal among the 59 or are the Government not interested in them, like Peter Walker and other fat cats, who made money out of the Mirror group pensioners? Is it not a scandal that an ex-Tory Minister who graced the Front Bench picked up £440,000 and a Mercedes and, instead of asking him to give the money back to the pensioners, the Prime Minister has given him a job and a peerage? What a scandal!
To answer the first part of the hon. Gentleman's question, he may not have noticed—but I think that everyone else in the House has—that the Maxwell case is under investigation, arrests were made recently and the investigation continues. On the second part of his question, the hon. Gentleman is free to scatter allegations in the House, but I think that his constituents and those who come from the good working-class stock of which he prides himself, would prefer the careful and impartial investigation of the Serious Fraud Office to the approach that he has taken in asking his question.
Is the Attorney-General aware of the concern that has recently been expressed, particularly by the Bar, on the method, timing and publicity given to some arrests involving the SFO? Is it necessary frequently to arrest in the early hours of the morning, with press and television in attendance? In order to ensure that our procedures, from the moment of arrest, are seen to be fair, will the Attorney-General consult the Director of Public Prosecutions, the director of the Serious Fraud Office and his right hon. and learned Friend the Home Secretary to consider whether it would be appropriate to issue guidelines to minimise concern and ensure that both the public interest and the rights of the individual are fully protected?
The right hon. and learned Gentleman will probably have seen my recent written answer to him dealing with the matter. One understands and shares the desire not to inflict unnecessary humiliation on any potential defendant. However, such matters are operational matters for the police, and the versatile critics might well ask themselves what they would say if a potential defendant, having been accorded a particular privilege, were then unable to be arrested.
Cases (Referral)
32.
To ask the Attorney-General if he will make a statement on his practice in referring cases to the Court of Appeal for possible increase of sentences.
Since 1 February 1989, when this power came into effect, my predecessor and I have applied for leave to refer 86 sentences to the Court of Appeal, including five to the Court of Appeal of Northern Ireland. Ten were later withdrawn in the light of futher information, but of the 61 so far reviewed, 48 have resulted in substantially increased sentences.
Does my right hon. and learned Friend agree that to retain public confidence the sentence must fit the crime and should provide the victim with some comfort? Does he further agree that the sentence should contain an element of retribution, punishment and deterrence? If all those are seen to be in place, the public are satisfied—but in so many instances they feel that judges pass sentences that do not fit the crime.
I entirely agree that in sentencing, not only must there be an opportunity for over-severe sentences to be reduced by the Court of Appeal but that public confidence requires that where a sentence is unduly lenient, the court should have an oppportunity to fix a more appropriate and, where necessary, more severe sentence.
Does the Attorney-General accept that in a case that I referred to him in which the relatives of a man prosecuted for serious sexual abuse over many years made the dramatic and courageous decision to appear in court, they were deeply disappointed that the right hon. and learned Gentleman did not choose to appeal against the sentence of probation? As the Attorney-General knows, that sentence allowed the convicted man to be seen by his last victim—a 12-year-old—wandering around a local town. The relatives felt deeply betrayed because the Government did not ensure that a sentence was imposed that would ensure that that man was kept well away from the area where he committed his vicious crimes.
I am aware of the details of the case that the hon. Gentleman referred to me. Such cases are not easy. It is essential that the considerable power to refer a sentence as unduly lenient should be exercised by the Law Officers after careful examination of the facts and in the light of the principles of sentencing, which are carefully laid down by the Court of Appeal.
Sedition
33.
To ask the Attorney-General how many current cases relating to possible prosecutions for sedition are being considered by the Crown Prosecution Service.
None.
Does my hon. and learned Friend agree that the laws of sedition that remain on the statute book cover threats below the level of treason, where the interests of the state are at risk? Does he agree also that they could apply to, and be used in bringing prosecutions against, republicans in the newspaper world who seek to undermine state institutions—including of course the monarchy?
Although the material to which my hon. Friend refers is highly offensive to many, it must be remembered that an essential element in sedition is the intention to incite violence for the purpose of disturbing constituted authority. The attention of my right hon. and learned Friend the Attorney-General has not so far been drawn to any material that falls into that category.
Serious Fraud Office
34.
To ask the Attorney-General how many requests have been received within the last year from other EC countries for assistance from the Serious Fraud Office.
While the Serious Fraud Office has received no specific requests for assistance from European Community countries in the last year, it has excellent working relationships with the overseas authorities with which it comes into contact. In the last year, co-operation and assistance have been given by countries including France, Switzerland, the United States of America, Channel Islands, and Isle of Man.
I am disappointed that the Solicitor-General's list does not include the Republic of Ireland because, as he knows, there have been a number of serious financial scandals there in recent months. The Garda makes no secret of the fact that its resources are not sufficient to deal with them. I refer in particular to the Goodman scandal concerning export credit insurance for beef, which the current Minister for Industry and Commerce, Mr. O'Malley, said resulted from Goodman's unusually close relationship with the Taoiseach, Mr. Albert Reynolds. The ramifications of that case extend to Northern Ireland, because it appears that export credit insurance was given for large consignments of beef that originated in Northern Ireland. In the light of that, would it not be appropriate for the Serious Fraud Office to play a more active role in examining the ramifications of those scandals?
I have recently returned from Northern Ireland. The Serious Fraud Office is always anxious to help when it can, but its powers under section 2 of the Act are limited to cases in which it is investigating a fraud in our jurisdiction; it cannot act as an agent for a foreign country in regard to a fraud within a jurisdiction of that country. We need a United Kingdom foundation before the SFO can act.
Crown Prosecution Service
35.
To ask the Attorney-General what improvements are being made to the Crown prosecution service; and if he will make a statement.
The principal current initiatives within the Crown prosecution service centre on continued improvement in the recruitment of lawyers, and in quality of service through the implementation of national operational practice —that is, national standards for casework management.
Will my right hon. and learned Friend confirm that the Crown prosecution service employs enough staff to ensure that the perpetrators of a crime are brought to book swiftly and effectively?
My hon. Friend raises an important point. I am pleased to confirm that recruitment in the Crown prosecution service has continued in a very satisfactory way. The numbers recruited during the past 12 months include an extra 200 lawyers, bringing the total complement of lawyers now in post to 2,017.
Overseas Development
Population Growth
40.
To ask the Secretary of State for Foreign and Commonwealth Affairs what contribution the Overseas Development Administration is making to examining the link between environment and population growth; and to what extent the strategies in the Rio declaration present an opportunity for expanding current activities.
The Overseas Development Agency has recently initiated a programme of research into the links between environ-ment and population. The Rio declaration and programme of action confirmed the need for a better understanding of these relationships. We will continue to look for opportunities to develop our activities in this area.
Action, rather than research, is needed. "Agenda 21" states clearly that a surging world population, linked to unsustainable consumption patterns, led to the present threat to the earth. We know that the support provided by family planning organisations in laying down voluntary principles has worked; we also know that, in 20 years, the average size of families in the developing countries has fallen from six to four. Is it not time that we allowed choice to the countless millions of women who are currently denied an opportunity to choose the size of their families?
I believe that we need further research as well as action. We have committed substantial resources to research—both World Health Organisation research, to which we have contributed £2·75 million, and our own research, to which we give £200,000 a year. We are also bringing about considerable action: we hope to launch new projects in Kenya, Ghana and Zimbabwe this year alone, and we have quadrupled the funds for such action over the past 10 years or so.
Perhaps unusually, I support what was said by the hon. Member for Clydebank and Milngavie (Mr. Worthington). Does my hon. Friend recognise that there is widespread Conservative support for the placing of greater emphasis on population policy in the Government's development programmes? Is he aware that, in recent years, the Government have established a fine record in that regard? Will my hon. Friend and his colleagues, however, put pressure on large and wealthy nations —notably the United States—to fund international bodies that are interested in population and environmental issues?
I agree with the general thrust of my hon. Friend's question. At present, we are taking particular action in regard to the European Community. We are pressing the European Commission with a view to encouraging the Community to provide more support for population programmes, and we intend to move a motion to that effect at a meeting of the Development Council in November, which I hope to attend.
Earth Summit
41.
To ask the Secretary of State for Foreign and Commonwealth Affairs what progress has been made in implementing the initiatives agreed at the Earth summit to help developing countries.
Work is under way on a number of fronts. The European Community Lisbon Council endorsed proposals by my right hon. Friend the Prime Minister for action to work towards a replenishment of the global environment facility, and aid to help developing countries implement "Agenda 21".
Does the Minister acknowledge that the substantial extra resources for "Agenda 21" goals that were promised in the Prime Minister's Rio speech were in addition to the £100 million pledged for the global environment facility? Bearing in mind that, under the present Government, official development assistance has fallen from 0·51 to 0·32 per cent. of gross domestic product, will the Minister tell us how much new money will be made available to fulfil the Prime Minister's pledge?
We are talking of funding spread over many years. I cannot possibly answer a question such as that. However, I can confirm that the funding that has been promised for the replenishment of the global environmental facility is distinct from any funding to implement "Agenda 21". I am certain that in all these areas there will, as has happened in the past, be substantial funding to this aid.
Africa (Non-Governmental Organisations)
42.
To ask the Secretary of State for Foreign and Commonwealth Affairs what support is being given to non-governmental organisations working in African countries suffering from drought and famine.
British bilateral aid channelled through non-governmental organisations to drought and famine affected countries in Africa since September 1990 stands at £87·83 million.
Does my hon. Friend agree that the performance of British charities in Africa is far more effective than the performance of any other European charities? Does not that reflect the excellent co-operation between the Government and non-governmental organisa-tions such as Oxfam and the World Development Movement?
Yes. Substantial funding is provided by both the non-governmental organisations and the Government's Overseas Development Administration. We are the leading European donor to both South Africa and the Horn of Africa. We are also the leading European donor in southern Africa and the third largest donor there.
May I say how valuable and vital is the aid from both this country and the European Community and from the non-governmental organisa-tions, but is the Minister aware that if we are to prevent the drought in southern Africa from becoming a famine, with millions of deaths, the remaining third of the pledges that were asked for by the United Nations needs to be honoured? Moreover, further contributions are needed.
Countries such as Zambia and Zimbabwe also need debt relief. Efforts should be made towards that end this week in Munich.Yes, we are increasing our funding in response to the crisis as it develops. The hon. Gentleman is aware that the director of Oxfam returned recently from a visit to Africa. In addition, my right hon. and noble Friend Lady Chalker announced on 30 June an increase of £10 million for drought relief in southern Africa.
Why has there been no statement in the House by the Government on the crisis in sub-Saharan Africa? How can the 40 million people at risk possibly survive if there is a 60 per cent. shortfall in pledges of aid and if the international relief effort fails through lack of funds? Will the Minister ensure that the blockages at European Community level are removed and sorted out rapidly? Will he also ensure that there are no further delays in transporting food from the regions into the villages, where people are dying daily before our eyes?
We cannot possibly be responsible for the failings of other countries, but can I assert what the British Government are doing? Since January 1992, we have given £48 million worth of humanitarian aid to southern Africa and £33 million worth of humanitarian aid to the Horn of Africa. In other words, since January of this year, we have provided nearly £80 million worth of aid to those areas.
Somaliland
43.
To ask the Secretary of State for Foreign and Commonwealth Affairs what progress has been made towards meeting the urgent need for humanitarian aid and development aid to the republic of Somaliland.
We want to help all Somalis in need. Since January 1991, we have provided £11·6 million worth of humanitarian assistance to Somalia, including our share of European Community aid.
While I appreciate the importance of the aid that is being given, does the Minister accept that stability is necessary if there is to be a reconstruction of the economy of Somaliland and if the thousands who have had to flee to refugee camps in Ethiopia and elsewhere are to be able to return home and society restored in that part of the country? Does the Minister accept that the people of the republic of Somaliland look not only to the international community and the United Nations but particularly to the United Kingdom to help them to restore stability?
We have given nearly £2 million worth of aid to the north of the country in question. The hon. Gentleman is absolutely right. Stability is a necessary prerequisite before substantial rehabilitation help can be given. All rehabilitation depends upon an improvement in security. We have been pressing the United Nations to step up its efforts in northern Somalia towards that end and have emphasised precisely the point that the hon. Gentleman has made.
Population Growth
44.
To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implementation of the principles outlined in "Agenda 21" relating to world population growth.
"Agenda 21" emphasises the importance of measures to strengthen family planning services and of further research into the links betweeen population and environment at global and local levels.
As my hon. Friend has said, during the British presidency of the EC we intend to propose a resolution to the development council in November. In March, my right hon. Friend the Prime Minister wrote that he wishes to encourage European consensus on population programmes and to urge greater support from European donor agencies. What detailed progress has been made in dealing with this matter and the resolution at the development council meeting?
We are working at a diplomatic and official level. The fruits of that work will appear at the development council in the autumn. As my hon. Friend will be aware, we have given great priority to this matter domestically; our "children by choice not chance" initiative was launched only last year.
Dentists (Ballot)
3.31 pm
To ask the Secretary of State for Health if she will make a statement on the decision by dentists, in a ballot, to withdraw in whole or in part from NHS service.
We have already made it clear that, whatever the result of the ballot, we will take the necessary steps to safeguard NHS dental services.
I regret the results of the ballot. In recent years, there have been considerable improvements in dental care. There has been a 43 per cent. real terms increase in spending on general dental services since 1979. I hope that dentists will not jeopardise this progress. I hope that no patient is deterred from seeking dental care by this action. Patients currently have, rightly, high expectations and respect for their dentists. I hope that they will have no cause to change that over the coming weeks. Dentists are independent contractors. They will now have to consider carefully their next steps. Dentists' pay is decided on the basies of recommenda-tions by the independent review body. This year, we agreed to the recommendation that they should receive an 8·5 per cent. pay increase in full. To achieve the £35,800 recommended by the review body would have required a fee reduction of 23 per cent. We decided that a 7 per cent. fee reduction, with the introduction of prior approval for costly treatments, was a fair and reasonable way forward. This will give dentists an average income of about £41,000 this year. At the same time, we increased their allowance for expenses by 11·6 per cent. to more than £47,000, so that they will, on average, receive about £88,000, including expenses. Patients will find it surprising that a profession which was prepared to accept £35,800 is now threatening to take action when we intend to pay them well over £40,000—substantially more than the review body intended. All are agreed that the present system of remuneration needs a fundamental review; I have asked the Minister for Health to take this forward. Detailed arrangements will be announced shortly. We must find a system that is fair to dentists, fair to patients, and fair to the NHS. We are monitoring the situation through the family health service authorities to ensure that NHS dental services remain available. We have reminded them of their powers to seek to employ salaried dentists if necessary. Meanwhile, I hope that the House will agree that the fundamental review offers a far more constructive way forward than action to withdraw NHS services from NHS patients.The Secretary of State expressed the hope that the current dispute would not affect patients. Are we to understand from her reply that, apart from that hope, Ministers intend to do nothing in the face of a decision by 80 per cent. of dentists to accept no more NHS patients?
Do not Ministers recognise that the current crisis is a direct result of their policy of increasing charges to patients while cutting fees to dentists? As the Secretary of State appears to think that dentists are better paid than ever before, will she explain to the House why they are leaving the NHS in larger numbers than ever before? I agree with the Secretary of State on one point. After the chaos created by the current contract, we urgently need a new system of dental remuneration, but how does she hope to get dentists to agree to a new contract if, on Wednesday, she proceeds with a cut in fees that breaks the existing contract? If she will not help dentists, will she at least help their patients? What is she going to do to guarantee the right of new NHS patients to dentistry on the NHS? The Secretary of State mentioned salaried dentists. Is she aware that last week we were told that there are precisely nine salaried dentists in the whole of England outside London? How far does she think it is reasonable for a new patient to travel in search of a salaried dentist? May I remind the Secretary of State that before polling day we were assured that the NHS would not be privatised —[Interruption.] What other word would Conservative Members prefer us to use now that more and more dental patients are being told that they must go private? Will the Secretary of State now admit the truth—that all those promises about the privatisation of the NHS were as hollow as all the claims about economic recovery?I can assure the House that we are monitoring the situation carefully and that there are no known cases where it has not been possible to secure an NHS dentist. FHSs are empowered to seek to employ a salaried dentist, and so far we have no reports of it not being possibile to find an NHS dentist.
The BDA said that it may take some months before the picture becomes exactly clear. I very much hope that it will co-operate with the fundamental review and will think long and hard before taking steps that will jeopardise the system of dentistry in this country which has, after all, delivered unprecedented results in the quality of dental care. We have never had so many people participating in dental care in this country—30 million patients are signed up; there has been a 29 per cent. increase in the number of dentists; and 12 per cent. of family health service authorities now employ salaried dentists. We have made it clear that, although we wish to be fair and reasonable to dentists, we must also safeguard the interests of patients and of the NHS. I do not think that it bodes well that the Labour party seeks to support a professional group which is seeking to secure not only £5,000 over and above the 8·5 per cent. increase recommended by the review body. If I were one of the lower paid workers in the NHS, I would not have great confidence in the Labour party.Will my right hon. Friend tell the House a little more about the timing and nature of the fundamental review to which she referred? Does not she think that it is highly irresponsible of professionals to take the action that they have at this particular stage when there is a real prospect of the problems of dental remuneration being solved by the review to which she referred?
I thank my hon. Friend. I hope that dentists will think long and hard before taking steps in relation to the future reduction at a moment when we all agree that we must find a better way of remunerating dentists. It may be a system that has stood the test of time for many years, but the time has now come when we need a system that inspires more confidence in dentists and in the NHS and is better for patients. There are a number of obvious difficulties. The BDA said that it was
There is a future in NHS dentistry. I believe that the fundamental review, the arrangements of which we hope to announce shortly, will make that future very clear."looking for a positive sign from ministers that there is a future in NHS dentistry."
Does the Secretary of State agree that NHS dentistry is in crisis because dentists are being penalised for making a success of a contract that they did not want in the first place? Now that dentists are baring their teeth, is not it about time that the Secretary of State swallowed her pride and ensured that dentists get their just deserts, that the nation's health does not suffer and that the nation's dental health does not go into terminal decay?
NHS dentistry has never been more effective, with 30 million patients signed up for continuing care. The hon. Lady is correct in saying that the dental contract was a success. More work has been undertaken as a result. That is precisely why the dentists were given 8·5 per cent. by the review body when the nurses and the doctors were given 5·8 per cent. and 5·3 per cent. We are proposing that, in addition to the 8·5 per cent., the dentists should keep £5,000. I think that that is a fair and reasonable way forward for dentists.
May I, as a Member of Parliament as well as a dentist, ask the Secretary of State whether she agrees that we should be asking the British Dental Association to respond to this House? The BDA should be using its professional standing to look for changes within the global sum, as the argument with dentists as a profession concerns not so much the global sum as the way in which it is distributed.
I very much hope that we shall be able to work closely with the BDA in taking forward the fundamental review. As my hon. Friend knows only too well, the system of dental remuneration is based on an average income, which applies across the country, and the average expenses required to deliver that average income. A number of practical and sensible proposals are coming forward, from the BDA and others, about how we might more appropriately develop a system of remuneration which is more fair to dentists, fair to the taxpayer, and fair to the NHS. I very much hope that the BDA will settle for this year's fair and reasonable arrangements and work constructively for the future.
Does not the Secretary of State realise that her idea that there should be a fundamental review rings very hollow against what seems to be a fundamental dictatorship, given that she has indicated that she will go ahead with her plans irrespective of the democratically expressed views of the BDA? Does not she realise that, in seeking to have the national health service supported by salaried dentists, she is creating in many rural communities, particularly in the highlands, the north-east of Scotland and the islands, a situation in which people will have to travel many miles to find a dentist? She has alienated people who wish to continue within the health service. Will she agree to postpone her decision on Wednesday to allow a review and a discussion to take place?
In order to deliver the income of £35,800 recommended by the review body—a reasonable income by any standard—we should have introduced a fee reduction of 23 per cent. A 7 per cent. reduction, together with the introduction of prior approval, seems fair and reasonable. The employment of salaried dentists should not be a first option. I very much hope that dentists will think long and hard before taking steps that would jeopardise NHS patients. But if they do take such steps, we shall have a duty to safeguard the interests of NHS patients, and we shall not hesitate to seek the employment of salaried dentists.
Will my right hon. Friend warn the dentists robustly and clearly that two groups will be hit by today's ballot? The first group is those dentists withdrawing from the national health service who will suffer particularly in terms of their professional integrity. The second is the large group of poor people who are not poor enough to be on income support and, thereby, qualify for free treatment. These people regard it as quite outrageous that a group of professionals—who are supported by the Labour party—who have just had an increase of 8 per cent. granted by their pay review body and had their fees increased by 11 per cent., should leave the poor in the lurch.
As ever, my hon. Friend makes his points very well indeed. This year, with the 11·6 per cent. increase in expenses, dentists will take home an average of £88,000 gross. That is a very sizeable amount of money, and every dentist should think long and hard, from his own point of view as well as in the interests of his NHS patients, before taking such a step.
Are there any circumstances in which the Secretary of State would preside over the creeping privatisation of dentistry?
I have made it clear that I am committed to NHS dental services. That is why I shall not hesitate to encourage the employment of salaried dentists when the need arises. I think, however, that there are great strengths, and that there has been great progress, in NHS dental services. Since the Labour party was last in power, there has been a 43 per cent. increase in spending on dental services. There are more dentists, and more patients are treated now.
Does the Secretary of State accept that at a meeting with 12 dentists last Saturday two points came across—first, they all wanted the continuance of a first-class national health service dental system; secondly, whereas they were perfectly happy with the gross income, they had misgivings about the sampling in the first quarter of the year only, which led to their net income not being truly representative of their own experience?
Some aspects of my hon. Friend's remarks should be discussed in the fundamental review. As for the average income and average expenses of the average dentist, the right place for the dentists to discuss them was at the dental rates study group. It was a great error on the part of the dentists to refuse to attend the meeting of that group; it is, after all, precisely the setting at which there is a rigorous deployment of the figures. They did not arise.
Will the right hon. Lady reconsider her over-optimistic comments about the health of national health service dentistry in this country? Will she recognise the extent to which dentists are withdrawing from offering a service to people under the health service and are continuing to threaten to do so? Will she think about the number of poor communities —for instance, the Ferrier estate in my constituency, where the only dentist operating has made it clear that he cannot afford to continue to operate—I have given the Secretary of State evidence of that—if she proceeds with her proposals? Will she think again, and think about the interests of the health of this country and its poor people instead of pursuing her dogmatic adherence to the Government's position?
Dentists have always been indepen-dent contractors who could be selective about the patients whom they took on. Concerns about that should perhaps rightly be the subject of the fundamental review. Substantial resources go into NHS dental services. Last year, 30 per cent. of dentists earned more than £100,000, and the hon. Gentleman may be interested to know that 40 dentists earned more than £200,000—[Interruption] —as someone rightly says, with their expenses as well. If the hon. Gentleman suggests that there should be greater variation in the deployment of remuneration in the various regions, I accept that point; it should rightly be taken forward in the fundamental review.
Does my right hon. Friend agree that dentists' costs vary enormously and that that should be a key element in the fundamental review about which she speaks?
My hon. Friend makes precisely the point that the hon. Member for Greenwich (Mr. Raynsford) addressed from a different angle. There has never been a time, however, when dentists' remuneration incorporated those variations. My hon. Friend the Minister for Health and I take the view that this should be part of the fundamental review. When discussing the dental contract, we agreed to remunerate business rates for dentists more directly. That was a step forward.
As for expenses, it is fair to say that an 11·6 per cent. increase in expenses, up to £47,000—that is what we are introducing—is generous on any count. We hope that we can discuss these matters further. On the last three occasions when dentists thought that their expenses had been under-recorded it turned out on examination that we had overestimated them for each year in question.rose—
Order. We must now make progress.
Points Of Order
3.48 pm
On a point of order, Madam Speaker. As we are now members of the European Community, would it be in order for the House to summon the French Prime Minister and Transport Minister to the Bar of the House to answer for the devastation that has been caused to my constituents and those of other Members by the French lorry drivers' strike?
The hon. Gentleman knows that that is not a point of order for me. That is a question that he must put to his Government and not to the Chair.
On a point of order about which I have given you, Madam Speaker, and the Secretary of State for Education notice. I want to refer to the date of publication of the proposed White Paper on education.
In the debate on the Queen's Speech, the Secretary of State said that the White Paper wouldHowever, in the closing minutes of the debate on special needs education on Friday, the Parliamentary Under-Secretary of State for Schools refused, in reply to an intervention from my hon. Friend the Member for Durham, North-West (Ms. Armstrong), to promise that the White Paper would be brought before the House before the House went into recess. We have since learnt from the newspapers that the Government plan to publish it in late July, after we have gone into recess. I have had the Journal Office check the precedents. No Government in the past 18 years have issued a policy White Paper in late July after the House has risen for the recess. On only one occasion—in 1983—has a White Paper been published in August. It has not happened since. In your ruling on the complaint of my hon. Friend the Member for Sheffield, Hillsborough (Mrs. Jackson) on 9 June, Madam Speaker, you made it clear that you were alive to the need to protect the rules of the House and its conventions and courtesies. In view of that, may I invite you to rule that, if the White Paper is published after the House has risen for the recess in late July or August, it would show gross contempt for hon. Members and that it would be a breach of long-established practice and of the clear undertaking given to the House by the Secretary of State only eight weeks ago to publish the White Paper "in due course"?"be brought before the House in due course."—[Official Report 12 May 1992; Vol. 207, c. 587.]
The hon. Gentleman did me the courtesy of giving me some idea of the point of order that he wished to raise. I know, as he has said, that he has carried out a great deal of research into the matter. As he is aware from his researches, it is not a matter for me. As he is also aware, under Standing Order No. 137, Ministers can present Command Papers to the House during recesses. As the hon. Gentleman said—
rose—
:Order. The hon. Gentlean should not get ready for another point of order.
The hon. Gentleman is aware that Ministers present Command Papers from time to time. As he knows full well, as Speaker, I have no authority or powers to prevent them from doing that during recesses.I am aware of what you say, Madam Speaker. However, in your ruling on 9 June in respect of the complaint of my hon. Friend the Member for Hillsborough about whether hon. Members can intervene in constituency cases arising in other constituencies, you made it clear that, although it was not a matter for the rules of the House—something you regretted—you deprecated the practice and, with respect, you were right to do so. As no Government over the past 18 years have published a White Paper just after the House has gone into recess, thus showing such gross contempt for the House, I invite you to deprecate the practice and to ensure, so far as you have influence, that Ministers do not act with such contempt for the House.
I saw the material relating to the hon. Member for Sheffield, Hillsborough (Mrs. Jackson) to which the hon. Gentleman has referred. As he is aware, I have not yet seen the White Paper which the Government propose to publish. As he knows, I have no discretionary powers in the matter. It is not a question of common courtesy to me. Standing Order No. 137 allows Ministers to publish White Papers during parliamentary recesses. I have no authority to stop them doing that.
On a point of order, Madam Speaker. I had a conversation a couple of hours ago with the Lord Chancellor's Office about a matter which affects the established rights and practices of hon. Members. It has been the practice of the Lord Chancellor's Office to release the figures about mortgage repossessions from all courts in the country, initially by telephone contact by a Member of the House. That practice was changed a couple of years ago so that a letter is now required, and I accepted that. However, I understand from a report in The Sunday Telegraph yesterday that it is the intention not to release the information in that way, but to release it, at best, quarterly in accordance with the Lord Chancellor's decision.
The practice is particularly important because hon. Members have raised the issue through the Lord Chancellor's Office and, if necessary, directly with the courts in their areas. One could phone the court in the area in which one was interested to get the figures. If that practice is to be stopped as well, hon. Members will either have to phone all the courts in the country or give up the practice altogether. If we phoned all the courts in the country, it would be good news for British Telecom but bad news for British democracy. When a major attempt is made to change the established practices of the House in a way which restricts hon. Members' ability to obtain information, it is vital that Ministers make a statement to the House and not just slip the matter through in that way. I know that the way in which others and I have used the procedure is a matter of political embarrassment to the Government—I make no apology for that—but the matter concerns all hon. Members' right to obtain information in the way that we always have done, and I ask for that to be continued or, if it is not to be continued, for a Minister from the relevant law office to make a statement to the House before the Government make the proposed change.I have had no request from any Minister to make a statement, but the hon. Gentleman will know that that is not a matter for me and that, over the next few days, he may exercise his imagination and ingenuity and find several occasions on which he may raise the matter with the Government, who have responsibility for it.
On a point of order, Madam Speaker. As I made my way to Wallasey at the weekend, I perused The Spectator, and discovered that the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) had commented on almost 10 per cent. of hon. Members—that is, the female Members. He said that we are
and that we look as though we are"not desert island material"
He also referred to you, Madam Speaker, and perhaps you would like to look up the reference for your own interest. Is it in order for someone who seems to reside in a permanent state of sartorial inelegance and who is not my idea of a desert island dream boy to make such comments about 10 per cent. of the membership of the House?"from the fifth Kiev Stalinist machine gun parade."
I take it that the hon. Lady has informed the hon. and learned Member for Perth and Kinross (Sir N. Fairbairn) that she would raise the matter. [Interruption.] Order. There are some periodicals that I do not read, and that is one of them, although the article has been related to me. If the hon. Lady wishes to take the matter further, perhaps she will write to me about it. There are procedures that I must look at, but the hon. Lady must put her request in writing, as she probably knows.
Statutory Instruments, &C
Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments &c.),
That the draft Housing (Northern Ireland) Order 1992 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Nicholas Baker.]
Question agreed to.
Opposition Day
[3RD ALLOTTED DAY]
Industry
There is great interest in this debate, so will hon. Members please voluntarily restrict their comments so that I may call as many hon. Members as possible?
Also, I inform the House that I have selected the amendment standing in the name of the Prime Minister.3.57 pm
I beg to move,That this House deplores the continuing impact of the recession which has caused the longest period of continuously falling output since 1945 and affected every region in the economy; condemns the record level of business failures and house repossessions, the serious decline in manufacturing investment, and the unacceptably high level of unemployment, which has risen for 24 months; regrets that repeated Government promises of swift recovery have not yielded the promised results; and calls upon the Government to adopt modern industrial policies which reduce unemployment, promote investment, tackle Britain's major training and skills crisis and enable the regions to play their full part in the economy.
First, the motion calls for special investment measures and a new industrial policy for Britain; secondly, it makes the case for action to assist hard-pressed regions with a new regional policy for the country; and, thirdly, it calls for urgent action on training and jobs so that we can bring to an end rising unemployment, and the fear of rising unemployment, which is the single biggest barrier to confidence and recovery. Since the election, business failures have risen by about 15,000, the worst recorded figure in our history; house sales are 20 per cent. down on last year; and repossessions are still at record level. Even the Government's own Insolvency Service, the only part of the Department of Trade and Industry's budget that seems to be expanding, is predicting that insolvencies will increase from 21,000 two years ago to 35,000 this year, a 60 per cent. increase; and unemployment has tragically and disgracefully continued its rise for 24 consecutive months—up over two years by 30 per cent. in the north, by 40 per cent. in the north-west, by 90 per cent. in the midlands, by 120 per cent. in the south, and by 150 per cent. in the south-east. It is clear not only that the recession is still with us but that the promised recovery has not arrived. Despite all claims to the contrary, business bankruptcies and redundancies are rising as fast as ever. The continuing inaction and complacency of the Government in the circumstances is not only unjustifiable but inexcusable. It is a gross betrayal of the urgent needs of Britain. We have suffered two full years of recession in which total output has fallen by 4 per cent.; employment by 5 per cent.; manufacturing by 8 per cent.; construction by 13 per cent.; business investment by 14 per cent.; and manufacturing investment by an astonishing 28 per cent. That is unparalleled in the rest of western Europe or the G7 countries. The tragedy for Britain is that there is not only no end to the recession but no Government strategy to bring it to an end. There is not one new special initiative to boost investment or training, to cut closures or to bring about recovery—no recovery and no plan for recovery; nothing in the manifesto, nothing in the Queen's Speech, nothing in the weeks since and, of course, nothing in the reshuffling of desks at the Department of Trade and Industry, which was an apology for a British industrial strategy when the Secretary of State announced it on Friday.The long list that the hon. Gentleman gives us is all very well, but before he goes any further perhaps he could pinpoint for the House what policies in the Labour manifesto at the general election would have done anything for British industry. Will he bear in mind that, of 200 top industrialists who were interviewed just before the general election, 86 per cent. said that the return of a Labour Government would be a disaster for British industry? If I may give the hon. Gentleman a bit of advice, he should concentrate on what Labour would do.
I am grateful that the hon. Gentleman feels the need to ask the Opposition what policies should be pursued to bring us out of recession. Is it not the case that in the hon. Gentleman's constituency unemployment has risen by 73 per cent. in the past two years? Would he not do better to argue with his colleagues in the Government about action that must be taken on unemployment?
The Prime Minister is at the G7 conference in Germany today. Is it not a disgrace, after all that he has said about Britain leading Europe and Britain being the economic miracle country in Europe, that Britain is bottom of the league of the major countries for growth not only for 1991 but, according to all forecasts, for 1992? We have been bottom of the league for demand for two years running. We are bottom of the league for business investment and employment growth. We have been seventh out of seven in the G7 for two years running, and we are now 12th out of 12 in the European Community. We have the lowest growth forecast for this year, the worst fall in employment, and the poorest business investment record. We are the only country to face the harsher conditions of the internal market with less investment this year than last year and less investment last year than the year before. That is a remarkable achievement with which to commemorate our European presidency. When they should call for co-ordinated interest rate cuts across Europe, the Prime Minister and the Chancellor of the Exchequer strut the world stage with solutions for everyone else's problems but their own and a policy for every economy but ours. No wonder they do not want to talk about unemployment in the EC or the G7 countries. In Europe, the Prime Minister sits profoundly at the top of every table while, as a result of his policies, Britain sits sadly at the bottom of every league. If anything sums up the Government's failure to take action to deal with the recession that they created, it is their callous attitude to those whom they have made unemployed. There is rising unemployment in every region. We have the fastest rising unemployment over two years of any country in Europe. There is an ever-growing number of casualties and victims of the Government's policies. Not only men and women in their 50s but those in their 40s fear that they will never work again. Young couples are jobless and homeless. Not only are thousands of young people denied their first job, but this summer they are likely to be denied their first training place. The Government have not only cut training and training places but betrayed even their promises of temporary placements for the unemployed. Employment Action was launched in a blaze of publicity last spring. The Government promised 30,000 places as early as the end of March. Now there is a mere 19,000 places. So in some constituencies, such as those represented by my hon. Friends, approaching 10,000, and in some more than 10,000, men and women are unemployed, and the best that the Government can do is offer an average of 30 temporary placements for those whom they have made unemployed. This is not employment action but unemployment inaction, and it is a callous disregard of those whom the Government have made unemployed. As we know from newspaper reports yesterday, the Government's response seems to be not to reduce unemployment but to consider reducing unemployment benefit. Just as the length of unemployment increases, the Government are considering reducing the time that benefit is available. It is not the unemployed who are to blame for letting down the Government but the Government who are to blame for letting down the unemployed. I want an assurance from the Secretary of State for Trade and Industry that the Government will use the power of Government and the public spending round to attack the recession rather than to attack the unemployed. This is the Government and the Prime Minister who told us that they would create opportunities for all, yet, as unemployment, the biggest single destroyer of opportunity, has risen by 1 million, as 50,000 businesses have closed, and as homes have been repossessed, they have done virtually nothing. This is the Prime Minister who promised during the general election campaign that he would create a classless society, a nation at ease with itself. While thousands of people feel under threat of losing part of their £43 unemployment benefit, privatised utility executive directors, such as those in Thames Water, are allowed to award themselves huge salary rises followed by huge boardroom perks and to push up water prices by 14 per cent. at the expense of consumers and are given licence to make excess profits. Does the Prime Minister criticise them, or legislate against them? No, his response is confined to accepting gratefully from Thames Water, on behalf of the Conservative party, a cheque for £50,000 for the election campaign. When the Government do nothing about recession profiteering while the Conservative party benefits from it, the electorate will not forget and the Conservative party will pay a heavy price one day.How much would the hon. Gentleman be happy to add to the costs of British industry by accepting the social chapter of the Maastricht treaty?
I am grateful to the hon. Gentleman for introducing the question of the social chapter because that will allow the Secretary of State to put on record his support for the social charter. I meet around the country thousands of people who are worried about the Government's failure to take seriously their responsibilities for social policy within the Community. I hope that the Secretary of State will continue to remind the Cabinet that the principle of the social chapter is acceptable not only to him but, according to every opinion poll, to the vast majority of the British people.
In the face of all this, the recession and unemployment, let us recall the promises that the Government have given so freely. They have promised not just that the recession would never happen, that it would be short-lived and shallow, that it would be over by last summer, last autumn, or last Christmas—the Prime Minister gave an interview on 1 January in which he said that the recovery had started as he spoke—but, just before the election and in search of power, that recovery would follow the election victory just as day followed night. During the campaign, the Prime Minister said:He also said:"Britain is ready to move forward when others are sliding backwards. All that Britain is waiting for to achieve recovery is the confidence a Conservative Government will bring".
Three months have now passed. What is industry saying about these promises? According to McAlpine Ewart Hill, one of the Tories' election backers, these are"Vote Conservative on Thursday and the recovery will continue on Friday."
Sir Anthony Pilkington said:"The most difficult trading conditions this company can recall."
The Burton Group said:"I've not met a single industrialist who sees any sign of upturn."
The Prime Minister who promised recovery last spring, last autumn, last Christmas and at the beginning of the year and was so explicit in his promises during the election campaign is responsible for a manifesto built on a fiction and has been guilty of misleading the country. What of the Chancellor of the Exchequer, whose comments were few and far between during the election campaign? Budget purdah, when the Budget was kept under wraps before Budget day, was followed by the election purdah when the Chancellor was kept under wraps. In one of his rare public utterances, he said:"The only pick up is not in consumer demand but in conversation about consumer demand."
The Trade Minister, not to be outdone, his comments in the campaign, as ever, never knowingly understated, made a speech entitled, "Prosperity through the 90s". One of his remarks, not lost on nearly 1,000 British Aerospace workers who have lost their jobs and 40,000 whose jobs are under threat, was:"The vital key to unlock recovery is … the confidence that only a Conservative Government can bring."
What has that kick-start been? Sixty thousand more job losses? Fifteen thousand businesses gone under? More repossessions? Indeed, yesterday, when The Sunday Times abandoned what it calls its green shoots of spring economic optimism index, it was because just about the only signs of recovery that it could find and report on in its columns over the past few weeks were Moss Brothers saying that dinner suit hire was rising at its Regent street and Covent Garden branches, and the Tea Council saying that Britons were drinking an average of five more cups of tea a year. No doubt the economy will boom when we see more people sitting around in hired dinner suits drinking more tea. Even The Sun tells the Chancellor of the Exchequer:"I say to all those people in our aerospace industries 'You can trust the Tories' … the only kick-start that will work will be the confidence created by the election of a Conservative Government on 9th April."
We have a Conservative party on which even The Sun is setting. The central promise of the election campaign that the recovery would follow victory is in tatters. It is a trust betrayed and a cruel deception now being unmasked. The truth is that the only recovery that interested Tory Members was the recovery of power, and the only unemployment that concerned them was fear of their own. Let us be clear about the sheer extent of the betrayal of promises. Before the election we were told that investment would rise by 1¼ per cent., but it is now falling; that domestic demand would rise by 3 per cent., but it is stagnating; that consumer expenditure would rise by 2½ per cent., but it is barely recovering; that GDP would rise by 2¼ per cent., but every day it is revised downwards; and that the balance of payments would rise to £6·5 billion, which was bad enough, but it is now running at a deficit level that is 50 per cent. higher. From those difficulties that our economy faces in the short and long term it is clear that the promised recovery through confidence has not arrived, that every excuse given for inactivity—that confidence would be triggered by Conservative victory—has been exposed as a mirage, and that the Government now have absolutely no justification for inaction over the recession. The Government must act in two ways immediately. First, we shall not swiftly bring the recession to an end unless we bring an end to the fear of rising unemployment, which is preventing people from spending, investing and moving home. That requires emergency action with a jobs programme for every region. Secondly, as the widening figures for the trade deficit already show, it is other countries' industries, not ours, that are likely to benefit from any recovery. To ensure lasting recovery for Britain we must have new investment in machinery, technology, skills and the regions as part of a new industrial policy for Britain. Faced with all these problems—a recession, a trade deficit and Britain bottom of the league—what has been happening in Government since 9 April? What has been achieved by the Trade Minister? His first action at the Department of Trade and Industry was not the much-needed change of policy, but the wholly unnecessary change of title —calling himself President. What has been achieved as the President approaches the end of his first 100 days? The President should have known the difficulties that he might have from the right of his party when he heard of the election night party of Baroness Thatcher and her right-wing friends. Although much of the media attention was focused on Mr. Patten, now the member for the comparatively safe seat of Hong Kong, East, even then it was the right hon. Member for Henley (Mr. Heseltine) who was being targeted by the right. Here is the first-hand account of The Daily Telegraph correspondent. He was at the party and later wrote:"For God's sake, wake up Norman. The economy is crumbling around you and yet you still do nothing.''
"It is not true to say the right wing cheered when the left wing chairman of the Tory party was defeated … I was there.
That gesture is at once symbolic and, as it turns out, prophetic. He has become President—but President of what? President of a Board of Trade which never meets, which has no active members, which must somehow spearhead a bold new industrial strategy for a new century and a new millenium, but which last met on 13 December 1850. The Board of Trade was wound up years ago, and there is no one there to notice should the President decide, on impulse and no doubt on a matter of principle, to walk out. The right hon. Gentleman is not so much the emperor with no clothes as the President with no board and far too little trade. What of the right hon. Gentleman's ministerial colleagues, who are all on the Treasury Bench, all the President's men—or are they? The Under-Secretary of State for Technology is from the No Turning Back group and, unlike the President, he believes that regional policy is a phoney activity of Government. Perhaps he is there to keep a watchful eye on the President. The new Minister responsible for competition is also from the No Turning Back group and, unlike the President, he believes that Britain should not be in the exchange rate mechanism and that Britain should be the free port of Europe. Perhaps he is there to report back to the Prime Minister. This is the first time it has been thought necessary to impose on a Cabinet Minister not just one minder but two. As the President would have put it in one of his great speeches in the election campaign, "Thatcherites to the left of him, Thatcherites to the right of him, Thatcherites everywhere." Let us stand back and look at the right hon. Gentleman's plans for the Department of Trade and Industry and at his books, "Where There's a Will" and "The Challenge of Europe". Calling himself President was not the limit of his ambitions. As President he would create not only an English development agency, introduce a public test for takeovers in a new law, and a new European company statute, transform research and development with a tax credit, but formulate an industrial strategy that would sweep across Whitehall, encompassing every Minister. The right hon. Gentleman also had ambitions for his colleagues. The Secretary of State for Employment would be told to introduce a new training law, a tax or levy; the Secretary of State for Education would be told to have a new skills investment programme; the Secretary of State for Transport would have to have a new transport review; and in the book the Foreign Secretary was told:In fact, Mrs. Thatcher was quick to express her sympathy for Mr. Patten … when Mr. Heseltine made an appearance on the TV she did though put her hand over the screen."
and changes would have to be made. Of course, the Prime Minister would have to sign the social charter. The whole of Government was to be reshaped in the image of the right hon. Gentleman's presidency. There were policies for every Department and roles for the President, not just as chairman of the National Economic Development Council in place of the Chancellor, because through the new industrial policy committee of the Cabinet,"Some of the work of the Foreign Office is unsatisfactory…"
One of the "inevitable roles" of the committee would be to decide for or against major projects, such as the channel tunnel and power stations, and it would control education and even taxation policy, which sounds a bit like the Chancellor's job. What would be the Chancellor's role in this great new strategy? The book says:"the president … should have the power base of a new cabinet committee on which he would take the chair … and on which other Cabinet Ministers … would sit."
I am sorry that there is no one here from the Treasury to hear this while the Chancellor is away. The book continues:"If the DTI is to increase its influence the Treasury will see this as a threat and so it should. Somehow we have to shift the balance. We must oppose the Treasury's never ending round of book keeping."
What has happened to this great design, this ground plan, this master strategy? The 100 days of the President started with his determination to expand the National Economic Development Council with him in control. But they have ended, not with the President taking the chair from the Chancellor, but with the straightforward abolition of the NEDC by the Chancellor himself. In those 100 days the President's big achievement has been to make even the Chancellor look decisive and powerful. The 100 days began with his plan for the power base of a new industry committee. What has happened? The committee that started as the President's base from which to control the rest of the Government is to be chaired by Lord Wakeham, whose remit is undoubtedly to keep a close eye on the President. What started as the President's plan for an expansion of his power has become a means by which the Presidents is kept under control. What of the Foreign Office? The 100 days were preceded by the statement:"How often the Treasury can fail to see the big defect in its conduct … The weakness in Government is that there is not sufficient challenge to Treasury judgments which may frustrate the strategic … objectives of the Government and the work of the DTI."
The 100 days have now ended with him saying exactly the opposite. I quote from his speech on 1 June:"The present role of the Foreign and Commonwealth Office is unsatisfactory … a changed role would naturally require considerable changes in the training of diplomats".
It is not so much a case of the 100 days that changed the Foreign Office as the 100 days that changed the views of the President. The same is true of training. The 100 days which were preceded by the demand for compulsory action, with a levy or tax on training, have ended with him praising the voluntary approach. The 100 days were preceded by the demand for action, with research tax credit, the English development agency, and investment in seed corn research. Undoubtedly, the need for new money has ended with the President in retreat, saying that he needs no more money —the first time that a spending Minister has conceded his case even before the spending round has begun. How do we sum up the President's first 100 days? After seven years of Kennedy-style build up and campaigning for the presidency and three months of Camelot hype, I can tell him what has happened. As President Kennedy would have put it, "Ask not what you can do for the Cabinet; ask what the Cabinet has done to you." The City responsibilities of the DTI have gone to the Chancellor, who is almost 10 years younger. The film responsibilities for the DTI have gone to the rising star, the Secretary of State for National Heritage. Public spending directions are now at the behest of the youngest Cabinet Minister, the Chief Secretary to the Treasury. As President Kennedy would have put it, "The torch has passed to a new generation." The President is able to call himself what he wants, talk to whoever he chooses, hire any advertising agency he fancies. He has full powers and unlimited responsibilities to reorganise the desks within his Department, but he cannot begin to contemplate the implementation of a genuine industrial strategy for Britain. Perhaps next week there will be an announcement on the dramatic reshuffle of the office furniture, and the week after that sweeping new recommendations on the colour of the curtains. But when there are no new measures on research, manufacturing, technology and exports, his is absolute power over a Department that is unfortunately becoming absolutely powerless. The Minister—the President—who spent years in exile working out his plans, who promised so much, who stormed the country with his new ideas for an industrial strategy, who was the darling of the Conservative associations, the hero of a thousand Conservative party lunches, the interventionist tiger of the rubber chicken circuit has been brought low, reduced to trophy status. The tiger that was once the king of the jungle is now just the fireside rug—decorative and ostentatious, but essentially there to be walked all over. My concern is not so much for the personal fate of the President, but for the fate of industrial policy. We face massive technological, demographic, industrial, training and environmental challenges in an increasingly global economy. There is an urgent need for our industrial strategy to have the backing not just of the President but of the Government. It must, first, encourage long-term investment to bridge what the President has called the investment gap. Secondly, it must boost training and technology to reverse the deterioration and erosion of our position. Thirdly, it must back exports to end the position where, as the President has said, our attitude to the trade deficit has been simplistic. Fourthly, it must ensure that our regional economies play a full part in balanced, sustainable growth in this country. We are faced with huge regional imbalances and growth rates in our regions which, over the next few years, are predicted to be a third or less than half those of the most prosperous regions of Europe. The Secretary of State has promised action, but there was nothing in the manifesto and nothing since, and cuts are taking place in the Government's regional investment budget. Regional selective assistance is to fall by 6 per cent. this year. Is it not vital that the Prime Minister and the Government listen to the views coming from the regions? Is it not vital that they do not use the review of regional aid maps to cut regional support? Also vital is detailed consideration of the creation of the long-sought English development agencies, and of work to strengthen those that already exist in Scotland and Wales. The President himself admitted a crisis in research and development funding, that the gap between ourselves and our competitors is widening, and that he proposed measures that have not yet been implemented. At the same time, support for technology has been cut this year, and nothing in the Queen's Speech reverses that. I want from this debate a guarantee that the Government will carefully consider the reports from the House of Lords and from their own scientific advisers that specifically make the case for information technology, and the creation of a new research tax credit and country-wide technology transfer network to ensure that we do not move out of the current recession with an even weaker technology base. Training also is recognised to be in crisis. The President spoke of Britain's lamentable training record and patchy part-time education, one of the poorest performances in science up to the age of 14, and alarming weaknesses in mathematics among teenagers. He said also that the youth training scheme is not an adequate building block. The right hon. Gentleman proposes changes in training legislation. Will he use his influence to bring training cuts to a halt so that our country will cease to be the only one in Europe whose training budgets are being cut? 'Will he promise to push for a new training policy so that skill levels can be improved? We know from the British Exporters Association that United Kingdom jobs are being exported because of lack of assistance, and that workplace redundancies are occurring because of the Government's cuts in export support. In Opposition, the right hon. Gentleman spoke of the importance of tackling the trade deficit. He said that it was not of incidental importance, self-correcting, or easily financed. I want the Government to outline measures to support British exports, end privatisation, and support regionally based export services that will lead to Britain winning new markets in Europe and elsewhere. I want a Government strategy for manufacturing, investment, training, technology, and our regions that measures up to the challenges of the future. We need a Government who will act in the public interest to end the recession, tackle the trade deficit and secure lasting recovery, preside over an investment decade for the British economy, and with the ambition to make our work force the best trained and educated in Europe. We need a Government who will take measures now to reduce unemployment, tackle poverty, and eliminate low pay. We need a Government who will confront the challenges that face our country in an increasingly international economy. We have instead a Government who, three months after an election victory, have no strategy for recovery other than to talk about it, no plan for unemployment other than further to penalise the unemployed, no policy for helping industry other than cutting its budget, and who are so complacent and arrogant that they do not even pretend to care about the misery caused by bankruptcies, closures, and unemployment in every region. We have a Government who are creating not a classless society but a heartless society. It will be the job of the Labour Opposition to attack Conservative failure, to expose the broken promises, and to point the way to a better future."Let me say it here, the Foreign Office has developed an experience and a sophistication in the promotion of our national enterprise that is now world class."
4.28 pm
I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
Three essential matters ought to preoccupy the House in any debate on recession in industry. The first, to which the hon. Member for Dunfermline, East (Mr. Brown) referred at length, is not in dispute—the existence of the recession itself. The second is the nature of the practical options available to the Government to combat the difficult situation. The third is the world context in which our economy operates. The hon. Member for Dunfermline, East regurgitated a range of facts about the recession. I might argue with one or two of the pieces of evidence that he produced, but I certainly do not take issue with his claim that we are in a recession—the most difficult recession that we have experienced since the war. I am prepared to recognise at once the strain that that places on companies and employees, including those who, as the hon. Gentleman pointed out, have lost their jobs or fear that they will lose them. We all understand that as constituency Members of Parliament and it is understood by every member of the Government. Such issues are drawn to our attention constantly, and rightly so. Although I do not take issue with the hon. Gentleman over the existence of a recession, I consider the naivety with which he presented his case that it was largely a United Kingdom phenomenon more suited to the politics of opposition than to any serious analysis of the real problems that face our economy. We heard virtually nothing of the fact that across the trading world, and among economies broadly comparable with ours, very similar Governments face very similar problems. The United States, Canada, Germany, Switzerland, Australia and New Zealand are all experiencing a degree of recession. Beyond peradventure, there has been a world turndown. The hon. Gentleman did not say how he expected the British economy to buck the present economic situation, or how a whole range of developments could take place in this country, given that the bulk of our export trade is with markets that are themselves in difficult circumstances. He seem oblivious to the fact that the leaders of the Group of Seven countries, who are meeting today, are acutely conscious that growth was lower last year than in any year since 1982. The catalogue of problems that he described are a consequence of that. The hon. Gentleman said that particular problems were associated with our position, but he entirely failed to add that one of the reasons for that was the high rate of growth enjoyed by our economy in the 1980s. He also failed to point out that unemployment has risen in most European countries and that in Japan, for example, industrial production has fallen by more than 5 per cent. over the past year, compared with only 0·5 per cent. in our economy. When I begin to analyse the options available to the Government, the division between the hon. Gentleman and myself becomes acute. At its simplest, the Government's task is not to find more ways of spending money; it is to find a way of helping the British economy to become more competitive. That task is never-ending and our competitors are not resting in the process: there is a constant change of circumstances, and a continual quest for further competitiveness, in the competing economies with which we must do business. I make no apology for saying that I intend my Department to continue to examine the factors in the British economy in regard to which we can and should do better. That strikes me as the proper purpose of the Department of Trade and Industry.'recognises the essential need to maintain British competitiveness by containing inflation and improving productivity; and believes that the long term needs of British industry are best served by the control of public expenditure, competitive tax rates, deregulation, and an incentive economy.'.
Does the Secretary of State recall the promise that was made to thousands of young school leavers? Every one of them was guaranteed a training place, but they are still desperate to obtain such places. Will the right hon. Gentleman apologise to them?
I am fully aware of the commitment to provide young people with, originally, places on the youth training scheme, and I am also fully aware that it was the Labour party that resisted those proposals—partly because they offended the trade unions, which felt that they would present a rival alternative to their own training procedures. That is the clearest example of the way in which, over the past decade, the fundamental issue of how to improve training in the public sector has been addressed by the Conservative party and resisted by Labour.
A major characteristic of the Labour party is its response to our efforts to address the fundamental issues involved in a lack of competitiveness. Whenever we have tried to address those issues, the Labour party has resisted our attempts, on behalf of the forces of the producer-led trade unions that it represents. That has been the tradition of the past decade.The intake of apprentices in the electrical contracting industry has gone down from 3,000 a couple of years ago to 1,000, and the number is falling. The unions and the employers are co-operating, but they find that they get very little Government co-operation.
I do not accept for one minute that they do not get Government co-operation. There has been more focus on Government-led training over the past decade than in any other decade since the war. That is the experience of all those who have any understanding of what is going on.
I intend to make sure that my Department improves the quality of our dialogue with the different sectors of the industries that we sponsor. Equally, I am preoccupied with ensuring that the services that we provide are delivered as effectively as we can provide them—close to those people who are responsible for running our companies at the trading level and at the local level. We have no choice but constantly to search for ways in which the Government can properly assist and advise the companies on which our wealth-creating process depends. I repeat, however, that a persistent characteristic of the Labour party is always to resist changes that are designed to pursue competitiveness. To take the most significant of them all, the battle against inflation: inflation fell from nearly 11 per cent. in 1990 to 4·3 per cent. in May 1992, yet the Labour party resisted at every turn the steps that were necessary to get inflation under control. [Interruption.] The hon. Member for Knowsley, North (Mr. Howarth) asks me who was responsible for the inflation. He forgets that inflation had been running at 27 per cent. under a Labour Government. with all the devastating uncertainties that apparently the Labour party wants to forget. We have faced the unpalatable truths about a competitive economy and pursued what we believe to be the right means of achieving it. When the Conservative Government lowered the levels of direct taxation to provide an incentive economy, the Labour party voted consistently against that process and campaigned, mercifully unsuccessfully, in the general election to reverse it. We reduced corporation tax from 52 per cent. to 33 per cent. The moment that we did it the party that was prepared to see corporation tax at 52 per cent. switched its ground dramatically in order to argue that we should go back to the industrial tax allowance procedures, even at the low level of taxes that we had introduced. I fully understand the arguments of all those people who say that we should give more export credit. That was the point that the hon. Member for Dunfermline, East wanted to make. He believes that we should provide more aid and trade provision support. He ignores the fact that inevitably a judgment of what we can afford has to be made by the Government. The hon. Gentleman never told the House that in the case of past debts, incurred under export credit, we are currently asking the British taxpayer to pick up a bill of £400 million a year because many of the risks have proved to be well-founded. In those circumstances, the Government must make a decision. I have every sympathy with those companies that face competition from companies backed by other Governments. They see tantalising contracts within their grasp, provided that the Government will back the risk. We do so on a significant scale, but there is a limit to what we can do, and there will always be such a limit. In the end, we may be unable to reach the judgment that all companies would like.Does the Secretary of State accept that what he has just said is a serious smokescreen? He has not touched at all on the major issues that face industry and business—interest rates. That is the greatest problem facing companies in my town of Wolverhampton and throughout the west midlands. There have been 2,000 bankruptcies in the past six months. Tell us about high interest rates.
I am most grateful to the hon. Member. Interest rates have fallen from 15 per cent. in September 1990 to 10 per cent. now, thereby cutting industry's costs by £6 billion a year. The Labour party, which thinks that inflation can be fought without taking difficult decisions, has no credible alternative to deal with that vital part of our industrial strategy.
If we are to debate genuinely the harsh facts of industrial competitiveness—the House must realise that whether we debate those facts or not is secondary to the fact that the world outside understands what they are—we must realise that Britain's inflation is still higher than that of our principal competitors. In the United States, inflation is about 3 per cent. but in Japan it is less than 2·5 per cent. Nothing that we do or say in the House will prevent a wider audience from weighing the facts of our wage settlements with those of our competitors. The hon. Member for Dunfermline, East, with his catalogue of generalisations and fictional policies, diverts the attention of the country from the reality that last year our manufacturing earnings grew by about 8 per cent., compared with 6 per cent. in Germany, 4 per cent. in Japan and only 3 per cent. in the United States. There are no policies whereby any domestic Government can prevent the conversion of those statistics into lost jobs, lost competitiveness and higher unemployment. The longer the Labour party goes on talking as though there were, the more the consequences will be felt by people who listen to them and are deluded by the escapism that it peddles. In our drive to continue the increased performance of our industry. we have, yes, increasingly privatised a growing sector of our economy. I accept that the Labour party thinks that we are wrong. The hon. Member for Dunfermline, East said today that we were wrong to privatise the nationalised industries. He wanted to keep control of the industrial sector in London, whereas we have transferred it to the regions. He wanted to keep tax at 98p in the pound so that he and his colleagues could spend the money that we believe the wealth-creating sector can better spend at its discretion. That is what socialism was about. When Labour Members talk of privatisation, do they ever realise that when a great raft of industries were nationalised they were not allowed to trade overseas or to move into export markets? That is what socialism meant —trade union-dominated committees, power vested in London, no competitiveness, vast subsidies and a raft of the British economy neutered out of the trading economy. We have been prepared to face down the Opposition and to carry through those policies of privatisation. What has been the outcome? Throughout the world, are Government after Government or country after country following the advice of the hon. Member for Dunfermline, East? Are they listening to him? Are they harking back to the great days of Britain's industrial supremacy under the previous Labour Government? Show me a Government who want to go back to what the Labour Government were doing. The Malaysian Government identified 147 privatisation candidates in 1990 alone, with 37 due for sale in the next two years. Poland—perhaps the hon. Member for Dunfermline, East harks back to the system that the Poles are trying to overthrow—plans to transfer 200 companies. Plans are well advanced in Singapore for the privatisation of its telecommunications network. The same can be seen throughout the world. Hungary is in the second stage of its privatisation programme, with 300 companies on the list. The Mexican Government have reduced their holding in their telecommunications business to less than 10 per cent. The Greek Government are planning to sell 49 per cent. of Olympic Airways before the end of the year. The Bundestag has voted to privatise air traffic control and the German Finance Minister has confirmed that Deutsche Telekom is a prime candidate for privatisation. Who was right, and what conceivable advantage would there be for the British economy to revert to the practices which have been discredited here and which everyone overseas is abandoning? All we have left is an ever-dwindling gathering of yesterday's zealots, competing to recycle yesterday's ideas. What is the purpose of the competition? What is the only target that Labour Members really understand? It is to win a place on the national executive committee of the Labour party or to grab the top slots in the parliamentary party. None of my colleagues would give house room to those targets, but Labour Members are obsessed with them. I absolve Labour Members from any form of doctrinal obsessionism. Nothing is sacred in the battle that they are fighting among themselves. Three months ago, the Labour party had a manifesto and was at war with the Tory Government. Today, to the best of my knowledge. the manifesto is still there but the Labour party is at war with itself. Everyone now knows that we persuaded the country that Labour's manifesto was wrong and ill-conceived. That was no mean electoral achievement. But none of us realised at the time just how great an intellectual achievement it was. It took time to realise that we had also persuaded large parts of the Labour party that the manifesto was wrong and ill-conceived. I found it extraordinarily difficult to keep up with Labour Members. Take my old friend, the hon. Member for Dagenham (Mr. Gould). We followed each other in and out of television and radio stations during the campaign. In every programme, he waxed more lyrical about Labour's policies for the 1990s. I had no idea how closely he was listening to me until I read shortly after the election what he had told readers of New Statesman and Society. He said:The hon. Member for Dagenham was uncharacteristic-ally slow in trying to gather back the departing middle classes compared with the hon. Member for Kingston upon Hull, East (Mr. Prescott), who was determined to play his own inestimable role in frightening them off for good:"Our endorsement of Tory macroeconomic policy and acceptance that it should aim for no more than monetary stability meant that we were unable to offer … a convincing route to full employment or economic recovery … all we had to say [to those on middle incomes] was that we intended to tax them more severely."
I do not know whether the hon. Member for Dunfermline, East is as happy, but nothing more clearly reveals the divide that opened up in the Labour party after the election. We all knew it before the election, the country discovered it during the election and now Labour Members are beginning to understand it for themselves. Against the background of that internecine battle for Labour's soul, we today heard the hon. Member for Dunfermline, East trying to invent a new industrial strategy. What is the only creative aspect of his new industrial strategy? It is to get himself made shadow Chancellor. I wish him well. He will certainly enjoy a great deal more loyal and consistent support from Conservative Members than he will ever receive from Labour Members. When the hon. Gentleman becomes shadow Chancellor, he will he forced to consider the third set of issues which confront Government on an international scale. The first is to reconcile the public expenditure pressures of recession with our membership of the exchange rate mechanism, with all the disciplines that that imposes. I have already referred to our relatively uncompetitive inflation figures. I assume that the hon. Gentleman is not one of those who are arguing to ease counter-inflationary pressures by transferring the strain to the pound. There is nothing new in that approach, except that this time it would mean realigning the pound for the first time within the ERM. That is not a new argument; it is only a reproduction of the old argument about J-curves which the siren voices have advanced many times since the war. The problem for us was that every time we let the pound take the strain, we encouraged domestic inflation to erode any temporary competitive advantage that we achieved; thus the incipient decline in competitiveness continued. The Government have set their face against that course. The second international issue which would confront the new shadow Chancellor is arguably the most significant of all. The Uruguay round of the general agreement on tariffs and trade has been under way for six years. Its successful conclusion could deliver nearly 5200 billion a year in extra world trade. The outcome could lead to a bigger increase in help to the developing world, central Europe and the former Soviet Union than any conceivable aid programmes ever could. The investment that it could provide would far exceed in environmental benefits anything agreed at the recent Rio conference. There should not therefore be the slightest doubt about our commitment to success in bringing a satisfactory conclusion to the GATT round. In fact, there are the makings of a deal. In particular, there is an opportunity —indeed, I would go further and say that there is a responsibility—for the European Community and the Commission to resolve the internal divisions over agriculture, which are the single greatest impediment to a successful conclusion of the GATT round. As shadow Chancellor, the hon. Gentleman would also wish to contemplate the completion of the single market under the British presidency. It was a Briton, the noble Lord Cockfield, who in 1985 forced Europe to abandon its customary rhetoric and to focus its attention on a detailed agenda. We shall see most of that specific agenda and a great deal else completed by the end of the year. It is impossible to overstate the importance of that achievement or the consequences for our trading companies. Two thirds of our overseas trade is now with Europe. There is an overriding national priority to ensure that no controversy over the Maastricht treaty clouds the judgment of the smallest company about the inevitability of the single market. It was 1986 and the Single European Act which set in stone our trading patterns for the foreseeable future. There are opportunities but no entitlements. Indeed, the Government's policy is constantly to widen those opportunities. Thus we strongly support Commission proposals to allow access by EC-based undertakings into other member states' oil and gas supply industries. The third aviation liberalisation package is another good example, leading to direct benefits to consumers and operators. It is here that some of the most exciting developments for our economy are taking place. I was appalled by the hon. Gentleman's misrepresenta-tions of the relative strengths of the British economy. He talks as though there were no signs of recovery and as though everything were going wrong. It just so happens that, without selecting anything other than today's news. I found on my desk the figures for sales of commercial vehicles, which show an increase of 5·16 per cent. on a year ago. New car registrations are up 4·4 per cent. on June 1991, so there are significant examples of recovery beginning to emerge. This morning I happened to read an account in The Times which made it clear that other European companies such as Volkswagen and Mercedes Benz scour British component manufacturers so that they can enjoy the benefits caused by the entry into our market of three big Japanese companies and the improved productivity that has followed. It is against that background that I invite the House to consider whether the increased productivity and increased performance of our work force, companies and managers are not the real world in which we must make a judgment. I ask the House to consider whether the shadow Secretary of State for Trade and Industry is more likely to bring a dispassionate account of performance of our economy than, say, a rather more perceptive observer such as Jacques Delors, who has described—[Interruption.] The House is likely to recognise that the President of the European Commission, who describes our economy as"there is a good case for public ownership … which I am happy to accept."—[Official Report. 11 May 1992; Vol. 207, c. 388.]
is more likely to be telling the truth than the hon. Member for Dunfermline, East. We must then consider why Jacques Delors made that judgment. Between 1988 and 1991 we attracted nine times more inward investment than Germany, five times more than Italy and three times more than France. The House will want to judge whether that is God-given or whether it is because there is in this country an opportunity to trade successfully on a scale not available in the rest of the Community. The House will also perceive another significant change about which we heard nothing from the hon. Member for Dunfermline, East, which is the performance of British exports. For the first time since the end of the second world war, Britain's share of world trade has stabilised and even improved slightly. [Laughter.] It is not surprising that the first reaction of members of Labour's Front Bench is to laugh. Are they laughing at the fact that it has stabilised and improved, or are they laughing in shame at their record in government when it constantly declined?"a paradise for Japanese investment",
Will the President of the Board of Trade simply confirm that Britain's share of world trade rose under the previous Labour Government and has declined under this Government?
I shall not confirm that because it is not the case. Since the 1950s, Britain's share of world trade declined consistently, and the first significant reversal of that happened towards the end of the 1980s. I am fully aware of our economy's propensity to import and of the open access of our distribution system, but I am equally aware of other impressive statistics which give grounds for optimism.
Exported goods account for more than 18 per cent. of our GDP, compared to 9·6 per cent. for Japan and 7·1 per cent. for the United States. It is therefore unthinkable to argue that we arc not capable of winning world markets, because we do so with a larger proportion of our GDP than almost any other equivalent economy in the world. In the three months to May 1992, British experts— [Interruption.]—were 5 per cent. higher than a year earlier, despite the most difficult trading circumstances in the world economy for some years. The hon. Member for Dunfermline, East has one overriding problem. He knows full well that in practice there are no short-term fixes or quick gimmicks to affect the course of a nation's economy, but the difficulty of being a spokesman for the Opposition is that one must give the impression that there are. Let me take the most frequently touted solution of them all which encapsulates the whole case that he made today. Broadly, the solution was that, somehow, if I were to ask my right hon. Friend the Chancellor of the Exchequer for some dramatic increase in my Department's expenditure, which I will not do, and if my right hon. Friend were to agree, which he would not do, I should be able to fix it jobs would flow, cash registers would ring, the nation, miraculously, would be back to work. It is a delusion. I should merely be recycling the taxes that someone else has to pay, or keeping interest rates higher than they would otherwise be. As the hon. Member for Dunfermline, East said, it is perfectly true that my Department's budget, at £1·4 billion, is a fraction of what it was in 1979. But what was the Department in 1979? I do not seem to remember that it was some great power-house of technological advance, driving the foreigners out of the marketplaces of the world. Oh, no, it was something very different, something that the Labour party understands—indeed, thrives on: losses, slush funds and industrial incontinence. In 1979–80 the Labour party spent, at today's prices, £3 billion propping up nationalised industries. That is why the budget of the Department of Trade and Industry was larger. British Steel required £1·5 billion, British Shipbuilders £0·6 billion, and so it went on. I have to confess that we are still, this year, spending £1 million, and we shall try to do better. But we do not have the slightest intention of asking my right hon. Friend the Chancellor to go back to the horrendous subsidies that were characteristic of the Labour party. It is very easy for the Opposition to talk of the white heat of technology. That was the label on the door. The closest they got to white heat was the roasting they received from the International Monetary Fund. One cannot make an economy efficient by subsidising inefficiency. Any institution can produce at a cost, but the point of production is to sell. I should have thought that the Labour party, with its new-found commitment to the wilder extremes of salesmanship, would realise that orchestrating large-scale extravaganzas is of limited appeal. But it never learns. Only three months ago, we saw, in Sheffield, the rally that was designed to herald the end of the lonely years—red roses, even redder faces, the limos, the charas, the razzamatazz. That was to be the night of which a future generation of young socialists would cry, "Where were you, daddy, on the night of the great rally?" More to the point, where are they now? I invite my right hon. and hon. colleagues to support us in making it clear that they are on the Opposition Benches and that is where they will stay.5.1 pm
I am grateful to have been called so early in the debate. I am conscious that many hon. Members on both sides wish to speak, so my remarks will he brief.
All of us who heard the Secretary of State will see this as a sad occasion—sad for him personally, and sad for the state of debate in the House of Commons. Over the years the right hon. Gentleman has tried to take industrial policy seriously, so it is sad that he should be reduced to the sort of speech to which we have just had to listen. What we have before us is nothing but a muted Tarzan riding a paper tiger, a President without powers, in charge of a Department without power. That is not exactly the agenda that the right hon. Gentleman set for himself, and I think that he will take it from me that many Opposition Members seriously expected from him more than he has been able to deliver. However, we understand the reasons. The right hon. Gentlman has been humiliated by the Chancellor of the Exchequer and ignored by his Prime Minister —the two people on the Government Benches who owe more than anyone else to the right hon. Gentleman for their elevated positions. Were it not for his pyrrhic victory and then his quixotic charge for the leadership of the party, they certainly would not be where they are today. What we have is a Secretary of State who had a very clear blueprint of what he wanted to do once he got to the very Ministry on which he had for so long set his sights if he could not get the leadership. What was wrong with that blueprint? What was wrong with the idea of redressing the balance within Cabinet, within the machinery of Government, in favour of industry and against the Treasury? What would have been wrong with having an industrial sub-committee of the Cabinet of which the Secretary of State, whoever he was, was the chairman, and the Chancellor a member? Those were very good ideas—to be found in the right hon. Gentleman's book, which many of us have read—and many of us in the Opposition would have liked to incorporate them into our policies had we won the election. The only thing wrong with them is that the right hon. Gentleman has been unable, in power, to implement them, and the country and the Government are the poorer. They were good ideas. What was wrong with the idea of an enhanced NEDC, now reduced to a rump to be located in the Department of Trade and Industry? The one change—a magnificent organisational change—that the right hon. Gentleman has made is that we are back to the sponsoring departments of his Ministry. It is a good idea, but if there is no money with which to sponsor, even that idea is not worth having. There is no point in trying to make a virtue out of the vice that the right hon. Gentleman has inherited—a Department devoid of funds. The right hon. Gentleman knows that the change whereby all the vital funding from our own Department was switched to European funding was matched nowhere in Europe. In the rest of Europe national funding was carried on in tandem with European funding. Indeed, it was used to promote those companies that were anxious to get into BRITE—basic research in industrial technology in Europe—for electronics and other projects. Britain, alone, under the last Prime Minister, thought fit to slash all the subsidies. It cut to the quick the promotional, constructive funding that had been very successful under SEFIS—the small engineering firms investment scheme —product development programmes in the early Tory years. So it was with no pleasure that I listened to the right hon. Gentleman's pathetic speech this afternoon. In the past, we have been entertained, we have been chastised, and we have seen him at his best. Today we saw him at his very worst. If it were only a personal tragedy it would not matter so much, but it is a national tragedy, about which hon. Members throughout the House will have to think very clearly as we enter a four-year Parliament. It seems to me—and this question or charge, however it is seen, is put forward very seriously—that the Government, in effect, have decided that they really do not mind if the recession is unduly prolonged. They do not mind if they do not take action that they know that they should take now. They ought to risk a reduction in interest rates, but they fear that if the recovery were to get under way too quickly they might have to face a second election with the economic cycle out of kilter with the political-electoral cycle. That would be a very serious charge, but I put it to the Secretary of State as a serious question because it seems to me that there is deliberate inaction. What we are seeing is unnecessary postponement of interest rate reductions. The Government wish to delay the pick-up, which will come, so that it coincides with the next electoral cycle. I can find no other reason. This is something about which the Government will have to come clean with the House and the country. I want to take this opportunity to put two other issues to the President. The first concerns the European fighter aircraft. This is one of the crises that occur in a Government's lifetime. In my opinion, it is a crisis of very serious proportions and of potentially very serious repercussions for the British aerospace industry. The withdrawal of Germany from EFA is a mortal blow to that programme in its present status. The murmurings from Spain that we have heard—the right hon. Gentleman will know far more about them we do—confirm that. Here we have a classic example of the balance of power in Government about to be played out in precisely the way the Secretary of State foresaw in his book. The international scene has dramatically changed with the collapse of the Soviet Union and the removal of the threat from the former Communist bloc, but is the decision to be driven by the Treasury or will it be taken by a Cabinet that is fully informed of industrial interests and in which those interests are fully defended? The right hon. Gentleman has lost out in all his battles so far: this is one battle that he must not lose. We shall understand if certain aspects of the EFA programme have to be modified to take account of the new defence situation—that will be unravelled as the debate starts. But we cannot accept the idea of the right hon. Gentleman losing this battle and the programme collapsing. My second point concerns the use of the Department's funds for the manufacturing sector. There are many initiatives which the President could take. I have already mentioned the small engineering firms investment incentive. It was highly successful, as were product grants. They could be reintroduced by the sponsoring Department and used in conjunction with companies' approaches to European funding for this country. Unless Europeans know that our own sponsoring Department is behind a programme, we are unlikely to get our fair share of the funds that become available. It occurs to me that I should declare an interest, as chairman of a publicly quoted company—Transfer Technology Group plc. At the sharp end we are increasingly aware that the United Kingdom Government are the only Government of a major industrialised country in Europe not supporting their own manufacturing industries. That will not do; the challenge that remains for the Secretary of State—if he survives in his position or feels that he can live with himself masochistically as he endures the humiliation to which I have already referred—is: can he bring our Department of Trade and Industry in line with other such departments in Europe, in line with best practice, and in support of British industry? The Secretary of State must be honest with himself and accept that if he cannot do that—he has failed to do so in the first 100 days—he will have no option but to take the honourable step, as he did once before, we hope with greater consideration on this occasion, and resign.
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I declare an interest as a director of Glynwed International plc, J. Bibby and Sons plc and Charterrail Ltd., all of which are directly involved with British industry.
It was a delight to listen to my right hon. Friend the President of the Board of Trade. It was a vintage performance and it was a privilege not to have to go to a party conference and engage in a standing ovation to hear such a speech—it was brought to us here and I thank my right hon. Friend for that. I follow up my compliment by saying how much I appreciated my right hon. Friend's emphasis on the Government's growing success in respect of inflation and productivity. My right hon. Friend knows, as all Conservatives know, that the Government's economic fortunes are intimately connected with all their fortunes. The problems, from dentistry to Maastricht, will be enveloped in a sombre veil if they are played out against the experiences of economic underperformance. I very much hope that my right hon. Friend's optimism in this respect is well-founded. I am sure that my right hon. Friend will understand if I speak candidly about how I see the prospects for the economy. I am delighted that we have moved away from the ministerial optimism that seemed to prevail for a while shortly after the election, when one felt that the spectre of Herbert Hoover and his presidential slogan "prosperity around the corner" was still apparent. Nobody feels that that applies now. There is bound to be some anxiety about why measures are not being taken to remedy what is clearly the most protracted recession since the war. The things that inspire caution in the Treasury are fear that measures may be ill-timed and not reversible and fear that they will have consequent inflationary implications. I understand that judgment, but it needs a little further consideration. Of course there are powerful inhibiting factors. The first concerns public spending. It cannot be adjusted as though it were a contra-cyclical element in economic management. Broadly speaking, we have tried to proceed with Budgets that run over a period and are not subject to short-term change. I am prepared to bet that the present public spending round will confirm that judgment. I have reason to believe that it will produce spending ahead of last year's and that it will reflect underlying and undeniable social demands for spending on education and health and other parts of social expenditure—albeit exacerbated by the recession. The second aspect of the economy in which there is little room to manoeuvre is revenue. There was a time when it was fashionable to think in terms of being able to use it as a short-term weapon of economic management. We had the regulator to deal with indirect taxation. That has now lapsed—it is no longer formally available and it is certainly out of fashion, and all who lived through that experience will understand why. The problem is much wider. We have it on the authority of the Prime Minister that value added tax is not to be altered or widened and that its rates are not to be increased, so a major area of indirect taxation has been, to some extent, insulated, making economic manoeuvring more difficult. The pressures in respect of income tax are that it should be rigorously contained, so the Tory pattern of taxation does not admit of much manoeuvre. We are confronted with high borrowing and, as the recession unwinds much more slowly than we should have liked, borrowing levels will persist. That is not very agreeable. I do not allocate blame, but I believe that this type of analysis has to be made in a House of Commons debate of this character so that we may judge as dispassionately as possible what the best course of action is. Although a policy of masterly inaction may have some merit, I do not believe that the politics of the situation will admit of it—nor would the economic situation. That is why I turn to what I know is distressing for my right hon. Friend the President of the Board of Trade: the final element in the economic equation, interest rates. The bank base rate of 10 per cent., giving a real interest rate of 5·7 per cent., seems profoundly high for an economy in the state of ours—output is static and Ernst and Young's Item Club in The Times of today prophesies that in the, year ahead the economy will contract by 0·6 per cent. No one could argue that there is much pressure on capacity: I would argue the reverse. There is clear evidence of spare capacity in the economy. Against that background, what would happen to inflation if there were a cut in interest rates? That is a calm and unemotional question. It is not an objective question, because it contains a political judgment. What would such a cut do for personal savings? Would it trigger a credit boom? One can only give an instinctive and highly judgmental answer. However, all the evidence points to the fact that there is great caution in respect of consumption. People are rebuilding their savings. I do not believe that they are poised ready for an expansion in credit reminiscent of a decade ago. What effect would such a cut have on the corporate side? Would it set off a great expansion of corporate investment? I do not believe that that is the case. The hon. Member for Coventry, North-West (Mr. Robinson) has experience of industry and he would echo my judgment. The serious devastating problems in the corporate sector involve costs. The tangible gain from the change that I am advocating is that it would provide some relaxation on the costs of the corporate sector and on industry more than any other aspect of our total economic activity because credit plays a rather greater role in that respect. I am advocating a modest change and step. However, I believe that it would be welcome and would be highly relevant in trying to develop the policies prosecuted by my right hon. Friend the President of the Board of Trade. If, at the end of the day, we are told that such a change cannot be made, not because of inflationary considerations, which I have tried to address, but because of exchange rate considerations, I must state that, having established a fixed exchange rate around which we dance as if it were a totem, we will re-create for ourselves the difficulties of the 1960s which hon. Members will recall. The Labour Government were crucified by the way in which they had to pay regard to a fixed exchange rate. I began by referring to a rather austere American, Mr. Herbert Hoover. To maintain the transatlantic link, I shall conclude by quoting a very exotic American, Mr. William Jennings Bryan. He became considerably agitated about economic guidelines in the great debate about gold and said,If the argument for interest rates suggests some real action for members of society infinitely more hard pressed than any hon. Member, they will wonder what world the Front-Bench spokesmen occupy when so little was said about the problem of interest rates bearing upon the whole range of industry. It is not just the privilege of Front Benchers, committed to the exchange rate mechanism, to decide that those matters are not available for wider discussion because of the implications that the whole thing is so horrific and horrendous, fundamental and revolutionary that it cannot be addressed. A system of fixed exchange rates on a Community basis is the apex of centralism. If we are moving towards a more relaxed view so that decisions can be taken more at the periphery—towards, dare I say it, subsidiarity—the argument for this country being master of its own exchange rate in partnership with its sister Europeans is valid. I hope that my few words will eventually, in their subversive way, convince even my right hon. Friend the President of the Board of Trade of that."Man was not born to be crucified on a cross of gold."
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It is always a privilege to follow the right hon. Member for Shropshire, North (Mr. Biffen) who turned what was becoming a debate about one President into a debate about several Presidents. He introduced an analysis with which, in large measure, I do not disagree—apart, that is, from its conclusion. I agree with the need for flexibility of manoeuvre and with the paramouncy of considering interest rates as an element of that. However, we should not do that in the structural ways that the right hon. Gentleman described.
The areas where there is no disagreement in the debate are interesting. There is now no disagreement between the Government and Opposition parties' Front Benches about the extraordinary, unique and difficult situation. The Government accepted the analysis set out in the Opposition motion. The Government broke ranks with the Labour party only in arguing about what should he done, although I do not believe that they argued very effectively about that. However, there appears to be no internal or external dissent about the extent of the recession, its depth and the fact that it is the worst since the war. We all have to accept the difficulties that we face. It is also accepted that there are no short-term fixes. No one now imagines that things will be different in a matter of weeks or months. It is noticeable that, in his most recent pronouncements, the Chancellor of the Exchequer is no longer talking about turning corners in the next six months. He is now talking in much longer time scales than that. The Chancellor made a much more realistic analysis last month. He said:We can argue whether the right decisions are being taken, but there is no argument that it will take two or three years before there is recovery and that this is the critical time. What is the agenda? What are the possible ways out of the recession? The newspapers have today confirmed the depths to which we have sunk. We are at the bottom of the league in comparison with our G7 partners meeting in Munich today. In comparison to the other Organisation for Economic Co-operation and Development countries, it is clear that no one is going to have a lower growth rate than ours, which is forecast at zero for this year. The tragedy is that the President of the Board of Trade ruled out many things. He reminded us of some things that will happen automatically. However, his speech appeared to be one for the Tory party conference, as the right hon. Member for Shropshire, North said. It was not a speech to encourage industry. The President of the Board of Trade said nothing to make people outside this place believe that the Government have a strategy to carry us forward. It is a wait-and-see policy, and a wait-and-see policy is no policy at all. The President of the Board of Trade said that we must continue down the road of privatisation. That has competitive benefits and is now increasingly accepted around the world, as he rightly said. He said also that we must follow a low inflation road. It is right that we should keep inflation as low as possible. He also said that we must keep wage increases down and that is right. There can be no dissent about that. He ruled out devaluation and I accept that because that is not the way forward. The President of the Board of Trade also highlighted the importance of the GATT round. That is fundamentally important and I wish the Government and the Prime Minister well in their attempts to remove the blocks that are preventing the GATT agreements being reached which would liberate world trade to our benefit and, as the right hon. Gentleman rightly said, to the benefit of the developing world as well. I also agree with the analysis by the President of the Board of Trade that the single market, which will come into force at the end of the year, will provide more opportunities. However, that is happening anyway. It is not the result of Government policy since the general election. It was signed, sealed and delivered by the noble Baroness Thatcher in 1986. So far, so good, but that is still not new policy. We heard no new policy to address what remained the unspoken issue on the Tory Benches before the general election. If there are to be more than 3 million unemployed sooner rather than later and if the figure is to rise steadily not just next year, but until the next general election, we must ask whether that is a price worth paying. My colleagues and I do not believe that it is. We believe that by reducing unemployment by taking various targeted measures, we will simultaneously restore the dignity of work and the economic capacity of the country to produce, export and earn and therefore save the money that is much more wasted by paying people not to work at all. There are small signs that some things might be improving, but I do not think that we can read much into them. We have to accept that the position is indeed at its worst, and that we have to find some remedies to make it better. I shall show with one or two examples from this capital city of ours how dire the position now is. Insolvencies in the capital city are already considerably up in the first six months of this year compared with all of last year. There are parts of our capital city—my constituency is one—with more than 20 per cent. unemployment. One in three males in inner urban working areas such as mine now are out of work, at a time when all the other indicators of economic progress are unhelpful. I have been talking to secondary school head teachers in my constituency. The most frightening statistic that I have heard since the general election is that, as presently analysed, of secondary school leavers this year, fewer than 3 per cent. are going into jobs and only about 2 per cent. so far are going into training. I have no idea whether that is a common pattern, but, if that is the economic base upon which we are planning to build our recovery, there is something fundamentally wrong indeed. What can be done? We do not believe that it is particularly productive to examine things that could have been done some years ago but have no: we have to look at what could be done now. The right hon. Member for Shropshire, North referred to the exchange rate mechanism as the apex of centralism. We believe that it is possible to have a package of measures which provides the room to manoeuvre that the right hon. Gentleman rightly says is necessary but without breaking ranks entirely, as the right hon. Gentleman would argue—perhaps not surprisingly, given his views in the past. If we left the exchange rate mechanism, the danger is that the pound would plummet, interest rates would potentially go up to support the pound, or the pound would fall so much that the consequences for inflation would be bad. There are severe risks with that extreme solution, and I know that the Secretary of State and the Government have not accepted it either. Alternatively, if we reversed our policy of opting out of EMU, if we moved sterling into the narrow bands, and if we gave the Bank of England independent control over interest rates, interest rates would not only be likely to come down to give us the competitiveness that we need and industry the boost of additional resources that it currently does not have, but it would bolster the credibility of anti-inflation policy at the same time. It is interesting that the London Business School has recently come around to that view as well. It would then be as part of a package that interest rates would be cut, but it would not be as part of a political fix mechanism, which always undermines the credibility of such an action. Another important matter relates to the other side of the coin. The public spending round is coming up. I argue as strongly as I can to the Government that to be unnecessarily tough in the public expenditure round will be the worst of all possible worlds. Our social infrastructure desperately needs the extra investment for which spending Departments are bidding. It desperately needs investment in training, education, public transport, housing and so on. More public expenditure, not less, is needed. We therefore have to allow that money to be spent, but not at the expense of either seeking to put up taxes, which would be the wrong way forward, or of giving ourselves further difficulties of another sort. We have to make sure that we do that in a way that gives us the long-term recovery that everybody has said that we need. I end my remarks by saying why we should not cut public expenditure at this most crucial moment, when we are trying to get out of our deep economic hole. Our national debt is at an historically low level, relatively to others and absolutely in terms of its level in the past. Even if we ran a deficit for the first half of the 1990s, we would still be unlikely to reach the average of our competitors in Europe. There is no good economic reason at the moment for seeking to reduce our national debt if the alternative is to put money back into the economy, which in turn will help us to build and compete our way out of recession. Even with the more realistic non-Treasury growth forecasts for the next few years, we should be able, without great difficulty, to meet the public finance side of the Maastricht convergence criteria. We should keep that as an objective of Government economic policy. Private sector savings are high. I agree with the right hon. Gentleman that there will be personal reluctance to spend that money. I do not think that there will be a consumer boom. People have learnt the lessons of the 1980s and will hang on to their finances for retirement or for later investment. Spending is more likely in the corporate sector than in the private sector. But it will not be difficult, because of the high level of private sector savings, to finance the PSBR over the next year. If savings are high, if there is no financing problem, current and forecast levels of PSBR will not lead to pressure on interest rates. Therefore, if the Government drop their unrealistic target of balancing the budget over the medium term in favour of a savings target, we could have a credible package of non-inflationary fiscal policies which would allow the public and private sectors to collaborate in getting us out of the recession that we all want to end as soon as possible. We accept that there will be a long haul and that constraints will be imposed on us by the international economic framework, but we do not accept that the Government can do nothing new to put forward a package to the country and show us a way out of the recession at home. The speech by the President of the Board of Trade contained no indication of new thinking nor of any commitment by the Government to reduce unemployment or seriously end the recession. The Government's position is not a policy to end the recession; it is an abdication of responsibility by a Government who have a responsibility to do something about it."In two or three years' time, I believe that people will look back and see that it was during this critical period that the right decisions were taken."
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I shall respect the wishes of Madam Speaker, who has called for hon. Members to be brief, as many hon. Members wish to speak. As a retread, I have an advantage in paying tribute to my predecessor, Sir John Stokes, in that I have seen him in the House. During his years in the House he commanded great respect from all hon. Members. In the constituency he increased his majority, which is something that we all hope to do. He began by winning the former Labour scat of Oldbury and Halesowen in 1970, and by the time he fought his last election in 1987—admittedly with some help from the boundary commission—he had built a majority of more than 13,000. Hon. Members can appreciate how popular he was with the electorate.
It is probably in the House and in the country at large that Sir John was even more respected. He was one of the characters of the period. There are fewer characters in the House than there used to be, and he was certainly one of them. I like the description that I read of him asThat just about covers his expertise on many issues, although I rather liked the comment of Andrew Alexander, who described him as"a traditional right-winger and superpatriot."
Having last year been chairman of the national campaign for capital punishment, I feel that, to a certain extent, I am following in his footsteps, and that is a great pleasure. History could have been changed if, in 1937, by the time Sir John was already president of the monarchist society, he had been slightly more successful in the election for the presidency of the Oxford University Conservative Association. He lost that election by seven votes. The person who won is now the Father of the House, my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath). How history might have changed had Sir John won that battle many years ago. I rather like to describe my constituency, similarly to my previous constituency of The Wrekin, as very mixed. It has many commuters. It has old and new industries. It is typical of many west midlands constituencies. It was interesting to read Sir John's maiden speech in 1970, in which he made two particular points about his constituency as he saw it. The first was the need for further reconstruction. The second was the problem of roads. I regret to say that 22 years on, despite the actions of successive Governments, my constituency still has the same needs. Until last May we had a Labour council. It refused even to tackle the problems created on the roads by the Merryhill shopping centre —one of the largest in Europe. The council was not prepared to provide the necessary infrastructure and put decent roads into the area. Within weeks of the Conservative council taking office, the plans to build new roads had been resurrected and put into the transport programme which will be sent to the Minister shortly. The council has now also encouraged a bid for City Challenge. We are one of the candidates to be considered by the Department of the Environment shortly. Now that we have a prudent Conservative authority, it should be successful in that bid. The money would be the pump priming that the Government should provide. I do not believe that the Government should necessarily have responsibility for putting large sums of money into the economy. The Opposition motion drags up all the ills that it could possibly find in the economy. But it fails to consider one of the most important aspects of the recession—that it is not home made. How do the Opposition explain the fact that socialist Governments elsewhere are suffering from the recession? They do not try to do so. The problems of the economy were demonstrated by the comments of one of my constituents whom I met just before the election. He is in heavy industry and exports 60 per cent. of his products around the world. He has been exporting for about 40 years. He said that this was the first recession in which all his markets were down at the same time. Previously, if the British market did not do well, one of his export markets, either Europe, Australasia or the far east, was still fairly successful. This time he found for the first time that none of his markets was providing a demand for his items. The west midlands has suffered more than most areas during the present recession. We have the fastest rising level of unemployment. Our output has fallen more than that of other regions. But we have some advantages. Our labour costs are lower than in many other areas—70 per cent. lower than in Germany. Our production costs are 20 per cent. lower than those in Germany. You may ask, Mr. Deputy Speaker, what I want for my constituency from the Government and the Department of Trade and Industry. I do not want them to throw money at the problem. I do not believe that that would help. They should ensure that we control inflation and maintain our greatly improved industrial relations. The Opposition would have us believe that industrial relations have improved by accident. But that is not the case. Last year we lost the fewest working days through strikes since records began over 100 years ago. That has happened not by accident but as a result of Government policies since we have been in office. On Friday my right hon. Friend the President of the Board of Trade proposed a revamp of the Department of Trade and Industry. He was right to offer services to more people. People need expertise, advice and help and it should be easily available. After I lost my seat in The Wrekin five years ago I set up a hotel with my wife and continue to run it with her. We experienced the problems of commerce and of running a business. That helped me considerably in the period that I was out of the House. We developed a derelict ruin into a hotel and restaurant which within two years got into the "Good Food Guide". We needed Government help and we received it in two ways. It was pump-priming help. We were entitled to enterprise allowance. That was one method of helping us over the initial few weeks and months. The second form of help was from the Welsh tourist board. We received section 4 help, which unfortunately is not available in England. I know that people in tourism hope that consideration will be given to reintroducing that help as a pump-priming exercise in England. It can and should be means tested and given to those who have the greatest need for it. That is the way in which the Government could give more help. My right hon. Friend the Member for Shropshire, North (Mr. Biffen) rightly pinpointed interest rates. As one who borrowed to set up a business, I know that the current level of interest rates, although considerably lower than it has been, discourages the development of industry and in particular small and middle-sized companies. We must not let the European exchange rate mechanism stop us from doing what we believe is best for British industry. It is no coincidence that within weeks of the general election result people started to believe that confidence and enthusiasm were returning to industry. That happened because the alternative frightened industry. The feeling that things were beginning to get better was highlighted in the west midlands not only by engineering employers, whose business trends were the most encouraging since November 1989, but in the west midlands business survey carried out by the Wolverhampton Business school in conjunction with the Warwick Business school and Price Waterhouse. It received encouraging responses. However, both the survey and the report from the engineering employers said that it was early days and that expectations might be clouded by the euphoria caused by the Conservative Government being returned in the general election. I wish to highlight a few points from the west midlands business survey. The survey was completed in May 1992. The forecasts that firms made for the next six months were, indeed, the best that they had made for lime time: 66 per cent. expected sales to increase; 33 per cent. expected employment to increase; 66 per cent. believed that general business conditions in the west midlands would improve. I notice that the hon. Member for Wolverhampton, South-East (Mr. Turner) is not in his place. He interrupted earlier to make a comment about interest rates. It was interesting that a report by a body in Wolverhampton said:"the most amiable of hangers."
That is important. That is why the Government are right to move slowly. If the Government became involved and did too much there would be a great danger that the economy would move forward too fast. It has overheated before. A slow movement out of recession would be more desirable than the Government forcing a faster movement. I look forward to supporting the Government's amendment tonight and voting against the Labour party's motion, which offers no hope for Britain and should be rejected."Continuing the low rate of inflation has taken over from lower interest rates as the most important factor leading to improvements in general business prospects".
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I have two things in common with the hon. Member for Halesowen and Stourbridge (Mr. Hawksley). This is my maiden speech and, like the hon. Gentleman who said that he met somebody who worked in heavy industry, five weeks ago, I also met somebody who had a job. I do not intend to answer the points made by the President of the Board of Trade, but when he slipped up and spoke of experts, instead of exports, going up by 5 per cent. I thought that that could only be receivers and bailiffs.
I begin by paying tribute to my predecessor, Patrick Ground QC, about whom I heard nothing but good from the electorate during the election campaign. His party should be grateful to him because he fought Feltham and Heston three times before winning it in 1983 and he doubled his majority in 1987. It was no fault of his that he lost it this time. He is a most honourable and likeable man. I should like also to refer to his predecessor, Russell Kerr, many of whose colleagues are still Members of Parliament. Russell was known for his sense of fun and his dedication to his principles and ideals. He will never be forgotten. This is not the first time that I have worked in Whitehall. I felt nostalgic when I came here in April because I first came here in 1960 at the invitation of Her Majesty the Queen as I was serving in the armed forces. I must have been more important than I am now because I got a desk and an office on my first day. I shared it with seven others, but it had three windows looking out on Whitehall and two into a yard on Horseguards. Two soldiers on horses guarded me every day. My career has gradually slipped away since those days, but the compensation is that I have been told that now that I am a Member of Parliament I cannot go any lower—unless I cross the Floor of the House. This debate is a suitable one in which to make my maiden speech because, like many working people, I have been affected by the economic and industrial policy. No doubt some hon. Members would like to know how it is that somebody who was born in Lewisham in south-east London and who has lived near Heathrow for 30 years should speak with such an obviously Middlesbrough accent. The answer goes back 70 years. My mother, who started work at 14, found, at the age of 16, that there was no work for her. She was forced to come to London where she worked as a servant for many years. She told me many times about the difficulties of coping with personal problems so far away from family and close friends. In one of those crises, she took me, aged three weeks, back to Middlesbrough. I am proud to have spent my childhood, school days and the beginning of my working life on Teesside. That was one generation. When I finished my Army service in 1963, I also found that, in order to get satisfactory work, I had to stay in the south. I worked in Brentford and settled in Feltham. That is two generations. People may say that things must be better today, but if one wants to see the third generation, one has only to go into the pubs in the west end and listen to the accents on both sides of the bar. One will hear Geordies, Scots, the Welsh—people from all the regions in the United Kingdom. They are here because they cannot get jobs in their home towns. They are the lucky ones. If one goes a short distance further, down Kingsway and the Strand and the Embankment, one will see hundreds who have no jobs, no homes, no hope, no future. I do not know what sort of country we are and what sort of House it is that allows that to happen. The regions are used to high unemployment, but the ratio of jobs to the unemployed in Feltham and Heston is now worse than it is in Newcastle, Sunderland, Middlesbrough and even Jarrow. Youth unemployment in Feltham increased by 145 per cent. last year. Unemployment has gone up by almost 200 per cent. in the past two years. Unemployment in London is higher than the national average for the first time. I do not know what will he done to put that right. When I first worked in Brentford in 1963, on what was known as the Golden Mile, west London had a flourishing engineering industry, renowned throughout the country. When Trico finally moves away from Brentford in a few months' time, there will be not one major manufacturer left on that Golden Mile. Watneys in Isleworth closed its gates last Friday and called time for the last time. That is gone—a place where fathers and sons worked together, with grandfathers before them. In Heston, Fairey Engineering, one of the premier high-tech companies, closed its gates a few months ago, leaving a highly skilled work force searching for jobs in a non-existent manufacturing centre. In Feltham, the Hecta engineering training centre which once had 250 people passing through at the same time now has only 40 and its future is in great jeopardy. Something must be done. Of course we want international trade and are pleased by the number of international headquarters buildings in Hounslow, attracted there by Heathrow airport. The people to whom I talk want to have again the pride of being able to buy British goods in British shops. We must do something about that. I do not know what has happened in the past 10 years. I do not know what the policies are, nor what action will get the manufacturing industries producing again. I do not know where the investment incentives are to assist our manufacturing companies to modernise and lay down new plant and equipment. Feltham is proud of Heathrow airport and the jobs that it brings, but we pay a heavy price in pollution, noise, traffic jams and one of the highest accident rates in the country. Sadly, the people of Feltham and Heston are telling me that they do not mind about the noise at Heathrow, they want all the expansion that is possible so that they can have jobs and keep their houses. Let me make it clear to those in the pleasant areas of Barnes, Putney, Richmond, Twickenham and Chiswick that they will have to do something about the recession or, while they may not suffer in their pockets, they may soon be suffering in their ears. It is clear from what I am saying that we need a partnership between industry and Government. We need long-term planning and, in the air transport industry, international planning. We do not want a planning application for the expansion of Heathrow to be put in as soon as the furore over the last one has died down. There must be long-term planning. The British people have seen enough of this free-for-all. Yes, we want efficiency, and we understand that it is necessary to have competition which forces management to greater cost cutting and efficiency. This can be achieved whilst at the same time retaining sensible public control over major decisions to ensure responsible environmental policies. I do not advocate interference on a day-to-day or even week-to-week basis with management. However, the public are beginning to demand they be involved in making decisions in such mammoth organisations. It is possible to compete in the hot house of free enterprise while still being democratic. Worker co-operatives throughout the country survive, sometimes perhaps with difficulty, in competition with private firms. That happens not just at the small end of industry; look, for example, at the Co-operative movement. It has a turnover exceeding £10 billion, more than 133,000 staff and policies of healthy food, responsible animal farming and ethical investment. Competitive edge and democracy go hand in hand. Compare that with Thames Water, which operates with no competition, no democracy and no choice for the public. It has only high salary increases for those at the top, high price increases for the users, and, at £50,000, a large sum for the Conservative party. The British expect and deserve much better than that.5.58 pm
Thank you for calling me to make my maiden speech, Mr. Deputy Speaker. Before doing so, I must pay tribute to the maiden speech by the hon. Member for Feltham and Heston (Mr. Keen). It demonstrated a wit and eloquence that I hope that we shall hear often in the House. I hope that his broad experience is available in the House on many future occasions so that we can benefit from it.
I know that it is customary for one to refer in a maiden speech to the traditions of one's constituency and to one's predecessors. As a new Member of Parliament for a new seat in a new town, I am struggling somewhat on predecessors, history and tradition. The part of Buckinghamshire in which Milton Keynes, South-West lies has had many varied and distinguished Members of Parliament over the centuries, ranging from Disraeli to Robert Maxwell. Milton Keynes itself, however, has had only one Member of Parliament and that was Bill Benyon. I know from my work in the constituency of the high regard in which he was held. Both in the House and among local people he was seen as an example of what a good constituency Member of Parliament should be. No case or no problem was too small for him. During my time as a prospective parliamentary candidate and since, I have met many people who have been helped or who know somebody who has been helped by him. Over the years I shall aspire to maintaining his record. The Milton Keynes constituency does not have a great deal of history. The ancient road of Watling street runs directly through it and many armies on the march have traversed that road. Indeed, it is believed that Boadicea was defeated by Suetonius within the environs of my constituency. My constituency may be able to lay claim to having had the biggest bloodbath in British history. Although the history and traditions of the constituency are somewhat light, I have the advantage of representing a constituency that is a microcosm of Britain today. The employment and industrial structures of Milton Keynes closely mirror the national employment and industrial structures. More than 70 per cent. of employment is in the service industries. That should be borne in mind when we listen, as we often do, to Opposition proposals that centre on subsidies and assistance to manufacturing industry only. A large number of small businesses exist in my constituency. More than 65 per cent. of all businesses are small with 20 or fewer employees. During the past 13 years, those businesses have grown and done extremely well because of the Government's measures to help small businesses grow and to provide employment. I have good news for the House this evening: during the past few months, unemployment in Milton Keynes has been falling. Previously, as in most parts of the country, the level rose, but to nowhere near the level in the early 1980s. Throughout the 1980s, Milton Keynes and many towns and cities like it developed a stronger, much better balanced economy. As a result, unemployment is falling; in Milton Keynes, it is below the regional and national averages. Many overseas companies have invested in Milton Keynes, often from the traditional areas of the United States, Germany and France. However, some of the newer overseas businesses are coming from areas such as South Korea. That shows where there is strength in the global economy: in the Pacific rim and the co-called dragon economies. Growth rates are much higher there than anywhere in western Europe. Earlier in the debate the hon. Member for Dunfermline, East (Mr. Brown) gave us growth rates in western Europe and described how Britain's rates ranged against them. During the past 10 years, growth rates have been low in Germany and strong in the far east. We must ask ourselves why that is the case. The answers are straightforward. Those far east economies are highly deregulated and have low levels of taxation. No far east economy is trying to impose a social chapter, to reduce the working week to 48 hours or to seek a four-week minimum holiday period; nor is it believed that the already excellent levels of economic growth can be improved by a single currency. The years of the German economic miracle have gone. Recent economic developments there mean that we shall not see a resurgence in growth such as Germany experienced in the 1950s and 1960s. The level of social provision has increased and a minimum wage has been imposed in the eastern part of Germany as part of the process of unification. Because of that, and because of the inaccurate conversion of the east German currency to equal the west German currency, we will see low levels of growth in Germany throughout the 1990s. That will have adverse consequences for the rest of western Europe. Britain can learn from some aspects of the German economy, especially from the control of inflation. I greatly admire the way in which the Bundesbank has consistently controlled inflation. When its president, Professor Schlesinger, visited this country last year and spoke to the London chamber of commerce on 21 June, he set out how Germany had managed to keep its inflation low during the previous 20 years. His recipe was setting and adhering to broad monetary targets. That is what produced low inflation in Germany. In 1986 and 1987, broad monetary indicators here, in the form of sterling M4, were growing at 15 per cent. At that time, conventional opinions, by the Treasury and the Bank of England, were that the figure had little meaning and was a side-effect of financial deregulation. However, some economists warned that 15 per cent. monetary expansion meant that we were getting into serious economic difficulties, with rising inflation and an overheated economy. In retrospect, we can all see that they got it absolutely right. Monetary aggregates are now growing at their slowest rate since the 1950s. Broad money, sterling M4, is growing at 5 per cent. Like my right hon. Friend the Member for Shropshire, North (Mr. Biffen), I believe that the present risks in the British economy are all on the down side and that we are more likely to face further deflation than further inflation unless we take significant action to ease monetary policy. Public expenditure is the other area in which our economic policies may be somewhat out of balance. It is some time since the Treasury has forecast the likely levels of the public sector borrowing requirement and public expenditure, but the independent private sector is producing many forecasts which are extremely worrying. They show, for example, that the PSBR for 1993–94 may be of the order of £40 billion. That would be well beyond any convergence criteria laid down in the Maastricht treaty. Our borrowing requirement would be some 6 to 7 per cent. of GDP. I welcome the Government's commitment in their amendment to firm control of public expenditure. Public expenditure provision for 1993–94 allows for an 8 per cent. increase. If we are to believe newspaper reports that there are bids on the table to add a further £15 billion to £16 billion to that already ample provision, Ministers will face a great deal of work during the recess to bring that side of our economy back into balance. I wish them well in their efforts. The hon. Member for Southwark and Bermondsey (Mr. Hughes) did not seem to be at all concerned about an expanding PSBR and thought that it could continue to expand because of the small national debt. I doubt that that is the case, especially when our financial policies provide for full funding of that deficit. Expanding the borrowing requirement further will not stimulate the economy. All Conservative Members are committed to firm control of public expenditure and low taxation. Those have been the central principles of Government since 1979, and our policy of low taxation was one of the central reasons for a Conservative Government being returned for a fourth term. I hope that we shall continue vigorously to pursue our policies and to control public expenditure as firmly as possible. I hope that we shall maintain our commitment to low taxation, because that will deliver economic growth to the private sector and ensure that the Government are re-elected for a fifth term.
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It is a privilege to follow three maiden speeches. In accordance with custom, I am pleased to congratulate all three hon. Members on their fluency. I am also pleased that the tradition of completely anodyne and bland maiden speeches seems to be dying. None of the three hon. Members was afraid to make telling and hard-hitting points, and I welcome that.
My hon. Friend the Member for Feltham and Heston (Mr. Keen) endeared himself to me by his complimentary reference to Russell Kerr. Many hon. Members and many people in the Labour movement remember the good work carried out for us by Russell and Anne Kerr. I was taken by not only my hon. Friend's wit, which has already been commented upon, but the coherence of his vision of what the House should be about. I welcome him and look forward to hearing many more of his speeches. Obviously, I have much less in common with Conservative Members. However, in common with the hon. Member for Halesowen and Stourbridge (Mr. Hawksley), I had to make a second maiden speech. It is a bit strange to make a speech as what might be called an experienced maiden, which is something of a contradiction in terms. The hon. Gentleman's analysis of the west midlands was interesting. He spoke about the terrible fall in the economic standing of the area and described what he called an advantage, low wages. Whether low wages are an advantage depends of one's point of view, and many of the hon. Gentleman's constituents would not think it much of an advantage. I have not often visited the constituency of the hon. Member for Milton Keynes, South-West (Mr. Legg) although I pass through it all too often on my way to the House. The hon. Gentleman spoke about Boadicea. That reminded me that I once went to Milton Keynes to address what might be called a counter-meeting, a fringe meeting at the opening by Mrs. Thatcher of an impressive shopping centre. One of the aims of the counter-meeting was to draw attention to the deficiencies of the ambulance service in the area. I hope that there is now a better service to match the handsome shopping centre. The President of the Board of Trade engaged in a peculiar exercise in logic when he admitted that we were in a recession but that it was not our fault because the whole world was in recession. Later, he took us on a world tour to prove that the rest of the world was following the same policies as those of his Government. He said that the whole world was in a mess but as the rest of the world was doing what this Government were doing, the Government would continue to do it. That is not a very impressive exhibition of logic, because if the rest of the world is in a mess by doing what we are doing, we should be searching for something else to do. I should like to suggest one or two options. I am not surprised at the President of the Board of Trade's admission that we are in recession, because in the past six months more than 236 businesses have collapsed every working day. The gap between north and south is increasing, with all the consequences for social cohesion. The GDP gap per head in the north-west compared with the south-east, excluding Greater London, rose from 10·3 per cent. in 1979 to 19·8 per cent. in 1990. There is zero growth in manufacturing. There is a high savings rate, not because people are happy with their lot and have no wish to spend but because they fear for the future. Retail sales are flat, not least because of the high savings rate. The CBI estimates that there was a fall in investment of 19·5 per cent. between 1989 and 1992. It is not surprising that the President of the Board of Trade had no alternative but to admit that we were in recession. It is not only Labour Members who think that the Government have some responsibility for the recession. Roger Humber, the director of the House Builders Federation, says in the federation's latest journal:"The economy is overhung by high … interest rates … an exchange rate fixed by ERM against the D-Mark which few can now find credible, … Despite this, the Chancellor tells us there is no prospect of cuts in interest rates nor of any devaluation within ERM to facilitate such cuts.
The director of the House Builders Federation is absolutely right. The spectrum of opinion that he represents shows that not only Labour Members are worried and fearful about the situation into which the Government are getting us. I come from and represent Preston but do not need to deliver a "come to sunny Preston" speech because this is not my maiden speech. However, every time I speak in the House I remember my constituency and try to represent it. We in Preston are alarmed about several matters. We are alarmed about the situation facing British Aerospace. We are alarmed about the European fighter aircraft. I believe that money spent on defence should be spent in this country to save jobs in this country, and should be spent on defensive defence. I put a fighter aircraft in that category and I want the EFA to be supported. It is a disgrace, however, that we in this country depend to such an extent on the narrow technological base of the defence industry. We depend on it not only in my district but in the country at large. The Germans can consider what they should do about the EFA in the light of all the circumstances, as they see them, because they operate from a much wider manufacturing base than we do. We depend so much on one sort of industry that we are constantly in danger. Although I support the EFA project, I do not believe that, in the long term, it is sensible to earn one's living by depending on the arms industry and arms exports. I worry about that, and believe that it is the Government's responsibility as well as that of British Aerospace to widen this country's technological base. We should have been talking about diversification in the arms sector a long time ago. Nevertheless, Preston still has other industries. GEC makes trains, at least when there are any trains to make, which is not very often. We have heard much from the Government about how it would be wrong to throw public money about. However, they throw public money about when they fail to act to reduce the need to pay unemployment benefit. That is a waste of public money which could be better utilised helping to provide jobs for those who need them. The Government huff, puff, bluff and fudge around the Jubilee line, the prospects for which have been damaged by what has happened at Canary Wharf. They should have pump-primed with £40 million to extend the Jubilee line, to create 3,000 construction jobs in London and a great many jobs in manufacturing elsewhere. I hope that jobs will be created in Preston when trains are needed for the extended line. However, instead of doing that, the Government prefer to engage in a game of bluff with the private sector and do not care that people will be laid off instead of engaged in constructive work on a project that is all set to begin. I would be more impressed by the Government's attitude towards the recession if they showed any sign of forming a coherent approach to industrial, economic and financial policy to enable people to be usefully employed. Such a policy would be perfectly possible. A Government who say that they can do nothing, and claim that it is a world disease, should not have run for office. If they can do nothing, what are they doing in government? The President of the Board of Trade said that industry should become more competitive. That is an insult to many of our working and skilled people, and to some managements. GEC gained a Queen's award for exports, has splendid quality control systems and produces a good range of products, second to none. It needs a shop window, and orders to be placed in this country by London Transport and British Rail. Without those factors, Government talk of international competitiveness is merely so much hot air. I am not impressed by the sort of society that the Government are building. I can give an illustration to show the way in which the Government and their privatisation polices are taking us. I have recently learnt that North West Water in my constituency, which has paid massive increases to its top officers, is trying to make customers pay their bills. That is fine—I think that people should pay their bills. But, if a customer is not on the telephone and cannot be telephoned directly, one of the techniques used by North West Water to try to contact its customer is to telephone his or her neighbours. That shows the sort of society in which we live. Water supplies are being disconnected and neighbours are being telephoned by North West Water in efforts to chivvy customers into paying their bills. I believe that most, if not all, of the customers will not pay, not because they do not want their water supply disconnected but because they cannot pay. They cannot pay because our society is becoming increasingly impoverished. The amendment tabled by the Prime Minister mentions the long term. In the long term we are all dead and, at the rate the Government are going, so is the British economy.And yet, more and more voices are being raised asking what is being achieved by such policies. We approach three million unemployed. Retail spending is not rising … Industry will not invest when faced with these interest rates and, in any event, the banks now won't and can't lend, as their liquidity is seriously threatened by the collapse of Olympia and York, … It is difficult, therefore, to see what current policies are achieving, when they will lead to success or what the measure of that success will he."
6.27 pm
It is with great pleasure that, in this my maiden speech, I follow my right hon. Friend the Member for Shropshire, North (Mr. Biffen), whose views I have long held in great regard. It is also a pleasure to follow my hon. Friends the Members for Halesowen and Stourbridge (Mr. Hawksley) and for Milton Keynes, South-West (Mr. Legg) and the hon. Member for Feltham and Heston (Mr. Keen), all of whom made excellent maiden speeches and made my task considerably more difficult.
As this is the first time that I have spoken in the Chamber it is only right that my first act should be to pay tribute to my predecessor, Lord Wakeham. For 17 years John Wakeham represented, first, the constituency of Maldon and Rochford, and then my constituency of Colchester, South and Maldon. He did so with enormous distinction in a way that won him friends throughout the area. I have lost count of the number of people who have come up to me in the past year and told me that I have a hard act to follow. But I have never doubted that they were absolutely right. In this place, John Wakeham was perhaps better known for his role in Government. He is one of that dwindling band who joined the Government in May 1979 and has remained a member of it ever since. In that time, he has held an enormous variety of positions, but he will be best remembered for his time as Chief Whip when he set a standard against which all his successors are likely to be judged. He once described himself as the Minister for stopping the Government doing silly things. It is a cause of great pleasure to my constituents and all Government supporters that he is still in the Cabinet and still fulfilling that role. In 1984 John Wakeham suffered severe injuries in the bombing of the Grand hotel at Brighton, which also caused the death of his first wife. I am sure that no one in the House who witnessed it will forget the moment when a few months later he walked back into the Chamber unaided. I remember listening to that event on the radio, and in particular the reception that he was given by hon. Members. It was a tribute to his remarkable courage—a courage that he has displayed every day since that terrible event. I should also like to mention some of my other predecessors. Before 1983, the Colchester part of my constituency was ably represented by Sir Antony Buck and, before him, by Lord Alport, to both of whom my hon. Friend the Member for Colchester, North (Mr. Jenkin) paid deserved tribute. Previous Members of Parliament for Maldon include Brian Harrison, who now lives in Australia but is still a regular visitor to the district. It was also once represented by Tom Driberg, who will be remembered as one of the more colourful Members of Parliament. Earlier still the constituency was represented by Mr. Quintin Dick, who is said to have spent more than any other hon. Member on bribery at parliamentary elections. I shall not follow his example, even if we do receive increased allowances for our office expenses. My constituency stretches from the southern part of Colchester to take in the whole of the Maldon district. It is an area rich in history. Colchester was the first Roman capital of England and is Britain's oldest recorded town. At the end of the Dengie peninsula, at Bradwell, is the chapel of St. Peter-on-the-Wall—one of the first Christian churches in England. It is just a short distance from Bradwell power station—the first Magnox nuclear power station to be built in Britain. Maldon itself was made a royal borough in 1171, and almost 200 years earlier was the subject of repeated assaults by invading Danes. The battle of Maldon in 991, in which the great Saxon leader Bryhtnoth was slain, inspired a famous Anglo-Saxon poem. Last year, the battle was re-enacted as part of the millennium celebrations. The House will be glad to learn that my constituents now regard the Danes in a much friendlier light. The recession has hit my constituents hard. The Colchester Lathe Company has announced its intention to cease production, light industrial companies throughout Essex have shed labour, and retailers, small business men, and the construction industry continue to suffer from lack of demand. Confidence among Essex business men remains low. I am frequently asked what are the Government doing to bring about an upturn. I have always replied that it is not in the Government's power to conjure up recovery. Only business can create lasting jobs, and it is the Government's duty to create the right climate in which enterprise can flourish. Having spent almost three years as special adviser to three of my right hon. Friend's predecessors as President of the Board of Trade, I read with interest his proposals to reorganise the Department of Trade and Industry. I welcome in particular his efforts to improve communica-tions between that Department and industry and to reduce further the regulatory burdens on business. However, the key to recovery lies more with my right hon. Friend the Chancellor of the Exchequer. As I said, it is primarily for the Government to create the economic conditions in which recovery can take place. In the words of my right hon. Friend's amendment, that can best be done by controlling public spending, reducing taxation, relieving business of burdens, and, above all, getting inflation down. I congratulate my right hon. Friend the Chancellor on his success in achieving that aim, and agree that nothing must be done to jeopardise the progress made so far. I hope, however, that my right hon. Friend the Chancellor will take the earliest possible opportunity to reduce interest rates again. With inflation falling, the real level of interest rates is actually rising, which is adding to the difficulties facing my constituents. I hope also that when interest rates fall again, that will be reflected in the rates charged by banks to small business men. I am concerned that too often they tell me that, despite the nine reductions in interest rates, the interest on their loans has not fallen accordingly—or that they have had to pay more in other charges. The other essential requirement for recovery is continued control of public expenditure. In that, I agree absolutely with my hon. Friend the Member for Milton Keynes, South-West. It is understandable at a time of recession that the public sector borrowing requirement will increase. Although it is higher than I would like, I am reassured that it is less than the average under the last Government, and that it is this Government's intention to restore it to balance in the medium term. That will not be easy. It will require my right hon. Friend the Chief Secretary to the Treasury, like Ulysses, to lash himself to the mast and to fill his colleagues' ears with wax so that they do not succumb to the siren voices in favour of higher public spending. If my right hon. Friend does that, and if the proportion of our gross domestic product taken by public expenditure can once again be reduced, allowing industry and the public to keep still more of the wealth that they create, then I am confident that, as the recovery gathers pace, the future for commerce and industry in my constituency and throughout the country will be bright.6.34 pm
I congratulate the hon. Member for Colchester, South and Maldon (Mr. Whittingdale) on his impressive and sincere maiden speech. We all concur with the hon. Gentleman's remarks about his predecessor, and remember the moving occasion on which he first returned to the House after the horrific incident to which the hon. Gentleman referred. I have no doubt that we will hear a lot more about the hon. Gentleman's constituency. However, he need not concern himself about the Chief Secretary to the Treasury having to lash himself to the mast—many others will be doing that in the not-too-distant future. Nevertheless, I welcome the hon. Member for Colchester, South and Maldon to the House, and no doubt he will contribute to many debates in years to come.
It was interesting to hear the President of the Board of Trade admit that Britain is suffering the worst recession since the second world war. Unfortunately, he did not produce many solutions for tackling it. The right hon. Gentleman said that the House ought to consider the recession itself, the practical options available to the Government, and the world context. The depth of the recession has been highlighted by right hon. and hon. Members in all parts of the House. The seriousness of the situation emphasises the lack of Government foresight. Many of the people who watch this debate or who read it in Hansard will feel concern about the lack of Government initiatives. I can offer the right hon. Gentleman practical options not only in terms of action taken centrally by his Department but regionally. If only the Government were prepared to give effect to subsidiarity in its true sense. We have heard from Government Members about monetary control but little about the real economy. There are many in the country who seriously want to tackle that aspect. In my own area, they include industrialists, academic institutions, local authorities, trade unions, and local communities. After surviving the recession of the early 1980s, which destroyed much of our manufacturing base, industry in my region became leaner and fitter, but in the current recession those enterprises risk going to the wall. That is true of many of the country's other industrial areas. I hope that the President of the Board of Trade will in the first instance consider public expenditure. Expenditure by the Department of Trade and Industry, Ministry of Defence, and Department of Transport in the south-east of England is £546 per head of population, whereas it is only £248 in the north. At a time when resources are scarce, there ought to be more equity in the way that they are distributed. Many parts of the United Kingdom attempting to grapple with the serious problems that confront them receive little support from central Government. Last Friday's announcement about the streamlining of the DTI is itself welcome, but in terms of overcoming regional problems it will offer few, if any, advantages. Although people may argue in the macro sense about interest rates —and the right hon. Member for Shropshire, North (Mr. Biffen) made a compelling argument, which I hope is taken on board—the exchange rate mechanism and the City's short-termism should also be considered. The Government could do much to assist the entrepreneurial spirit in the regions, and to create a climate in which that spirit can operate, without necessarily creating a climate of intervention, or adopting a hands-on approach. The DTI should give serious consideration to the partnerships that are developing in the regions, thus enabling them to operate more effectively and to initiate their plans for local economies. The Government and, in particular, the DTI are obstructing and stifling the development of ideas in regions. It was, I believe, the Audit Commission that described the DTI's actions as a programme overload in a strategic vacuum. I trust that I have spoken briefly, although Front-Bench Members are looking daggers at me. Let me conclude by expressing the hope that, as the Secretary of State travels around the country, he will take seriously, in an entirely non-partisan way, the ideas that are currently being expressed. People are genuinely trying to work in partnership, and to ensure that the industrial base—the real economy—gets back into first gear. I hope that, when considering further reforms of his Department, the right hon. Gentleman will take that on board. His record and his writings lean in such a direction, and I hope that he has the guts and the determination to make certain that his wishes are carried out by the Department.6.41 pm
I assure my hon. Friend the Member for Sheffield, Central (Mr. Caborn) that, at this point in the calendar of the parliamentary Labour party, Front-Bench Members do not look daggers at anyone.
The motion has given rise to a good debate in the short time available. We have heard some eloquent maiden speeches from the hon. Members for Milton Keynes, South-West (Mr. Legg) and for Colchester, South and Maldon (Mr. Whittingdale), and a "return maiden speech" from the hon. Member for Halesowen and Stourbridge (Mr. Hawksley). We also heard an excellent speech from my hon. Friend the Member for Feltham and Heston (Mr. Keen), who was generous in his praise of his predecessors in both parties, and showed great un-derstanding of the problems that face industry and those who work in it. Middlesbrough's loss is Feltham's gain, and long may it remain so. We also heard interesting speeches from the right hon. Member for Shropshire, North (Mr. Biffen), the hon. Member for Southwark and Bermondsey (Mr. Hughes) and my hon. Friends the Members for Coventry, North-West (Mr. Robinson), for Preston (Mrs. Wise) and for Sheffield, Central. In a speech of the highest quality, my hon. Friend the Member for Dunfermline, East (Mr. Brown) outlined the case for an industrial policy. In the speech that followed it, the right hon. Member for Henley (Mr. Heseltine) admitted that the present recession was the deepest that the country had experienced since the war. I do not know whether that was a boast or a complaint, but it was significant that the right hon. Gentleman should make comparisons with Malaysia and Poland rather than comparing Britain with the great nations of Germany and the United States, as he might have done in the past. People in this country know that unemployment has now reached 2·6 million and has been rising for 24 consecutive months—a tragedy that has caused depriva-tion and hardship in all walks of life and all regions of the country. In my own region, north-east England, 153,000 people are now out of work; most alarming of all, 35 per cent. of all manufacturing jobs have been lost between 1979 and 1992. Output is now below the 1988 level, and —if this morning's forecast by Ernst and Young is correct —the 2·6 per cent. fall in output in 1991 will be followed in 1992 by a further fall of 0·6 per cent. Manufacturing output has fallen for seven consecutive quarters. Business failures were up by 32 per cent. in the first six months of this year, and mortgage repossessions were at an all-time high. Hon. Members on both sides of the House will know of the pain and hardship that that has caused families throughout the country, because of the increasing number of people who have come to their surgeries to complain. Most critical of all at this time of deep recession is our serious trade deficit. Is not that the most telling statistic of all? More successful industrial economies with stronger manufacturing bases show, at the very least, a major improvement in their balance of trade at a time of recession, and many run a trade surplus as the demand for imports falls; yet, after two years of deep recession, the British economy now has a projected deficit of £10 billion for 1992. I take issue with the right hon. Member for Henley on two points. First, he said—if I understood him correctly —that the world recession has been a major contribution to Britain's difficulty in achieving recovery by means of an export drive. The right hon. Gentleman has missed the point. As Britain was in recession first, we should still have been able to increase our exports more than we did before other countries, in Europe and elsewhere, went into recession. The right hon. Gentleman would do well to face up to the fact that our real problem is our lack of supply-side competitiveness: that is what has prevented us from improving our balance of trade. Secondly, I believe that the right hon. Gentleman was both wrong and complacent in saying what he did about world trade in manufactured exports. Britain's position improved under a Labour Government: its share rose from 7·4 per cent. in 1974 to 7·9 per cent. in 1979. and subsequently fell to 6·4 per cent. in 1990 under a Conservative Government. That is a telling statistic. Does not our trade deficit tell us, very sharply, that our industrial base is so weak that we cannot even meet our domestic demand for many industrial products? Does it not tell us that there has been no supply-side miracle that we still have all the problems of under-investment, lack of training, lack of export assistance and inadequate infrastructure? Most damaging of all, does it not tell us that any upturn in the economy—and we all want an upturn—is likely to be halted quickly when a further surge in imports of industrial products that we can no longer produce leads to more balance-of-payments problems, and they in turn lead to a further policy of deflation in an effort to control inflationary pressures in the economy and to hold the currency? In the past, the right hon. Gentleman has acknow-ledged the formidable nature of the task faced by British industry. I want to be fair to him: he has been recognised by hon. Members on both sides of the House as a man with the courage to face up to the nation's problems. He has shown courage in Cabinet—not to be dismissed lightly just because it was a little over-focused on the question of helicopters. He has shown courage in the wilderness, displaying enormous fortitude in the dark ages of 1985–86 and carrying his message to countless dimly lit church halls and civic centres. He was then in competition with Jeffrey Archer in the great battle of the chicken-leg suppers. The right hon. Gentleman's publisher has told me, with some chagrin, that, although the right hon. Gentleman may have edged ahead in the battle of the chicken legs, he could not match the about-to-be-ennobled Jeffrey Archer in the battle of the autographed paperbacks. The right hon. Gentleman showed courage in his comeback. When he realised that he needed a new legend, he cried from the same dimly lit church halls, "You Margaret, me thinker." Where is that thinking now? Where is the thinking that was contained in the book that the right hon. Genlteman published in those dark, dark ages? Where are the strategies, the policies and the measures to help industry? Where is the firm action to rebuild our industrial base? Where is the right hon. Gentleman's British solution now? Surely he does not claim that the shuffle of desks announced on Friday addresses the issues that he identified previously. Industrialists—people who work in industry and have experienced the damage done to their businesses and jobs —want to know when the President of the Board of Trade will preside. When will he preside over tax allowances to help companies to invest in new equipment? When will he preside over the establishment of an English development agency, to which he was previously committed? When will he preside over the establishment, or rather reestablishment, of a body like the National Economic Development Office, which could provide a real forum for partnership discussions—where industry and the world of science and technology could sit down independently to discuss Britain's problems with Government, and to tackle the problems of competitiveness, market share and export potential? Does the Secretary of State support the need for a body such as the National Economic Development Office, or is he caught up in the same revenge or the same spite as the Treasury which, rather than deal with the problems that have been thrown up by the N EDO reports, has sought to shoot the messenger? Many people have lost their businesses and jobs as a result of the recession. Both those who have lost their jobs and those who still struggle to provide the nation's wealth know that further damage to industry could still be caused by present policies. They know that lack of investment has often left their businesses and jobs uncompetitive; they know that there has been no supply-side miracle in the economy; they know that industrialists abroad get real support from their Governments to help them undertake research and development, invest in new equipment, and make sure that the work force is highly skilled. Our industry could have the same support, but that will demand honesty by the Government about the difficulties that industry faces. It will demand determination by the Secretary of State to build a partnership with industry to meet the challenges of the 1990s and genuinely to modernise the supply side of our economy. It will demand policies to avoid another plunge into further recession. It will demand that the Secretary of State does not timidly serve his parole in Cabinet in permanent hock to the post-Thatcherites in the Treasury. These are reasonable and realistic demands. The House should support them.6.51 pm
This has been an important debate, for three reasons. First, it has given the House an opportunity to hear some fine maiden speeches. Secondly, it has provided a constant reminder to us of the importance of controlling inflation. The control of inflation is the key to sustainable economic recovery and to international competitiveness. Thirdly, it has provided us with some indication of the ideas—or perhaps I should say lack of them—of the Labour party on industry.
I pay tribute to the excellent maiden speakers. My hon. Friend the Member for Halesowen and Stourbridge (Mr. Hawksley) will perhaps forgive me if I include him among them. We welcome him back to the House. I particularly appreciated his tribute to his predecessor. The hon. Member for Feltham and Heston (Mr. Keen) also paid a nice tribute to his predecessor in the witty first part of his speech. My hon. Friend the Member for Milton Keynes, South-West (Mr. Legg) deserves to be congratulated on the skilful way in which he overcame the handicap that he identified of being a new Member for a new seat in a new town. He, too, paid a generous tribute, not just to half his predecessor but to the whole of his predecessor. He made some interesting comments on the economy which I am sure all those who did not hear his speech will want to read. My hon. Friend the Member for Colchester, South and Maldon (Mr. Whittingdale) paid a particularly moving tribute to his predecessor, whom we are delighted to know is now helping us from another place. He added a miniature, albeit interesting, history lesson, although I am not sure what conclusions we should draw from it. The House always expects, and always gets, a thoughtful and interesting contribution from my right hon. Friend the Member for Shropshire, North (Mr. Biffen). He will appreciate it, I know, if I say that I do not always agree with him, even on the subject of interest rates, but he knows all too well that my right hon. Friend the Chancellor of the Exchequer keeps interest rates always under review. There are, however, many implications in making changes in interest rates, particularly for inflation. If I followed the view of my right hon. Friend the Member for Shropshire, North on the exchange rate mechanism, I fear that there would be implications not only for inflation but for inflationary expectations. We are well aware that lower interest rates could help industry, but I am sure that we all agree that consistently low inflation is more important. Among other things, it is the key to improved productivity. During the 1980s, substantial progress was made on productivity. It grew faster in Britain than in any other major industrial country, after decades when our record has been quite the contrary. We tend to think of inflation most in the context of the general level of prices and the disastrous effect that high inflation can have on our international competitiveness and exports. That is certainly important, but it is by no means the only reason why keeping inflation down is vital for industrial success. Investment decisions are always difficult. I know that from my own experience in industry. They require not just an analysis of facts and figures but judgment. Judgments are made more difficult and the outcome of investment decisions more unpredictable the higher the rate of inflation and the greater the difficulty of forecasting the costs—particularly the cost of investments, of which there are many, that take several years to complete before products are ready to be sold in the marketplace. The larger the scale of the investment, the longer the time scales involved, the more difficult the judgment becomes, if we have high inflation. Therefore, we have to make sure that we control inflation. That is the only way to avoid deterring investment and to ensure that good investment decisions are made. High rates of inflation erode the purchasing power of wage packets. That in itself can lead to industrial unrest, as we were all too frequently reminded during the period in office—now, happily, a fairly distant memory—of the Labour party. There has been general recognition throughout the debate of the severity of the recession. Conservative Members recognise that it is an international phenomenon and that there are no quick fixes. The hon. Member for Southwark and Bermondsey (Mr. Hughes) recognised that there are no quick fixes, but I am not sure that he carries his party with him. I suspect that some members of his party have always been addicted to quick fixes. The hon. Member for Dunfermline, East (Mr. Brown) called, as he often does, for a regional policy. He never says what a regional policy is meant to be, nor does he recognise what our regional policy is now doing to help the various areas. The hon. Member for Sheffield, Central (Mr. Caborn) also referred to that point. The current assisted areas map—[Interruption.]Order. There is an undercurrent of conversation on both sides of the House. It makes it difficult for me to hear the Minister, and that I wish to do.
Thank you, Madam Deputy Speaker.
I was about to say that the current assisted areas map —the map that identifies the areas which receive regional assistance—was drawn in 1984 and covers some 35 per cent. of the working population: 15 per cent. in development areas and a further 20 per cent. in intermediate areas. I hope that even the hon. Member for Dunfermline, East agrees that in the intervening seven and a half years British industry has gone through major changes. As one would expect, the effect of those changes on employment opportunities has not been uniform throughout all the regions. After such an interval, therefore, it must be appropriate to review the assisted areas map to ensure that it remains effectively focused on the areas of greatest need. As the House will know, we have issued a consultation paper which confirms that measures relating to unemployment will continue to be the major component in the review, although other factors will also be considered. Our intention is to reach conclusions on the review later this year. I shall make the results known to the House at the appropriate time. Our assisted areas map, like those of other European Community countries, is subject to clearance by the European Commission. A new map should therefore be in place in early 1993. The Government are conscious that assisted area status is important to many local and regional bodies that are concerned with economic regeneration. We have decided, therefore, as part of the review, to consult as fully and widely as possible. We have invited local and regional bodies that wish to do so to make representations before the end of September. I assure the House that we take such consultation very seriously and that we shall listen carefully to any points that are put to us. The Government remain committed to an effective, properly targeted regional industrial policy. The third benefit of this important debate was the reminder that it gave of the views of the Labour party. We heard outdated ideas, with which we are familiar, and antiquated policies. My right hon. Friend the President of the Board of Trade eloquently and powerfully reminded the House of them. He said that, even among Labour Members, some doubt is creeping in about those outdated ideas and antiquated policies. Some of those doubts were expressed. I suspect that the hon. Member for Dunfermline, East may think that we heard too much. Again, we heard nothing about the alternatives. It is no wonder that the hon. Member for Dunfermline, East did not remind us of the extraordinarily toxic—perhaps lethal —cocktail of policies that the Labour party proposed for British industry in the election: higher taxes to deter entrepreneurs and investors and to frighten away inward investors, and the abolition of the reforms of the trade union laws that have been of such benefit to industrial relations and investment. As always, we heard from Labour Members about red tape, regulation, quangos and committees too numerous to mention. However, worst of all, although it is not often mentioned now, we heard about the minimum wage. Everybody knows that that would have destroyed jobs and increased unemployment. I cannot say that we cannot wait to hear what changes might emerge from the moving of chairs in the Labour party, but, happily, I can say that the electorate has ensured that we do not have to worry about those ideas and that industry does not have to worry when it recovers from the recession. I therefore urge the House to reject the motion and accept the amendment.Question put, That the original words stand part of the Question:—
The House divided: Ayes 262, Noes 301.
Division No. 50]
| [7.02 pm
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AYES
| |
Abbott, Ms Diane | Callaghan, Jim |
Adams, Mrs Irene | Campbell, Mrs Anne (C'bridge) |
Ainger, Nicholas | Campbell, Menzies (File NE) |
Ainsworth, Robert (Cov'try NE) | Campbell, Ronald (Blyth V) |
Allen, Graham | Campbell-Savours, D. N. |
Anderson, Donald (Swansea E) | Cann, Jamie |
Anderson, Ms Janet (Ros'dale) | Chisholm, Malcolm |
Armstrong, Hilary | Clapham, Michael |
Ashdown, Rt Hon Paddy | Clark, Dr David (South Shields) |
Ashton, Joe | Clarke, Eric (Midlothian) |
Austin-Walker, John | Clarke, Tom (Monklands W) |
Banks, Tony (Newham NW) | Clelland, David |
Barron, Kevin | Clwyd, Mrs Ann |
Battle, John | Coffey, Ms Ann |
Bayley, Hugh | Cohen, Harry |
Beckett, Margaret | Connarty, Michael |
Beith, Rt Hon A. J. | Cook, Frank (Stockton N) |
Benn, Rt Hon Tony | Cook, Robin (Livingston) |
Bennett, Andrew F. | Corbett, Robin |
Benton, Joe | Corbyn, Jeremy |
Bermingham, Gerald | Cousins, Jim |
Berry, Roger | Cox, Tom |
Betts, Clive | Cryer, Bob |
Blunkett, David | Cummings, John |
Boateng, Paul | Cunliffe, Lawrence |
Boyce, Jimmy | Cunningham, Jim (Covy SE) |
Boyes, Roland | Dalyell, Tam |
Bradley, Keith | Darling, Alistair |
Bray, Dr Jeremy | Davidson, Ian |
Brown, Gordon (Dunfermline E) | Davies, Bryan (Oldham C'tral) |
Brown, N. (N'c'tle upon Tyne E) | Davies, Rt Hon Denzil (Llanelli) |
Burden, Richard | Davies, Ron (Caerphilly) |
Byers, Stephen | Davis, Terry (B'ham, H'dge H'I) |
Caborn, Richard | Denham, John |
Dewar, Donald | Leighton, Ron |
Dixon, Don | Lestor, Joan (Eccles) |
Dobson, Frank | Lewis, Terry |
Donohoe, Brian | Litherland, Robert |
Dowd, Jim | Lloyd, Tony (Stretford) |
Dunnachie, Jimmy | Loyden, Eddie |
Dunwoody, Mrs Gwyneth | Lynne, Ms Liz |
Eagle, Ms Angela | McAllion, John |
Eastham, Ken | McAvoy, Thomas |
Enright, Derek | McCartney, Ian |
Etherington, William | MacDonald, Calum |
Evans, John (St Helens N) | McGrady, Eddie |
Ewing, Mrs Margaret | McKelvey, William |
Fatchett, Derek | Mackinlay, Andrew |
Faulds, Andrew | McLeish, Henry |
Field, Frank (Birkenhead) | Maclennan, Robert |
Fisher, Mark | McMaster, Gordon |
Flynn, Paul | McWilliam, John |
Foster, Derek (B'p Auckland) | Madden, Max |
Foulkes, George | Mahon, Alice |
Fraser, John | Mandelson, Peter |
Fyfe, Maria | Marek, Dr John |
Galbraith, Sam | Marshall, Jim (Leicester, S) |
Galloway, George | Martin, Michael J. (Springburn) |
Gapes, Michael | Martlew, Eric |
Garrett, John | Maxton, John |
George, Bruce | Meacher, Michael |
Gerrard, Neil | Meale, Alan |
Gilbert, Rt Hon Dr John | Michael, Alun |
Godman, Dr Norman A. | Michie, Bill (Sheffield Heeley) |
Godsiff, Roger | Michie, Mrs Ray (Argyll Bute) |
Golding, Mrs Llin | Milburn, Alan |
Gordon, Mildred | Miller, Andrew |
Gould, Bryan | Mitchell, Austin (Gt Grimsby) |
Graham, Thomas | Moonie, Dr Lewis |
Grant, Bernie (Tottenham) | Morley, Elliot |
Griffiths, Nigel (Edinburgh S) | Morris, Rt Hon A. (Wy'nshawe) |
Griffiths, Win (Bridgend) | Morris, Estelle (B'ham Yardley) |
Grocott, Bruce | Morris, Rt Hon J. (Aberavon) |
Gunnell, John | Mowlam, Marjorie |
Hain, Peter | Mudie, George |
Hall, Mike | Mullin, Chris |
Hanson, David | Murphy, Paul |
Hardy, Peter | Oakes, Rt Hon Gordon |
Harman, Ms Harriet | O'Brien, Michael (N W'kshire) |
Harvey, Nick | O'Brien, William (Normanton) |
Hattersley, Rt Hon Roy | O'Hara, Edward |
Henderson, Doug | Olner, William |
Heppell, John | O'Neill, Martin |
Hill, Keith (Streatham) | Orme, Rt Hon Stanley |
Hinchliffe, David | Patchett, Terry |
Hoey, Kate | Pendry, Tom |
Hogg, Norman (Cumbernauld) | Pickthall, Colin |
Home Robertson, John | Pike, Peter L. |
Hood, Jimmy | Pope, Greg |
Hoon, Geoff | Powell, Ray (Ogmore) |
Howarth, George (Knowsley N) | Prentice, Ms Bridget (Lew'm E) |
Howells, Dr. Kim (Pontypridd) | Prentice, Gordon (Pendle) |
Hoyle, Doug | Prescott, John |
Hughes, Kevin (Doncaster N) | Primarolo, Dawn |
Hughes, Robert (Aberdeen N) | Purchase, Ken |
Hughes, Roy (Newport E) | Quin, Ms Joyce |
Hughes, Simon (Southwark) | Randall, Stuart |
Hutton, John | Raynsford, Nick |
Jackson, Ms Glenda (H'stead) | Redmond, Martin |
Jackson, Ms Helen (Shef'Id, H) | Reid, Dr John |
Jamieson, David | Robertson, George (Hamilton) |
Janner, Greville | Robinson, Geoffrey (Co'try NW) |
Jones, Barry (Alyn and D'side) | Roche, Ms Barbara |
Jones, Jon Owen (Cardiff C) | Rogers, Allan |
Jones, Ms Lynne (B'ham S O) | Rooker, Jeff |
Jones, Martyn (Clwyd, SW) | Rooney, Terry |
Jones, Nigel (Cheltenham) | Ross, Ernie (Dundee W) |
Jowell, Ms Tessa | Ruddock, Joan |
Kaufman, Rt Hon Gerald | Sedgemore, Brian |
Keen, Alan | Sheerman, Barry |
Kennedy, Charles (Ross, C & S) | Sheldon, Rt Hon Robert |
Kennedy, Ms Jane (L'p'I Br'g'n) | Shore, Rt Hon Peter |
Khabra, Piara | Short, Clare |
Kilfoyle, Peter | Simpson, Alan |
Skinner, Dennis | Turner, Dennis |
Smith, Andrew (Oxford E) | Tyler, Paul |
Smith, C. (Isl'ton S & F'sbury) | Vaz, Keith |
Smith, Rt Hon John (M'kl'ds E) | Wardell Gareth (Gower) |
Smith, Llew (Blaenau Gwent) | Watson, Mike |
Smyth, Rev Martin (Belfast S) | Welsh, Andrew |
Soley, Clive | Wicks, Malcolm |