House of Commons Hansard Debates for 22 Mar 1990

Mr. Foulkes : I was born in England.

Mr. Max Madden (Bradford, West) : Is the Leader of the House aware of the allegations that three Chairmen of Select Committees hold financial interests that bear directly on the work of their Select Committees? Is he also aware that the Select Committee on Members' Interests will find great difficulty in bringing recommendations to the House before the summer recess because of its backlog of work? Will the right hon. and learned Gentleman have discussions with the Chairman of that Select Committee to see whether there is any way in which the Committee can bring recommendations to the House to dispel public disquiet about that matter?

Sir Geoffrey Howe : As the hon. Gentleman knows, there are procedures to deal with any individual allegation, and I encourage him to follow those if he wishes to pursue the matter. On the wider questions, the Chairman of the Select Committee on Members' Interests and his colleagues are considering the several matters before them in the way most likely to bring a conclusion before the House. I was in touch with the Chairman recently and I know that he is seeking to do his best.

Ms. Marjorie Mowlam (Redcar) : Will the Leader of the House please stop dodging and weaving on the question of a debate on the House of Fraser? During business questions last week he said that he would give the matter serious consideration. The Chair of the Select Committee on Trade and Industry, behind which the right hon. and

Column 1247

learned Gentleman is hiding, said last Thursday that he did not think that consideration of the matter by his Committee prevented debate in the House.

Will the right hon. and learned Gentleman assure us that once the matter has been referred to that Committee next week, he will confirm during business questions next Thursday, and certainly before we break for the Easter Recess, that he has finally made a decision?

Sir Geoffrey Howe : The hon. Lady is energetic in pressing that cause upon me, and she is not alone in doing so. The matter, together with all the evidence from my right hon. Friend the Secretary of State, will be fully considered by the Select Committee. It would be sensible to wait for that before reaching a conclusion.

Several Hon. Members rose --

Mr. George Foulkes : My mother was born in England.

Mr. Speaker : Order. The Scots have been very patient-- [Interruption.] There is an adage about the first coming last and the last coming first, and that happens from week to week, but this time I call Mr. Foulkes.

Mr. Foulkes : Good evening, Mr. Speaker.

Does the Leader of the House agree with so many Opposition Members that it is an insult to the House for the Secretary of State for Scotland to make a detailed statement to the press at 2.30 pm instead of coming to the House to make a statement at 3.30 pm? Is the right hon. and learned Gentleman aware that, in his earlier replies, he misunderstood--perhaps deliberately- -what we were saying? We want a statement, but we do not want only to ask questions about a detailed statement after the scheme has been worked out ; we want to ask questions about what the Secretary of State said today.

Why is the £4 million coming from the already overstretched Scottish Office budget? Which parts of the budget will have to be cut because of that? Will the Secretary of State come to the Dispatch Box at the first possible opportunity to do what he is paid to do, which is to answer to this House?

Sir Geoffrey Howe : As I have already said, my right hon. and learned Friend the Secretary of State will fully report his proposals to the House at the earliest opportunity after the details have been worked out.

Mr. Dick Douglas (Dunfermline, West) : Perhaps the Leader of the House could help us because of his previous experience as Chancellor of the Exchequer. Are we to understand that the statements about capital offsets were made in Cabinet and accepted by the whole of the Cabinet, and that it was not until the Secretary of State for Scotland threatened to resign and the hon. Member for Southend, East (Mr. Taylor) expressed his displeasure that a rapid turnabout occurred?

Will the Leader of the House assure us that the person who comes to the Dispatch Box before Scottish questions next Wednesday will be the right hon. and learned Member for Edinburgh, Pentlands (Mr. Rifkind) and not the hon. Member for Southend, East or the hon. Member for Stirling (Mr. Forsyth)?

Above all, I invite all those who wish to pursue the campaign against the poll tax in Scotland to attend a rally in Glasgow on 31 March, when we intend to show our total opposition, not manufactured opposition, to the poll tax.

Column 1248

Sir Geoffrey Howe : Despite my passion to help the hon. Gentleman and despite his newly independent status, I am not prepared to divulge what took place in Cabinet. I assure him that all his allegations stand on imagined foundations.

Mr. Malcolm Bruce (Gordon) : Does the Leader of the House accept that the Secretary of State for Scotland has effectively been cut adrift by the rest of the Cabinet over this issue? In those circumstances, his future is at stake, and his inability to come to the House and tell us what a packed press conference heard is not only unacceptable but further undermines his already weakened position. Is not it a fact that the £4 million that he has put aside has come from his Scottish Office budget, which shows that the rest of the Cabinet have washed their hands of him?

Sir Geoffrey Howe : There is no basis for reaching such a conclusion. As one would expect, my right hon. and learned Friend has discussed the matter with his colleagues, including my right hon. Friends the Prime Minister and the Chancellor of the Exchequer. The Prime Minister has already answered questions about it in the House, as have I. The position will be explained to the House in due course by my right hon. and learned Friend the Secretary of State.

Mr. Thomas McAvoy (Glasgow, Rutherglen) : I am tempted to say, "Good morning." As you have repeatedly said, Mr. Speaker, this is a United Kingdom Parliament. Bearing in mind the fact that, particularly since 1987, the Government's decisions have been vindictive and unfair to Scotland, will the Leader of the House undertake to have a debate in the House next week to consider the record of this Conservative and Unionist Government on damaging the Union?

Sir Geoffrey Howe : Speaking as a Welshman for another national component of the United Kingdom, I find the sensitivity of the Scots on this matter difficult to understand. The Government seek to govern the United Kingdom, and do so effectively ; Parliament seeks to represent the United Kingdom, and does so effectively. We shall continue to do so.

Mr. Andrew Welsh (Angus, East) : When I previously asked the Leader of the House what should be done when important Scottish business was put through the House so that it minimised parliamentary scrutiny, he expressed some concern, yet once again he has allowed that to happen. It is insulting enough for Scotland to be treated as an afterthought, but worse still when parts of the Scottish Office budget are to be transferred and services endangered without the Secretary of State for Scotland being here in any shape, form or presence to answer for his actions. If his statement was made today, surely his response should also be made today.

What can be done about a Prime Minister who deliberately misleads the House --

Mr. Speaker : Order. The hon. Gentleman must withdraw that remark. No Minister, or even hon. Member, misleads the House.

Mr. Welsh : I was only asking whether anything could be done, because clearly--

Mr. Speaker : Order. The hon. Gentleman may have done so, but I am asking him to rephrase his question.

Column 1249

Mr. Welsh : I shall certainly do so. What can be done about a Prime Minister who, perhaps accidentally, misleads the House? When she says that the poll tax will be popular, not only does she mislead the House, but she totally deludes herself.

Sir Geoffrey Howe : My right hon. Friend the Prime Minister has expressed her opinion on the matter clearly, and it is one which we share. I hope that the House will also come to share it.

Dr. Norman A. Godman (Greenock and Port Glasgow) : I offer the right hon. and learned Gentleman no apologies for staying with the issue of the implementation of poll tax concessions to people in Scotland. If the matter, as it relates to England and Wales, was important enough to be outlined in detail by the Chancellor of the Exchequer on Tuesday, why have we heard only a statement of sorts today by the Prime Minister and the Leader of the House concerning the Scottish poll tax payers? The issue is above party politics ; an increasing proportion of our surgery workload each week is concerned with dealing with distressed, elderly constituents who simply cannot find the means to make their poll tax payments, be they weekly or whatever. A statement should be made from the Dispatch Box. Has the Leader of the House received any information in the past few minutes about whether such a statement is to be made by the Secretary of State for Scotland on Monday or Tuesday of next week?

Sir Geoffrey Howe : It is because of the need for clarity about such matters, as the hon. Gentleman said, that I have said that my right hon. and learned Friend will make a statement to the House when the details have been fully worked out and can be understood.

Mr. William McKelvey (Kilmarnock and Loudoun) : Does not the Leader of the House, with hindsight, confess that, had he given serious consideration to the setting up of a Select Committee on Scottish Affairs, the great disorder, the shambles, that is now apparent in the Scottish Office might not have occurred?

Column 1250

Sir Geoffrey Howe : There is no such shambles in the Scottish Office ; nor does the hon. Gentleman's argument add to those that have already been made about the possibility of setting up a Select Committee.

Mr. John Home Robertson (East Lothian) : Why is the Secretary of State for Scotland being kept under wraps today? Does this latest victim of the pampering of the Scots by the Prime Minister have one black eye or two? As this must be just about the only example of a Secretary of State, on a Thursday, handing out from his overstretched budget £4 million in settlement of a claim that on the Wednesday he dismissed as bogus, may we now have a proper explanation?

Sir Geoffrey Howe : My right hon. and learned Friend the Secretary of State for Scotland, and the Government as a whole, have responded sensibly, within the budgetary framework, to the case that has been canvassed in this House. The House will be told about it in due course by my right hon. and learned Friend.

Mr. Alex Salmond (Banff and Buchan) : I am aware, Mr. Speaker, that one day the last will be first.

Is the Leader of the House really saying that a Lobby briefing was given today on a scheme that had not been fully worked out, a scheme that the Chief Secretary to the Treasury had said was impossible? Is not the real reason for the lack of a statement by the Secretary of State for Scotland the fact that such a statement would quickly expose the hollow sham of recycling money in the Scottish Office budget, by comparison with the provision of the new money that was announced by the Chancellor on Tuesday? Does the Leader of the House not understand the wish of Scottish Members to question the Secretary of State for Scotland? The only reason that we can think of for his remaining in office is the identity of his possible successor.

Sir Geoffrey Howe : The hon. Gentleman is again allowing his fancy to run riot. The fact is that the proposals that my right hon. and learned Friend has disclosed will be presented to the House in due time. [ Hon. Members :-- "When?"] When the details have been fully worked out.

Column 1251

Motion for Adjournment

4.16 pm

Mr. Speaker : I have a short statement to make about arrangements for the debate on the motion for the Adjournment which will follow the passing of the Consolidated Fund (No. 2) Bill on Tuesday 27 March. Members should submit their subjects to my office not later than 9 am on Monday 26 March. A list showing the subjects and the times will be published later that day. Normally the time allotted will not exceed one and a half hours, but I propose to exercise discretion to allow one or two debates to continue for rather longer--up to a maximum of three hours. Where identical or similar subjects have been entered by different Members whose names are drawn in the ballot, only the first name will be shown on the list. As some debates may not last the full time allotted to them, it is the responsibility of Members to keep in touch with developments if they are not to miss their turn.

Mr. George Foulkes (Carrick, Cumnock and Doon Valley) : On a point of order, Mr. Speaker.

Mr. Speaker : If I divine what it is about, I am not sure that I can answer it.

Mr. Foulkes : I am sure that you will do your best, Sir. You will have heard the genuine anger from the Leader of the Labour Party, from the shadow Leader of the House, and from spokesmen of all other Opposition parties, about the fact that the Secretary of State for Scotland has not made a statement to the House but, instead, has made a statement to the press. Will you, Mr. Speaker, raise again the question of the Government's ignoring the convention that statements should be made to the House and, instead, briefing the press? Perhaps you, with all your authority, can do something about it.

May I ask you, Sir, also to use your good offices to ensure that, if we cannot have a statement, the Secretary of State for Scotland might be allowed to speak from the

Column 1252

Dispatch Box in the Budget debate to explain why he has made this amazing U-turn? As my hon. Friend the Member for East Lothian (Mr. Home Robertson) has said, the Secretary of State has today acceded to a claim that yesterday he described as bogus. Can you use your influence to have the Secretary of State brought to the Dispatch Box? He is not usually reluctant to come to the Dispatch Box ; indeed, he is normally very enthusiastic. Can you ensure that that enthusiasm is channelled?

Mr. Speaker : Who speaks from the Dispatch Box is not a matter for me. As to the press being briefed before hon. Members are briefed in the House, the whole House knows my strong feelings.

Mrs. Margaret Ewing (Moray) : Further to that point of order, Mr. Speaker. I emphasise that this is the third occasion on which the Secretary of State for Scotland has shown gross discourtesy to hon. Members and, through them, to their constituents. After all, it is our constituents whom we are elected to represent. Particular issues are the future of lowland airports, the distribution of fishing quotas--a vital matter in Scotland-- and now cash limits under the community charge regulations. It seems that this discourtesy is becoming a matter of policy that is exercised by the Scottish Office.

These back-door announcements cannot be tolerated by Members, who are democratically elected to look after their constituents' interests. I ask you, Mr. Speaker, as the protector of Back-Bench Members, to raise the matter directly with the Leader of the House, the Secretary of State for Scotland and the Prime Minister, who was obviously finding great difficulty in responding to questions on the issue this afternoon.

Mr. Speaker : The hon. Lady knows that that is not a matter for me. Undoubtedly her remarks will have been heard by the Leader of the House. I remind the hon. Lady that there will be opportunities to raise the matter during the Easter Adjournment debate and during Scottish questions on Wednesday.

Column 1253

Orders of the Day

WAYS AND MEANS

Order read for resuming adjourned debate on Question [20 March].

Amendment of the Law

Motion made, and Question proposed,

That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance ; but this Resolution does not extend to the making of any amendment with respect to value added tax so as to provide--

(a) for zero-rating or exempting any supply ;

(b) for refunding any amount of tax ;

(d) for relief other than relief applying to goods of whatever description or services of whatever description.-- [Mr. Major.] Question again proposed.

Budget Resolutions and Economic

Situation

[Relevant documents : European Community Document No. 9487/89 on the Annual Economic Report 1989-90 and the un-numbered Explanatory Memorandum submitted by HM Treasury on 31st January 1990 on the final version of the Report as adopted by the Council.]

Mr. Speaker : Before I call the Secretary of State for Trade and Industry, I tell the House that many right hon. and hon. Members wish to participate in the debate, but not enough to impose a 10-minute limit on speeches. If right hon. and hon. Members confine their speeches to about 15 minutes each, all those who wish to contribute to the debate will be able to do so.

4.24 pm

The Secretary of State for Trade and Industry (Mr. Nicholas Ridley) rose--

Mr. Dick Douglas (Dunfermline, West) : On a point of order, Mr. Speaker. I wish to take up a remark that you made about the opportunities to raise a matter that concerns many Scottish Members. You referred to Scottish questions next week. Will you try to use your good offices to ensure that we have a statement at least by Wednesday? I appreciate that there are many Scottish questions tabled for that day.

Mr. Speaker : That point has been made on numerous occasions by Opposition Members. I am sure that it has been heard by the Leader of the House, who has been present throughout.

Mr. Ridley : We come to the trade and industry part of the debate on the Budget. I shall argue that, through the sound policies of this Government, we live in a very different world from that which we knew 10 years ago. That is too easily forgotten. The Budget, which I strongly commend to the House, will sustain and build on those achievements. It will allow industry and commerce to redouble their growing contribution as engines of growth. All this is in marked contrast with the empty words mouthed by the Labour party. I will press them again and again--and doubtless in vain--to put some flesh on the

Column 1254

skeletons that they keep digging out of the cupboards of the 1960s and 1970s when they had responsibility for these matters. I commend the Budget for three reasons--first, because it is the right Budget to squeeze inflation out of the system, secondly, because it makes valuable changes in relation to the taxation of savings, charitable giving, workplace nurseries and other areas, and thirdly because I believe that it will be good for British business in all its manifestations. I intend to concentrate on the third of those areas.

When Opposition Members talk of business they think of large manufacturing industry, no doubt because their paymasters are manufacturing industry trade unions. In fact, there is a wealth of activities, including small businesses, services such as retail, consultancy and financial services, and many others, as well as manufacturing. It is the success of all sectors which matters for our standard of living.

In the past decade, thanks to the combined success of all these sectors, our standard of living has increased very substantially. I know that the mortgage rate, and the consequences of a spending spree by Labour local authorities are causing deep concern, and some hardship. But the take-home pay of a married man, with two children, on average earnings, has increased by more than a third in real terms since the Government took office. We should look at current difficulties against that background. Most people in this country are considerably better off now than they were in 1979-80.

In relative terms, too, our standard of living has improved. Let us look at "Purchasing power parities", as published by the Organisation for Economic Co-operation and Development. These make international comparisons of what our incomes will buy in different countries. During the 1970s Britain slipped back, and by 1980 we came eighth of the 12 EC countries. By 1988, we had moved up to fifth. We had overtaken Italy, the Netherlands and Belgium and had moved to within 5 per cent. of Germany and within 1 per cent. of France. Only Japan, of all the 24 OECD countries, has moved up the league table faster. What was the sick man of Europe is now doing very well.

Figures of economic growth in member countries also show that gross domestic product in the United Kingdom grew at an average annual rate of 3.2 per cent. between 1981 and 1989. The figure for Germany was 2.2 per cent. and for France 2.1 per cent. Here is further proof of the resilience of the British economy under this Government.

Mr. D. N. Campbell-Savours (Workington) : If we are doing so well, where has the surplus on invisibles gone? Why has it evaporated?

Mr. Ridley : I am glad that the hon. Member for Workington, (Mr. Campbell-Savours) acknowledges that we are doing so well, and I agree with him. I will give him the answer, if I may, later in my speech. I am coming to the very point that he has raised, but I would rather put it in the right context.

All this is a far cry from the days of the last Labour Government when, with very high levels of unemployment and inflation and appalling standards of living, all the then Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr. Healey)--who, I am sorry to see, is not in his place-- could say-- [Interruption.] --I quote him

Column 1255

because I am sure that Opposition Members would like to hear what their last Chancellor said, so perhaps they would be quiet and listen--was :

"of course there has been a fall in people's standard of life. And it has fallen this year and will fall again next year."

That is the truth. Labour Chancellors promise misery ; Conservative Chancellors have brought economic success.

In examining the current state of business in Britain, I want to look at the various sectors I mentioned earlier. First, small businesses : in 1988 a total of 1,200 small businesses a week came into existence--that is a net figure, after allowing for firms going out of business. The corresponding figure in 1980 was 300 a week. Much of the credit for this belongs to the Government. Reductions in personal and corporate tax and succesive programmes of deregulation have produced in Britain one of the best climates in the world for the birth and early growth of new businesses. My right hon. Friend's Budget continues the good work in several ways.

The increase in the profit limit for the small companies' rate of corporation tax and in the upper limit above which companies will pay the full rate will release £40 million in a full year which small businesses can use for investment. The measure will benefit 20,000 small companies, and it will mean that only companies with profits of more than £1 million will pay the full 35 per cent. rate of corporation tax. The House will recall that, when we took office, a company that made profits of more than £100,000 faced a swingeing 52 per cent. rate of corporation tax. We now have what is probably the most advantageous tax regime for small and medium enterprises of all our competitors.

The changes in value added tax that my right hon. Friend announced will also reduce both the financial impact of this tax and its administrative burden. The new system for bad debt relief will benefit business to the tune of £150 million a year, as well as ending what has become widely seen as an injustice, and the simpler rule for VAT registation by new and growing businesses will bring a useful additional relief, as well as removing a worrying risk of an unwitting breach of the regulations.

In Britain, as in other industrial countries, services account for a growing proportion of the economy. The service sector of the economy has grown by a third since 1981 ; employment in the service sector has increased by nearly 2.5 million people in the last six years, and services are a major contributor to the balance of trade. Last year, we earned a surplus of more than £4 billion on services. Many of the measures that we are fighting for in the single market negotiations are aimed at making a reality of competition in the supply of services in the community. The opportunities for competitive British suppliers, and the rewards, may well be greater than in manufacturing.

Nowhere is international competition sharper than in the financial services sector, which alone contributed more than £7 billion a year to the balance of trade in 1988. Deregulation, and modern information technology, have revolutionised both the structure of this sector and its operations in a few short years. It is essential for the tax regime to keep pace with these developments.

Stamp duty on share transactions accounts for a quarter of the cost of a modest transaction by a private investor, and for no less than three quarters of the cost of the largest transactions. Other financial centres in Europe are moving quickly to eliminate comparable taxes, and I congratulate my right hon. Friend the Chancellor on doing the same ; it is essential if we are not to put at risk the

Column 1256

leading position that the City has attained over the years. Together with the introduction of TAURUS, that will enable us to keep London the prime financial centre of Europe. I know that the Labour party hates the City, but we all benefit from its success, including the Opposition.

Mr. Ian Taylor (Esher) : My right hon. Friend makes an important point about safeguarding and encouraging the City of London's international position, but does he agree that the abolition of that stamp duty will also help to widen share ownership?

Mr. Ridley : I agree : in a year when the Chancellor did not have much to release from his Budget, that was a wise thing for him to do for our future prosperity and it will help greatly to widen share ownership.

Manufacturing, too, to the disappointment of the Opposition, is a success story. Manufacturing output was up again by 5 per cent. in 1989 to its highest level ever--32 per cent. higher than in 1981 and 7 per cent. above the previous all-time peak in 1974.

Manufacturing investment was up by 5 per cent. in 1989, following a 12 per cent. increase in 1988. Since 1983, the average annual rate of growth in manufacturing investment has been no less than 8 per cent. Manufacturing profits, too, are at their highest level for almost 20 years. Perhaps most remarkable of all, after our appalling performance of the 1970s, manufacturing productivity has risen by some 60 per cent. since 1980.

Mr. Tony Banks (Newham, North-West) : The obvious question to ask the Secretary of State is why, in view of what he is now claiming to be yet another economic miracle, we had a £21 billion deficit in manufactured goods last year. Why do we keep being told that all the imports are going into capital investment in industry? What are they equipping themselves with--Japanese hi-fi? We do not see any return in terms of the balance of payments on manufactured goods.

Mr. Ridley : The hon. Gentleman simply has not understood or listened to what I was saying. This is the best industrial performance that we have seen in his lifetime, and probably for much longer than that. Why do the Opposition continue to denigrate it, knock it and pick holes in it?

Mr. Tony Banks : A £21 billion deficit is not a hole, it is a chasm.

Mr. Ridley : Many countries would give their eye teeth to be able to quote those figures. But, as I have said before, there is more to do.

Mr. Hugh Dykes (Harrow, East) : My right hon. Friend makes a powerful point on behalf of the strength of British industry and our commercial resilience in the face of spurious attacks from the Opposition. Does he agree that that strength now gives us the opportunity to join the exchange rate mechanism without any further delay?

Mr. Ridley : My right hon. Friend the Chancellor dealt with that in his Budget speech. I have nothing to add to, or subtract from, what he said.

As I said, there is more to do. In particular, we need better education, better management education, and better skills training. We recognise that, and we have a clear policy.

Column 1257

Training is primarily the responsibility of employers. Private sector spending on training is running at £18 billion a year. The number of employees receiving training rose by 70 per cent. in the five years to 1989. So business is rising to the challenge. The Government for their part are spending £2.5 billion a year on training, and here too, it is right that business should have a large say in the determination of priorities. That is why the training and enterprise councils are being established, to manage the greater part of the Government's training programmes.

I believe that the TECs will revolutionise training in this country, but they never get a mention from the Labour party. The Chancellor's proposals to allow tax relief for a period of five years for business donations to TECs is a cost-effective incentive to further involvement in training by employers.

Next Section

Home Page