| Previous Section | Home Page |
Mr. Skinner : I remember that, on 28 October 1971, the right hon. Gentleman was one of the 30 or so Tories who went into the Lobby against the Common Market. His leader at that time, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), the right hon. Member for Finchley (Mrs. Thatcher) and the rag tag and bobtail dragged us into the Common Market without a vote. I remember the 36 Divisions. We might still do the Lobbies together. How many years is it since then? For 19 years, we have carried on the battle. I look forward to a few more in the Tory ranks who ratted at the time getting on board ship against the exchange rate mechanism, the single currency and the central bank, dominated by the Germans.
Mr. Biffen : I am most grateful to the hon. Gentleman. Very wisely, he is taking a panoramic view of the issue. I wish, however, to concentrate on the narrow issue of the state of the economy. There is now a burgeoning recession. I am not sure that that point is really appreciated by the Treasury Bench and the Governor of the Bank of England. There is still talk
Column 317
about the recession being short and shallow. I see little evidence, on an anecdotal basis, to persuade me that the recession has that character. I believe that, in many sectors of the economy, we have been in recession for a considerable period. That makes nonsense of the proposition that the recession will be short.If I need additional evidence, I move away from feelings and sentiments that are shared by almost every hon. Member who comes from an industrial area and turn to that great and respected source of judgment, the Confederation of British Industry, whose judgment is much more likely to weigh with the Goliaths of the Treasury Bench. The latest CBI report says :
"Output expectations in December represent the largest expected fall since December 1980."
In my view, the case is clearly made out for an early reduction in interest rates.
No one who looks at the general pattern of demand in this country and at monetary control can suppose that we are in a lax monetary position that will not admit of a further reduction in interest rates. The Government's reluctance to cut interest rates is because of their inhibitions on account of our membership of the exchange rate mechanism. In a recent debate, the Chancellor of the Exchequer said :
"There can be no question of a reduction in interest rates that is not fully justified by our position in the ERM. That will be the case however strong is the pressure for lower interest rates based on other indicators." --[ Official Report, 12 December 1990 ; Vol. 182, c. 966.]
Other indicators? The rate of unemployment, the fall in industrial investment, the range of economic experiences that we can now trace within our domestic economy? Are they to be set at naught and are we predominantly to take a view on
"our position in the ERM"?
My hon. Friend the Member for Chichester (Mr. Nelson) intervened in the debate to give his benediction to the Government's policy. We could argue about fixed exchange rates and free exchange rates on another occasion. We adhere to two different economic philosophies. Due to the fraternal nature of the Conservative party, which has been so evident over recent weeks, we can cope with that.
There is, however, a narrow issue : whether membership of the exchange rate mechanism was effected at an appropriate parity. If it was not effected at an appropriate parity, a perpetual disadvantage will weigh upon British industry, just as the return to the gold standard at a wholly unrealistic figure cast its shadow over the operation of the economy in the 1920s and 1930s. I do not want the House to be burdened by the oppressive memory of Montagu Norman. Central bankers had a great deal more control over our affairs then than, happily, they do at the moment. I want politicians to be able to form their judgment on what the economy requires and to reach a decision on such intimate matters as the rate of interest.
Mr. Anthony Nelson (Chichester) : I do not want to break the shallow unity that has broken out. Indeed, I was hoping for a more contrite speech from my right hon. Friend, since we had to pay high rates of interest in recent years when we were not members of the exchange rate mechanism.
Column 318
My right hon. Friend referred to giving the maximum flexibility to politicians, but to exercise proper responsibi-lity we need a stable medium of exchange. Unless we have a secure and valuable medium of exchange--a currency whose value does not change from one minute to the next--how on earth shall we be able to address the deep-seated problems of our economy? If we prefer instead to deal in funny money--in a currency that readily depreciates from year to year--surely we are perpetrating a fraud on the people we represent and are denying ourselves the proper responsibility of addressing our economic problems?Mr. Biffen : I am happy to have allowed my hon. Friend to make his speech in an intervention.
Mr. Biffen : No : it is a technique that I admire.
The inflationary difficulties that we have experienced in recent years derived precisely from when we tried to shadow the deutschmark a few years ago. The lessons that I draw from that are precisely the opposite of those drawn by my hon. Friend.
Of course one would like a degree of relative stability in these matters. It is perfectly possible to have a system of proper and responsible monetary and fiscal policies that will produce that. That is the responsibility of national politicians and Governments answering in this Parliament. Indeed, it can be argued that, since 1979, there has been a period when those policies produced considerable advantageous movements in the exchange rate. We shall debate that some other time. I want to return to the crucial point of whether we have joined the exchange rate mechanism at a level that will place us at a permanent disadvantage.
Mr. Bowen Wells (Hertford and Stortford) : The point that I want to make was made by another central banker, Karl Otto Po"hl, who said that domestic interest rates should be established primarily in relation to the state of the domestic economy and not in accordance with or to sustain an exchange rate that might be selective. A central banker--one of the most powerful--agrees with my right hon. Friend.
Mr. Biffen : If I lose the support of my hon. Friend the Member for Chichester (Mr. Nelson) but gain the support of central banker Po"hl, who am I to complain?
There are voices in continental Europe who take the more open view on how we should conduct our economic arrangements within the wider partnership of Europe, which must include eastern Europe. We must not allow ourselves to be argued into the belief that we are merely representative of one narrow national interest in our desire for looser economic and monetary arrangements for our Community partners and ourselves. I am grateful to my hon. Friend for making that point.
May I be allowed, with tedious repetition, to return to the central point, which we must understand and evaluate--whether we have joined the exchange rate mechanism at a level that will confer a permanent disadvantage on the industrialists and workers of this country, unless and until it is rectified. Gone is the glad morning confidence when the exchange rate mechanism was announced, when there was practically a competition of euphoria between the Treasury Bench and the Opposition Front Bench, then represented by the right hon. and learned Member for Monklands, East (Mr. Smith) but now elevated in status
Column 319
by my neighbour from Shropshire, the hon. Member for The Wrekin (Mr. Grocott). That shows that when the two Front Benches--the Goliaths of Parliament--are in absolute unity, it is time for the grubby Davids and Denises to come out and to search their scrips for their pebbles.I am delighted to see that there is a growing sense of realism about these affairs. An excellent speech was made by my hon. Friend the Member for Worcestershire, South (Mr. Spicer), who called in question the desirability of the exchange rate mechanism if we are to be in this Lubyanka. [Interruption.] I want to show myself as broad European.
My argument is reinforced by a letter in The Times from the hon. Member for Great Grimsby (Mr. Mitchell). I must mention my pair, the hon. Member for Durham, North (Mr. Radice). I had hoped that our close association would have stripped him of any innocence. He is saying, "Can't we renegotiate?" He believes that those with whom we have joined the mechanism on disadvantageous terms will say, "We are terribly sorry, we did not realise that it would be so difficult for you ; of course we shall accommodate a new parity."
We need action a bit more robust than that. Let us be clear : there must be a growing volume of protest in this House and elsewhere that the present terms of the exchange rate mechanism are wholly disadvantageous for this country. Those who feel disposed to argue that are not alone, because those opinions are propounded outside, particularly in the quality press. I have in mind the article of Anatole Kaletsky in The Times , which said :
"The conflict between Britain's domestic economic needs and the disciplines of the ERM will grow steadily worse."
That is the analysis of a man--I have not the faintest idea of his politics --who believes that, if a country joins at the wrong parity, it does not naturally resolve itself. If anything, it will be compounded through time.
My simple message to the Treasury Bench is that this nation is enduring a considerable recession in manufacturing industry--a recession that is spreading to most parts of the economy. We do ourselves no credit to talk about it in terms of something that will be short or shallow. Remedial action should come sooner rather than later. One of the most obvious forms of remedial action is to lower interest rates. Inasmuch as that is also an action necessary to rectify some of the imbalance that is implicit in exchange rate mechanism membership, the sooner it is undertaken the better. 5.26 pm
Mr. Jack Ashley (Stoke-on-Trent, South) : One of the interesting aspects of the House of Commons is the rejuvenation of Members when they leave office. The speech of the right hon. Member for Shropshire, North (Mr. Biffen) showed the beneficial effects of throwing off the cares of office. The Leader of the House will be delighted by that speech, because when the right hon. Member for Shropshire, North spoke as a Minister--he was a very good Minister--he did not make stimulating or inspiring speeches because, as Leader of the House, he could not do so. He now has the freedom of the Back Benches and holds the interest of the House.
Another interesting aspect of the House is that, although hon. Members are prepared to listen to such reviews of national issues, they are also prepared to listen to issues that affect small numbers of people. I ask the House not to adjourn until we have discussed four
Column 320
separate groups of disabled people who are neglected. The first is a group of severely disabled people who are recipients of the independent living fund. They need the money from that fund to keep out of institutions. The independent living fund enables these people to maintain their independence and their dignity. Without it, they will be forced into long-term residential care, at great cost to the state.The Government have threatened to wind up the independent living fund in 1993. They say that responsibility for the payment of the fund will pass to local authorities, but that is a sacrilege, because we all know that most local authorities cannot be bothered to help disabled people. Many others have competing claims on their resources.
There are some good local authorities, but there are plenty of very bad ones that are indifferent to the needs of disabled people. Some local authorities will spend money on fancy bypasses and on all kinds of popular projects rather than on helping disabled people. We know that that will happen and that the result will be catastrophic for severely disabled people.
Some severely disabled people receive large amounts from the fund to keep them out of hospital. Mr. J, for example, who lives in Shropshire, is paralysed from the neck down and receives £400 a week from the fund. Before the introduction of the ILF he was cared for by his 82-year-old mother. That man will not be allowed such independence and dignity if that money is withdrawn. If the local authority cannot, or will not, pay, he will be incarcerated in an institution.
The Select Committee on Social Services believes that the ILF should become a statutory body, and nearly all organisations that represent disabled people believe that it should be preserved. The all-party disablement group has insisted that it should be preserved. I hope that the Government will think again and will not abolish it. The second group of severely disabled people for whom I am concerned are those affected by discrimination. In the past, the House has debated the need for such anti-discrimination legislation, but the Government claim that there is insufficient evidence of discrimination against disabled people--what nonsense. Anyone who is severely disabled could tell Ministers that, every day of their lives, they experience gross and vindictive discrimination. Some of that discrimination is unthinking, but every day severely disabled people are confronted with it.
Some disabled people are not allowed to go into the pubs of their choice. Others are denied access to various buildings. Some cannot go to seaside resorts and some are denied jobs. Every day those people are hit, and hit again, by such discrimination. Although we do not see it in the House, it exists. We should deal with it because it is scandalous if someone is denied a job because he is in a wheelchair, he has an artificial limb or he is deaf or blind.
For the past two years, the Government have reviewed employment opportunities for disabled people. However, they have never discussed that review with those organisations that represent disabled people. The Government should take far more notice of the opinion of disabled people and their organisations. We have legislation to combat discrimination on the grounds of sex and race, and such legislation is badly needed to combat discrimination against disabled people--that is certainly the opinion of disabled people and their representative organisations.
Column 321
The Governments of Germany, Belgium, Greece, Spain, Italy, the Netherlands and Portugal have introduced legislation to combat discrimination against the disabled. If they can find the time and the good will to introduce legislation to outlaw discrimination against disabled people, why cannot we? In the United States, a marvellous new Bill has been passed to give new rights to disabled people covering a range of matters, which states that employers cannot discriminate against disabled people. I wish that we had led the way, but at least we could follow the Americans and the Europeans.The third group of people to whom I want to draw to the attention of the House are those service men who have been disabled through negligence. The House will recall the campaign that was conducted a few years ago to allow service men to sue when they had been disabled as a result of negligence. Three years ago, no ex-service man or acting service man could sue for negligence, because section 10 of the Crown Proceedings Act 1947 prevented such actions.
I was proud to take part in the campaign on behalf of those service men. We fought the Ministry of Defence, who argued that it could not allow service men to sue the MOD as that would be bad for discipline, it would upset people and, in any case, the negligence could not be proved. For that reason we fought our campaign, and fighting with me were many disabled ex- service men in wheelchairs--I could name them, but I do not want to detain the House.
After two years, the MOD gave way and said that it would repeal section 10 of the 1947 Act so that service men would be allowed to sue for negligence. That was fine. At that time, the hon. Member for Davyhulme (Mr. Churchill) introduced the Crown Proceedings (Armed Forces) Bill, and he helped us wonderfully. As a result, the Government changed their mind and service men can now sue for negligence. When the Bill was enacted, however, the Government said that they were not prepared to allow those people who had campaigned in the past to sue for negligence. They were not prepared to make the Bill retrospective, but that was an anomalous act on the part of the Government. Those men who had campaigned with me were loyal ex-service men who loved the services, but they have been denied the right to sue for negligence.
I have given the MOD example after example of retrospective legislation. For example, there were some in 1532, as well as some in 1987 as a result of the Local Government Act. I believe that the legislation should be retrospective to enable those ex-service men to sue for negligence. If that is not possible--I am trying to be reasonable--why can the Government not give those people an ex gratia payment if they can prove that they were disabled through negligence? That is all I am asking.
I have raised that issue tonight because we have a new Prime Minister. When I put this problem to the former Prime Minister, I included a number of proposals to enable an ex gratia payment to be made--there are not many people involved. The right hon. Lady said that she was not prepared to consider that, because of practical difficulties. In response, I proposed a number of compromises to limit the numbers involved, so that only those who had evidence to prove that they had been maimed through negligence could claim.
Column 322
All those suggestions were turned down. I hope that the Leader of the House will ask the new Prime Minister to review the issue--that is all I am asking. Those loyal ex-service men have a powerful case and they deserve to be considered.I have spoken for too long, but I want to spend just a couple of minutes on a group for whom I have campaigned for the past 25 years--nuclear test veterans. The Government have refused to allow them compensation on the basis of lack of evidence that they have suffered from radiation. The Government's stand is preposterous. They refused to move on haemophiliacs who have been infected by contaminated blood, but they then changed their mind. Similarly, they have refused to act on nuclear test veterans, but, sooner or later, I am sure that they will change their mind.
The essence of my case is this. British ex-service men suffered the effects of radiation in the nuclear tests 40 years ago, and they have been suffering ever since. How can the Government deny that they suffered radiation damage? The United States Government looked into the matter for their ex-service men. They found that radiation damage was proved and they are paying for 13 cancers caused by radiation to their ex-service men suffering from radiation to which they were exposed at the tests.
What is the difference between American soldiers and British soldiers? Their bodies are the same. The nuclear tests were the same. The radiation was the same. What is the difference? The difference is solely in the Governments' attitudes. That is all that I wish to say. It is a simple, strong, powerful and moving case.
I ask the Leader of the House to take on board the issues that I have raised. I do not expect answers or solutions from him tonight. He has a difficult job. However, if he passes my comments on to the Ministers responsible and to the Prime Minister, and if the Prime Minister will review the matter which I raised, perhaps we could start the ball rolling. I have made reasonable points. Severly disabled people should simply be given a fair chance.
5.41 pm
Sir Dudley Smith (Warwick and Leamington) : The right hon. Member for Stoke-on-Trent, South (Mr. Ashley) is a well-known champion of disabled people. I have a good deal of sympathy with the points that he made about discrimination against disabled people. Many disabled people live lives of great heroism in their attempts to carry on normally at home and at work. It is up to all of us to give them as much support as possible.
I wish to speak about planning laws and their impact on a country such as ours at this late stage of the 20th century. We sometimes forget that we are basically a small, overcrowded island. I represent the part known as mid-Warwickshire, which is the very heart of England. Yet it is only 100 miles from this Chamber. My comments inevitably sound parochial, but they refer to problems that are replicated in a hundred and one places throughout the United Kingdom.
There are considerable environmental pressures on all of us. Many greedy developers, given the chance, would concrete over the whole of the west midlands or the south of England without any worry, if an enormous profit was to be made out of it. My county of Warwickshire is one of the smallest in the country. The latest structure plan
Column 323
decrees that there will be about 37,000 new houses in the county by the turn of the century, of which 9,000 will be in my constituency. That has given rise to a great deal of anxiety among residents. In addition, further industrial development is promised. We already have a surfeit of technology parks--the polite way of referring to industrial sites--and more are apparently planned. Many of my constituents believe that those plans are too expansive. I urge the Secretary of State for the Environment to limit the structure plan and I hope that he will take that on board. I and many of my constituents have been in correspondence with him.With the advent of the M40--which will come on stream between Birmingham and London as early as next month--my constituency will be between two motorways. On the other side we have the M1. Our communications makes us an extremely desirable area. Like the rest of the country we need housing and jobs. There are constant references to that need in the House. But jobs and houses should not be to the exclusion of everything else. When green areas are finally breached, they have gone for ever. There is no way of getting them back. The quality of life is not merely the provision of reasonable accommodation for everyone. The environment in which one lives is also of paramount importance. Compared with that of many countries, our environment is still unique. It is green and pleasant and it attracts many people. What is why so many people from abroad wish to retire here.
Another threat to which the Department of the Environment should address itself is that of mineral extraction. It is linked to what I have already said about planning. In Britain we have strong laws which demand that there should be sand and gravel extraction and that counties should maintain their quotas. I submit that the quotas and the law are in urgent need of drastic revision. Wide areas of desirable countryside are being torn up for sand and gravel. Currently there are three sites in my constituency. The landscape will be severely scarred for many years as a result of the operations.
Surveys carried out throughout the county of Warwickshire reveal a veritable "sea" of sand and gravel deposits, the extraction of which will threaten the entire county with environmental hazards for decades to come. The stipulated quotas are unrealistic and need revision. More sand and gravel should be imported into Britain and a better system should be established to move it round the country from extraction sites where the environment is not an issue. We cannot continue despoiling the best parts of the country purely to extract sand and gravel.
My third point about planning is that the Department of the Environment needs to revise its overall planning policies, particularly in crowded and desirable areas such as the one which I am fortunate enough to represent. In a recent local planning dispute, I sided with the residents, but they were overruled by the district council. There are no politics in my point because it is a Conservative council. The chief officer of the council subsequently wrote to me stating :
"Planning committees are faced with the situation that planning legislation has made it clear that there is a presumption in favour of granting planning applications, unless there are planning reasons why applications should not be granted."
That was not terribly well put, but we get the message. In other words, he says that the objectors are guilty until they
Column 324
can prove themselves innocent. The assumption is against them right from the start. Unless they have a very good case, they will lose. Many of us have not taken that on board sufficiently. As we are all aware, planning applications arrive at the offices of our councils every day. It is just not good enough.Every developer has an automatic right of appeal if he is turned down by a local authority, and frequently he has the decision reversed. Over the years, his persistence is often relentless. He comes back time and again, the residents are harassed and eventually the local council gives in. Yet when the decision goes against the local residents, they have no right of appeal. I have believed for a long time that in specific circumstances a right of appeal should be open to the individual, particularly in areas where there may be considerable changes.
Unless we attend to the matters that I have mentioned and seek to obtain a genuine balance, future generations will look upon us as philistines who ruined a uniquely pleasant land and made it into an ugly and dreary one. These matters affect every hon. Member, and we must constantly and vigilantly press them with the Department of the Environment.
5.49 pm
Rev. Martin Smyth (Belfast, South) : The hon. Member for Warwick and Leamington (Sir D. Smith) spoke from the centre of the nation. I speak from its periphery, and with some hesitancy. The announcement by the Leader of the House of the dates for the Christmas recess was received with glee because we were to have a prolonged holiday. If I oppose the motion for the Christmas Adjournment, to put on record some of the issues about which I am concerned, I may cause the wrath of the House to fall upon me.
Mr. Roy Hughes (Newport, East) : Does not the hon. Gentleman feel that he is giving the country the wrong impression by speaking of a holiday? I am sure that, like me and like many other hon. Members, he spends a lot of time in his constituency and is active there.
Rev. Martin Smyth : Our constituents will be glad to hear that hon. Members agree with them on occasion. If they think that it is a holiday, let them bask in the summertime of Christmas discontent. The right hon. Members for Shropshire, North (Mr. Biffen) and for Stoke-on-Trent, South (Mr. Ashley) did not give me a great deal of hope that my points will be answered tonight, but I shall press them none the less. The House will well understand that during Advent--the season in which we turn our thoughts to hopes of peace and festivity--the people of Northern Ireland will be focusing their thoughts on the security situation, but it is not to that point that I wish to direct my attention. The Leader of the House will not be at all surprised if I bring before the House the problem of the non- establishment of a Northern Ireland Select Committee. I recognise that descendents of Herod Agrippa abound in Northern Ireland ; in that part of the nation, the slaughter of the innocents tragically continues unabated. While others say that a security situation cannot be found, I claim that a security solution alone cannot be found and that we must have a political solution. If we are to find that
Column 325
solution and for the good governance of Northern Ireland, we need a Select Committee, even if that is only one aspect of the political solution.For 50 years, Northern Ireland had a devolved regional Parliament, given to it and kept at arm's length by this House. We were unaware of what was going on in Northern Ireland. The day-to-day responsibilities of Northern Ireland were not the affairs of this Parliament. In my view, no matter how wisely that Parliament may have governed, that was a mistake. But for the past 18 years, an even greater mistake has been made to the detriment of the people of Northern Ireland. Irrespective of the wisdom, integrity and ability--or otherwise--of Ministers in the Northern Ireland Office, scrutiny of the expenditure policy and administration of the Northern Ireland Office and its associated public bodies has been hopelessly inadequate.
The role of local government has been reduced to a charade. That has encouraged councillors to spend their time on business not strictly pertaining to local government, not to mention their limited role in the supervision of parks, leisure facilities, cemeteries and refuse collection.
I have tried unsuccessfully to find out why successive Governments have failed to abide by the rules of the House which require scrutiny by Select Committees of major Government Departments. Northern Ireland Members are willing to serve and, unlike others, have not objected to Members for English constituencies sitting on a Northern Ireland Select Committee.
In 1978, the Procedure Committee recommended that there should be a Northern Ireland Select Committee and the 1979 Conservative manifesto--the basis of the Government's mandate--contained a pledge to move forward in restoring democracy to Northern Ireland. This year, the Procedure Committee again sought to set up a Select Committee. I can understand the Northern Ireland Office, or indeed any Government Department, being glad not to have a Select Committee breathing down its neck, but that does not excuse the House for not establishing such a Committee.
The former Leader of the House, the right hon. and learned Member for Surrey, East (Sir G. Howe), and the Secretary of State for Northern Ireland rejected the instructions of the Procedure Committee as "inopportune" at a time of sensitive negotiations. Likewise, the hon. Member for Foyle (Mr. Hume), who rarely graces this place with his presence, opposed it. I cannot understand why any negotiations should impede the ability of this House to scrutinise a Department of Government. The clue to such opposition is perhaps to be found in the reported remark of an official to the late Airey Neave to the effect that the Government could not deliver on the 1979 manifesto because of a commitment given to Dublin. What was that commitment, who gave it and with what authority?
As far as I can see, the tardiness in establishing the Committee has nothing to do with the possibility of a devolved Government in Northern Ireland. Unless such a Government were given independent status, there must be a role for the House in scrutinising the affairs of the Northern Ireland Office.
Column 326
Moreover, to the best of my knowledge, there has been no suggestion that the Northern Ireland Office will cease to exist in the foreseeable future. That means that unless we are to send Northern Ireland into limbo--as we did in 1921--there must be scrutiny by the House of Commons. At the very least, such scrutiny would still be required in respect of reserved matters, even if transferred matters went back to a devolved Administration in Northern Ireland. The recent report of the Select Committee on the Environment reinforces the need for such a Committee. It recommended that another quango should be set up to look after environmental issues in Northern Ireland. Who will supervise that quango? Those appointed by a Department whose affairs are not scrutinised by the House. The establishment of a Select Committee is long overdue. There must be no more hastening slowly by a Government who appear to drift rather than direct on Northern Ireland matters. In my opinion, such a move would be a clear signal to those who practise the politics of violence that they cannot succeed. In a democracy, the Government must hearken to and heed the voice of the ballot box. They dare not continue to dance to the whine of the bullet and the blast of the bomb. Politics must prevail so that semtex cannot succeed. 5.58 pmMr. James Paice (Cambridgeshire, South-East) : I listened with interest to the hon. Member for Belfast, South (Rev. Smyth) who told us of his trepidation in speaking against the motion for the Christmas Adjournment. I am happy to speak in favour of that motion because it will give the Government more time to think about and--it is to be hoped--find a solution to the problem that I am about to lay at their doorstep. It is a problem with a major impact on my constituency and an important relevance for the country--the future of the bloodstock breeding industry. The House will be aware that Newmarket is the centre of British racing. In and around my constituency the stud farms contribute substantially to Britain's economy and balance of payments, but they are facing major problems. Britain is the world leader in breeding quality bloodstock. Although the New Zealanders, Americans and Irish all produce a number of good-quality horses, Britain is recognised as the leading nation in breeding. Last year, the turnover in British auction rings was about £116 million, of which £96 million was from one well-known company, Tattersall's, which has headquarters at Newmarket. It is estimated that £80 million of the £116 million came from foreign buyers and so attracted foreign resources into this country. There are massive private sales, particularly when horses have finished their racing days and are put out to stud as brood mares or stallions. We all know the telephone number prices for which stallions are often syndicated.
There is an estimated £200 million-worth of overseas earnings from the sale of bloodstock from this country every year--that figure is a few years out of date and the sum may be substantially more. In addition, 13,000 people are employed directly in breeding bloodstock and it is believed that there are another 4,000 jobs in the ancillary industries. The Thoroughbred Breeders Association, which represents the industry, has 2,000 members. It is an
Column 327
important industry. Some people will say that it is for the wealthy such as Arabs, but I emphasise, first, that that is not necessarily the case. Many people involved in breeding bloodstock are not in that category ; secondly, that argument is irrelevant. I am talking about the industry's future and the economic benefits that it brings to this country which are now under severe threat.From 1 January 1991, Ireland's exemption under the value added tax rules of the Community's sixth directive disappears and there will be major changes in the VAT rules as they affect bloodstock sales from the Community. That means that from 1 January, the VAT rates in the major bloodstock countries of Europe will be as follows : Italy, 9 per cent. ; Germany, 7 per cent. ; France, 5.5 per cent. ; Ireland, 2.3 per cent. ; and in the United Kingdom, 15 per cent. The VAT will be charged at the point of sale.
Tattersall's, which has £96 million-worth of turnover in this country, has already opened a new sale ring and associated facilities in Ireland. It now expects to move all its operations from Newmarket to Ireland during the next year or so unless my plea to the Government is recognised and action taken. It will inevitably mean that the breeders will follow the sale ring, for the simple reason that it is far better to breed the stock close to where it will be sold than to have the massive expense of transporting it from Cambridgeshire and the other important breeding districts in this country across to Ireland for sale.
In addition, the Irish are keen to attract British breeders to go over there. The worst estimates are that about half the jobs in the Newmarket region could be lost if that were to happen. The net effect of that would be that the VAT income to this country would be lost because the industry would have gone to Ireland and the ancillary tax benefits of income tax, corporation tax and other general taxation revenues that the Government receive from the industry would disappear.
The Government's policy is, first and foremost, that they have tried to find a solution. The breeders had a meeting with my right hon. Friend the Member for Mid-Norfolk (Mr. Ryder) when he was Paymaster General ; he recognised their arguments they put and offered his sympathy and help wherever possible. I know that the Government are looking at the problem, but we keep hearing rumours that it will not be easy to solve. My purpose in raising the subject today is to try to add further encouragement and stiffen the backbone of those who might be prepared to give up and say that they cannot find a solution. For many years the Government have offered export concessions so that a horse can be raced in this country for two years before being exported without incurring VAT problems. I understand that that concession would also disappear.
Another aspect of Government policy is their approach to VAT taxation after 1992. It is a totally market-based approach, but I also know that they believe that there should be no extra VAT rates other than the current 15 per cent. and zero rate. I totally support the Government's market-based approach. Imposed harmonisation of tax rates from Brussels would be ludicrous, and we should not move towards that. The market-based approach means the market will respond to VAT disadvantages. That is precisely what we believe will happen in the bloodstock industry. It will move to Ireland because of the VAT disadvantages that we should have in this country--that is simply the market working.
Column 328
But the logic of such an argument is that, in response to that, a Government who find rates so uncompetitive should take voluntary action to bring their rates into line so that their industry is not at such a disadvantage and is not decimated. I support that principle, which reflects the principles on which the Government have addressed the problem of tax harmonisation in Europe. I know that my right hon. Friend the Member for Mid-Norfolk, when he was Paymaster General and my hon. Friend the Member for Norfolk, South-West (Mrs. Shephard), the Treasury Minister who has taken over responsibility for the matter, are sympathetic to that.The proper solution to the problem is to reclassify the horse as an agricultural animal. That may seem a simplistic answer, but it should be properly examined. When the EC and the treaty were originally devised, it was undoubtedly the intention of those involved that the horse should be an agricultural animal. Annexes A and B of the sixth directive, both of which specify farming activities, were intended to include bloodstock. Annex C of the directive, which relates to common methods of calculating VAT for agriculture, specifically includes equines under the heading of agricultural products. Therefore, there is a sound basis in Community and VAT law for classifying the horses as a agricultural animal.
There are possible objections, and it would be a foolish person who did not recognise and counter them. The first is the cost to the Government of reducing VAT from 15 per cent. to zero, but we shall lose that income anyway. It is difficult to be absolutely precise about the actual amount it is about £10 million to £12 million VAT a year on those sales. We have a precise sales figure, but not a precise VAT figure, because there are concessions and registered people who can reclaim VAT. That money will be lost anyway, so it is not as though the Treasury must forgo it.
The second possible objection to that solution may come from the Department of Environment because it would mean that in future all horse establishments would benefit under the business rate from the same exemptions as apply to agriculture. That is peanuts. Equine establishments' business rates are minuscule when set against all the business rates raised in this country. Set against the massive loss of jobs and the general taxation of industry, their contribution becomes insignificant. There may also be objections in the context of planning by the Department of the Environment, but as agricultural exemptions are reduced in number--the Government propose to reduce them still further--the differentiation bears little close scrutiny. There will also be implications for the Ministry of Agriculture, Fisheries and Food. As Parliamentary Private Secretary to a Minister in that Department I must not comment on that except to say that in my view none of the problems that would be presented is insuperable. I ask my right hon. Friend, who I know takes a close interest in these matters, and particularly in this sector of rural activity, to recognise that this is a matter of grave importance to a vital industry. Unless we voluntarily recognise the impact of this country's tax disadvantage we shall lose that industry and its economic benefits and jobs, and we shall lose the prestige that we have gained for the best bloodstock breeding in the world. I hope that, between now and when we reconvene after Christmas, the Government will think again about a solution and preferably adopt the one that I have advocated.
Column 329
6.11 pmMr. Roy Hughes (Newport, East) : My purpose is to draw attention to the need for Newport, Gwent, to be granted city status, especially in view of its growing economic, social and cultural importance in Wales.
In March 1991, I will have represented Newport in this House for 25 years-- a great honour and privilege. It is a town with a population of about 130,000. It is on the eastern seaboard of Wales, and that favourable geographic position has helped to make it an important centre of commerce, industry and communications. The progress of the town has been helped by an enlightened borough council. Major inward investment has enabled the industrial base to be diversified. Private sector investments in the pipeline now exceed £600 million. A wide range of local, national and international companies have achieved success in Newport. They include A. B. Electronics, Inmos, Standard Telephones and Cables, Monsanto Chemicals, Marconi, Alcan, IMI Santons, the Avana confectionery group, J. Compton Sons and Webb, an important textile organisation, and Crompton Parkinson, a battery manufacturer. Newport remains a major centre for the steel industry, personified by the great Llanwern works.
Public and commercial confidence in the borough has been further advanced in recent years, with several major inward investments, including the Trustee Savings bank, the Patent Office, Panasonic, Newbridge Networks and Bisley Office Equipment. The town is also the centre for the administration of justice in Gwent ; Crown, county and magistrates courts are all there. The business statistics office provides central Government with most of its trade and industry statistics, and the passport office serves about one third of Britain. It is my contention that conferring city status would help maintain the momentum of this considerable progress.
Newport has an enviable position in this country's communications network. The M4 and M5 link Newport with London and the midlands. The town has main rail routes to London, the midlands and north and west Wales. On the InterCity express, London is a mere one and a half hours away. Newport docks can accommodate vessels of up to 40,000 tonnes deadweight and they provide a worldwide import and export facility.
Newport has long been established as the commercial and retail centre for the whole of Gwent and major new developments in this area are under way.
The Newport centre provides one of the finest leisure, entertainment and conference centres in Britain. As part of the town's economic development strategy, £43 million is committed to the regeneration of the Usk river front, with a view to realising commercial, leisure and residential development opportunities. An unusual feature of the Newport skyline is the giant transporter bridge. It is basically a suspended ferry and there is only one other bridge like it in the whole of Britain. Newport boasts a first-class museum, art gallery and central library. Tredegar house is a magnificent example of a 17th century country mansion. Two years ago it provided the site for the royal national eisteddfod of Wales. That event proved to be one of the most successful examples of this great annual national festival, which has been held for many years.
Column 330
Newport has actively fostered international links. It is twinned with Heidenheim in Germany, with the city of Wuzhou in the Peoples Republic of China and with Kutaisi in the Georgian republic of the USSR.I have tried to give a brief outline of present-day Newport, but it has a long and colourful history which can be traced from the sites of ancient Celtic settlements through the occupation by the Romans, who built the headquarters of their second Augustan legion at Caerleon. Under the Normans, Gwynllwg, the forerunner of Newport, flourished as a port and market town. A major castle was constructed early in the 12th century to defend the crossing point over the River Usk. The castle became the centre of the lordship and traders settled close to its walls for protection, thus founding Novus Burgus, or New Town, which later became Newport.
Unfortunately, during the uprising of Owain Glyndwr in 1402, much damage was done to some of the principal buildings. Nevertheless, the borough's first charter had been granted in 1385 and the title of mayor was adopted in 1476. Newport's cathedral, St Wooles, stands on the site of St. Gwynllyw's church, which was established in 500 AD. It was designated a cathedral in 1921 on the creation of the diocese of Monmouth.
One of the most notable events in Newport's history was the Chartist uprising in 1839. It was led by John Frost, a former mayor of the town, and the Chartists marched down Stow hill fighting for their right to vote and protesting about the desperate economic and social conditions of the time. My predecessor, the late Sir Frank Soskice, a former Home Secretary, was so impressed by the event that when he retired from the House he took the title Lord Stow Hill. Last year the borough celebrated the 150th anniversary of the uprising and the town's central shopping centre has been named John Frost square. In the 19th century, Newport grew rapidly and its port flourished, exporting millions of tonnes of coal mined in the valleys of Gwent. The town also became a major centre for the steel industry, which it still is, but now its industrial structure has been diversified and it has a much larger industrial base. My case has the full backing of Newport borough council, which, within the last few days, officially communicated its view to the Secretary of State for Wales.
Mr. Paul Flynn (Newport, West) : As the other Member who has the honour to represent the town of Newport, I congratulate my hon. Friend on initiating this debate. Does he think that the excuse that has been given in the past for not allowing Newport the status of a city is likely to be repeated? Does he accept the excuse that it must be tied to a certain royal occasion?
| Next Section
| Home Page |