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must be answered. How can the Government present their rhetoric about the privatisation of English and Welsh water and expect us to believe that they do not have a timetable for Scottish water? Let us have a clear statement of when they propose to privatise Scottish water or a clear assurance that they have no intention of privatising it because the way that the water industry is organised in Scotland is the model that England and Wales should follow.

It is interesting that the White Paper on the Scottish electricity industry contains assertions about the benefits of keeping the Scottish boards autonomous. One passage states :

"The Government wishes to provide competitive pressures within the industry in Scotland and considers that the proposal to privatise two companies will achieve this to a significant degree." I wonder why such an "excellent" argument in that context was not applied to Scottish gas, Scottish telecommunications or the Scottish steel industry? The Government seem to have adopted a selective use of argument.

The Government have created growing concern about their intentions for the future of economic development in Scotland. Scotland on Sunday leaked a proposal about the dismantling of the Scottish Development Agency, which the Government denied. They have only themselves to blame, however, for the mess in which they find themselves over that issue. I advise the Government that quite a good motto is, "If it's not broke, don't fix it." The work of the Highlands and Islands Development Board and the SDA has been widely praised, and to dismantle them in favour of regional enterprise boards that would be run by local business men would be the height of folly. The best business men are running their businesses. If they take over the enterprise initiative, who will man the shop? Much more sensible would be a partnership between the SDA, the HIDB, existing enterprise trusts, Scottish Business in the Community and local authorities. We should move forward in that way.

Mr. Favell : I shall be pleased to give the hon. Gentleman the benefit of my experience. In Stockport, there is an excellent local enterprise agency. It is run by local business men. Stockport is a northern industrial town and unemployment is now less than 6 per cent.

Mr. Bruce : I am grateful to the hon. Gentleman. I can say exactly the same about the enterprise board in my city of Aberdeen. I am pleased to say that it makes an important contribution to the community. I am not criticising enterprise boards, but it is important to ensure that they fit properly into the scheme of things. They cannot take overall responsibility for local development, which is what the Government suggest. Business men are busy running their own businesses and there is a shortage of business men to advise the queue of those who wish to start new businesses. I make no criticism of the enterprise trust movement. On the contrary, I think that it is excellent. I merely say that it is not the complete answer that the Government seem to think it is.

There is a long list of actions that the Government will have to take before they will convince me and others that their present green tinge is anything other than cosmetic. I think that hon. Members have all received copies of the Green Gauntlet, which sets out practical measures that the Government could implement with existing technology. The House will be interested to know whether there will be

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a constructive response by the Government. It is worth mentioning a few of the problems with which we must deal.

According to a United Nations economic commission for Europe, by 1993 Britain will be polluting the skies with as much sulphur dioxide as France, West Germany, Sweden, Denmark, Austria, Switzerland, Luxembourg and the Netherlands put together. That is the status that we have achieved. Water authority pollution incidents increased by 9.5 per cent. in England and Wales in 1987. Agriculture pollution in Scotland has increased by 49 per cent. Britain still dumps sewage sludge around its coastline. The amount of hazardous waste has increased from 53,000 tonnes to 81,400 tonnes between 1981 and 1986. We have the greatest output of noxious fumes of any country within the Community, yet we are still lagging behind other European countries in introducing unleaded petrol. Only one in nine garages in the United Kingdom sells it compared with 98 per cent. in West Germany. It may be a niggling point, but it would be impressive if the Prime Minister were to use a Jaguar that had been converted to use unleaded petrol, as it would have to be if it were sold in the United States.

There has been an investment of £24 million on wind research, £4 million on solar research, £1.9 million on tidal research and £935.6 million on nuclear energy. That imbalance will have to be redressed. If the Government are sure that they have their energy policy right, why are they cutting the budget for the Energy Efficiency Office? We should be jacking it up considerably if we are to turn round our energy policy.

Opposition Members need attach no credibility to the Government's stated position on environmental concern until they produce measures that are not cosmetic and advance arguments that are not twisted. They must respond to the facts that have been placed before them. As and when they take appropriate measures, they will be entitled to claim that they have confronted the problems of the environment. As yet, they have a long way to go.

6.17 pm

Rev. Ian Paisley (Antrim, North) : Since we debated the previous Gracious Speech the agony of the Ulster people has continued unabated. The IRA campaign of violence has claimed more victims, broken more homes and left more widows and orphans. That is the harsh reality of the situation in Northern Ireland. Far from being eradicated and eliminated, IRA terrorism is on the increase. Recently Sir Jack Hermon, the Chief Constable of the Royal Ulster Constabulary, warned us that the IRA is now better equipped than ever before and that Ulster must brace itself for an horrific end to the year. Ninety-two people have died already this year as a result of terrorism in the Province. That must be compared with the total of 54 who died as a result of terrorism throughout 1985. It is clear that the signing of the Anglo-Irish Agreement has not brought the peace, reconciliation and stability which was promised. It has led instead to more deaths in the Province, greater instability and greater polarisation between the communities.

Some of the events of last week were not reported in the national press. At the beginning of the week, a 600 lb bomb was placed just outside the Army base in North Howard street. When it exploded, it injured eight or nine soldiers and caused tremendous damage to the base. It

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caused severe damage to many houses. Many people, both elderly and young, along with their families, were badly shaken by the explosion. No warning was given. It was only by the mercy of Almighty God that there were not many more injuries or even deaths. How is it that the IRA is able to place such a massive device on the perimeter of a major Army base in west Belfast? Among those who died was an RUC reserve constable, William Monteith, of Castlederg. He was murdered. Tuesday witnessed a murder attempt on an RUC constable carrying out his duties in connection with the Royal visit. Also on Tuesday there was an IRA rocket attack on an RUC patrol at Castlewellan and an attack on the police headquarters in Strand road in Londonderry. On Wednesday there was an horrific IRA attack at Benburb on an unmanned police station which resulted in the deaths of Emma Donnelly and Barney Lavery, a grandfather and granddaughter who happened to be in a car in the vicinity when the bomb exploded. Eight people were injured, including a 78-year-old woman. On Thursday night a man was shot dead near Coagh, in county Tyrone.

That is the sad chronicle of what happened last week in Northern Ireland. At the beginning of last week the Chief Constable announced that he had to close the following police stations because of cuts : Achalee, Dromara, Waringstown, Annalong, Strangford, Greyabbey, and smaller posts at Larne, Carrickfergus, Greenisland and two in my constituency of Ballymena. The closing of the police stations is a terrible thing.

The Chief Constable discriminated against women police officers who took him to the local tribunal and won their cases to the tune of more than £1 million. Is it not a fact that money must be found from this year's budget and as a result we will have less security in Northern Ireland as the situation deteriorates? The Government should tell us whether that is the case. The stupidity of the chief of police to take on the womenfolk in his own force and to try to discriminate against them has caused the problem. When he was taken to the local tribunal it was found that he was acting out of order. I salute the womenfolk. They had every right to be employed. Why must the people of Northern Ireland suffer because of the Chief Constable's actions? The expenditure on security in Northern Ireland should not be taken from the Ulster budget but should be funded directly from the Treasury.

I want briefly to welcome other aspects of the Government's policy on security. There is a feeling in Northern Ireland that some of the Government's policies do not go far enough. However, we welcome the fact that the Government are taking the proper course. What disappoints us and causes us sorrow is the fact that the Social Democratic and Labour party has come out strongly against all the proposals. It has said that the proposals will not help and as a result the IRA can continue its insidious campaign. By encouraging that the SDLP has become a party to it.

The tragedy of the proposed oath against terrorism is that it is fatally flawed at the outset. That rule will not be enforced by the Attorney- General or the Law Officers of the Crown. Individuals will have to take it on their own personal responsibility. In the regions where councils would be affected by such a proposal the majority of the councils would favour Sinn Fein councillors. As a result, they will not take any action. However, if a councillor took action and a Sinn Fein or IRA member of the council was

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disqualified and lost his seat, it is easy to see what would happen in Northern Ireland. The person who made the complaint and carried it through the courts would find himself in a coffin. That would be the end of the law.

The oath will be effective only if the Law Officers of the Crown are prepared to take on the responsibility. It is interesting to note that Mr. Adams said that he would not take his seat in Westminster because he would have to take an oath of allegiance to Her Majesty the Queen, but he would go ahead and take the oath of terrorism if elected to a council seat.

Belfast city council made representations to the effect that the oath of allegiance to the Queen should be restored--Sinn Fein members have said that they will not take that oath. That would deal with the situation far more effectively than the present proposal. The Government must face up to proscribing Sinn Fein and not tinker around with this matter.

The Government have placed great stress on extradition between Northern Ireland and the south and between the south of Ireland and this country. Anyone who has had his ear to the ground in the past few days will notice with concern what is happening in the case of Father Patrick Ryan. It has been said that the Attorney-General in the south of Ireland is deeply anxious because the feeling is that there is no justice in English courts. That accusation has been made against Ulster courts, and it is made continually against the judiciary of Northern Ireland. However, as the extradition in this case is not from the south to the north, but from the south to this part of the United Kingdom, the same argument is put forward. People in Northern Ireland will be looking carefully at this case because it illustrates the ineffectuality of the present arrangements under the much vaunted Anglo-Irish Agreement.

As I promised to be brief, I will finish by paying my tribute to the hospital services in Northern Ireland, and especially to the nurses. Ministers have said that justice has been done to the nursing profession. I do not agree with that. The nurses in Northern Ireland, as well as their counterparts in this part of the United Kingdom, have been badly treated in many instances. The nurses in my area told me that they have been asked to appeal but that they would hear the results of their appeal in three years' time. That is not justice for the nursing profession. The nurses in Northern Ireland deserve the full-hearted support of their public representatives, and they will have it in their battle for justice.

6.27 pm

Mr. Peter L. Pike (Burnley) : Today's debate is centred on two specific themes--industry and the environment. I want, first, to consider industry, because industry involves the creation of wealth and provides jobs. It is therefore vital to the nation. On many occasions over the past few years I have criticised the Government for their lack of concern about the importance of manufacturing industry to the future of this nation.

The figures have shown that we have been trading continuously in deficit in manufacturing industry, but the Government have said repeatedly that we must consider the picture as a whole and consider tourism and invisibles. I do not dispute that, but at the end of the day

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manufacturing industry is a basic requirement of this nation. The Government must be worried about the trade deficit figures of £2.43 billion and the manufacturing deficit of almost £3 billion announced last week.

While I accept that the figures may improve next month and that one or two factors may have affected the figures that were published last Friday, to call the figures a slight freak, as the Chancellor of the Exchequer did on Friday on television, is grossly to underestimate the situation. The underlying trend of the past few months has shown that our trade balance is increasingly worsening. It was announced on Friday that interest rates were rising yet again, to 13 per cent. Inflation is running at 6.4 per cent. and rising.

Since 1979 the Government have said repeatedly that we must accept unemployment, cuts in public expenditure and many other things that are unacceptable to Opposition Members because it is important to control the economy. Although the Government have managed to con the people that they are controlling the economy, it is becoming increasingly apparent that they are failing to do so. No doubt when the people recognise their failure in that regard they will recognise their many other failures.

If we are to export more manufactured goods than we import, we must recognise the problems posed by the high value of the pound and the tremendous burden imposed by increased interest rates, which will make it even more difficult for manufacturing industry to win the world's markets. Since 1979 public investment has fallen by 40 per cent., and the outline of the Government's expenditure programmes shows that it will fall by a further 6 per cent. in the next three years. The Queen's Speech mentions the Government's intention to make further cuts. Some of the cuts are occurring in the environment : spending on the water industry reached a peak in 1974, and in constant terms we are now spending only about two thirds as much as we were then on dealing with the industry's massive problems. That is an appalling indictment of the Government.

Manufacturing industry is particularly important to my part of the country, the north-west. The Government claim that investment in manufacturing industry is just above the 1979 figure, but in the north-west it is 38 per cent. below that figure in constant terms. The north-west is heavily dependent on manufacturing jobs, but they have declined by 38 per cent.-- coincidentally the same figure, but in fact the two are linked. Until the Government right the position, unemployment and the balance of trade will continue to present problems.

We want a Government committed to ensuring that the regions can benefit from the Channel tunnel. We need rail and road links to bypass London so that we can get our goods into Europe speedily and efficiently and our people can travel there in the same way. We also want our regional airports developed and are hoping for an announcement this week that Manchester airport will be allowed to spend £500 million on a second terminal. We do not want the airport privatised. After years of development it is a successful airport, developed first by the city of Manchester, later by the county council and then by the consortium of local authorities that has run it since the council's abolition. We believe that that success can continue in the public sector, and we want a rail link to the airport as soon as possible.

The Secretary of State said that he believed the privatisation of water was the Government's greatest

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environmental move. The right hon. Gentleman is sadly mistaken. If given the right powers, the money and the staff to do its job, the National Rivers Authority could be a move in the right direction, but the industry need not be privatised for that objective to be achieved. If given powers to borrow on the commercial market, it could do so. If the Government did not limit them, by financial constraints, to passing on costs to consumers, water authorities could work effectively in the public sector, attacking the problems of pollution in our rivers and estuaries and ensuring our water quality.

Mr. Keith Raffan (Delyn) rose --

Mr. Pike : I do not want to give way, because I am anxious for many hon. Members to speak in the debate.

The North-West water authority has the biggest problems of any water authority in the country, with the Mersey basin and the old mains and sewer pipes which owe their existence to the industrial revolution. Much money needs to be spent. We are also fearful of what may happen to our heritage and our valuable land holdings in the Lake and Peak districts and other parts of the north-west as a result of privatisation.

We are told that we are to have another Housing Bill. I wish that the Government would try to treat those wishing to rent properties in the same way as those who wish to purchase. Ever since 1979 they have been subsidised completely differently. Almost all local authorities have lost Government subsidy from their housing revenue accounts, which has forced up rent levels. We are now told that authorities themselves will not be able to subsidise. That will again mean substantial rent increases in many areas, penalising many people. The Government will say that those qualified for housing benefit will get it back, but other tenants will end up paying for the subsidy, and that is a dangerous way to proceed.

The person who will receive help is someone buying a house, receiving a large income and paying 40 per cent. tax and wanting a mortgage. It is quite different for someone who rents a property and will no longer receive housing benefit. Moreover, almost every local authority has had to cut back on its housing programme, which has affected the provision of sheltered housing, the improvement of stock and the building of new stock.

The Secretary of State said that the housing condition survey, published today, showed that there had been an improvement between 1981 and 1986. He has had the advantage of seeing the report, which Opposition Members have not. If the report shows such an improvement, it is unique, for every other report--political, Church or even with royal patronage--has criticised the present state of housing stock. The Government say that they intend to do something about housing grants. I support any move that ensures value for money ; at present many bad improvement jobs are done by cowboy builders and more checks would be welcome. We shall, however, look closely at the Government's proposals. The grants reached a peak in the free-for-all just before the 1983 election. There were cuts immediately after it.

In some parts of the country the cost of improving a house is not covered by the value of that house after it has been improved. My constituency in north-east Lancashire is a good example. A person can spend £10,000 or £11,000 on improving a house, but he will be lucky, depending on

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the area in which he lives, if he can sell the house for £10,000. We must know how the emphasis is to be changed and what assistance the Government intend to give.

There is a deterioration in the housing stock, whether it be in the public or the private sector. The Government must do something positive about it. The Housing Bill that the Government introduced in the last Session did nothing to tackle the housing problems. I fear that the new Bill will not tackle them, either.

Sufficient resources should be made available so that adequate sheltered housing can be provided for all elderly people who need it. Central Government, local government and housing associations must meet the growing need. The Government have announced that they intend to introduce another Local Government Bill. Since 1979 the Government have said that they believe in the freedom of local government and that they will set the town halls free, but they have curtailed the freedom of local authorities ; for example, by limiting their financial powers to meet the needs of the communities that they have been elected to serve.

I fear that the new Bill will be another move in that direction. The Secretary of State and many Conservative Members do not believe in local government, but many of their Conservative colleagues on local authorities share my concern. Conservative councillors, and councillors of other parties, agree with Labour councillors that elected local authorities ought to be able to implement programmes that meet the needs of their communities.

The football Bill will do nothing to solve the problem. It is a mistake to call it a football problem. Even when there is no football match, or football team, one can go into certain town centres on a Saturday and be met by hooliganism and violence. People are thrown into fountains, and there are many other similar incidents. Do the Government intend to introduce identity cards for people who go shopping? That is the direction in which they are going.

I was amazed to hear the Minister with responsibility for sport say on television yesterday that if a card was rejected the person would be dealt with when he had passed through the barrier. What nonsense. Anybody who possesses a credit card knows how often the card fails to go through the wipe-through machines when paying for petrol or other goods. The scheme will not solve the problem at football grounds. It will create more problems. It is a move in the wrong direction. The Government need to think again.

6.43 pm

Sir Rhodes Boyson (Brent, North) : In a debate on the Loyal Address, as in any other debate, it is nice to be able to speak about general principles. It is also nice to deal with general principles that concern one's own constituents. I want to deal with a narrow planning subject--the preservation of the environment in north-west London and in suburbia throughout the country.

I regret the fact that the Gracious Speech contains no proposals to prevent the excessive building in suburbia that is taking place now. There was a meeting recently of north-west London Conservative Members of Parliament. I did not call that meeting, but I was asked to go to it. I realised then that my concern is shared by many other Members of Parliament with suburban constituencies.

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There are between 70 and 80 constituencies outside the inner cities and towns that were developed in the 1930s, the 1950s and the 1960s. In the 1930s, those suburbs were the precursors of Thatcherism. Under the Conservative Government of the 1930s there was considerable economic expansion. The rising living standards that followed the economic expansion of the 1930s led to houses being built outside the inner cities and towns, in the then green belt that we now call suburbia. Germany and the United Kingdom advanced more economically in the 1930s than any of the other major countries of the world.

Suburbs also grew up in the 1950s but the great change came in the 1960s. People went to live in suburbia because they knew that their houses would have good-sized gardens, where their children could play on grass. Playing fields were provided. The quality of life in suburbia was much higher than in the towns and cities from which they had come. In the 1930s, families could buy houses in suburbia relatively cheaply. Similarly, compared with the position now, houses in the 1950s and 1960s were relatively cheap. The attraction for people to move into suburbia was the quality of life--the green gardens, the playing fields and the good schools.

Before I am accused of becoming a collectivist, or it is said that I may be intending to cross the Floor of the House, may I make it perfectly clear that I am a free-marketeer Conservative, as I have always been. I am quite happy that there should be no planning laws. I should be prepared to get rid of the lot and see what happened. I object to planning laws that go against the interests of my constituents and those of other Members of Parliament. The job of a Member of Parliament is to look after his constituents and to ensure that the law does not act against their interests, as the planning laws certainly do in suburbia.

Mr. Hugh Dykes (Harrow, East) : I thank my right hon. Friend for giving way, and also for the work that we have jointly done in north-west London on this matter. Does he not agree that increasingly we have come to realise that the planning legislation is excessively weighted in favour of the developer and against the interests of local residents?

Sir Rhodes Boyson : I agree with my hon. Friend and I shall turn to that point in a few moments.

Mr. Favell : Does my right hon. Friend also agree that the planning legislation is heavily weighted in favour of those who live in privileged circumstances in the open country and against those my right hon. Friend represents in suburbia and those I represent in my own constituency? They say that every available piece of green land should be built on before their view is obscured.

Sir Rhodes Boyson : I promise not to give way again, Mr. Speaker. If I am successful in the ballot for private Members' Bills, I know that I shall have my hon. Friend's support. He will certainly be involved at that stage.

So-called enlightened views--liberal views, in American political terms-- have favoured the green belt. The green belt is sacred in some quarters and the inner cities are attractive in others, but nobody is concerned about the 10 million people, of all political opinions, at all

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levels of society, who live in suburbia. Houses are being pulled down and playing fields are being built over. That good environment is being destroyed.

I wondered whether this was my personal opinion, but then I found that my hon. Friend the Member for Harrow, East (Mr. Dykes) is of the same opinion. We are not on the same side of the party, which demonstrates our breadth of vision. Only two weeks ago the Institute of Economic Affairs, which cannot be attacked for its Left-wing views, published a paper "No Room! No Room!". It was written by Alan Evans, professor of environmental economics at Reading university. He said :

"Accessible open space, the space where most people live, primarily garden space, is developed and built over in order to preserve inaccessible open space, land in rural areas which few can visit because the land so preserved is almost invariably private. This environmental swap--the maintenance of the rural environment at the expense of the urban environment--is mostly unrecognised. But is especially ironic when the economic pressure for re-development to higher densities affects urban conservation areas, so that, in effect, an urban conservation area is destroyed (because one cannot stand in the way of progress') in order to preserve the rural environment (where, apparently, one can).

Moreover, this reduction in the quality of the urban environment affects all the inhabitants of the urban area. So although owner-occupiers may make capital gains from the increase in the value of their housing, they are made worse off through the reduction in the quality of their immediate physical environment. The only unequivocal gainers are those, not unknown amongst the aristocracy of England, who live in a preserved rural area and own property in urban areas."

I quote that so that the Opposition know that this is also a cross-party speech.

Since 1960, tens of thousands of good homes have been knocked down in suburbia. Some were built after the second world war, when the nation invested in houses with gardens where children could be brought up easily. They are being replaced by blocks of small flats. Houses with gardens are then overlooked by flats, the residents flee elsewhere and whole areas are destroyed. We could have a new inner city in the destruction of what was once a green environment. The green belt I want is gardens and playing fields in surburban areas, which should be preserved to enable all in those areas to enjoy a good quality of life.

I want to suggest a change in planning legislation for the next Queen's Speech--I am sorry that it was not in the Queen's Speech this year. First, no house should be knocked down without planning permission. At present, houses are knocked down and something else is allowed to be built in their place because the council does not want the site to be left empty. Secondly, it should be possible for the householders of the area to appeal against planning permission granted by the council. At present a developer can appeal if planning permission is refused, but if planning permission is granted by the council--whether because of the rateable value of the proposed development or because of vindictiveness against the people of the area whose environment is being destroyed--there can be no appeal. That goes against natural justice. The man who is making a quick buck can appeal, but the local people whose lifestyle will be destroyed have no appeal.

Thirdly, planning permission should be applied for only by applicants who own the land concerned. When I was first elected, somebody applied for planning permission to knock down 700 houses in my constituency. There was panic in the area. The old widow, for example, who had lived in the area since the 1930s was worried. People may

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say that she should have sold her house and left the area, but it was her quality of life that was being affected and her family, including her grandchildren, could not stay twice a year with her. Those visits are the life boats of her life. Man does not live by bread alone, and those visits kept her going. But many people sold their homes in panic. I may be a Tory romantic, but I am in good company in my views on this issue.

Fourthly, I wish to comment on the calling in of planning applications. I realise the difficulty of the decisions that have to be made by the Department on which of the major applications to call in. In the past three years, three major planning applications in my constituency have been called in and the Minister has agreed in each case that the green belt of playing fields and green areas should not be destroyed. The important point was that those applications were called in and the matter was referred to the Department. There is no clear line on which to make those decisions. Although it is easy for hon. Members to decide what is of national importance in their own constituencies, the Department deals with many applications. I have great respect for my right hon. Friend the Secretary of State for the Environment. I know how difficult it must be to make those decisions and it would help him to have a system for deciding which applications should be called in. I should no longer need to write letters about planning applications.

I shall give one example from my constituency. A big superstore was to be built which would have brought traffic on a road to a stop. Everyone in the area was opposed to it, but the council gave permission. The application was called in by the Department. An inquiry was held and the inspector, who was wise and good, took evidence and advised Ministers, who were also wise and good, saying that the development should not be built. However, three years later the same firm put in an application to build a bigger superstore in the same place. That application was not called in.

How was the application of national importance then but not now? I realise that there may have been differences between the two applications, but there must be a better system for calling in. Residents in my constituency will consider it to be against natural justice that one planning application was turned down by the Department whereas a larger development on the same site is allowed. We may have to ask for a judicial review of that case.

The hon. Member for Burnley (Mr. Pike)--the hon. Gentleman represents an area that I know well--said that he believed in local government. So do I. I do not like power to be centralised. A centralised state is almost as bad as a Socialist state. There is much wisdom outside Government--[ Hon. Members :-- "Hear, hear."]--which is why we have privatised several industries. I cannot let the Opposition cheer without explaining myself, or I shall be deselected. It is important that there should be a balance of power between central Government and local councils ; it is part of the freedom of our society. If one section is in total charge, freedom will die. We should have smaller councils. I opposed the reorganisation of local government in 1964, which was a disaster. Big tower blocks were built, big comprehensive schools were set up and size was everything. That policy has proved to be a disaster. The creation of Brent was typical. It was opposed by Willesden and Wembley, yet it was pushed through. The Boundary Commission should look again at the disaster area of Brent for the sake of both

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sides of the borough. That would have the backing of other hon. Members in the area. It should be split into areas where people know their councillors. They should vote not for a particular party, but for the person who will do the best job for them. As Lord Woolton said, local government should be government and should be local. The big local authority areas have brought about full-time local politicians, the politicisation of local government and other developments that are deplored by hon. Members from all parties. If we continue to allow the green gardens and playing fields of suburbia to be destroyed, I foresee a future in which millions of acres of the green belt are preserved for the privileged and for American, European and even Asiatic tourists, whereas the residents of what was once green suburbia will have to drive out into the countryside at weekends along traffic-jammed roads to see what shrubs and trees look like and for their children to play on grass. We shall no longer have horticultural societies--we shall have window-box societies. Window-box prizes are already being given in my area. Present planners will then be attacked, just as we attack those who allowed the building of the tower blocks. That was considered to be enlightened at the time, but everyone now asks why it was allowed. We have done so much damage to suburbia that people there are already appalled. People will say in the future, as they say now, "Why was it allowed?" Everybody from the working class and middle class upwards moved to suburbia, to the green belt, so that they could have gardens and playing fields for their children. To see all that destroyed now will be as disastrous as the tower blocks that have been built.

I am making a cross-party not a political speech. To return to what I said at the beginning, I am a free marketeeer. I say that to clarify the position for any Opposition Member who might temporarily agree with me and to ensure my reselection at the right time. I would prefer a free market that is allowed to sort itself out. Some of the best streets in London--or anywhere--with their big houses were built in a free market, as indeed were the good working-class houses in the north in, for example, Burnley and Haslingden. I would prefer such a free market society. However, if we are to have planning, let us be sure about what we are doing. We should not preserve the green belt areas only to destroy the areas of the little green belts of gardens where tens of thousands, if not millions, of our people live, because if we do that we will destroy the environment for the children.

Mr. Speaker : I remind the House that until 9 o'clock we are in the 10-minute limit period.

7 pm

Mr. Allen McKay (Barnsley, West and Penistone) : I am pleased that you have reminded me of the 10-minute limit, Mr. Speaker. It is good to follow the right hon. Member for Brent, North (Sir R. Boyson) because we have clashed on many occasions in Committee and have agreed to disagree. However, at least I can say that he has always explained why he has disagreed with me--and that is refreshing. One thing that the right hon. Gentleman and I do agree on is that local government should remain local. I agree that our problems with local government began in 1964 because if we had not had the 1964 reorganisation we

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would not have had our problems in local government. Unfortunately, this Government's policies will destroy local government. It was a sad reflection of that fact that when I was speaking to local councillors this week they questioned whether it was worth being a councillor any more. It is serious when people who have spent a life time in local government question doing so any longer. However, they are right to view local government with trepidation when they read of the legislation in the Queen's Speech. It looks as if central Government is attacking not only the finances but the workings of local government. That attitude will create many problems at a local level.

The Queen's Speech states :

"A Bill will be brought forward to reform the law on local government capital and housing finance, on home improvement grants". In his Budget the Chancellor of the Exchequer decided to alter the system of rebates or grants for renovating houses. In my area and in many of the areas represented by my hon. Friends there are many pre-reinforced concrete houses ; many previously belonging to the National Coal Board, or British Coal as it now is, have been passed over to the local authorities and some belong to the local authorities themselves. Altering the system of grants alters the system under which a person can buy his house from the local authority if that is what he wants to do because he may be buying a house that he cannot put on the open market. It may also alter the system whereby a person can get an improvement grant if the house belongs to British Coal and pay for the improvements in that way--

Mr. Alan Meale (Mansfield) : Does my hon. Friend agree that it is hypocritical of the Government to proceed with the privatisation of the energy supply industry at a time when Ministers are giving assurances that former NCB houses will not be up for tender or auction without first being offered to local authorities or proper housing associations? Is my hon. Friend aware that 168 houses in Nottinghamshire have been put up for tender without going through that process, despite the assurances that were given?

Mr. McKay : It is regrettable, but my hon. Friend is right. I thought that there was an understanding on a formula to be adopted before reaching the final stage of putting the houses on the open market. If British Coal has decided to go another way, it is regrettable. I have had similar instances in my constituency and know of the problems of the tenants of such houses.

I turn now to homelessness. It will be very regrettable if we change the definition of homelessness to rooflessness. There are rumours about the involvement of private institutions. It will be regrettable if a person who is already down and homeless is subjected to that. I hope that the Government will not go that way. I refer now to an issue that has already been referred to today--nurses' pay and the National Health Service. Whoever advised the Secretary of State for Health to give a wage increase at the same time as undertaking a regrading exercise should be sacked. If the Secretary of State knew about that and went along with it, it is time that he looked about as well. It is fundamental to any industrial relations policy that one should never give a wage increase at the same time as undertaking a reorganisation or regrading. The regrading should be carried out either

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before the increase is given or about three years later. It is known to be a disaster if both are given together, but that is what has happened. Somebody must have worked really hard to be able to put £2 billion forward as a wage increase for nurses only to have them then go on strike. The Secretary of State should look carefully at what has happened.

I should now like to ask a number of pertinent questions about the privatisation of electricity. We know that the electricity industry will be organised into three blocks : big G, little G or whatever, and the redistribution board. It is a fact that out of our five advanced gas-cooled reactors three are not working. Millions of pounds of taxpayers' money is being poured into trying to get those stations working before privatisation. The Secretary of State for Energy is always reminding us of the fact that it is taxpayers' money.

The Magnox power stations will be taken out of use in between five and 10 years time--10 years at the most. Therefore, we have 10 Magnox power stations that will be out of use within 10 years, three AGRs that are not working, two pressurised water reactors that are working and four PWRs are required at a cost of £6 billion. No one will buy shares in an industry that will have to fork out £6 billion for four power stations, no one will buy shares in an industry that has three AGRs that will need to be written off and no one will buy shares in an industry that will have to pick up a £3 billion bill for getting rid of nuclear waste. Either the Government can ringfence the nuclear industry and take the cost of nuclear generation out of electricity charges and pay for it themselves--if they do that the taxpayers will be paying for it--or the cost will be borne by electricity consumers. The Government should tell us exactly what they intend doing and tell the future shareholders what will be required of them.

It is wrong for the Government to privatise the water industry. We want to know about the land that belongs to the water authorities now. We should not forget that the water authorities belonged to local government at one time and that local government has never been recompensed for the water authorities being nationalised. We should certainly look for recompense now that the water authorities are to be privatised.

What will happen to all the land? Will it be dealt with differently? Will there be protection for the people who use the land for recreational purposes? Will the waterways, which are also used for recreation, be protected? Will we be able to use the pathways that cross the land just as we do now, without any charge? Are authorities to be brought into being which will not only increase the price of water but deny access to their land?

The Government are bringing green issues into water privatisation simply to camouflage the cost of the privatisation because they know that thousands of miles of sewage pipes and thousands of miles of lead water pipes need replacing. If those replacements are to be made under private enterprise and the enterprise has to make a profit, prices will rise.

What will happen to the people who cannot afford to pay for water? Will their water supply be turned off? Public health is another important local government function. The Government are trying to destroy local government, but here we shall have a serious public health issue.

In Committee, we shall have to consider a water rebate system along the lines of the rate rebate system, as that is

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the only way in which people will be able to afford the installation of meters, the rental on meters and the increased price of water.

7.10 pm

Mr. Michael Grylls (Surrey, North-West) : I shall not take up what the hon. Member for Barnsley, West and Penistone (Mr. McKay) said about privatisation because of the lack of time, not out of any discourtesy.

One aspect of the Gracious Speech will have raised a great deal of interest --it is certainly important. I refer to the proposed changes to legislation which affect mergers in industry and commerce. The issue has come to the fore recently. There has been a spate of merger mania during the past few years. The matter has also come to prominence as a result of the advance towards the single market in 1992.

It is important that certain ground rules should be laid down before mergers so that industry knows where it is. There is a need in a free market system for the threat of mergers to keep businesses on their toes. That is a useful weapon, but it is generally accepted in almost every industrialised country that it is necessary to have some regulation of mergers. We were talking about sport earlier. It is crucial to have referees on the playing field of mergers. It is important to examine history to see whether there are any lessons to be learnt. If we look back over the past 20 or 30 years and compare British industry with that in more successful economies such as West Germany and Japan, we find that we have had a much freer system. We have allowed companies to grow by acquisition rather than by organic methods. That has not been allowed in West Germany and Japan, perhaps because they learned from their special experiences of 40 years ago.

As British industry becomes stronger and as we prepare for entry into the full market, we must ensure that our system is on all fours with the others. Many people will say that we have a much more developed capital market in the City of London. That is true, and it is an asset, but it presents threats to our industry as it is much easier to raise money for very large takeovers. We must try to encourage our industry to grow more internally.

In his Budget this year, my right hon. Friend the Chancellor helped the trend that I advocated. He put capital gains tax and the top rate of income tax at the same level--40 per cent. At a stroke, he removed one of the reasons why many entrepreneurs have gone public. They have floated their companies on the market so that they can get money out at the lower rate of capital gains tax, rather than at the higher rate of income tax, which used to run at 83 or 98 per cent. There was previously a great temptation to sell a business to maximise success at the lower rate of capital gains tax. I hope that, now the difference has been removed, more entrepreneurs will stick with their businesses. I hope that, if they wish to reward themselves --they are fully entitled to--they will take money out as income.

We must consider what is happening on the continent. Germany, Holland and, to some extent, Italy have much more difficult markets in which to take over companies. I believe in the free exchange of capital in Europe and the world. It is crucial. Britain has benefited from acquisitions overseas. The Government's responsibility is to maintain competition policy within the United Kingdom.

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My right hon. Friend Lord Young made that clear in a speech on 27 October, which is published as an attractive and interesting blue book. He issued a warning which we should heed. Talking about the efficiencies which are often claimed to come from large mergers-- people talk about the international competitiveness which results from mergers--he said :

"but I have to say that all too often in the past the claims have not been borne out by results, and the track record of post-merger performance does not justify our simply taking such claims on trust."

We must remember those words as we approach 1992.

We must maintain the spur of the threat of takeover, but we must also ensure that there is maximum competition in each market sector. Many of my hon. Friends may say that that is all very well, but that we have to make a judgment. There must indeed be a judgment. I am perhaps one of the least interventionist people by nature, but judgments are inevitable in the formation of competition policy. We had to make a judgment in 1986 in regard to the attempted takeover by GEC of Plessey--a matter which has now arisen a second time. We had to judge whether the merger would reduce competition in, for example, the supply of defence equipment to the Ministry of Defence. It was decided that that would happen, so the merger was stopped.

Policy should maximise competition in each sector of the market. If a merger does not damage that competition, I would be happy for it to go ahead. The other wing of competition policy--the national interest--arises only rarely, as with BP. If we maintain competition in each market sector and encourage companies to grow organically rather than by acquisition, we shall have a more effective industry which is better able to compete in the EC and in the rest of the world.

7.17 pm

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