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"The place was in a terrible state. It was a derelict building. It was a shell. Part of our training, and of bricklayers and landscapers who went there a year ago, was to build walls, paint, plaster and put in doors and windows. After a year, the main work we've been doing is renovating the premises for the company. It's cheap labour, putting up doors and windows, building their offices."

There are countless other examples in this well researched series of articles. It is a shameful expose of what ET really is today--quite contrary to what the Government and their supporters would have us believe.

ET does not stand up to scrutiny on quality of training, supervision or the monitoring of huge sums of public money. ET has done little to tackle the skills shortages that undermine Scotland's economic progress. Meanwhile, again as the articles point out, private companies are being established to cash in on what has become an extremely lucrative business. The Evening Times highlighted one such company with an annual turnover that is already in excess of £1 million. That is just the tip of the iceberg.

The Queen's Speech says :

"My Government will continue to develop training and enterprise councils."

We in Scotland are particularly concerned about that. Scottish Enterprise is about to be established. That will lead to the sale of the Scottish Development Agency's assets, which will be a scandal not just in Scotland but in the United Kingdom as a whole. Even in the short period of office that is left to them, it is urgent that the Government should do more than just develop such bodies. The Government must ensure that they strictly monitor all training schemes so that at least some meaningful training is provided for people who are desperate to have work and who are crying out for the chance to train or retrain.

On that subject, however, as on so many others, the Queen's Speech is inadequate. I do not have sufficient time to touch on those issues, important though they are. My hon. Friends have already mentioned them. They range from developments in eastern Europe to broadcasting and to the imposition of even further vindictive shackles on trade unions. The Queen's Speech was bereft of vision, which suggests to me that the Government do not have sufficient confidence to plan for the long term. I believe that that judgment is justified and that it will eventually be vindicated. We shall be forced only once more to listen to a Gracious Speech in the name of this Government. Not least in Scotland, that is one saving grace in this year's shabby offering. 5.46 pm

Dr. Ian Twinn (Edmonton) : My hon. Friends and I warmly welcome the assurance in the Queen's Speech that the Government are to attach great importance to protecting the national and the international environment. The lead given by the Prime Minister in galvanising international opinion and bringing together world opinion to tackle the problems associated with global warming should be welcomed by all right hon. and hon. Members. It will do no good, however, if any of us pretend that easy solutions to those problems will be found, nor if we believe that by ourselves we can implement solutions. Global solutions have to be found. The United Kingdom will have to make sacrifices in order to implement world solutions. We shall have to help to solve the problems of other countries that are less fortunate than we are. As we develop the quality of life theme that is outlined in the

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Queen's Speech, we must ensure that that theme applies to the whole world. Britain must face up to its responsibilities to other nations by helping them to implement scientific findings that will lead to an improvement in the world's environment. That is just as important as the United Kingdom's environment.

I hope, Mr. Deputy Speaker, that you will forgive me if I talk about the environment, as I see it in London, rather than about the world environment. I intend to refer to my constituents' experience of their environment in Edmonton and in the borough of Enfield. I urge the Government to use the town planning system more effectively so as to conserve and enhance the environment and the quality of life. My right hon. Friend the Secretary of State for the Environment's recent pronouncements have encouraged us to believe that a sensible balance can be achieved between the need for development and the need to protect the environment. My right hon. Friend's decision to refuse planning permission for the development of Foxley wood was widely applauded. I understand the reasons why my right hon. and hon. Friends applauded his decision to protect the rural environment, which is very important.

Equally important, however, is the urban environment. To my constituents, and to the constituents of many of my hon. Friends, the suburban environment, although sometimes seen as a slight joke, is equally important. The quality of life of a great many of my constituents depends upon the quality of the planning system as it operates in outer London, and the same applies in the outer suburbs of other towns.

I am afraid that those of us who represent outer-urban areas know that there is growing dissatisfaction at the pressure for development. People are uncertain about how the pressure for housing and commercial development is to be met. Britain has championed its green-belt policies, which are the envy of other countries, and it is quite right that we should be proud of them, but if we are to protect all green-belt areas designated over the past 10 years, the development will have to go elsewhere. Either it will crowd back into the cities, in which case my constituency will be affected, or it will leapfrog the green belt into virgin countryside well beyond London and our other big cities.

There is no easy answer to the problem. Recent Government guidance and the planning policy guidance on housing encourage us to believe that a sensible approach will be adopted to providing land for housing. Development pressure in the south-east will not go away. We may wish that development would occur in the north-east, the north-west and Scotland, and of course that will come as well, but the pressure in the south-east will remain. We live in a democracy. We have no intention of directing our work force and telling it where it should live. We do not want a centrally planned and directed economy that tells industry where it should move, taking its work force with it. Industry and commerce will continue to expand in the south- east and will continue to need labour, and people will continue to wish to live in the south-east of their own free will. Housing will have to be provided--in my constituency, in inner-city constituencies and also in the shire counties. I hope that my hon. Friends will accept that none of us has an absolute right to bar development in our areas ; we must be positive about that.

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There is growing disillusionment in the outer suburbs about the way in which the planning system operates. Local residents are unsure about the value of their input into the planning system and their local councillors and professional planning advisers are equally unsure about the status of their own plans. In too many cases-- although not the majority, by any means--they have watched their policies being overturned by Government inspectors. In particular, that has affected the phenomenon that is now called town cramming, which affects my constituency among others where increasingly dense development has taken place and where the quality of life has suffered. We have houses and buildings that are not good enough to be listed in their own right but which nevertheless form an important part of the urban environment. Some are in conservation areas that have now been lost to development and some are outside. I would not want the use of conservation areas to be expanded to protect housing in areas that are merely pleasant to live in by giving the local authority control over demolition. That would be wrong. But if we are to prevent local authorities from giving in to pressure for more conservation areas, we must be much firmer about the way in which we operate our planning policy.

Mr. Vaz : Does the hon. Gentleman agree that there is also widespread concern among local residents and local authorities about the state of the stop notice procedures that currently exist in our planning laws? Does he share my hope that a measure will be introduced in the near future to tighten up the stop notice procedure to ensure that companies and businesses that trade in residential areas cannot take advantage of a cumbersome procedure to continue to cause a nuisance to local residents?

Dr. Twinn : Many aspects of planning law and practice need to be simplified. The Government have recently encouraged us to believe that that will happen and that we are interested in improving the quality of life for everyone while allowing businesses to operate successfully, to make a profit and to be successful employers in our areas.

Let me give an example. The London borough of Enfield is pretty typical of a London borough. It is a fairly typical mixture of green-belt land-- although there is none in my constituency--and pleasant suburban areas, mixed with what would typically be thought of as inner-city areas, with tower blocks built by typical Labour councils when they typically demolished very good housing--as Opposition Front Bench spokesmen typically realise.

Our borough plan was adopted in 1983 and, in accordance with good planning practice, has been annually updated in consultation with all those in the area who rightly have an input into that planning process. That plan could be considered up-to-date by anyone's standards. Since 1983, more than 30 initial amendments have been made to it. The problem has been that some of the Department's inspectors consider that the plan is not up-to-date. If we are to have good planning in London, with local councils making responsible decisions for their own areas, our borough plans need to be recognised as being up-to-date.

We have the prospect of the unitary development plan system coming into practice but it will not be possible for the plans to be on deposit before 1991. The problem in London is urgent. We have to tackle the problem of development now and that means that the Department

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must recognise our plans as being up-to-date and take into account local authorities' opinions. I know that my right hon. Friend the Secretary of State is sympathetic to that view. We cannot afford to wait any longer. We know that the Government will take action to help, but our environments are being destroyed now and it is not reasonable to ask our constituents to wait any longer for us to stop the town cramming that is badly affecting the quality of life in outer-urban areas.

5.57 pm

Mr. Robert Hughes (Aberdeen, North) : Some concern has been expressed in our debates that the media may present us in terms of our looks and demeanour. My concern is much more basic--it is that they should get the captions right. A couple of weeks ago I was approached by a researcher from a well-known television company who asked me about my views on the European monetary system. I said all the right things : "Good idea. Not a panacea. A useful tool." I was then asked what I thought of the Prime Minister. After the Commonwealth summit at Kuala Lumpur and the Madrid summit, it is my view that the Prime Minister is congenitally incapable of keeping her word. The researcher said, "Oh good. Can you do a piece for us on film tomorrow?" I said that I would be delighted. I contacted the producer the next day and cheerfully introduced myself. There was a slight pause and then the producer said, "You are Bob Hughes, the Labour MP for Aberdeen, North, are you?" I said, "That's right." He uttered an expletive and said, "I asked my researcher for the views of the Tory MP, Bob Hughes of Harrow, West." If not in my interests, in the interests of the hon. Member for Harrow, West (Mr. Hughes), I hope that the captions are right so that his future career will not be blighted.

In many ways, the speech by the Secretary of State disappointed me. He has a reputation as a formidable debater. In the past he has shown sharp wit and a sharp turn of phrase. Unfortunately, what we heard today was a continuation of what Ministers have been saying for the past 10 years. They have made a dubious use of language from the beginning : words have been used to mean their very opposites. We have all been distressed by that from the moment the Prime Minister appeared, quoting St. Francis of Assisi. We have not had peace, we have had conflict. We have not had decentralisation, we have had centralisation. We have not had the public good, we have had the private good. If George Orwell produced the manuscript for "1984" today, he would be summoned to court by the chairman of the Tory party, the right hon. Member for Mole Valley (Mr. Baker), and the Attorney-General and charged with plagiarism. He would be accused of stealing ideas from No. 10 Downing street and from Conservative party central office. They would accuse him of stealing "newspeak" because that is what we have heard from the Tory party.

Over the past 10 years, we have seen a Mafia-style operation from the Government. They have been skimming and siphoning off the public wealth into private pockets. They have pretended to be legitimate business men, but they have skimmed off everything that they possibly could. The Government are an asset-stripping organisation. They have been laundering the proceeds of the sale of public assets and have given them back in tax cuts to the very rich.

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The Government have denied everything that they have ever said. In the coming Session there will be another trade union Bill which, it has been said, will give trade union rights back to trade unionists. It has been said that the Bill will tilt the balance away from the all-powerful trade union barons to sensible business. That has not been happening. Month after month, year after year, the Government have steadily made it almost impossible for trade unionists to carry out legitimate trade union disputes.

There is a legitimate trade union dispute at Aberdeen Journals in my constituency. Earlier this year the journalists went on strike because the management arbitrarily withdrew trade union negotiating rights. That strike was fought and won and the terms to return to work were agreed. When the journalists went back to work, the National Union of Journalists discovered that the agreements were not adhered to, and there was victimisation and threats. The journalists went out on strike again. Anyone with a knowledge of industrial relations will know that when people have been out on strike and then return to work, it is not easy to get them out on strike a second time. The idea that they came out a second time because a small group of tightly knit and motivated men were determined to destroy the company is utter nonsense.

When the journalists came out on strike a second time, they were sacked within 48 hours. Since then, every effort to try to get negotiations started has been totally frustrated. Many of my colleagues from the north of Scotland have tried to speak to the management about these matters. I pay tribute to the industrial chaplain of the Church of Scotland, the Rev. Donald Rennie, and to the general secretary of the Scottish Trades Union Congress, Mr. Campbell Christie, for their efforts to get negotiations going. A couple of weeks ago my hon. Friend the Member for Aberdeen, South (Mr. Doran) and I tried to start yet another initiative. We invited a broad spectrum of opinion. For example, we invited the conveners of Highland region and the convener of Grampian region who are no political allies of mine. We also invited the Moderator of the Church of Scotland's Aberdeen Presbytery and the Roman Catholic Bishop Conti of the diocese of North of Scotland, Orkney and Shetland. We invited Alex Mair, the president of Aberdeen chamber of commerce, and Members of Parliament from every political party within Aberdeen Journals' circulation area to come together and ask both sides in the dispute to meet and discuss the position. We hoped that the management would agree to begin negotiations.

All the people whom we contacted readily agreed to take part in the exercise. They were only too keen to participate. However, the initiative was completely rebuffed. The managing director said that he would not see the group collectively although he was prepared to meet people individually. Why can he not discuss the matter in a group instead of individually? Why must discussions take place in the bunker at Lang Stracht where he cannot have proper discussions? I do not know.

The managing director was the only person to rebuff the negotiations. However, more seriously and more sinister, he said that our aim, the commencement of negotiations, was not a path that Aberdeen Journals wished to pursue. That is the state of industrial relations to which the Government have reduced industry. That is extremely bad industrial relations. There is no doubt that

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the managing director of Aberdeen Journals intends to use the law and sit it out in the hope that he will drive the journalists back to work.

I spoke to the managing director this morning on the telephone and I said that those of us who are interested in the future of Aberdeen Journals, in its readership and in the wellbeing of the NUJ are ready at any time to begin negotiations. Sadly, the Government's industrial relations laws, which thrust power into management's hands with no checks or balances, have led to dictatorial management and an authoritarian style of industrial relations. That is bad. I have made my position clear. I support the NUJ and the right to negotiation. I support the right to solve problems through discussion, not by confrontation. The idea that the people on strike are gung-ho is absolute nonsense. If the managing director would sit down and discuss these matters with his employees--I believe that they are still his employees--we could achieve a proper settlement. I said earlier that the Government have preached decentralisation and practised centralisation. I hope that on another day we shall have an opportunity to discuss the Williams report on the agriculture colleges in Scotland. The proposal is that the three colleges should be amalgamated and all the planning of educational courses and buildings should be centralised and run from Edinburgh. I do not know what the Government think they are doing. They have no idea of local initiative or the merits of local colleges. The proposal is based purely and simply on the grounds of efficiency and cost. There are no educational merits in the proposals. No one has said that the Northern College of Agriculture is a bad institution. It has a worldwide, first-class record. Students come from all over the world for training and teaching there. However, its future will be blighted because of the Government's blind disregard for anything that happens locally. There is a blind obsession that Whitehall or St. Andrew's house knows best. The Government will destroy the education system because of their blinkered ideology.

There is naturally and properly great excitement about the pace of events in eastern Europe. As a convinced democratic Socialist, I welcome the way in which people are standing up for freedom against authoritarianism. Many of us have argued for and have cherished real freedom for many years. I wish that the Prime Minister had mentioned the fact that other great events are taking place.

There has been an event of great historic significance in Namibia. A fledgling state is going through the process of democracy and we should be proud of that. I did not believe that I would see the day when it happened. That it has happened is a great victory for democracy. I send a message of congratulations to President Sam Nujoma of SWAPO. Having won the victory, his is a call for reconciliation ; if hon. Members had experienced what the people in Namibia have experienced, defending themselves and fighting for freedom, perhaps we would not be quite so charitable in calling for reconciliation.

Great events are taking place in South Africa. We must welcome the fact that eight historically significant political prisoners have been released. That is a ray of hope and a cause for optimism. I have argued against colonialism for

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many years and I have seen the end of the Portuguese empire, and freedom for Mozambique, Angola, Zimbabwe and now Namibia. We celebrate those victories. We have learnt the lesson that this is not the time to relax and let matters take their course. Those events have happened because of internal pressure and struggle and because of international pressure and struggle. The Prime Minister had better realise that if she relaxes and carries on in the way that she is now, she will not help to bring about the end of apartheid.

It might surprise the Prime Minister to learn that she and I share one fundamental truth. We believe that with the ending of apartheid will come the ending of the ways in which the multinational and giant corporations rob the people of their wealth. However, we draw different conclusions. The right hon. Lady believes that sanctions are wrong. I believe that sanctions are right. They are the way to freedom.

In the next decade, we will see tremendous changes in the world. The tide of democratic Socialism is on our side. The Government's days are numbered, and the days when my party will govern the country in the interests of the people are upon us. We shall succeed where the Government totally failed and destroyed our people.

Mr. Deputy Speaker (Sir Paul Dean) : I remind the House that a 10- minute limit on speeches is now in operation. I appeal for the co-operation of all hon. Members. They will find the digital clock winking at them when there is half a minute remaining.

6.10 pm

Mr. David Martin (Portsmouth, South) : The first part of the Gracious Speech which particularly appealed to me and to many other hon. Members is the commitment to give every possible encouragement and support to the incredibly fast-moving changes taking place in Poland, Hungary and other countries to the east of the iron curtain. I hope that such encouragement and support will include increased economic and trading initiatives, too. Our efforts within the Common Market--I stress within the Common Market--should be directed to that end, in concert with other members. Apart from humanitarian considerations, such economic initiatives will aid our economy, trade, industry and employment and help to build up trading economies which, for many years, have been literally beyond the pale--controlled, subsidised and distorted by a variety of methods common to Socialist systems within the Russian empire and its satellites since the war. I have mentioned financial help with our trading partners in the EEC. Crucial to our trading prospects is the passage in the Gracious Speech about working with our European Community partners to complete the single market and to enhance economic and monetary

co-operation--not union, thank goodness ; there are no starry eyes. This is no time for the European democratic group of the self-styled European Parliament to lecture my right hon. Friend the Prime Minister and those who agree with her on how to conduct themselves in Europe. Certainly, for years my right hon. Friend has been managing very successfully and courageously in this country's best interests. The letter in The Times of 17 November, which was signed by 30 out of 32 of those members of the European Parliament, has been interpreted as an attack on my right

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hon. Friend's vision of Europe, as expressed most notably in her Bruges speech, which few of her critics have read and which even some of them delight in misrepresenting as anti-EEC. That letter pours cold water on a Europe of co-operating sovereign states in favour of what is described as a "closely knit community". I suspect that that code means to join the exchange rate mechanism of the European monetary system as fast as possible, at virtually whatever trading cost to ourselves, and swallow far too many of the Delors proposals, hook, line and sinker.

Such mass letters, which are signed by so many, have an unfortunate pedigree. They are in the same line as the infamous one that was signed by 364 economists in 1981, asserting with the utmost confidence that the Government's economic policies would not reduce unemployment and that the Government would fail. My right hon. Friend the Prime Minister has outlasted that prediction by nearly 10 years. Critics should note that my right hon. Friend's views are those of the majority in this country, across party political bounds. The Gracious Speech commits the Government to work with our European partners in the most sensitive way for this country, from the point of view of trading strength and maximum opportunities to keep control of those things which we cherish in our own ways of life. Crucially connected with trade issues is the state of the economy and what we can afford by way of taxation for health, social services and the host of other claims on public money. I have worries because the bold spirit of 1981 is dead. That was when my right hon. and learned Friend the Leader of the House was Chancellor of the Exchequer, and, to his eternal credit, suddenly stood almost friendless and alone. However, seeing my right hon. Friend the Secretary of State for Trade and Industry in his place, I have no doubt that my right hon. and learned Friend was not entirely alone. My right hon. and learned Friend took the right action at that time to curb inflation and explode the hopes of those who thought that no Government would dare to take the necessary measures significantly to reduce inflation.

In present days, with interest rates and inflation far too high, we heard in the Autumn Statement of the extra several thousand million pounds of public expenditure--on worthy matters, of course. I am as guilty as anybody else of finding many ways in my constituency and wider by which money can be spent to effect. Only last Friday, I visited the Portsmouth family support service, which provides excellent care for the elderly and the severely disabled to live as independently as possible in their own homes. More money is needed for that, as it will be needed to implement the community care proposals set out in the Gracious Speech and in the Disabled Persons (Services, Consultation and Representation) Act 1986 which I have no doubt will be considered in conjunction with them.

But, with such pressures, let us not expect inflation to fall rapidly, or allow difficult confrontation over wage rises to be a thing of the past, or exhortations to others trading in the private sector to show the restraint that politicians dare not show. The situation reminds me of an upstairs- downstairs scene. Upstairs, an overweight madam is having her corsets laced up with a tourniquet wielded by her maid. Madam is almost fainting because of the constrictions which the operation imposes. Downstairs, however, cook is carrying out her orders to stoke up the stove and prepare dish after substantial dish

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of tasty food for madam to consume. That is uncannily like the everyday life of the British economy. Only with few honourable exceptions has it had breaks over many years under all Governments. I now refer briefly to the environment and to the Bill which we are promised will enhance protection in the national and international contexts. One of the major considerations attached to the national environment is development and planning in the south-east. My hon. Friend the Member for Edmonton (Dr. Twinn) has raised some relevant matters. There is no point in hiding the fact that there is a conflict between those who are responsible for representing towns and cities and those who represent mainly country areas. Hon. Members heard also from my hon. Friend the Member for Somerton and Frome (Mr. Boscawen) on this matter.

I do not wish to see vast areas of green fields and cherished landscapes ruined by irresponsible development. However, those who worry about that must keep a sense of proportion. In the south-east region, even if another 1 per cent. of land is developed, the area that is built on would still be under 15 per cent. of the total. In my constituency, and, I suspect, in that of my hon. Friend the Member for Edmonton, only about 15 per cent. of the total is not built on. People do not wish to see housing need for the future aimed solely at so-called urban infill sites when, too often, in places such as Portsmouth, it means infilling precious open space.

Any Bill must address those conflicts as well as more general pollution issues. It should also address the quality of life in urban areas, particularly with regard to noise, dirt, litter, graffiti and bad neighbourliness. Sometimes, local authorities and police have insufficient powers to act in conjuction to improve matters for residents who feel strongly about such things. They write to me and speak to me about them in my surgery.

Many other measures in the Gracious Speech invite comment, but there is no time to do so. My belief in restraint in Government is accompanied by an equally strong conviction that speeches should be as short as possible. There is nothing like personal example to reinforce that view.

6.18 pm

Mr. Austin Mitchell (Great Grimsby) : I will not attempt to follow the hon. Member for Portsmouth, South (Mr. Martin) in his excursion into the economics of 1981. From his point of view, it is deeply out of fashion even with this Government. I hope that the hon. Gentleman will find a happy place in the monetarist museum at Liverpool university which, given the change in the climate, is probably where he should go.

I shall concentrate on industry, about which the Queen's Speech said little. That is a tragedy, because industry is the basis by which we as political parties can provide what the people of this country want for their way of life. Industry, and especially manufacturing, is the provider of jobs, the generator of growth and the generator of the surplus that we use to fund public spending. Industry pays our way in the world, yet for a nation that depends for its economic health on a powerful competitive industry, British industry is now in the position where our industrial base is too weak and has contracted too much to do the jobs that we as a

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community expect it to do. It is too weak to support the superstructures that we, as an advanced industrial society, want to place on it.

In this crucial area of our policy towards industry and manufacturing, we see the prime failure of the past 10 or 11 years of Thatcherism. Those 10 years are the years of the greatest opportunities that this country has ever had. They were the oil-rich years that provided us with opportunities that we had never had since the war. We have had the economics of stop-go, but the past 10 years could have provided us with an opportunity to expand, through the constraints of the balance of payments, and to grow and to invest, to get back the ground that we have lost in industry over the years since the war. However, at the end of those 10 years of opportunity, we find that our industry is in a weakened condition. Yes, it is more profitable, but it is investing its profts in a competitive takeover frenzy, often overseas. Our industry now has a lower share of world trade and a much lower share of its own domestic market. It is not enabling us to pay our way in the world.

The analyses of those 10 years, such as the interesting one produced by Professor Wynne Godley in "The Political Quarterly" of April this year, show that, if we compare the Thatcher 10 years with the two or three previous decades, on all the measures of the things that improve or have some benefit to our quality of life in this country, the Thatcher decade comes out as the worst.

In terms of growth, we have had an average annual growth of under 2 per cent. in those 10 years, which is the lowest of over three decades. In terms of productivity as measured by output per employed member of the work force, our productivity is now at a lower level than in any of the last four decades. Only our manufacturing productivity has increased faster than in previous decades, but it has done so on the basis by which the Yorkshire county cricket club could improve its cricket performance--by shooting its last three batsmen to improve its batting average. It is on that basis that manufacturing productivity has increased, but in terms of the growth in manufacturing production, the past 10 years have seen the smallest growth of any of those four decades. I have some news for the Government Front Bench : we have been successful in increasing our manufacturing production more than Zambia--that is our one achievement in this area. Finally, the past 10 years have seen our worst performance in imports and our second most successful performance for exports.

Those oil-rich years have effectively been wasted. The oil has been used to finance the import of manufactured goods to destroy jobs in this country. The tax revenues from oil have been used to support the unemployed and the investment flows from oil have been invested overseas in the productive capacity of our competitors.

At the end, we are in a balance of payments trap that will stifle everything--the tragedy that will unfold over the next two years. We are in that balance of payments trap because the first three years of this Government saw a massive, unnecessary and stupid deflation. The economy was savaged by the dead sheep on an inconceivable scale. We closed one quarter of our manufacturing capacity in those three to four years and lost 28 per cent. of our manufacturing jobs. If one follows that contraction and

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destruction with a huge expansion of demand, based on credit expansion and asset inflation, which is what the previous Chancellor of the Exchequer did, it is clear that British industry will not be able to cope. We suck in imports and run into the balance of payments trap, which will now cause massive deflation.

The Government won the last election in the same way that Ben Johnson won the 100 metres at the Olympics, by false economic expansion, and we shall now have to go through a detoxification process as our price for that expansion. The result has been disaster. The right hon. Member for Blaby (Mr. Lawson) was wise to use the pretext of his argument with Professor Sir Alan Walters to get out while the going was good. His successor now has to clear up the mess.

We now have to face two years hard--and perhaps that is the easiest way out, because we are dithering on the brink of a sterling crisis and at any moment there could be a massive and sustained run on the pound. The Government are desperately trying to shore up the pound by high interest rates ; they are effectively paying foreigners high interest rates to bring junk money into this country to close the gap that we cannot close ourselves by what we make in this country and sell from this country. That is what is happening to the economy. We are on the brink of disaster. We have a deficit in overseas trade which is between 4 and 5 per cent. of GDP, which is bigger than the deficit America has been facing in the past few years. Indeed, when America was facing deficit on a similar scale four years ago, the dollar came down by about 40 per cent., and has only now begun to rise again. Sterling will have to do much the same if we are to get out of this.

If the approach to the deficit is to be high interest rates to choke back demand, those high interest rates will support the pound at an unrealistic level, which will penalise exports, subsidise imports and cripple investment in manufacturing. If we are not producing adequately in this country to sustain our demand for imports and if we face that by cutting demand, it will have to be by a massive cut in demand through interest rates. The process of cutting demand will cripple industry. In fact, the only way to fight back and to escape from that trap is to expand industry. However, we are contracting and over the next few months and years, instead of shifting the weight of the economy from domestic demand to export-led demand, we shall see the Government moving into a bunker phase of misery as interest rates remain high.

Although it could not happen to a nicer crowd, the consequences will fall on manufacturing and on industry. Those consequences will mean more bankruptcies, more liquidations and more closures, together with a rise in unemployment over that period, with exports stultifying because the pound is not competitive. Imports will continue to rise because the pound is overvalued and we shall see more takeovers by foreign firms in our markets and less investment, which is industry's means of facing the future.

That policy will not work. It will not get us out of this trap. The Government's only answer is to accept the Prime Minister's advice and to let the markets decide. Why should the market not be allowed to operate for exchange rates? Why is the market only appropriate to exchange rates when our exchange rate is going up? Why is it not appropriate when the exchange rate needs to come down, as now? Getting the pound to a competitive level by lower

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interest rates is the only way in which this country will see a manufacturing turnaround. It is the only way in which we shall be able to close the gap in trade.

Deflation has never worked, and it will not work now. Deflation as an approach to the problems of industry and the economy is as useful as trying to sell timeshare flats in the Beka'a valley. That policy will cripple and ruin British industry at a time when we also have to face a challenge of being peripheral in a wider EEC, which is draining development from this country, and in a single market where competition will be more intense. We are entering that competition crippled by economic decline, deflation and high interest rates. That is what we are now facing.

I am emphasising industry because Grimsby lives by industry. We are proud of our industry. We are Europe's food town. We have food production, Courtaulds and textiles, engineering, chemicals and oil. We live by industry. It is that industry which is being asked to face the world and the crisis that the Government have produced, with the ball and chain of high interest rates around its neck. We are crippling industry, yet if we destroy industry in this way we will be destroying not only the prosperity of my town, but our ability as a nation to fight back and to face the world. We are destroying our way of life and the prospects for our future. Ultimately, only industry will provide the jobs. Only industry will generate the growth that we need to provide this country with the ability to hold its head high in the world because it pays its way in the world.

6.28 pm

Mr. Robert Hayward (Kingswood) : Before I comment on some of the Labour speeches that we have heard, I wish to compliment the hon. Member for Newry and Armagh (Mr. Mallon) on his excellent contribution to the debate. He made a series of suggestions as to the way forward in Northern Ireland. It is rare for such suggestions to be made and I hope that all sides will consider them carefully.

Mr. John D. Taylor (Strangford) : Will the hon. Gentleman give way?

Mr. Hayward : I am afraid that I am on the 10-minute limit, so I shall not give way.

I was extremely disappointed by the contributions of Labour Members today. The hon. Member for Great Grimsby (Mr. Mitchell) suggested a formula that would produce rampant inflation. The hon. Member for Dunfermline, East (Mr. Brown) painted such a bleak picture of the economy that one could imagine that no one was employed. It is interesting that he made no reference to Ford at Dundee, although substantial reference was made to Ford and Jaguar in another context. Given the hon. Gentleman's constituency, he must be only too well aware of the implications for Dundee of the trade union decision at Ford. Equally, he failed to answer a number of challenges put to him.

The hon. Member for Dunfermline, East also commented on the social divide between north and south, but that statement does not bear the comparison that he sought to make. He drew a rosy picture when describing the social fabric and employment rates of Germany, France and Italy. If one looks at the unemployment statistics as they apply in West Germany one discovers that Schleswig Holstein, Hamburg and Bremen have unemployment rates above 10 per cent. In fact,

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unemployment in Schleswig Holstein and Bremen is well above 13 per cent. In the United Kingdom only one region, Northern Ireland, tragically, has an unemployment rate above 10 per cent. The regions with the next highest unemployment are Scotland and the north with about 9 per cent. Those percentages come from official statistics and one must accept them when published by any Government. The OECD undertakes direct comparisons of unemployment rates and, in that context, unemployment in France, Italy, Spain, the Netherlands, Belgium and Ireland is higher than that in the United Kingdom. The regional variations in most of those countries are substantially greater than they are in the United Kingdom.

We have had a series of quotes from the Confederation of British Industry, and from Moger Woolley who lives in the constituency next door to mine at Northavon, concerning current Government policy on takeovers and investment. The hon. Member for Dunfermline, East quoted many people, but if he had asked whether they preferred previous Labour party practices, the latest Labour policies, as much as we can divine them, or Conservative Government policies, I believe that there would be unanimous support for our policies rather than those of Labour, which is putting itself forward as the prospective Government. Although the policy review was completed more than a year ago, we still do not know what is Labour party policy. This afternoon we heard a series of statements that were equivalent to saying, "I am against sin.". There was no statement of value about how policy would be achieved.

I should have liked a reduction in the amount of legislation contained in the Gracious Speech. We came in with a commitment to reduce legislation and I hope that we can achieve that in the long term. We have, however, allowed trade and industry to decide how to govern themselves. We have removed regulations and stopped interfering. We have not decided, unfortunately, to make a similar reduction in the level of government. I believe that we should give serious consideration to removing some county councils. I must admit that I was disappointed by the statement of the Minister for Local Government and Inner Cities who said recently in Norwich that the Government had

"no intention of embarking on any major reorganisation of the structure of local government."

A review of the London boroughs is being undertaken, but it does not appear that the number of boroughs will be reduced. Many of the boroughs that are now unitary authorities have populations substantially smaller than those of many major cities. Sheffield and Manchester were parts of metropolitan counties, but now they are unitary authorities. Cities such as Derby, Nottingham, Bristol, which I partly represent, and Leicester are larger authorities than the unitary authorities of London. Given the steady drift away from inner London, I believe that it would be right to reduce the current number of London boroughs from 32 to a more realistic figure of between 20 and 25. For fear that anyone thinks that I am suggesting that we should reduce every other level of government but the House of Commons, I also believe that the number of Members of Parliament should be reduced to below 500. If India's Lok Sabha, its lower house, has 532 elected members and most European countries have fewer than 600--in some cases fewer than 500--Members of Parliament, there is no reason why we should have 650 hon. Members.

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I especially welcome the proposals for protecting the environment and the fact that people who drop litter will be penalised as well as those who commit acts of graffiti. Earlier this year, in conjunction with the local authority, I launched a campaign to improve our local environment. I was amazed by the response of the average member of the public who clearly does not like the conditions with which he is confronted. People would prefer a better quality of life in terms of their local surroundings.

A few weeks ago I was especially interested in a report that appeared in Today . It studied a number of different cities and constituencies and, interestingly, it found that Bath, represented by my right hon. Friend the Secretary of State who is now present, was the cleanest constituency surveyed. The dirtiest constituency is Peckham in Southwark. I am afraid that many London authorities pay no attention to the quality of life of their ordinary citizens. The hon. Member for Peckham (Ms. Harman) responded by saying that, following representations, the authority was trying to improve matters. She did not say that those representations came from Conservative Members who live in that constituency. I wrote to the borough of Southwark in August 1988. The vast majority of our citizens would prefer to live in a better and cleaner environment ; therefore, I welcome the proposed legislation.

A number of comments have been made about the Autumn Statement. I welcome its proposals on the National Health Service which showed a continued commitment to increased spending and to increased investment in the NHS. We have more doctors and nurses than ever before. I had hoped that the grading scheme would have been completed more quickly. I hope that it will happen in the near future. I have been a Member of Parliament for only six years, but in that time three brand-new hospitals--the Bristol eye hospital and the hospitals at Weston-super-Mare and at Taunton--have been completed in my area. Massive redevelopments are taking place at Frenchay, the Royal Infirmary, the maternity hospital, Southmead, Manor Park, Glenside and Cossham. Those redevelopments demonstrate that there is a continuing investment programme in our hospitals. However, developments go further than that. Since I was elected to this House, the local ambulance station at Soundwell has been completely reconstructed, a new health centre has been developed at Cadbury heath and a new health centre is about to transfer from Soundwell to Cossham.

The Autumn Statement shows our long-term commitment to the NHS through its redevelopment. That redevelopment is good for all my residents and the commitment in the Autumn Statement will benefit the rest of the country.

6.38 pm

Mr. John P. Smith (Vale of Glamorgan) : As a Welshman I am disappointed by the Gracious Speech because my country was not even referred to--some of my hon. Friends have already made that point, but it is worth repeating. I am especially disappointed, however, that the Gracious Speech offers no encouragement for the prospects of our trade and industry. I will take that a step further : not only does the Gracious Speech offer no

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encouragement, but it includes the basic contradiction contained in Government policy over the past eight years--the reason for our manufacturing industry doing so badly. The opening part of the speech contained a reference to the desire to improve this country's economic prospects. Right after that is a reference to the Government's commitment to reducing public expenditure as a proportion of the gross national income in real terms.

The Government still fail, after 10 years of failure, to recognise the value and strategic importance of public investment and public expenditure when it is spent wisely and efficiently. As far as the Government are concerned, all that is private is good and all that is public is bad. In my part of the world, in Wales and in my constituency, that formula has been an unmitigated disaster. The industrial town of Barry in my constituency lost no less that 85 per cent. of its manufacturing jobs in the first part of this decade. Despite some recent welcome, marginal improvements in inward investment in manufacturing, that town is nowhere near returning to its previous levels of employment in manufacturing industry. I could give a number of examples in which some imaginative public expenditure in manufacturing industry and trade would have enormous benefits. However, the Government lack the vision to see, as have our major competitors--the Americans, Japanese and Germans--over the past 10 years, the advantages which come from strategic public investment. That is why our competitors are doing so much better than us. Just one example is the Government's failure to recognise the strategic economic importance of Cardiff Wales airport, the national airport of Wales.

Everyone in the country--the industrialists and the vast majority of hon. Members from both sides of the House--recognises that this airport will play a crucial role in the next decade, particularly after 1992, in ensuring the economic fortunes of Wales. However, the Government have shown a total failure and a lack of commitment to providing the sort of updating of surface links to the airport to guarantee its future. A case already exists for providing such links.

Believe it or not, at the moment there is a single lane carriageway running from the capital city to the airport. The ludicrous position is shown by what happened recently, when a car crash entirely blocked the road to the airport. Passengers were seen parking their cars on the side of the road, carrying their bags and rushing on foot to try to catch their aeroplanes out of the country. That is scandalous, when we are seriously trying to attract investors from overseas to set up business there. They would trade mainly with Europe and want to travel by air, particularly to Brussels.

The Government seem to fail to recognise the importance of an adequate airport. In fact, they do not fail to recognise its importance because, on 13 June, the Minister of State at the Welsh Office, said :

"I realise the importance to Wales of a thriving international airport and the advantages which a rail link would bring but British Rail cannot provide and service such a link unless it is commercially viable."--[ Official Report, 13 June 1989 ; Vol. 154, c. 886.] The Government, particularly the Secretary of State for Wales, have no intention of providing the necessary public funding to ensure an adequate rail link and guarantee that

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the airport can meet both the expansion in air traffic over the next decade and the economic challenge which Europe presents for the future.

Only last week I addressed the Barry business men's club and referred to this problem, which is in my constituency. For the past 10 years, there has been a prima facie case for reopening the rail link to passengers ; it already exists for freight traffic. After the discussion at the club, three business men representing three of the largest industries in my area told me that the last time they met was in the lounge of Heathrow airport. One way and another, they had to rush from their homes and companies in south Wales by train, car, bus or whatever to get to Heathrow airport to fly to Brussels when, on their very doorstep, there is an airport which should have regional and national significance. They thought that this was a scandal ; I think so too, and, more importantly, the people of Wales think so. 6.45 pm

Mr. Charles Wardle (Bexhill and Battle) : I trust that the hon. Member for Vale of Glamorgan (Mr. Smith) will understand if I do not comment on his speech, because the 10-minute rule applies. Conservative Members will welcome the Gracious Speech. There are three reasons why it will meet with approval from a wider national audience : first, because the Bills announced in it will introduce measures designed to improve the quality of life, enhance enterprise, extend choice and strengthen necessary regulations ; secondly, because the volume of Government legislation appears to be just a little lighter than in the previous Sessions of this Parliament ; thirdly, because it contains the important policy statement that the Government remain fully committed to the fight against inflation. It is principally to this last point about anti-inflationary policy and its relationship to the trade deficit and Britain's competitiveness that I shall address my remarks. However, before doing so, I shall add my welcome to the Bill which will establish the pace and direction of reform in the National Health Service and community care.

The public debate about ways in which to deliver an even higher level of patient care than is achieved today has been intense and at times bitter. What is needed now is the statutory authority to bring about the changes which must take place if the NHS is to make maximum use of its considerable resources.

The volume of new legislation looks marginally less onerous. More government and less reform is by no means unwise when the management work load of every Government Department for overseeing change and supervising investment must already be enormous. We only have to recall the speed at which some recent legislation--for example, the Financial Services Act 1986 --has already had to be overhauled to appreciate that my right hon. Friends have sometimes tended to rush their legislative fences. Perfectly sound Conservative policies have too often become blurred and confused in the public vision by the pace at which legislation has been introduced. The extraordinary number of Government amendments introduced after the Committee stage of several Bills earlier in this Parliament is evidence of a tendency which mitigates against otherwise excellent Government initiatives. Hopefully, these problems will not recur in this Session.

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No matter what reforms make their way towards the statute book over the next few months, the all-important theme for 1990 will be the economy and Britain's competitiveness in world markets. That is why the clear message in the Gracious Speech, reinforcing what the Chancellor asserted in his Autumn Statement, is fundamentally good news. If in the year ahead the Chancellor will signal three messages--that he will continue to fight inflation, do all he can to encourage savings and take a close look at the indicators of broad money as well as exchange rates--economic management will be in good hands during a period in which it is more than likely that the going will be tough, as the Chancellor has already suggested.

I would go further : I do not share the Treasury's optimistic assumption that the worst scenario will be two quarters of zero growth in output next year. I am not talking anybody into a recession or about recessionary dangers which do not yet exist, but I suggest a look at the facts in the real world of business.

It is not just the high street retailers who are now feeling the pinch as consumer demand is quite rightly being squeezed by high interest rates. The order books of manufacturers are also tailing off because of destocking at the outlets that they supply. There is nothing alarming about that, because industry is now much more able in terms of productivity to cater for a cyclical downturn, thanks to the economic climate over the past few years. Manufacturers are already preparing contingency plans for the anticipated lower levels of turnover next year. The result may well be a short-term rise in unemployment, but provided their stocks are not too high and they have not borrowed too much to pay for new plant and machinery, businesses will come through.

Next year's trading challenges have already been widely predicted, but I should like to add a caution. There is no point in the Treasury or the Department of Trade and Industry assuming, as has been suggested, that the surplus production capacity that will certainly emerge from the fall in domestic demand can instantly be diverted to export markets. That is not an overnight process. Winning extra market share overseas requires lead time in terms of design development and distribution, all of which has to be carried out in the face of fierce competition on price, quality and delivery. That takes time.

It will not help people in industry if some of my right hon. and hon. Friends who have not all taken part in the money-making process of manufacturing deliver too many homilies about the sanctity of market forces as some kind of superior alternative to an industrial strategy. No Government rely purely on market forces and refrain from intervention. Look at the Bank of England's role in the currency markets and the price fixing for research in proprietary pharmaceutical companies and at the defence procurement market. Those things are facts of life.

Industrialists will be faced with considerable challenges next year in trading conditions and on their strategy formulation for 1992 and beyond, and they can do without too many lectures on market forces. Instead, they need a clearly articulated Conservative statement of industrial strategy. They do not need a statement of the hackneyed Labour variety, full of empty promises of unworkable and unsubstantiated infrastructure investment plans and regional development plans. They need a sound Conservative industrial strategy free of any inhibitions about dirigiste and collectivist habits, which sets out clear

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