Mr. D. N. Campbell-Savours (Workington) : I beg to ask leave to move the Adjournment of the House, under Standing Order No. 20 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the handling of the Lockerbie incident by the Secretary of State for Transport."
The matter is important, as the country and Parliament want to know the truth about what has happened. On 18 November last year, a warning was issued by the United States Federal Aviation Administration, alerting the authorities to the activities of terrorists who were likely to use a new type of bomb which could be concealed in a radio cassette player. That information was also raised at the Wiesbaden conference, following upon which the British Airports Authority was also alerted.
On 19 December, two days before the Lockerbie disaster, the Department of Transport received additional vital information concerning details of the radio cassette player, which included colour photographs, information about the wiring of the bomb, X-ray identification characteristics, and details of the arrangements for packing Semtex explosives within the cassette player. That information was not relayed to the airlines until after the disaster took place.
The Secretary of State, in a desperate attempt to hide his blunder, now says that the information was unimportant. He indicated his lack of concern at the time by posting this vital new information to the appropriate authorities by second-class mail, far too late, while adding the utterly irresponsible suggestion that suspicious packages should be placed in the holds of aircraft. My hon. Friend the shadow Secretary of State for Transport has said that the Secretary of State for Transport could have given a full explanation on 10 January, yet he has singularly failed to do so. Indeed, he deliberately tried to block further questions in Parliament by telling an hon. Friend on 10 January :
"I am not prepared to go further than my earlier remarks about warnings being subject to the assessment process."--[ Official Report, 10 January 1989, Vol. 144, c. 708.]
This was a blatant attempt to hide the truth from Parliament by refusing to be drawn on the vital issue of his Department's failure to communicate. [ Hon. Members :-- "Order."] The public want to know why he refused in January to comment on details of the radio ‡cassette bomb, when the German authorities were perfectly prepared to comment on details of the same device in Wiesbaden at the beginning of November. Hiding behind the police inquiry is no answer.
This matter is urgent because the Secretary of State insists on refusing to comment on it in the Chamber, while at the same time he makes statements to Lobby correspondents, who, last Wednesday, were told by him that the police were allegedly doing a brilliant job and that the whereabouts of the terrorists who had planted the Lockerbie bomb were known. His denial of this allegation, which he leaked with his ambiguous and misleading statement, "The only person I saw on the relevant dates were three journalists on the record," is quite outrageous.
Column 732The hon. Member for Workington (Mr. Campbell -Savours) asks leave to move the Adjournment of the House under Standing Order 20 for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"The handling of the Lockerbie incident by the Secretary of State for Transport."
As the House knows, under Standing Order 20, I have to take into account the requirements of the order and to announce my decision without giving reasons to the House. I have listened with care to what the hon. Member has said, but, as he knows, my sole duty in considering his application is to decide whether it should be given priority over the business already set down for this evening or for tomorrow. I regret that the matter that he has raised does not meet the requirements of the Standing Order, and I therefore cannot submit his application to the House.
Mr. John Prescott (Kingston upon Hull, East) : On a point of order, Mr. Speaker. Can you say whether the Government have indicated whether they are prepared to make a statement, before the Easter recess, on the early bomb warnings prior to the Lockerbie tragedy, in view of the statement, made today by the Daily Record editor, that "Mr. Channon", despite his denial, was the source of information that claimed that the arrest of the terrorists responsible was imminent? Will you make it clear, Mr. Speaker, that this House will not tolerate the denial of a debate on the importance of airport security before the Easter recess, as such denial will only feed the view that a cover-up is now being conducted by the Government?
Mr. Richard Holt (Langbaurgh) : On a point of order, Mr. Speaker. During the course of the diatribe by the hon. Member for Workington (Mr. Campbell-Savours), he accused my right hon. Friend of telling a lie to the House of Commons. He may have wrapped it up in parliamentary language of a sort, but that is what he said, and it should be withdrawn. You heard him, Mr. Speaker.
Dame Elaine Kellett-Bowman (Lancaster) : On a point of order, Mr. Speaker. Unlike most Opposition Members or those on this side of the House, my husband and I were actually present at Heathrow that evening, and we know very well that security was extremely tight. I very much hope that if there is a statement I shall have an opportunity
Column 733wonder what on earth is happening when the House of Commons cannot get statements or answers on matters of clear and immediate public interest. I know that it is not customary procedure to refer to the fact that private notice questions have been asked or have not been asked, but if the Government are refusing to do that which they constitutionally should and that which the public is entitled to expect--to come to the House and explain themselves--we as a House look to you and the private notice question procedure to ensure that they do.
Mr. Speaker : Yes, but the right hon. Gentleman knows perfectly well that, in considering these difficult decisions, I must take into account the requirements of the Standing Order. It is not for the Chair to get involved in party political controversy. There are other methods of debating this matter.
Mr. Tony Favell (Stockport) : Further to that point of order, Mr. Speaker. What is most important is that the perpetrators of this appalling crime are brought to justice. This sort of interference from Opposition Members, who are nakedly trying to advance their ambition and chances of becoming deputy leader of the Labour party, does no good whatever.
Mr. Matthew Taylor (Truro) : Further to that point of order, Mr. Speaker. Surely it is unacceptable for the House to learn through the drip, drip, drip of media leaks and briefings what happened in this serious incident. Is there no way that you can bring the Secretary of State to the House to answer to the public, as is his duty?
Mr. Alan Williams : Further to that point of order, Mr. Speaker. You made a perfectly legitimate point when you said that you must stand aside from the party wrangling within the House. No one would challenge that. However, if you look at the quotations over the weekend in relation to Lockerbie and what has happened in the past few days, you will see that Tory Members as well as Labour Members have been asking for the statement that we have been denied, or for a private notice question on the subject. It is not a matter of party wrangling, but of general national concern on both sides.
Column 734there is a certain amount of arguing with the referee, which is not a very attractive situation. Can some of us on this side of the House express our gratitude to you in preserving the dignity of the House from the charm school of the hon. Member for Kingston upon Hull, East (Mr. Prescott) and his carrion ratbag as they seek to gorge themselves yet further on the blood of Lockerbie? This was an American aircraft exchanging cargo with another American aircraft. It was an American responsibility which tragically fell out of the skies in Britain. We want to seek the people who committed this atrocity and bring them to justice. I am sure that that is the overwhelming desire of my right hon. Friend. We are disgusted at the disgraceful behaviour of the Opposition in seeking to dredge into the entrails
Mr. Dobson : Mr. Speaker, on several occasions you have rightly said that you prefer important statements by Ministers to be made in this House rather than in other places, whether the Parliamentary Press Gallery or at unattributable briefings. Throughout the whole history of the sad business of Lockerbie, my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has asked the Secretary of State time and again to come to the House to make a statement. We have been told in various ways, "No that would be inappropriate," "There is nothing to say," "It would be a threat to the security arrangements," "It would upset our relations with the West German intelligence service," and so on. Then, later the same day, the Secretary of State, who will not come to the House, rushes to the newspapers and tells them everything that we have been asking him to come to speak about in the House.
Under the rules of procedure, if a Minister will not make a statement, a way of bringing him to the House is to get him to answer a private notice question, provided that you will authorise it, Mr. Speaker. I shall not discuss what private notice questions have been sought or refused, but it would make Labour Members happier if, when they were refused, my hon. Friend was the first to know. On two recent occasions the press have rung to tell him, from whatever source I know not, that his private notice question application has been refused.
Several Hon. Members rose--
Mr. Speaker : Order. I am not having any more of this. We cannot have a debate on the matter now, and certainly not on private notice questions. I say to the House that I have an extremely difficult decision to make every day as to whether to grant private notice questions. In doing so, I must take many factors into account. As I have already said to the House, I must give no reasons for my decision but must simply stick to the criteria set down in the Standing Order. I invite the House to study those criteria ; then it can make its judgment. Whether there is to be a statement or a debate is not a matter for the Chair.
Mr. Dafydd Wigley (Caernarfon) : On a different point of order, Mr. Speaker. When the business of the House was announced on Thursday last week no reference was made to the fact that we would be asked to debate later tonight the Water Bill money resolution. I understand that money resolutions are normally appended to other substantive matters that come before the House. No statement was made on Friday and no notification has been given to the parties at any stage since last Thursday that this matter would be forthcoming.
I ask for your guidance, Mr. Speaker, as to what defence we have when the first that we hear of substantive matters of significance to the Water Bill is when we pick up our Order Papers. Is that in order?
Mr. Wigley : I am sorry, Mr. Speaker, but I have a further point of order. No doubt the money resolution is a matter that arises from amendments to the Bill, but the Bill is being debated tomorrow and on Wednesday and there will be time then to debate the substance of the money resolution. When we went away last week we were not under the impression-- nor were we given any indication or guidance--that the Water Bill would be considered tonight, whether on this amendment or on anything else. We are in an impossible situation, because all our papers are lined up to be here tomorrow and not today.
Mr. Speaker : That is in order, and it has frequently been done. I believe that those are matters that the hon. Gentleman must argue tonight ; if he objects, he must vote against the money resolution.
Order read for resuming adjourned debate on Question [14 March].
Motion made, and the Question proposed,
That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance ; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide--
(a) for zero-rating or exempting any supply ;
(b) for refunding any amount of tax, otherwise than in a case where the amount has been paid by reason of a mistake ;
(c) for varying the rate of that tax otherwise than in relation to all supplies and importations ; or
(d) for relief other than relief applying to goods of whatever description or services of whatever description-- [Mr. Lawson.] Question again proposed.
Budget Resolutions and Economic Situation
[Relevant documents : European Community document No. 8887/88, Annual Economic Report 1988-89 and the unnumbered document, "Annual Economic Report 1988-89" (final version as adopted by the Council).]
The Secretary of State for Employment (Mr. Norman Fowler) : One of the central achievements of the Budget has been to tackle some of the outstanding barriers to employment that still remain in this country. Employment is already at an all-time record with more people in employment now--more than 26 million--than at any stage in our history. Unemployment has fallen at a record rate since the 1987 election and has fallen by more than 1 million since then. However, my right hon. Friend's Budget recognises the potential for further improvement. It sets out ways that new employment can be created and, above all, it sets out those proposals at a time when the labour market is changing rapidly.
Perhaps the Budget measure that gives some of us on this side of the House most cause for satisfaction is the abolition of the pensioners' earnings rule, because that removes a major disincentive to people who want--it is their choice--to work beyond the statutory retirement age. It means that men between 65 and 69 and women between 60 and 64 will no longer be faced with the loss of pension income if they remain in employment. We previously raised the earnings limit, but that still meant that anyone earning more than £75 a week had the disincentive of a reduced pension if they remained in employment. The abolition of the earnings rule means that there is substantially more choice for men and women in their sixties. If they choose to work on--whether full-time or part-time--it will not affect their pension entitlement ; while, of course, if the man or woman does not draw his or her pension at all, he or she builds up an increased pension. In other words, the Budget achieves an increase in flexibility and choice for the older worker. That recognises the changing nature of the British labour market.
Column 737I am probably the first Employment Secretary in 20 years to come to a Budget debate to say that, now, our priority is to increase the supply of labour to meet the rising demand that we will face in the years ahead. In the next seven to eight years we will face, for the first time, a relative shortage of new school leavers coming to the labour market--there will be a drop of a quarter by the mid-1990s. That is in stark contrast to the position in the 1970s and most of the 1980s, when our central concern was to find jobs for young people. That position is now changing radically, and for the better. In the past two years, unemployment among young people has fallen substantially. The United Kingdom now has a lower unemployment rate for the under-25s than any other major European Community country, with the exception of Germany. Today, the prospects for well-qualified young people have never been better, but we must recognise that the supply of new school leavers will not be sufficient to keep up with demand in the manufacturing and service industries or in the public services, such as the Health Service. One of the aims of policy, therefore, must be to look at new sources of recruitment. One course is to attract back married women, and a range of employers are currently pursuing that policy. A less obvious but vital course is the recruitment and retainment of older workers.
Mr. Paddy Ashdown (Yeovil) : I am sure that the right hon. Gentleman is aware of the woefully low level of over-16s who go on to further education in Britain. I am sure that the right hon. Gentleman agrees that there is a need to raise that percentage towards the levels enjoyed in Germany and Japan--60 per cent. and 90 per cent. respectively. Will he give an undertaking to the House that no deficiency in the labour market will stop the Government seeking to raise the numbers who go on to further education and to better qualifications?
Mr. Fowler : Yes, Sir. I will give such a commitment, as it is entirely correct. We want people aged between 16 and 18 to be as well educated and as well trained as possible. The fact that there will be fewer young people coming on to the labour market underlines the importance of that, but it is a question not just of education, but of training. The whole aim and purpose of policy must be to improve the professional standards of all people not only young people. The abolition of the earnings rule takes a giant step towards more choice for older workers. As a nation, we have not sufficiently valued the contribution that older workers can make. At a time when people are living longer, we have become preoccupied with earlier and earlier retirement. I believe that debate should be about maximum flexibility and about maximum choice for people.
Mr. Ron Leighton (Newham, North-East) : The Secretary of State mentioned the need to attract married women back into the labour market. Can he tell us why the Budget did not abolish the tax on women using workplace nurseries? Was that not a mistake?
Mr. Fowler : I do not think so. We are witnessing the unprecedented development of the exact measures to attract women back to the labour market. A whole range of employers are undertaking developments that are not
Column 738only right--of course, they get tax relief on them--but in their own interests. I can hardly think of a time when there has been more development in such measures.
Mr. Christopher Hawkins (High Peak) : On the last available figures, GDP per head has been rising at about 2.6 per cent. per annum. The Treasury is forecasting that the economy will grow in the coming year by only about 2.5 per cent. The labour force is rising. If output rises by 2.5 per cent. and productivity goes up by more than 2.5 per cent., it is impossible for unemployment to go on falling, even without increasing the labour force as the Government are suggesting. Would my right hon. Friend please comment on that?
The second major change in the Budget concerns national insurance. That proposal will bring gains to nearly 19 million workers at an annual cost of about £2.8 billion. Every employee with a weekly income of £115 or more will gain £3 a week. Everyone with a weekly income of more than £75 will gain between £1.50 and £3 a week. The change will particularly benefit those on half average earnings, where the national insurance charge is of crucial importance. Just as important is the fundamental change which my right hon. Friend the Chancellor of the Exchequer has introduced to the system of national insurance. In 1985, the Government introduced lower rate contributions for the lower-paid. That was a welcome step, but a major problem remained. When an individual crossed the lower earnings limit of national insurance, he had to pay 5 per cent. on all his earnings. If he earned £1 more than the lower earnings limit of £43, he lost £2.15 through national insurance. Not surprisingly, many people were deterred by that cliff-edge effect from crossing the lower earnings limit. Among other things, they were excluded from a range of national insurance benefits.
The changes introduced by my right hon. Friend the Chancellor means that those earning below £43 a week will continue to pay nothing. Those with earnings above the lower earnings limit will pay 2 per cent. on the first £43--that is, 86p--and 9 per cent. on the rest, up to the upper earnings limit of £325. The 86p earns entitlement--I must stress this- -to contributory benefits including the basic retirement pension.
In summary, those changes will remove a disincentive for employees to increase the hours that they work. They will also generally increase incentives for people on low incomes. They should contribute to employment where growth has already been so remarkable. The 1988 labour force survey, published last week, shows that there has been a real and dramatic improvement in employment in this country. It shows that there are now 1 million more people in employment than in 1979. It shows that, in the year to September 1988, total employment increased by more than 730,000 and that 85 per cent. of those new jobs were full-time posts. It also shows that self-employment has increased by 1.1 million since 1979 and by 125, 000 in the year to September 1988. It shows that, over the past two years, we have had the fastest employment growth since 1945.
Column 739Wales, the west midlands, the north-west, the north, Yorkshire and Humberside, Scotland and Northern Ireland, there are still 800,000 fewer jobs than in 1979 despite this economic miracle? Virtually all the jobs have been created south of a line between the Severn and the Wash, and most of them are part-time.
Mr. Fowler : That is not true of the growth in employment or of the fall in the rate of unemployment. The rate of unemployment has come down fastest in many of the areas to which the hon. Gentleman referred including the west midlands, Wales, the north and north-west.
The labour force survey shows that there is absolutely no truth in the suggestion that unemployment has not been falling at the rate shown by the monthly unemployment count. On the contrary, it shows that, in the 12 months to June 1988, unemployment fell by 500,000 on the international definition of unemployment used in the labour force survey and on the figures recorded by the unemployment count. Furthermore, the survey confirms that unemployment fell because of the record number of new jobs created. In the 12 months to June 1988, employment increased by 870,000, more than matching the fall of 540, 000 in the number unemployed. In other words, more than enough jobs were created to bring about a fall in unemployment and to provide employment for a 300,000 increase in the labour force. Those are the facts about Britain's employment position.
Only the hon. Member for Oldham, West (Mr. Meacher) seeks to contradict that improvement. He is on record as saying that the labour force survey would show unemployment at 2.6 million in the spring of 1988. He is on record as saying that both in the House and outside it as well. The hon. Gentleman is wrong to the tune of 200, 000. Last Thursday, the hon. Gentleman made another prediction : "Unemployment has fallen as far as it can go with current Government policies."
With the hon. Gentleman's record, that prediction must be the best news that the unemployed have had for a very long time.
Mr. Marlow : Would it be true to say that one of the reasons that unemployment has dropped so dramatically over the last couple of years or so is the large amount of inward investment we have had into this country-- particularly from Japan and countries like that? Would my right hon. Friend confirm that one thing that would put off the Japanese and other people wishing to invest in our productive and successful economy would be the institution by him or somebody else of some airy-fairy concept like a Ministry of Innovation or, alternatively, a system of picking winners, whereby my right hon. Friend would take more tax from some companies so that he could expend his largesse on various political operations that he thought might be beneficial?
Mr. Fowler : I am sure that my hon. Friend is entirely right. We do not even need to consider the hypothetical situation. We can see what happened in respect of inward investment at Dundee, where the threat of industrial action, and the rest, deterred valuable inward investment. Worst of all, the hon. Member for Oldham, West, who leads for the Opposition on employment, did not at any stage have the courage to condemn the action that was taken at Dundee. That is the condemnation of the Labour party.
Mr. Meacher : Is the Secretary of State really bragging about the fact that unemployment is still over 2 million and still twice as high as it was in 1979? Is he aware that the latest labour force survey figure shows also that, in the period following the end of March 1988, which is the half-year for which figures are available, jobs increased at only half the rate of the year before, showing that the jobs boom is clearly over and that unemployment is clearly bottoming out? Is the right hon. Gentleman aware also that vacancies have fallen by 39,000 net over the past year, which is a trend normally associated with rising unemployment? Is he satisfied that adult male unemployment is still twice as high as the European average?
Mr. Fowler : I am not bragging about the employment or unemployment situation. I am saying that the hon. Gentleman not only got his predictions wrong but self-evidently wrong, and that if he had any courage at all, he would get up and apologise to the House and to the country for his inaccurate statements about the fall of unemployment. The fact remains that unemployment has come down, but that the hon. Gentleman has sought month after month to fiddle the unemployment figures upwards. His claims have now been shown to be entirely bogus, which comes as no surprise to those of us who have known the hon. Gentleman over the years.
Dame Elaine Kellett-Bowman (Leicester) : Will my right hon. Friend commiserate with the 1,000 workers in Liverpool who have lost their jobs because of the Luddite tactics of the antiquated unions there?
Let me take up what the hon. Member for Oldham, West has just said about vacancies. The significant point about unfilled vacancies is how the number has kept up. On Thursday, the hon. Gentleman issued a press release in which he talked about the alarming fall in vacancies. He said that vacancies had fallen by 1,000 in jobcentres over the past month, and if he wants to deny that we have it on record. There are now nearly 230,000 vacancies in jobcentres alone, which means that in the economy generally there are probably between 600,000 and 700,000.
Mr. Richard Holt (Langbaurgh) rose --
In such circumstances, it is entirely right for the Chancellor to remove barriers that stand in the way of those jobs being taken up, and to take away obstacles that prevent new jobs from being created. Mr. Holt rose --
My right hon. Friend has done that by ending the pensioners' earnings rule for men and women in their sixties. He has done it by reforming the national insurance system, which I should have thought would be welcomed by hon. Members on both sides of the House. He has also done it by increasing corporation--
Mr. Holt : I am sorry that my right hon. Friend does not wish to hear the good news from Teesside that I would like to give him. The latest newsletter from the Teesside chamber of commerce shows that 28 per cent. of firms anticipate taking on new labour in the next few months, and that the vacancies advertised in the newspapers in that location are running into pages and pages. Last Friday, there were five pages of vacancies.
One reason why the number of vacancies registered with the jobcentres is not as high as it was may be that jobcentres are no longer a source of labour. Jobs are being advertised in newspapers, as has been the case historically, and in Teesside they are booming.
Mr. Fowler : I am grateful to my hon. Friend, and I apologise for not having given way to him earlier. It was unforgivable of me not to allow him to give news of that kind. I should like, however, to make a few minutes' progress with my speech before giving way to any more hon. Members on either side of the House.
By increasing the corporation tax threshold for small companies, my right hon. Friend has reduced the corporation tax burden for 20,000 small companies. He has simplified the tax regime for small business men and raised the compulsory threshold for VAT. By any standards those are significant measures, but of course other barriers to employment exist.
At the same time as making those reforms, it is right for us to consider other measures to improve employment levels. As my right hon. Friend said in his Budget speech :
"The task of business and industry is to control their pay and other costs. The more successfully they do so, the less costly in terms of output and employment the necessary adjustment will be."--[ Official Report, 14 March 1989 ; Vol. 149, c. 245.]
As the House knows, we have been reviewing the closed shop, particularly the pre-entry closed shop. The effect of the closed shop is to limit employment opportunities and to reduce the supply of labour. At the same time, it limits the employer's freedom to decide whom to employ and whom not to employ, and the employee's freedom to decide whether or not to join a trade union in the first place. As part of the review, I commissioned a special survey of the extent of the closed shop, which shows that the number of jobs covered by the closed shop has fallen from a peak of 5 million in 1978 to just over 2.5 million today. Nevertheless, the survey found that one worker in 10 said that the most important reason for union membership was that
"it was a condition of having the job."
The survey also shows that 1.3 million jobs are the subject of a pre-entry closed shop. To get the job, one needs a union card. That is substantially more than previous estimates and, in effect means that there are still 1.3 million jobs which are closed to anyone who is not already a member of a trade union. We have already taken action against the post-entry closed shop whereby the employer may take on a non-unionist, so long as such a