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Mr. Tam Dalyell : On a point of order, Mr. Speaker.

Mr. Speaker : I will take it if it really is a point of order.

Mr. Dalyell : Most courteously the Prime Minister said earlier in relation to a question about the explanation given by the former Chancellor of the Exchequer that she would return to that subject. My point of order is, should Ministers, however powerful and however senior, say that they are going to deal with something in a speech and then not do so?

Mr. Speaker : Order. That is a point of argument, not a point of order.

The Prime Minister : We have dealt with the economy, for the success of which we have a great deal to thank my right hon. Friend the former Chancellor of the Exchequer.

If I might now get on with my own speech-- [Interruption.] The Government warmly welcome the changes that are taking place in eastern Europe as a great step for freedom and democracy. Every bit as remarkable as the changes are the speed and suddenness with which they have occurred. We very much hope that other eastern European countries will soon follow the lead of Hungary, Poland and now East Germany. May I add how strongly the Government deplore the violence used against peaceful demonstrators in Prague at the end of last week in which British journalists were also hurt. By all accounts, the situation was better last night--

Mr. Tom Clarke (Monklands, West) rose --

The Prime Minister : The Government's main tasks-- [Interruption.]

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Mr. Speaker : Order.

The Prime Minister : In consideration of other hon. Members who wish to speak, I should like to complete my own speech on this matter.

The Government see two main tasks in the period ahead. First, we must do everything possible to encourage and sustain genuine democracy throughout eastern Europe--

Mr. Tom Clarke rose --

Hon. Members : Sit down.

The Prime Minister : But in the euphoria of the moment, we must not underestimate the magnitude of the task. By genuine democracy, we mean not just the outward trappings, but the underlying substance, free elections in a multi-party system--

Mr. Tom Clarke rose --

Mr. Bernie Grant (Tottenham) rose --

Mr. Speaker : Order. I think that the whole House heard the Prime Minister say that she wanted to get on with her speech and that she was not going to give way at this point.

The Prime Minister : I do not think that any hon. Member has given way more than I have-- [Interruption.]

By genuine democracy, we mean free elections in a multi-party system, together with all the freedoms that were set out in the Helsinki final act. That will certainly not come about quickly. Indeed, in some east European countries to achieve genuine democracy and economic reform may well take years, so great are the changes required. Britain is already helping Poland and Hungary, but we are ready to do more as part of an international effort.

Our second task is to enable these great changes to take place in conditions of stability in Europe so that no country feels its security, its alliances or its borders threatened as a result of them. We should remember that these changes would not be happening were it not for President Gorbachev's courage and vision. All of us have a strong interest in seeing his reforms in the Soviet Union succeed.

These matters were discussed by the European Heads of Government at a successful meeting in Paris last Saturday evening at which this approach received wide support. We all welcomed changes in eastern Europe and agreed that the Community should continue to give them every possible help. The particular urgency of Poland's and Hungary's needs was recognised. The European Council in Strasbourg, in just over two weeks' time, will decide on the additional help that the Community can offer--

Mr. Bernie Grant rose --

Mr. Speaker : Order.

The Prime Minister : --covering not just financial help, but further food supplies and training. We shall also consider the possibility of extending to eastern Europe European Community programmes in areas such as technology and education. Britain's recent suggestion that we should consider the various options for bringing eastern Europe into closer association with the Community will also be studied and discussed further at Strasbourg.

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Mr. Bernie Grant : Will the Prime Minister give way?

The Prime Minister : No.

At the same time we agreed that NATO and the Warsaw pact remained the basis for defence. Their borders are not on the agenda and we shall continue to abide by the Helsinki final act. Without NATO and the European Community the great events in eastern Europe would surely not have happened.

The meeting in Paris was excellent and had a satisfactory outcome. The next step is a meeting of NATO Heads of Government on 4 December when President Bush will report on his meeting with President Gorbachev. Before that, I shall meet President Bush at Camp David later this week.

The Leader of the Opposition regards events in eastern Europe as yet another excuse to weaken our defences by getting rid of nuclear weapons, even though they are a fundamental part of NATO strategy. It is because of NATO, because we have kept our defences strong, because we deployed cruise and Pershing against the Soviet SS20s and because we convinced the Soviet Union that it could never succeed in intimidating or threatening the West that we are witnessing these great changes in eastern Europe.

Times of great change are times of great uncertainty, even danger. We must be prepared for any threat, however unexpected. Events have demonstrated conclusively that we are winning the battle of ideas. We must ensure that subsequently we do not lose the peace. Our nuclear deterrent and the collective security provided by NATO remain the cornerstone of our defence.

Our reaction to recent events will shape Europe and the wider world for decades ahead. Against the background of a sure defence, our programme set out in the Gracious Speech to enlarge opportunity and enhance the quality of life and well-being of our citizens is the right one for Britain and I commend it to the House.

Mr. Nigel Griffiths : On a point of order, Mr. Speaker. I wish to be guided by you. On 1 November, in response to a question from my hon. Friend the Member for Liverpool, Garston (Mr. Loyden), the Secretary of State for Trade and Industry, who was asked to comment on the suggestion that credit cards should be made available to 12-year-olds, replied :

"If they have sufficient credit, it would be possible,"--[ Official Report, 1 November 1989 ; Vol. 159, c. 312.]

Will you give the Prime Minister the opportunity to correct the record?

Mr. Speaker : The hon. Member could make that point if he were called to make a speech. That would be in order. It is not a point of order for me.

4.37 pm

Mr. Paddy Ashdown (Yeovil) : It is perhaps symbolic that, according to their usual tradition, Conservative Members are walking out at this juncture. The Gracious Speech will be seen as the moment when the Conservative party walked out and turned its back on the challenges now facing Britain.

By tradition I am required to congratulate the hon. Members for Eastbourne (Mr. Gow) and for Bury, South (Mr. Sumberg) on moving and seconding the Loyal Address. I do so warmly and happily. Their speeches amused us, particularly the first part of the speech of the hon. Member for Eastbourne, although the latter part was

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perhaps more political than we have come to expect. The hon. Member for Eastbourne is well known in the House both for his courtesy and for his plain and fair speaking. He might have lived up to that reputation better if, when he congratulated himself and his party on the sale of council houses, he had added that in 1973 the then Liberal council of Eastbourne was the first in the land to sell council houses. That was long before the Government came to power. Mr. Barry Field (Isle of Wight) rose --

Mrs. Edwina Currie (Derbyshire, South) rose --

Mr. Ashdown : The hon. Gentleman and hon. Lady will have a chance to make their own speeches.

Mrs. Currie rose --

Mr. Speaker : Order. The hon. Lady should be the first to know that if the right hon. Gentleman does not want to give way, she must resume her seat.

Mrs. Currie : On a point of order, Mr. Speaker.

Mr. Speaker : Order. I hope that the hon. Lady is not about to challenge what I have just said.

Mrs. Currie : On the contrary, Mr. Speaker. The matter concerns me. Is it in order that the leader of one of the Opposition parties should get his facts so wrong? The first council was Birmingham.

Mr. Speaker : Order. I cannot be the arbiter of facts.

Mr. Ashdown : I congratulate the hon. Lady on having finally managed to make her intervention before the television cameras are switched off.

The hon. Member for Eastbourne might have lived up to his splendid reputation if, when he congratulated himself on the Eastbourne village harbour project, he had added that the project was only resurrected by the Liberal council of Eastbourne against the opposition of the Conservatives on the council.

Mr. Barry Field rose--

Mr. Ashdown : The hon. Member for Eastbourne might also have added that the Liberal council supported him in his splendid work with Lord Tordoff in getting the Bill through the House.

The hon. Member for Bury, South spoilt his speech by a gratuitous, unnecessary attack on Sir Clement Freud. I am grateful to the hon. Member for Liverpool, Walton (Mr. Heffer) for putting the record straight. The hon. Member for Bury, South commented on the "part-time" attendance of Sir Clement Freud. [Interruption.] His comments certainly threw some doubt on Sir Clement Freud's attendance record. I checked to see who made the greater number of speeches last Session and found that Sir Clement Freud spoke 18 times and the hon. Gentleman six times only.

We all listened to the Prime Minister's speech with great interest. Her most remarkable statement was at the beginning when she said that "we" will never be in opposition. I remind her that this is a democracy. A little more humility and a greater understanding of her electoral mortality might lead to better government in Britain and rather less abuse of power, which has become the hallmark of this Government.

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Both the Leader of the Opposition and the Prime Minister were right to lay down as a criterion for judging the Gracious Speech the fact that this is the last Gracious Speech of the decade and maps out the programme for the first year of the next decade. It is right to look at it in those terms. What are the fruits of the decade that will always be known in politics as the Thatcher decade, and will they measure up to the requirements that face Britain in the 1990s? If that is the measure, any rational judgment of the speech must lead to one conclusion only : as a programme for the first year of the next decade it is peculiarly sad and visionless, often irrelevant, and at times downright eccentric. I do not say that in a spirit of negative opposition-- [Interruption.] As Tory Members know, this party has supported and commends many steps that the Government have taken. They have taken steps that needed to be taken and should not now be undone. We supported the Government on the democratisation of the trade union movement, on enterprise and on liberalising the markets. They were good steps. But we are measuring the speech not against what the Government have done in the past, but how the Government measure up to the task in future.

At the heart of the programme for the first year of the next decade lies a vacuum. Where the Gracious Speech speaks, what it says is irrelevant to our future needs, and where it does not speak--for example, on training, reinvestment and Europe--is where Britain desperately needs a lead. It is a Gracious Speech full of leftovers. It reflects the fag end of the Thatcher decade.

I should like to consider what the programme might have addressed. It might have addressed the regeneration of our industrial base, one fifth of which is calculated to have been wiped away in the recession which the Government visited on us in the first years of the decade. Is it not a peculiarly brutal comment on the Government's legacy that they entered the 1980s with a vicious long-term recession that damaged British industry and that they end it perched on the edge of another recession? I see the Chancellor of the Exchequer shaking his head. Perhaps it should not be called a recession. He will tell us that it is not a recession. How shall we refer to it? Will "stagnation" do? His own figures show that growth next year will be only 0.75 per cent. Given the Government's record on accuracy, is he so confident that a tiny plus will not end up as a substantial minus at the end of the year?

The Government say--indeed the Prime Minister said this today--that that is the price of success. The House should remember that when we entered the 1980s we were told that we had to have hard years and a recession because that was the price of past failures. Now we are told that we must have hard years and a recession because that is the price of success. It would be a sick joke were the truth not so painful.

Our overall production has only now just blipped above its 1979 level-- after 10 full years. Our world market share has dropped and continues to drop. Inflation is higher than that in any of our major competitors. Interest rates are higher than those of our major competitors. Wages are running ahead of inflation faster than in any of our major competitors.

Mr. Jacques Arnold (Gravesham) rose--

Mr. Ashdown : I shall give way in a moment.

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We now have a trade deficit of record proportions. It is a full £6 billion above the Government's prediction of only six months ago

Mr. Arnold : Will the right hon. Gentleman tell us what a mythical Liberal Government would do to control wage inflation?

Mr. Ashdown : The hon. Gentleman has heard our past statements. We would wish the Government to enter the European monetary system, which would mean that we could begin to control inflation, and therefore wage rates, without using high interest rates. I am here to discuss the Government's programme--[ Hon. Members-- : "No."] The hon. Gentleman will know that I do not have time in a relatively short speech to put forward all the alternatives.

The Government tell us that the success story is investment. But the record shows that investment, as a percentage of gross domestic product, has now only just blipped above the 1979 level. With interest rates at their present level, who can doubt that investment levels will begin to plunge again?

The Government describe all this as an economic miracle. It is not an economic miracle ; it is an economic mirage. One could describe it as a miracle only if one was entirely prey to one's own propaganda and capable of deluding oneself about the real state of the economy and industry. The Government have shown themselves adept at such delusion.

Mr. Dalyell : Given that two entirely incompatible views have been put forward on this subject, one by the Prime Minister and the other by her former Chancellor, does the right hon. Gentleman believe that the House of Commons is entitled to know what inaccuracies the Prime Minister believed were present in her former Chancellor's statement?

Mr. Ashdown : The hon. Gentleman is pressing a point that he has persistently pushed for some time. Yes, the House of Commons is entitled to know, but I can tell the hon. Gentleman and the House that it will not get to know, such is the secrecy of the Government and such is the Prime Minister's refusal to fulfil her duties of accountability to the House by telling the whole story.

Given the economic situation, one would have thought that the Gracious Speech would have contained some programme for industrial regeneration. There is no commitment, however, to increase training above its present inadequate level. One need only listen to what has been said by the Confederation of British Industry to appreciate that the present level of training is inadequate to meet the needs of our economy and industry in the future. There is no commitment to increase long-term research and development, which is desperately needed by industry. After the next year of stagnation or, if it turns out that way, recession, industry will, once again, come out weaker than it went in.

Mr. Dafydd Wigley (Caernarfon) : What does the right hon. Gentleman think about the lack of attention given in the Queen's Speech to the regional disparity in economic performance between the south-east of England and other areas where unemployment is between 10 and 12 per cent. compared to 2 per cent. in the south-east? Does he agree that that omission reflects the uncaring nature of the Government towards areas such as Wales and Scotland?

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Mr. Ashdown : The hon. Gentleman is entirely right. That regional imbalance clearly shows that the Government have no long-term policy for industrial regeneration in the key areas of industry and of our country where that industrial base must be made to go grow again. The Gracious Speech might have talked about the homeless--there are now 100,000. In the Autumn Statement the Government announced a programme to deal with this problem, but it amounts to the building of no more than 15,000 flats or houses. That building, measured against the 100,000 homeless, accounts for a mere 1 per cent. difference in a two-year programme. From our surgeries we all know the sum of human misery caused by housing problems. Those problems are not confined to the homeless, but relate to those who live in squalid, damp and inadequate accommodation. Look at the masses of money held by every council in Britain. South Somerset district council has £18 million available to spend on housing, but it is not allowed to spend a penny. Given this huge problem, the Government have produced a mere sticking plaster to cover a gaping wound in our social fabric.

Mr. Nicholas Bennett (Pembroke) rose--

Mr. Ashdown : I hope that the hon. Gentleman will forgive me, but I must make some progress, and I have already given way three times. The Government's programme for next year might have addressed the problem of poverty in Britain. Year in, year out of the Government's 10 years in office, the gap between the richest and the poorest has grown wider and wider. Recently I saw some figures that showed that, between 1979 and 1985, there has been a 91 per cent. increase in the number of children living at or below supplementary benefit level. In the Gracious Speech the Government have turned their back on the poor, as they have on the haemophiliacs and the war widows.

The Government have also turned their back on the pensioners. The Leader of the Opposition asked why the level of old-age pension in Britain was lower than that of any of the advanced industrial nations. The answer is plain and evident. It is because the Government have taken away from every pensioner couple £17.35 a week as a result of changing indexation in 1981 from wages to inflation. Mr. Barry Field rose --

Mr. Ashdown : No, I shall not give way.

That change has been a massive earner for the Government. Figures have suggested that, in the past year alone, taking money away from pensioners has earned the Government £4.1 billion. That money has been taken on the back of the poorest pensioners in Britain. Second only to privatisation, taking money from pensioners has been the Government's greatest "little earner".

The Gracious Speech might have included a programme of sufficient scale to address the problems of education. That programme might have acknowledged that the number of young pupils between 16 and 18 who go on to further education is now lower than that achieved by almost all our major competitors. About one third of our 16 to 18-year-olds, 33 per cent., go on to further education compared with 50 per cent. in Australia, 77 per cent. in Japan and 75 per cent. in Canada. We could have

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had a programme to raise those participation rates, but all we are offered are student loans. Those student loans will inevitably result in discrimination against women, the disabled and, above all, the poorer families. That scheme will lay the basis for a divided higher education system serving a divided nation.

The Government claim that the purpose of their health programme is to put patients first. If that purpose was achieved, we would support the Government. We believe that there is a case for reforming the Health Service to make it more sensitive to the needs of patients. We would like to see some legislation to introduce a patients' charter to cover rights of access and the length of time spent on waiting lists. If the health reforms follow the White Paper, however, accountants, rather than patients, will be put first. The reforms are not about removing bureaucracy, but about taking that bureaucracy away from the health authorities and transferring it to doctors' surgeries. Above all, we believe that the proposed legislation will be used--I do not lay this charge on the right hon. and learned Gentleman the Secretary of State--perhaps by a future Secretary of State or by a future Government to provide a two-tier Health Service. One tier will be for the rich who can pay, and the poor will have to make do with the rest. If the proposed legislation follows the White Paper, we shall oppose it. We believe that a basic principle must not be breached--the free provision of health care for those in need and at the point of delivery.

We welcome the environment Bill, but only if it is about action and not rhetoric. It must contain measures and it must not simply be about monitoring. We have produced our own alternative environment Bill, and when the Secretary of State drafts his Bill I hope that he will at least cast a glance at our own as it contains some useful measures. If the Government produce a measure which is about action, we shall support it. But if it is only about motherhood and apple pie, we will demand the necessary changes to make it effective. The broadcasting Bill to which the Prime Minister referred is of deep concern to my party because we believe that the exercise of the free market principle in broadcasting in the way that the Government propose will inevitably result in a decline in quality and in the destruction of much of the regional base of our broadcasting network.

We welcome the principle of a food Bill, but what sort of measure will it be? If it is an effective piece of legislation, we shall support it. But if it is toothless, as it shows every sign of being--if it does not allow a proper system of registration for food outlets, does not provide proper sanctions for those who infringe the legislation and if it has enshrined at its heart the conflict of interest that the same Department which deals with success and prosperity for farmers must deal with the security and safety of food for consumers--it will be flawed at the outset and will result in the Government continuing to play Russian roulette with the British consumer.

In foreign affairs, the speech seems to shift from the irrelevant to the downright eccentric. The Government say that they will encourage reform in the Soviet Union. Leaving aside the extraordinary statement that the Government will seek to interfere in matters which are internal to the Soviet Union, and leaving aside the question of how that matches up to the Prime Minister's rhetoric about seeking to assist Mr. Gorbachev, one wonders at the brass neck of a Government who say that

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they will encourage reform in the Soviet Union when they have stood against every kind of democratic reform in this country-- [Interruption.] That is indeed so. They have stood against any kind of reform in favour of fair votes, against providing a parliament for Scotland and Wales, against any kind of devolution, against a Bill of Rights, against freedom of information--yet they have the brass neck--

Several Hon. Members rose --

Mr. Speaker : Order. I do not think the right hon. Member for Yeovil (Mr. Ashdown) intends to give way.

Mr. Nicholas Bennett rose --

Mr. Ashdown : No, I will not give way.

Mr. Edward Leigh (Gainsborough and Horncastle) rose

Mr. Speaker : Order. If the right hon. Gentleman does not give way, hon. Members who wish to intervene must resume their seats.

Mr. Ashdown : What a brass neck the Government have to propose to back reform in the Soviet Union when their record on reform at home is so miserable.

Several Hon. Members rose --

Mr. Ashdown : Hon. Gentlemen who are on their feet can save their energy. I shall not be giving way again during my remarks. This remarkable Gracious Speech says that the Government will "play their part in the search for a settlement in Cambodia". What does that mean? Does it mean that they will continue to train guerrillas and saboteurs who will effectively come under the command of the Khmer Rouge, whose job it is to put back the revolting regime of Pol Pot?

We then find that the Government commit themselves to playing "a full part in the United Nations, and in the Commonwealth." How will they do that? Will it be by continuing always to be isolated in a minority of one at every world meeting? The Prime Minister traipses round the conference centres of the world--a sort of international pariah--always ending up in a singular and isolated position. She was isolated in Madrid on the issue of monetary union ; she was isolated in NATO on the issue of the modernisation of nuclear weapons ; she was isolated in the Commonwealth on the issue of South Africa ; she will be isolated in Strasbourg on the issue of playing a part in the integration of Europe.

Mr. Leigh rose --

Mr. Ashdown : The hon. Gentleman must realise that I am not giving way.

Time and again we hear the doublespeak of the Government. By "playing their part" they mean using the Prime Minister as the singular and sole block to the march of history and the integration of Europe, to tackling the issue of apartheid and in dealing with the whole question of disarmament. But one has to read the lines about Hong Kong to appreciate the Government's doublespeak at its most clear. They claim that they will

"vigorously and with determination restore confidence in Hong Kong".

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I believe that that means that the Government will resolutely stand by their betrayal of the people of Hong Kong and the betrayal of the rights of our passport holders to exercise the use of those passports effectively. In that betrayal they will be supported by Labour Members, who agree with them to the bottom line in refusing to allow proper rights to British passport holders in Hong Kong.

Indeed, the Government's whole approach to Hong Kong is an extraordinary exercise in doublespeak. An East German who drives his Trabant car to West Germany by way of the Czech border is described as a champion of freedom. He is given 100 deutschmarks, in due course receives a house and is praised by the Prime Minister. But if the tyranny from Communism from which one seeks to escape happens to be Vietnamese and one sails in a leaky boat across one of the most dangerous seas in the world and by chance arrives in Hong Kong, that action categorises one as an economic refugee to be forced on to an aircraft--whether one is a man, woman or child--and flown back to the very tyranny from which one has fled in fear of one's life. For the East German Government, it is wise to open their borders since this is the way to stop their people travelling a handful of miles to a nation with a higher standard of living. But for the British Government, it is stupid to honour the rights of Hong Kong passport holders, because that would immediately cause millions of Chinese to board aircraft and fly to a country 8,000 miles away which has a higher level of unemployment, a slower growing economy and where order in the streets is infinitely less reliable. What nonsense. What double standards!

The issue of Europe betrays a lack of vision at the heart of the Gracious Speech. Twice before in the last two or three decades this country has been faced with a choice, once under a Labour Government and once under a Conservative Government. The question was whether we would play our part in Europe. Twice before we said no. Twice before our nation suffered immeasurably in consequence. We are now faced with that choice again. If the Conservatives or Socialists have their way, we will say no again, with immeasurable consequences to the future of Britain.

Britain must play a full part in deepening the unity and strengthening the democracy of Europe. Only within a strong and unified Europe shall we be able to deal with the problems that are now being unleashed and cope with the opportunities in the East--for example, of nationalism and of restructuring a security and defence system which will assure the peace of Europe in the future. Only within a unified Europe will Britain's interest in the long term properly be achieved.

Mr. Tony Favell (Stockport) rose --

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