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world war, we found that the very similar Bretton Woods regime did serve as a useful discipline. Now, as my right hon. Friend the Prime Minister acknowledged two weeks ago, our entry into the ERM can be seen as an

"extra discipline for keeping down inflation."--[ Official Report, 30 October 1990 ; Vol. 178, c. 888.]

However, it must be said that that practical conclusion has been achieved only at the cost of substantial damage to her Administration and, more serious still, to its inflation achievements.

As my right hon. Friend the Member for Blaby explained : "The real tragedy is that we did not join the exchange rate mechanism at least five years ago."

As he also made clear,

"That was not for want of trying."--[ Official Report, 23 October 1990 ; Vol. 178, c. 216.]

Indeed, the so-called Madrid conditions came into existence only after the then Chancellor and I, as Foreign Secretary, made it clear that we could not continue in office unless a specific commitment to join the ERM was made.

As the House will no doubt have observed, neither member of that particular partnership now remains in office. Our successor as Chancellor of the Exchequer has, during the past year, had to devote a great deal of his considerable talents to demonstrating exactly how those Madrid conditions have been attained, so as to make it possible to fulfil a commitment whose achievement has long been in the national interest.

It is now, alas, impossible to resist the conclusion that today's higher rates of inflation could well have been avoided had the question of ERM membership been properly considered and resolved at a much earlier stage. There are, I fear, developing grounds for similar anxiety over the handling --not just at and after the Rome summit--of the wider, much more open question of economic and monetary union. Let me first make clear certain important points on which I have no disagreement with my right hon. Friend, the Prime Minister. I do not regard the Delors report as some kind of sacred text that has to be accepted, or even rejected, on the nod. But it is an important working document. As I have often made plain, it is seriously deficient in significant respects.

I do not regard the Italian presidency's management of the Rome summit as a model of its kind--far from it. It was much the same, as my right hon. Friend the Prime Minister will recall, in Milan some five years ago.

I do not regard it as in any sense wrong for Britain to make criticisms of that kind plainly and courteously, nor in any sense wrong for us to do so, if necessary, alone. As I have already made clear, I have, like the Prime Minister and other right hon. Friends, fought too many European battles in a minority of one to have any illusions on that score.

But it is crucially important that we should conduct those arguments upon the basis of a clear understanding of the true relationship between this country, the Community and our Community partners. And it is here, I fear, that my right hon. Friend the Prime Minister increasingly risks leading herself and others astray in matters of substance as well as of style.

It was the late Lord Stockton, formerly Harold Macmillan, who first put the central point clearly. As long ago as 1962, he argued that we had to place and keep ourselves within the EC. He saw it as essential then, as it is today, not to cut ourselves off from the realities of

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power ; not to retreat into a ghetto of sentimentality about our past and so diminish our own control over our own destiny in the future.

The pity is that the Macmillan view had not been perceived more clearly a decade before in the 1950s. It would have spared us so many of the struggles of the last 20 years had we been in the Community from the outset ; had we been ready, in the much too simple phrase, to "surrender some sovereignty" at a much earlier stage. If we had been in from the start, as almost everybody now acknowledges, we should have had more, not less, influence over the Europe in which we live today. We should never forget the lesson of that isolation, of being on the outside looking in, for the conduct of today's affairs.

We have done best when we have seen the Community not as a static entity to be resisted and contained, but as an active process which we can shape, often decisively, provided that we allow ourselves to be fully engaged in it, with confidence, with enthusiasm and in good faith.

We must at all costs avoid presenting ourselves yet again with an over- simplified choice, a false antithesis, a bogus dilemma, between one alternative, starkly labelled "co-operation between independent sovereign states" and a second, equally crudely labelled alternative, "centralised, federal super-state", as if there were no middle way in between.

We commit a serious error if we think always in terms of "surrendering" sovereignty and seek to stand pat for all time on a given deal--by proclaiming, as my right hon. Friend the Prime Minister did two weeks ago, that we have "surrendered enough".

The European enterprise is not and should not be seen like that--as some kind of zero sum game. Sir Winston Churchill put it much more positively 40 years ago, when he said :

"It is also possible and not less agreeable to regard"

this sacrifice or merger of national sovereignty

"as the gradual assumption by all the nations concerned of that larger sovereignty which can alone protect their diverse and distinctive customs and characteristics and their national traditions."

I have to say that I find Winston Churchill's perception a good deal more convincing, and more encouraging for the interests of our nation, than the nightmare image sometimes conjured up by my right hon. Friend, who seems sometimes to look out upon a continent that is positively teeming with ill- intentioned people, scheming, in her words, to "extinguish democracy", to

"dissolve our national identities"

and to lead us

"through the back-door into a federal Europe".

What kind of vision is that for our business people, who trade there each day, for our financiers, who seek to make London the money capital of Europe or for all the young people of today?

These concerns are especially important as we approach the crucial topic of economic and monetary union. We must be positively and centrally involved in this debate and not fearfully and negatively detached. The costs of disengagement here could be very serious indeed.

There is talk, of course, of a single currency for Europe. I agree that there are many difficulties about the concept--both economic and political. Of course, as I said in my letter of resignation, none of us wants the imposition of a single currency. But that is not the real risk. The 11 others cannot impose their solution on the 12th country against its will, but they can go ahead without us. The risk is not

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imposition but isolation. The real threat is that of leaving ourselves with no say in the monetary arrangements that the rest of Europe chooses for itself, with Britain once again scrambling to join the club later, after the rules have been set and after the power has been distributed by others to our disadvantage. That would be the worst possible outcome.

It is to avoid just that outcome and to find a compromise both acceptable in the Government and sellable in Europe that my right hon. Friend the Chancellor has put forward his hard ecu proposal. This lays careful emphasis on the possibility that the hard ecu as a common currency could, given time, evolve into a single currency. I have of course supported the hard ecu plan. But after Rome, and after the comments of my right hon. Friend the Prime Minister two weeks ago, there is grave danger that the hard ecu proposal is becoming untenable, because two things have happened.

The first is that my right hon. Friend the Prime Minister has appeared to rule out from the start any compromise at any stage on any of the basic components that all the 11 other countries believe to be a part of EMU--a single currency or a permanently fixed exchange rate, a central bank or common monetary policy. Asked whether we would veto any arrangement that jeopardised the pound sterling, my right hon. Friend replied simply, "Yes." That statement means not that we can block EMU but that they can go ahead without us. Is that a position that is likely to ensure, as I put it in my resignation letter, that

"we hold, and retain, a position of influence in this vital debate"?

I fear not. Rather, to do so, we must, as I said, take care not to rule in or rule out any one solution absolutely. We must be seen to be part of the same negotiation.

The second thing that happened was, I fear, even more disturbing. Reporting to this House, my right hon. Friend almost casually remarked that she did not think that many people would want to use the hard ecu anyway--even as a common currency, let alone as a single one. It was remarkable--indeed, it was tragic--to hear my right hon. Friend dismissing, with such personalised incredulity, the very idea that the hard ecu proposal might find growing favour amoung the peoples of Europe, just as it was extraordinary to hear her assert that the whole idea of EMU might be open for consideration only by future generations. Those future generations are with us today. How on earth are the Chancellor and the Governor of the Bank of England, commending the hard ecu as they strive to, to be taken as serious participants in the debate against that kind of background noise? I believe that both the Chancellor and the Governor are cricketing enthusiasts, so I hope that there is no monopoly of cricketing metaphors. It is rather like sending your opening batsmen to the crease only for them to find, the moment the first balls are bowled, that their bats have been broken before the game by the team captain.

The point was perhaps more sharply put by a British business man, trading in Brussels and elsewhere, who wrote to me last week, stating :

"People throughout Europe see our Prime Minister's finger-wagging and hear her passionate, No, No, No', much more clearly than the content of the carefully worded formal texts."

He went on :

"It is too easy for them to believe that we all share her attitudes ; for why else has she been our Prime Minister for so long?"

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My correspondent concluded :

"This is a desperately serious situation for our country." And sadly, I have to agree.

The tragedy is--and it is for me personally, for my party, for our whole people and for my right hon. Friend herself, a very real tragedy--that the Prime Minister's perceived attitude towards Europe is running increasingly serious risks for the future of our nation. It risks minimising our influence and maximising our chances of being once again shut out. We have paid heavily in the past for late starts and squandered opportunities in Europe. We dare not let that happen again. If we detach ourselves completely, as a party or a nation, from the middle ground of Europe, the effects will be incalculable and very hard ever to correct.

In my letter of resignation, which I tendered with the utmost sadness and dismay, I said :

"Cabinet Government is all about trying to persuade one another from within".

That was my commitment to Government by persuasion--persuading colleagues and the nation. I have tried to do that as Foreign Secretary and since, but I realise now that the task has become futile : trying to stretch the meaning of words beyond what was credible, and trying to pretend that there was a common policy when every step forward risked being subverted by some casual comment or impulsive answer.

The conflict of loyalty, of loyalty to my right hon. Friend the Prime Minister--and, after all, in two decades together that instinct of loyalty is still very real--and of loyalty to what I perceive to be the true interests of the nation, has become all too great. I no longer believe it possible to resolve that conflict from within this Government. That is why I have resigned. In doing so, I have done what I believe to be right for my party and my country. The time has come for others to consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long.

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Orders of the Day

Debate on the Address

[Fifth Day]

Order read for resuming adjourned debate on Question[7 November].

That an humble Address be presented to Her Majesty, as follows : Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament.-- [Mr. Younger.].

Question again proposed.

Education and Training Mr. Speaker : I must announce that I have selected the first amendment in the name of the Leader of the Opposition and that furthermore today, because of the large number of right hon. and hon. Members who wish to participate in the debate, I propose to put a 10- minute limit on speeches between 7 pm and 9 pm. I should have liked to put the limit on somewhat earlier, but we have two maiden speeches today and that would have been unnecessarily harsh and perhaps unfair to those hon. Members. Therefore, I ask hon. Members who are called before 7 pm to bear it in mind that I should be most grateful and the whole House would applaud them if they could keep their speeches to approximately 10 minutes in length. 4.38 pm

Mr. Jack Straw (Blackburn) : I beg to move, at the end of the Question, to add :

But humbly note the increasing anxiety of parents and employers that the education and training policies of Her Majesty's Government have seriously undermined choice and opportunity and placed standards at risk ; express anxiety and concern that Britain's investment and achievement in education and training is leaving the country further behind its major European and other competitors ; condemn Her Majesty's Government for its incompetence towards, and mismanagement of, the education service and its profound failure to fulfil its proper and necessary role in improving and upgrading the skills base of the nation ; and believe that standards will only be raised and opportunities increased by a change of administration to a government committed to serious investment in the nation's future.

It is customary to congratulate a new Secretary of State on his appointment to office, and that I do. The presence of a new Secretary of State at the Dispatch Box results from the deep political crisis that faces this broken- backed Administration. It is not only a crisis about the future role of Britain in Europe but a crisis of confidence in the Government's ability-- indeed, their inability--to provide the standards of education and training enjoyed by our major competitors in Europe and beyond. Never has public anxiety about the state of Britain's education system been greater. Never has public confidence in the Government's ability to deliver a decent standard of education been lower.

In last week's Gallup poll in The Daily Telegraph, 82 per cent. of respondents said that Britain was not giving

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enough attention to education ; 73 per cent. believed that the quality of education in Britain was declining. When asked who was to blame, just 10 per cent. blamed the Government's usual scapegoat, the local education authorities ; 4 per cent. blamed the teachers' unions and 68 per cent. blamed the Government. So much for the Prime Minister's claim in February :

"The education service is in better shape than it has ever been."--[ 0fficial Report, 6 February 1990 ; Vol. 166, c. 757.]

If the Government had set out on a deliberate strategy to ensure that Britain fell further and further behind its major competitors in education and training, they could hardly have done better. In the early and mid- 1980s, the Government undermined the foundations of the education service by deep cuts in spending and continuous abuse of the teaching profession. Then the right hon. Member for Mole Valley (Mr. Baker) put intolerable pressures on the system by imposing contentious and ill-conceived changes on all schools without consultation.

Then came the previous Secretary of State for Education and Science, who is now the Leader of the House. I believe that he recognised the damage and havoc caused by his predecessor, but he lacked the political clout to do much about it and was consistently and publicly undermined and humiliated by Downing street, the chairman of the Conservative party and central office. So now we have the right hon. and learned Member for Rushcliffe (Mr. Clarke). The man who, at the Department of Health, increased hospital waiting lists, closed wards and alienated health workers and patients alike is now to be responsible for the education of our children. How long will it be before the Secretary of State who derided professional ambulance personnel as mere drivers calls professional and highly trained teachers just minders?

The Secretary of State may be new to the Department of Education and Science, but he is not new to Conservative education policy. In his speech 17 months ago, he proudly admitted part authorship of the education section of the Government's 1987 manifesto. In that speech he claimed that in education and health the Government were not "opposed by left or right"

and that the only opposition to the Government's education policies were

"the forces of pure reaction and the resistance to change of the trades unions--the middle class and professional trade unions in particular--who represent the deliverers of the service the teachers."

He concluded in a spectacular passage :

"The National Union of Teachers and the National Association of Schoolmasters Union of Women Teachers are now looking like powerless spectators as Kenneth Baker's reforms sweep on past them to mounting public approval."

Even as the right hon. and learned Gentleman spoke, what little public approval had existed for the promise of the Baker reforms evaporated as their desperate practice dawned. It even dawned on many Conservative associations. In a resolution, the Conservative association of Doncaster, North complained of

"the manifest failure of the Baker education reforms to improve standards of learning."

The simple truth is that, after 11 years, the Government's education policies have collapsed.

The Government lack ambition for the nation's children and have failed to provide the leadership, funding and effective management which the education and training services so desperately need.

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Mr. Andrew Rowe (Mid-Kent) : I must admit that I do not know what goes on in Doncaster. However, I have made a wide-ranging tour particularly of the primary schools in my constituency. The heads of those primary schools are almost unanimous in their approval of the recent changes to the system under which they have to operate.

Mr. Straw : I can only tell the hon. Gentleman that his experience is not that of almost any other head teacher in the country. Nor is it the experience of the chairman of the Kent education committee, who recently wrote to parents condemning the Government's proposals for opting out.

The Government's lack of ambition is shown most emphatically by their failure during 11 years significantly to increase the proportion of young people aged between 16 and 19 in full-time education and high-quality training.

Dame Elaine Kellett-Bowman (Lancaster) : Will the hon. Gentleman give way?

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

Recent figures from the DES show that, at 35 per cent., the proportion of young people staying on at 17 in Britain is lower than in any of our major competitors--half the rate of most.

"What an incredible disregard of human potential to accept that 60 per cent. of our children leave school at 16 while in our competitor countries that number is 10 per cent. or less."

So said Peter Morgan, the director general of the Institute of Directors, earlier this year.

Dame Elaine Kellett-Bowman : Will the hon. Gentleman give way?

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

There is no strategy to tackle that disregard of human potential, only ministerial confusion and contradiction. The former Secretary of State for Employment, the right hon. Member for Sutton Coldfield (Sir N. Fowler), said in his speech last December that on behalf of the Government he would set stretching targets under which by 1992--just two years away--the number of young people obtaining the equivalent of five O-levels or GCSEs grades A to C would be doubled to more than two thirds, and that in three years 25 per cent. of our young people should reach the national vocational qualification level 3, equivalent to two A-levels or more.

Dame Elaine Kellett-Bowman : Will the hon. Gentleman give way?

Mr. Straw : I have told the hon. Lady that I shall give way in a moment.

That was the promise made by the Secretary of State on behalf of the Government. Within four weeks, he had left the Government, and every word that he said in that speech was repudiated by the Prime Minister and his successor.

Dame Elaine Kellett-Bowman : Will the hon. Gentleman give way?

Mr. Straw : If the hon. Lady does not sit down, I shall not give way to her. I have told her that I shall give way. She must simply wait her turn.

What the right hon. Gentleman said should be stretching targets were totally repudiated by the Prime Minister in a letter to my right hon. Friend the Leader of

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the Opposition. She said that those stretching targets could not be "specific Government targets." The whole policy was simply dumped within four weeks of being formulated. In contrast to the shambles of the Government, Labour will set targets and those targets will be achievable. They will have the support of both sides of industry.

Dame Elaine Kellett-Bowman : The hon. Gentleman referred to opted- out schools. I have two of those in my constituency and they are doing exceedingly well. The first has already appointed four extra members of staff and is about to appoint two more. The schools have been given 25 per cent. more cash in every subject department for equipment. They are managing their affairs infinitely better than Lancashire county council did on their behalf. We now hope that others will follow their excellent example.

Mr. Straw : I shall deal with the detail of opting-out policy later, but the hon. Lady should know that opted-out schools have had more money because of the deliberate fiddling of the formulae. Opted-out schools are being bribed and given extra cash, for which the ratepayers and poll tax payers of Lancashire have to fork out. The Government's lack of ambition is also shown in nursery education. Britain has the lowest pre-school and child care provision of any of our major competitors and the Government have no strategy whatever for tackling it. In many Conservative areas, there is no choice or opportunity for nursery education for thousands of children, because there are insufficient nursery schools or nursery classes. In contrast to the Government, Labour will ensure that the Prime Minister's pledge of 1972 of nursery education for all is turned into a reality.

Good leadership requires clarity, consistency and consent, but the education service has had none of them. Instead, it has been subjected to a lurch in one direction and a retreat in another. The right hon. Member for Mole Valley was told by everyone who knew anything about education that an inflexible, 10-subject national curriculum and associated testing would not work. Reality dawned on his successor. He set about a retreat, but it was never clear where that retreat would take him.

As a result we got decision-making on the hoof, with different Ministers saying different things. In a speech in July, the former Secretary of State announced one series of so-called solutions to the problems left by his predecessor. Then up popped the new Minister of State, anxious for a headline, with another prescription. On 30 October he told The Daily Telegraph that the Government were planning

"radical changes in secondary schools to allow less academic children to concentrate on vocational education from 14." It is not remotely clear whether that is to be the start of a great new reform along West German lines, some variant of the French system or, as I suspect, the introduction by the back door of a grammar stream to an unreformed A-level, and a secondary modern stream for the rest.

The chaos in the curriculum before 16 is replicated post-16. The reform of education and training opportunities beyond 16 is of profound importance to the creation of real choice for young people and to secure the skills base of the economy. The present range of vocational qualifications and courses is, as the senior chief inspector of schools put it,

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"a jungle in which talent and opportunity are lost",

while A-levels as an examination are outdated and outmoded. The argument is, indeed, about standards. A-levels cause pointless over-specialisation which leads to the under-education of each generation, especially in science and technology. A-levels are even failing on their own terms. The number of entrants for A-levels in physics and mathematics, for example, has declined markedly. This country cannot possibly compete until the jungle at 16-plus is sorted out, as Labour has proposed. Everyone bar the Government knows that. There is no coherence from the Government, just confusion.

Mr. Harry Greenway (Ealing, North) : What the hon. Gentleman has said is extremely serious. The country will want to know now what alternatives he proposes to A-levels. He cannot undermine A-levels, which are valuable to a great many pupils, without proposing alternatives. That should be done in the same breath.

Mr. Straw : If the hon. Gentleman had waited, both would have been almost in the same breath. He knows as well as anybody that we have spoken a thousand times and published documents about our alternatives to A-levels and the reform of 16-plus education. Everyone bar the Government knows that there must be changes to 16-plus examinations.

In 1988 the Government established a committee, under the chairmanship of Professor Higginson, with the remit to reform A-levels. Two weeks before it published its report, the members of that committee were privately told that the Government would accept their recommendations for a sensible system of a five-subject, slimmer but no less rigorous A-level qualification. Two weeks later, the report was publicly rejected as a result of a prime ministerial veto of the wishes of the previous Secretary of State. It is not just on European policy that Downing street disrupts Cabinet government. It is on educational policy and in many other areas. Two years were then wasted as various groups tried to salvage something from the mess. A-levels, AS-levels and some core skills were to be combined. In the summer, near-anarchy broke out on the ministerial corridor at the DES. The Secretary of State went on holiday, leaving the shop to the Parliamentary Under-Secretary of State, the hon. Member for Darlington (Mr. Fallon). On 17 August The Independent announced : "Minister rules out A- level changes."

There were to be no changes to A-levels and no five-subject examination. Then the Under-Secretary went on holiday and the Secretary of State returned.

"MacGregor hints at big A-level changes",

he announced to The Independent on 11 September. He continued : "Major changes might be needed to A-levels to increase the number of pupils staying on."

The Secretary of State was summoned to Downing street. The Under-Secretary of State returned from holiday, started up the war of words against his Secretary of State, attacked his advisory body and accused those who want reform of having been "hijacked" by progressive elements.

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