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Mr. Couchman : What would happen to all the inward investment into this country from the United States, Japan and the continent, which has been so beneficial in recent years to our manufacturing industry, should the hon. Gentleman's policies be pursued?

Mr. Livingstone : I welcome all inward investment. My complaint is that it does not match the outward investment from Britain. If one considers the inflow of investment capital against the outflow, it is clear that this year we are running a deficit of £30 billion. We cannot sustain that year after year.

The hon. Member for Fulham (Mr. Carrington) spoke about the problems associated with the Common Market. There is not the slightest doubt that what I am advocating would cause a major trauma within the Community, but it must face that. By the time we have got through 1992, and the French have witnessed the impact of removing their exchange controls, we may find that we have many allies within the Community. They will realise that we cannot leave it to the European financial capital centres to decide where investment is made. That is already happening. Many financial capitalists in Europe are saying that perhaps they should not invest any further in France or West Germany as they could invest in Poland or Czechoslovakia, which have much cheaper labour costs because they are emerging from Stalinist dictatorships.

When a Labour Government come to office we may find that there is a tide of opinion across Europe arguing for the wealth created in our countries to be used to create a basic decent standard of living that rests on a sound industrial base. That will, as the hon. Member for Fulham suggests, involve changes to the Common Market.

I give credit to the deputy leader of the Labour party who, in the run-up to the election, proposed that we should operate differential levels of taxation. Those companies that chose to invest abroad on a scale considered unacceptable by the Government would be subject to a higher level of taxation. That concept was hardly revolutionary, but it would be effective. One could increase the level of taxation to the point where it became more painful to resist the elected Government than to comply with their demands. Or one could go to the other end of the spectrum and adopt the methods used by the old Bolsheviks who took power in 1917. I say this as a joke in case someone rushes up and puts it on the Press Association tapes. When the Bolsheviks took power, the banks would not co-operate. Lenin sent a detachment of Red Guards to the bank and they said to the manager that they needed the money in the state bank. The manager would not open the bank, so they put a gun to his head and said that he had a choice : either he could open the vault,

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or they would pull the trigger. New realism was obviously alive and well as long ago as 1917 and the bank manager co- operated. Now I am not advocating that we shoot the bankers, but surely somewhere between Roy Hattersley and Vladimir Ilyich Lenin we can find the method that we need for Britain in the 1990s.

It is the principle that matters. Finance capital must serve the people of Britain rather than subordinate the whole country to its own needs. The tragedy of the past 10 years is that when we had the wealth of North sea oil, which could have been used so easily, it was allowed to flow abroad. Our major competitors have had so much of the benefit from it. That is the dilemma that we face.

Mr. Harry Cohen (Leyton) : I appreciate my hon. Friend's excellent speech. Does he agree that excessive defence spending and the flow of capital abroad are dangerously linked for us in the medium and long-term future? If there were a world recession, many of the countries where British money has been invested would seek to appropriate it to get themselves out of that recession. All that would be left to us would be the threat of force and our defence budget, which could lead us into war-- possibly not with the most powerful countries, such as the United States, but with other countries. We could find ourselves on a war footing because of the silly policy of excessive investment abroad. That is the link with defence spending.

Mr. Livingstone : My hon. Friend is right. Over the past 150 years, the British economy invested abroad on a large scale and felt that it needed a huge arms budget to defend itself from the growing power of Germany and America. That is the problem. However, there is also a link with our education institutions. We should compare ourselves with Germany. In 1870, already more scientists were employed in the German chemical industry than were employed in every public and private institution throughout the British empire. Germany was committed to building a strong industry, and it recognised the consequent need for a skilled and well- educated work force. We had an economy that was investing abroad and that wanted, therefore, a huge defence establishment to protect those investments. It did not need to train its own work force because investment was going abroad. In the debates about the creation of a proper universal education system, Lord Salisbury, before he became leader of the Conservative party, opposed expanding the education system because he said that Britain did not need it.

He said that it would mean "pouring learning into louts." That philosophy has run through our education system. Our system is still skewed towards the old imperial objective of investment abroad, for which we need a colonial structure, rather than creating the skills among our own people that we need to provide a modern economy.

Mr. Madden : Will my hon. Friend confirm that even today in Germany there are more students studying engineering than the entire student population of Britain? Will he also confirm that we now have the most marvellous opportunity because of developments in eastern Europe? We could switch all the talent and ability here from production for war to production for need. That is the marvellous opportunity that faces this country and the Labour movement.

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Mr. Livingstone : I shall close on that point. The world has been changed by Gorbachev. I said earlier that we needed to cut defence spending irrespective of the recent changes. We now see the chance emerging for a massive switch of resources--not just in western Europe, but in eastern Europe and the Soviet Union--away from arms and into a genuine modernisation of the economy right across Europe. We should look to eastern Europe and the Soviet Union where a market of 400 million people wants to trade with us, and to see the expansion and development of a closer and more integrated European home. The hon. Member for Eastbourne should not judge the Labour party by comparing the 1983 manifesto with our policy review. He should judge us by the manifesto that we shall post before the British people in a year or two. He should ask us then whether we have costed our proposals, where the money will come from, how much we shall cut defence, an how much we shall control capital. We must ensure that when we go into the next election we can say to the people, "This is our programme and that is what it will cost." Our programme will be paid for not by increasing the money supply and fuelling inflation, by increasing taxes on ordinary middle-income families or by a structure of wage controls, but by redirecting our existing wealth, which is being consumed by excessive arms spending, and by ensuring that Britain's financial institutions first serve the reconstruction of our own economy before considering investment abroad.

Several Hon. Members rose --

Mr. Deputy Speaker : Order. We have had two speeches in about as many hours. Unless speeches and interventions are briefer, most hon. Members will be disappointed.

Mr. Madden : On a point of order, Mr. Deputy Speaker. When we were involved in the exchanges earlier about how an official of Conservative Central Office obtained permission to enter the civil servants Box, you were good enough to say that inquiries would be made. Would those inquiries include whether there was an official request from the Government, including the Cabinet Office, for that official to be given permission to enter the Box? Before the chairman of the Conservative party speaks, may we ask him whether he will make it clear whether his intervention is being made in his capacity as chairman of the Conservative party or on behalf of the Government, as Chancellor of the Duchy of Lancaster?

Mr. Deputy Speaker : To the extent that the hon. Gentleman's points are matters for me, I assume that what he has said will be taken into account in the inquiries.

Mr. Skinner : Further to that point of order, Mr. Deputy Speaker. Discussions have been taking place behind the Speaker's Chair, of which you will not be aware, about the deep concern about how this person managed to evade the security people and how it was that a day pass was allocated. It was done perhaps on the basis that it was thought to be OK because the Chancellor of the Duchy of Lancaster, the chairman of the Tory party--non- elected and given his job by patronage from the Prime Minister--had induced the officials and almost intimidated them into thinking that they would be doing the right thing if they allowed this person into this high security place. In view of that deep concern, the fact that the Patronage Secretary came here some time ago with a worried look on his face and the fact that these inquiries

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are developing, we should have a statement before the House rises so that we may know what has happened. You, Mr. Deputy Speaker, should pass that message on as soon as possible to the relevant authorities.

11.58 am

The Chancellor of the Duchy of Lancaster (Mr. Kenneth Baker) : I have already said that I apologise to the House if there was a mistake. There should not have been an official from central office in the civil servants Box and he has withdrawn from that position. I congratulate my hon. Friend the Member for Eastbourne (Mr. Gow) on having had the good fortune to win the ballot in this matter and on directing the House to this subject. We do not often have an opportunity to discuss Labour party policy. Some of my right hon. and hon. Friends try to direct questions to the Prime Minister at Prime Minister's Question Time about Labour party policy, but they are ruled out of order, as the Prime Minister is not responsible for that policy.

We have had two such opportunities in the past few weeks ; the first was the debate before Christmas on a motion about the future of Socialism ; the second is today.

I have no disrespect for the hon. Member for The Wrekin (Mr. Grocott) but I must tell him that I am surprised that on these two occasions, which have presented an opportunity for shadow Cabinet members to speak about Labour's policy, they have not tried to intervene. I remember the hon. Member for The Wrekin as the hon. Member for Lichfield and Tamworth, a seat which he lost ; no doubt he will lose his present seat in the fullness of time, too.

The person chosen to reply to the debate must have been discussed collectively by the shadow Cabinet. No doubt Mr. Mandelson strongly advised the shadow Cabinet not to debate against me in the House because I might have to spell out what its members believe in, which would be wholly unacceptable--to Mr. Mandelson, who is very determined on these matters, and to the shadow Cabinet.

Mr. Bill Walker : My right hon. Friend will probably also have noticed that not a single Scottish Opposition Member is present. They are holding a sham convention in Scotland today at which they will debate the future government of Scotland, instead of coming here to explain the Labour party's flawed, fraudulent and unworkable proposals on devolution.

Mr. Baker : So yet another opportunity has been missed by the Opposition--

Mr. Simon Hughes (Southwark and Bermondsey) : I can shed a little light on the absence of Labour Front-Bench spokesmen. The Labour Whip said that the hon Members for Copeland (Dr. Cunningham) and for The Wrekin (Mr. Grocott) would be in attendance, but a last-minute intervention removed the shadow Leader of the House, perhaps because he is more vulnerable than many others.

Mr. Baker : We need a parliamentary inquiry into that, too. Why has the hon. Member for Copeland (Dr. Cunningham) been removed from the Front Bench today? After all, he was in the Lobby last night to vote, and he is not only the shadow Leader of the House but the Labour campaign co- ordinator. I frequently find myself debating

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with him. I am grateful to the hon. Member for Southwark and Bermondsey (Mr. Hughes) for reminding the House of these circumstances. But why?

Mr. Grocott : I am sorry to hear that the Chancellor does not think me a worthy opponent, but we shall have to judge that when the debate is over. I can give him an absolute assurance that I have been well aware for some time that I would take part in the debate, and I look forward to doing so, although I doubted at one stage whether I would be able to, as the first speech lasted for one and a half hours. I hope that I shall at least be a match for the hon. Member for Eastborne (Mr. Gow)--

Mr. Deputy Speaker : Order. I have already said that unless speeches and interventions are shorter many hon. Members will be disappointed.

Mr. Baker : I do not believe that the hon. Gentleman is an unworthy Member, but he does not speak with the authority of the shadow Cabinet. It is clear that two names appeared on the Whip ; the hon. Member for The Wrekin was going to wind up, but the hon. Member for Copeland was going to open the debate. Where is he? It is all very extraordinary.

I have several shadows. Sometimes I am shadowed by the deputy leader of the Labour party, sometimes by the chairman of the Labour party--it is hard to remember who he is these days--but I must point out that these debates deserve the attention of, and attendance in the House by, a member of the shadow Cabinet. The absence of such a member shows the Opposition's reluctance to debate these matters and the contempt in which they hold the House.

I want to touch on the speech made by the hon. Member for Brent, East (Mr. Livingstone). I have some regard for the hon. Gentleman ; we crossed swords in the past on the GLC in the days of Red Ken and Blue Ken. Since he joined the House it has become fashionable to write him off and to say that he has disappeared without trace. I do not happen to agree with that view. I think that the hon. Gentleman represents a consistent strand in Labour party thinking and in Socialism ; he has stuck to that, as have the hon. Members for Bradford, West (Mr. Madden) and for Bolsover (Mr. Skinner). It was clear from the speech made by the hon. Member for Brent, East that he has little sympathy with the so-called Labour policy review. He said at the end of his speech that we should judge the Opposition not on the review but on the manifesto to be published in one or two years' time. But that manifesto will draw on the review. It has been approved by such bodies as pass for representative organisations in the Labour party.

The hon. Gentleman said in an interesting aside that he had been involved for two years in the policy review. He was obviously dropped thereafter, rather like the hon. Member for Copeland was dropped from the Front Bench today. I am not surprised, given what the hon. Member for Brent, East was saying. He spoke bluntly, frankly and openly as we would expect of him, and he clearly said that the economic policy that any Labour Government must follow must be based upon massive intervention in the markets. He openly said that there must be exchange controls ; that is not the view of Labour Front-Bench spokesmen. No wonder the hon. Member for Copeland is

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not here today. He would have had to defend the non-return of exchange controls ; Labour Front Bench spokesmen do not believe in their reimposition.

The hon. Member for Brent, East also admitted, when answering the intervention by my hon. Friend the Member for Fulham (Mr. Carrington), that these controls would lead to major trauma in the EEC but that he was prepared for that. That is not the view of the Labour shadow Cabinet or of the policy review document. The hon. Gentleman pictured the wonderful possibility of sabotage by the City and of Lenin's red guard marching down to the bank. If it ever came to that there would be no better person to command the march on the Bank of England than the hon. Member for Brent, East. We would relish it. It would be his personal Bastille and the flag of Socialism would be planted on the Bank of England. It is pointless to disguise these differences between strands of opinion in the Labour party.

The policies in the review document merit examination and discussion. Entitled "Meet the Challenge Make the Change", it gives rise to two questions of great interest : first, whether Labour policies have changed ; and, secondly, whether a big idea lies behind them.

Thousands of column inches in the press have been used up discussing whether there is a big idea, and various people have tried to find one. The last article on the subject that I read suggested that the big idea was to have no big idea. Certainly, there is no guiding vision in the document, no overriding view of the future. The only big idea that one can detect behind the document is a desire for power and office at any cost. That is what has overtaken the Labour party.

Have Labour policies changed? We should recognise that there have been some changes--for instance, the language of the Labour party has changed. Throughout the document we find words such as "market", "choice", and even "the homeowner". Occasionally even shareholders are mentioned--a benighted group they would be under Labour. And sometimes, the document even mentions taxpayers.

Is there a new agenda? Let us examine the subject of choice. The document rightly says that quality is important in education. That means support for the national curriculum, which the Opposition are trying to change and modify. The document also says that Labour is committed to preserving diversity in schools so that there can be choice for parents. What does diversity mean in terms of Labour policy? The Opposition want to abolish the remaining grammar schools. That is not increasing diversity, it is reducing choice. They are on record as wanting to destroy the city technology colleges that we shall set up. By destroying those colleges, Labour will not be increasing diversity but reducing it. It wants to destroy the grant-maintained schools, the many schools that have already opted out and the many more that will want to opt out. That is not increasing diversity. The rhetoric has changed, but the underlying reality has not, because Labour basically believes that all our children should go to one type of school that is owned, controlled, dominated and run by the local education authority. So much for the page 46 statement that :

"Labour is committed to preserving diversity."

Mr. Madden : I am grateful to either the chairman of the Conservative party or the Chancellor of the Duchy--I am not sure how I should address the right hon. Gentleman.

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He rightly talks about the importance of choice and diversity. May I refer him to one small but important aspect of choice and diversity? Does he think that schoolchildren should have the opportunity to dress according to religious belief? If he does believe that, will the Government reinforce that important aspect of choice and diversity?

Mr. Baker : As the hon. Gentleman knows, the matter of dress for children is determined by the governing bodies of schools. It would not be appropriate for the Government and the hon. Member for Blackburn (Mr. Straw), if he were in the Chamber, would not suggest that the Government should impose a particular pattern or solution for school dress. That is a matter for the respective governing bodies.

Mr. Madden : I understand what the right hon. Gentleman says, but I should like to press him further. Would he advise governors wherever possible to ensure

Mr. Deputy Speaker : Order. We are departing from the motion before the House. Perhaps we should return to it.

Mr. Baker : The hon. Gentleman's comment shows that Opposition Members are always trying to find ways in which Ministers can tell other people what to do. We believe in true diversity and that parents should have a much greater say in the running of schools. Grant-maintained schools have a democratic process for deciding whether they wish to become part- maintained schools. Labour would set that aside. How does that tie in with Labour's statement that "Parents are a cornerstone of a school's success and a pupil's progress."

Labour pays lip service to such matters, but its underlying policies have not changed, and Labour continues its vendetta against private schools.

Labour makes it clear that it will withdraw charitable status and will abolish the assisted places scheme. The party wants to destroy private education and that is restricting choice, not diversifying it. We get little insights into the vindictiveness of the Labour party. It is not in the document that we see the true Socialist venom on public schools. Ten days ago, in a speech by the deputy leader of the Labour party on constitutional matters, he put forward the reasons why he did not believe in a Bill of Rights. He also put forward other proposals about the House of Lords and such matters with which hon. Members are familiar. He said :

"One of the reasons why we are against a bill of rights is that it would almost certainly protect the public schools."

That is another indication of how Labour is prepared to trim its principles. It talks about people's rights, but when it comes to a Bill of Rights that would enshrine choice and protect the individual, it says, "We do not want that, because the individual might want to exercise his choice by spending money on the education of his children." It is unparliamentary to say that that is hypocritical so I shall say that it is very devious.

The hon. Member for Brent, East talked about industrial policy as it is sketched in the policy review document. One of the early passages of the document talks about a "productive and competitive economy". We know from reports in The Guardian that the article had to be redrafted. Its author, the hon. Member for Dagenham (Mr. Gould), is not on the Opposition Front Bench today.

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The hon. Gentleman is one of the thinkers in the Labour party. I am not saying that the hon. Member for The Wrekin is not a thinker or is incapable of thinking, but the hon. Member for Dagenham has set himself up as one of the revisionary thinkers. At the last general election, he held the fort when the Leader of the Opposition went round the country. He was the bright new guy whom we did not know much about before, and he was doing all the thinking. Never has a reputation plummeted so abruptly, completely and precipitously than that of the hon. Member for Dagenham. Yesterday, he made one of the most inept and disastrous speeches that we have heard for a long time.

I shall now turn to the parts of the document that deal with industry and markets. We know that Labour's adherence to markets is only skin deep. It talks of the importance of recognising market forces, but the whole document is based upon the analysis that the market and market forces have failed and that we need massive instruments of intervention. Labour has plans for introducing quangos, national banks and public enterprise agencies, and that bears witness to Socialism's cold embrace for modern economics. Under Labour, we would have a "British industrial bank" and "British technology enterprise". Those bodies will pump money into projects which, basically, the planners in Whitehall think are viable. That takes us right back to the policies of the 1960s and 1970s. In a lecture to the Tribune Group, which was subsequently shortened and printed in The Guardian, the hon. Member for Sheffield, Brightside (Mr. Blunkett) looked forward to a local high street version of the national investment bank. All sorts of people will be encouraged to part with their savings to back winners. As I and my hon. Friends know only too well, we have been here before in the 1960s and 1970s. The hon. Member for Brent, East knows only too well about the Greater London Enterprise Board. That body was to pump money into projects which would not otherwise be funded by people who were too short-sighted to invest in projects on the frontiers of science. The hon. Gentleman knows that we had meetings about that when he was running the GLC. In 1984, of 18 companies in which the GLEB held 10 per cent. or more of the share capital, four were in liquidation, one was in receivership, and nine had failed to provide proper audited financial statements.

Mr. Livingstone : Will the right hon. Gentleman compare those statistics about the minority of failures that we had with the record of his Government under whom 80 per cent. of all new firms created in the last 10 years failed within two years? If the private sector had achieved the success rate of GLEB, many jobs and firms would still be going.

Mr. Baker : The GLEB failed in virtually every one of its investments, and the hon. Gentleman knows that. He talks about the creation of businesses. As a result of the changes that we have made in Britain's general economic framework, we are creating about 1,200 net new businesses a week. That is because we have provided opportunities and rewards through reduced taxation and have not tried to tell businesses where to invest and what products and projects to develop. We have left those matters to the spontaneity, inventiveness and originality of individuals.

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That is why we have had eight continuous years of the highest growth since the war. That is also why we have created more jobs than any country in Europe. The unemployment rate in Britain yesterday was 5.8 per cent. and in Europe it is about 9.1 per cent. This has been a decade of economic success.

The Labour party policy document talks about forcing investment to state ownership. My hon. Friend the Member for Eastbourne eloquently set out all the different companies and nationalised industries that we have privatised. That policy has been one of the greatest successes of the last 10 years and has not only increased the number of shareholders but has allowed industry to expand. Cable and Wireless was transformed from a sort of post-imperial telegraph company into a major telecommunications business. We have seen such transformations one after the other. What will the Labour party do about such matters? According to page 12 of its policy document, it will renationalise British Telecom. Page 15 says that Labour will restore water to public ownership and buy back shares in gas and electricity. The language has changed. Nationalisation, the old cry of the Labour party--clause 4 and all that--has been transformed into social ownership. Those words have been replaced by another weasel phrase--"public interest companies". What is a "public interest company"? I would have thought that Marks and Spencer, Sainsbury's, or British Airways--to whose transformation after being a state airline my hon. Friend the Member for Eastbourne also referred--are all public interest companies, because they put the interests of the public first. That is what the market does, but Labour cannot resist the temptation to meddle, to own, and to take public companies back into state control.

It is little wonder that the hon. Member for Copeland is not present to defend his party. It is extraordinary that no member of the shadow Cabinet is here to reply to the comments that have been made.

In his recent infamous interview, the hon. Member for Dagenham spoke about the way in which a Labour Government will treat shareholders and dividends. I believe not that that interview was an aberration but that it revealed the true nature of Labour's thinking. That is another example of Labour changing the rhetoric but not the reality.

The Labour party does not want to debate trade union reform, either. It declines to answer straight questions on that topic because its relationship with trade unions is one of the closest in political life. The Labour party grew out of the bowels of the trade union movement, which is why 90 per cent. of the voting power at Labour party conferences is in the hands of trade unions, why 40 per cent. of the members of the electoral college that selects Labour's leader are trade unionists, and why 40 per cent. of the votes for Labour party parliamentary candidates throughout the country are controlled by trade unions. There are rumours that those percentages might be changed, but I guarantee that they will not be eliminated, because Labour cannot cut its residual links with the trade union movement.

Mr. Couchman : Does my right hon. Friend agree that the hon. Member for Oldham, West (Mr. Meacher) gave such a frank insight into the actions that Labour would

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take for trade unions if elected that he was removed from his post as shadow Cabinet spokesman for employment, because his remarks did not sit well with the new policy of glitzy packaging and not too much truth?

Mr. Baker : The hon. Member for Oldham, West (Mr. Meacher) meant what he said, and that is no way to hold on to a place in the shadow Cabinet.

The "People at Work" section of Labour's policy document reveals a party looking over its shoulder at its paymasters and not a party concerned with the industrial realities of the 1990s. It states that under Labour, not all sympathy strikes would be unlawful--which means that Labour will reverse our legislation and legalise secondary action. We wait for further clarification on that aspect of the Opposition's policy. The document adds that under Labour, walk-outs and strikes would go ahead before ballots have been taken. In other words, strike first and vote Labour.-- [Laughter.] I mean, vote later. My slip of the tongue revealed absolutely the true nature of that policy--strike first, vote later, and vote Labour all at the same time. Under Labour, individuals would have the right to strike without their union's funds being seized by the courts, which would put unions above the law.

Since the publication of Labour's policy review, we have witnessed a blinding flash of light, as my hon. Friend the Member for Gillingham (Mr. Couchman) observed. The hon. Member for Sedgefield (Mr. Blair), who is Labour's new spokesman on such matters, could have come to the House today to clarify Labour policy. One might well ask where he is. One can be sure that he is not present to answer questions about Labour policies. The hon. Member for Sedgefield has said that the Opposition will not defend the closed shop when the Government move to outlaw it in the Employment Bill. That is quite a change on the road to Damascus. When did Labour decide not to support the closed shop? It was when it realised that we intended to take action. Labour realised that it would be totally indefensible to defend the closed shop in debates in the House and throughout the country. That is another example of Labour trimming its previous views.

The Employment Bill contains many other new measures. It will be interesting to see whether Labour supports our proposals to abolish wildcat strikes, which will mean extending the responsibilities not only of trade union officials but their members. It will be interesting also to discover whether Labour supports our action to eliminate secondary action. Again, it is hardly surprising that there is no official Labour spokesman present to clarify Labour's policy on those matters.

Mr. Harry Cohen (Leyton) : Closed shops will be debated when the Employment Bill begins its progress through the House in a couple of weeks. Labour's thinking is that such matters fall within the scope of the European social charter. That part of the charter outlawing closed shops is something that many of my right hon. and hon. Friends do not like, but members of our Front Bench are prepared to accept it because they want to see introduced all the good elements in the social charter--including the banning of blacklists, such as those produced by the Economic League, and rights at work provisions, such as parental and family leave. The Government are anxious to implement the social charter's move against closed shops but none of the other provisions that it contains. How does the chairman of the Conservative party justify that?

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Mr. Baker : I can justify it because we believe that many of the matters dealt with in the social charter should be dealt with within the relationship between the employer and the employee. We have already received from the hon. Member for Brent, East a clear indication that he wants to dismantle the EEC as it is now organised--to traumatise the EEC.

Mr. Livingstone : No, to reform it.

Mr. Baker : To see the hon. Member for Brent, East as a reformer requires a imaginative jump of a kind that I am not prepared to make.

Labour's policy on defence is also obscure. It would have been useful if there had been present for this debate Labour's shadow Cabinet spokesman for defence or even one of his three hon. Friends who serve as defence spokesmen. I dare say that there is hardly one right hon. or hon. Member who can name them, so well known are they. They must be somewhere in the country today, putting over Labour's defence policy. Not only is it impossible to name them, but one never hears from them. I am not surprised, because defence policy is another policy that Labour has given the appearance of changing but has not changed.

Labour has given the appearance of abandoning unilateralism and adopting a multilateralist policy. When the matter was debated at the last Labour party conference, The Times ran a leader commenting that Labour had at last rid itself of what had probably been its most consistent decisive and consistent handicap. If there has been a change, we must recognise it, but Labour are unhappy, unwilling and hesitant to debate it.

If Labour's policy is new why do they hide it under a bushel? Why is it so vague and why do we have to piece it together from speeches and interviews? Why does the leadership refuse to give straight answers to straight questions?

I shall pray in aid Mr. Bruce Kent, of the Campaign for Nuclear Disarmament, who has summed up Labour's problems when he spoke at the Labour conference last year. He said :

"It doesn't make any sense today. Read the papers. Baker--quite correctly-- and the Conservatives say that the real issue is, are we going to have nuclear weapons as long as anybody else? That's the question they won't answer here in the NEC."

I have put that question to the right hon. and learned Member for Monklands, East (Mr. Smith) in Question Time, and on many other occasions to Labour Front-Bench spokesmen.

In the disarmament process it is not the weapons that one starts with that are important but the weapons that one ends up with at the end of the process.

I have to ask that question again, and perhaps the hon. Member for The Wrekin could have a stab at answering it. I know that it can only be a stab at it, because he is not a member of the shadow Cabinet. It would know the answer to the question, which is quite

straightforward--should we give up our nuclear weapons while other countries have nuclear weapons targeted upon us? We shall ask that question again and again until polling day.

In a recent interview, Mr. David Frost put that question to the Leader of the Opposition and I put it again. The reason why he did not give a clear answer is again given by Bruce Kent, who says : "The policy review is an electoral strategy, not a set of disarmament proposals."

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A genuine and well-thought-out policy designed to defend Britain in the 1990s could withstand scrutiny and provide answers to these questions, but Labour's policy is a fudged formula, multilateral in language and unilateral in essence. It cannot survive any thorough going examination.

Mr. Hugo Young, the well-known political journalist and commentator, whom no one could describe as a closet Conservative--

Mr. Gow : He writes for The Guardian.

Mr. Baker : My hon. Friend confirms me in my belief that he is not a closet Conservative if he writes for The Guardian. This is Mr. Young's comment on the Leader of the Opposition's appearance on the David Frost interview the other morning--the hon. Member for Brent, East will enjoy this :

"His discourse on defence policy, and Labour's attitude to nuclear disarmament, contained so many seamless obscurities, delivered in such ungrammatical verbiage yet with an air of sententious candour, as momentarily to convince you that this man is not fit to be put in charge of a pea-shooter."

That is the considered view of one of our leading political journalists upon the Leader of the Opposition when he is pressed on defence policy.

Yesterday, the House debated local government and the community charge. Questions have been asked this morning about how Labour would propose to pay for local government and the questions have not been answered, because Labour has no proposals. It has agreed to half of our proposals for the business rate. It is in favour of revaluation, but against the uniform rate. Therefore, it wants revaluation, but it wants the councils to be left to decide what the local rate will be. Labour would leave it to the Socialist brothers and sisters in the town halls to make up their minds. Where would that leave people in Haringey, where business rates increased by 56 per cent. last year? Is that democracy for the business men of Haringey? What about Islington, where the business rate went up by one fifth last year? Under the Government's proposals, individuals will pay the community charge, but there will be comprehensive rebates for special categories of child care and for the less-well-off. Labour have opposed that tooth and nail. Many members of the modern Labour party, including 18 hon. Members, have openly encouraged law breaking and declared that they will not pay the charge.

Why have Labour opposed our policy? They know that it will sound the death knell for extremist Labour councils up and down the country because Labour is not interested in restoring sound financial discipline to local government. Next year, in Ealing, the council will find it more difficult to impose a 31 per cent. rates increase and to offer free self-defence classes to lesbians. Next year, Liverpool city council will find it harder to justify spending £250, 000 on the council media room, when some classrooms are closed because of dry rot.

Labour's opposition to the community charge is meaningless until they come up with an alternative. Hon. Members in the House yesterday--

Mr. Grocott : Leave things as they are.

Mr. Baker : We have had another alternative. The hon. Member for Lichfield and Tamworth has added his twopenn'orth--

Mr. Grocott : I am the Member for The Wrekin.

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Mr. Baker : Well he will not be the member for The Wrekin for very long. He has said, let us leave thing as they are. Is that official Labour party policy? Of course it is not.

Mr. Grocott : No.

Mr. Baker : That is encouraging.

Mr. Grocott : I am quite sure that if there had been a free vote in the House last night instead of a coerced vote, many Conservative Members would have shown that they wished that we had left things as they were.

Mr. Baker : The only striking speeches in the debate yesterday were those by my right hon. Friend the Secretary of State for the Environment and by my hon. Friend the Minister for Local Government and Inner Cities when he wound up. The hon. Member for Dagenham gave a disastrous and inept performance. He has made two bad speeches this week, one on Monday and one on Thursday. He had to admit that Labour do not know what to do.

The Minister for Roads and Traffic (Mr. Robert Atkins) : The keeper of the Grail.

Mr. Baker : Yes, he is the keeper of the Grail. I was describing the intellectual distinctions of the hon. Member for Dagenham. Yesterday he admitted that Labour does not know what to do. It has had four or five years. A year ago it knew what to do, and produced a document. The hon. Member for Copeland spoke about it. It is no wonder that he is not here today.

The document said that Labour would

"introduce a modern property tax based on the capital value of a property, combined with an element of income tax dedicated to local government".

That would mean two new taxes. The Independent reported, however, that an Opposition Member had discovered while canvassing that a system of two taxes was not popular on the doorstep. The Opposition have therefore abandoned that idea. What are we to have instead? Will a small chink of Labour's policies be revealed to us today? After all, a member of the shadow Cabinet is now here : he must know what his party is going to say. He has gained a distinguished record on profligate Labour councils over the years, and he should use this opportunity to tell us what form of local government finance the Opposition favour. I suspect that they incline towards a tax on the capital value of homes, related somehow to the wealth or income of the families or individuals living in those homes. But I shall give way, because I think that we are about to hear the answer to my question.

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