House of Commons Hansard Debates for 7 Nov 1991

Mr. Jimmy Wray (Glasgow, Provan) : Will the Minister allow time to debate the report of Dr. Forwell of the Greater Glasgow health board, which highlights the dire poverty in the Greater Glasgow area?

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Mr. MacGregor : Not next week.

Mr. Thomas Graham (Renfrew, West and Inverclyde) : Is the Leader of the House aware that an inquiry is being held into toll increases on the Erskine toll bridge? Recent press reports state that the Secretary of State will privatise the toll bridge, sack its 32 workers and employ a private company. Will the right hon. Gentleman ask the Secretary of State to make a statement showing whether the public are wasting their time by attending the inquiry and whether all the money that was spent on setting it up has been wasted? My constituents' time is being wasted by the facade of an inquiry, because at the end of the day the Secretary of State will abolish the right of local people to have a say by privatising the bridge.

Mr. MacGregor : I shall put that point to my right hon. Friend the Secretary of State. I am sure that he will have a satisfactory answer.

Mr. Terry Lewis (Worsley) : Does the Lord President recall that, when the Prime Minister was a Social Security Minister, he announced the closure of the DHSS resettlement centres but assured the House that replacement beds in the private and voluntary sectors would be available for those who were displaced? Will he take it from me that, when the resettlement centres finally close next March, those replacement beds will not be ready? What is to be done, and may we have a debate in the House?

Mr. MacGregor : I cannot fit in a debate next week, and I have already mentioned the pressures on parliamentary time in the next few weeks. We have a full legislative programme--not only all the Second Reading debates but the two-day debate on European issues. I shall draw the hon. Gentleman's point to the attention of my right hon. Friend the Secretary of State.

Mr. Ron Brown (Edinburgh, Leith) : Is it not clear that, in terms of the health service, most people have had their chips, particularly in the Lothian region, where the local health board is trying to set up a deal with Reo Stakis in order to produce the promised new hospital, which should have been resourced under the health service? Is this not disgraceful? Is this not backdoor privatisation? Should we not have a debate next week to discuss it?

Mr. MacGregor : I am not aware of that issue, but there is not time for a debate on it next week.

Mr. David Winnick (Walsall, North) : Given the continued financial speculation about the Maxwell business concerns, will we have a statement next week if, despite denials, the Daily Mirror is up for sale? Does the right hon. Gentleman recognise that it would be totally unacceptable for that newspaper to go into the hands of those who already have substantial press holdings? It is wrong that so many newspapers throughout the nation are owned by so few people. Indeed, that in itself should be the subject of an early debate.

Mr. MacGregor : As I think the hon. Gentleman recognises, he is raising hypothetical questions. All that I can say is that I have noted what he has said.

Mr. Paul Flynn (Newport, West) : In the interests of the citizen's right to information, will the right hon. Gentleman ensure that next Friday we have a statement on the furious row which is going on in secret between

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Nuclear Electric and the nuclear installations inspectorate on the safety of Magnox reactors, particularly Trawsfynydd reactor No. 1? Problems discovered with the outlet valves which have caused embrittlement and corrosion could lead to a sudden collapse of the core because of pressure and could eventually result in ignition of the graphite and fuel in the core. This is an important matter because it affects three other Magnox reactors, and it should be publicly debated.

Mr. MacGregor : I shall look into the point with my right hon. Friend the Secretary of State for Energy. As I am sure the hon. Gentleman recognises, because I do not know the details of any issue that may arise, I cannot promise a statement.

Mr. Peter Hain (Neath) : Will the Leader of the House find time next week for a Government debate on cot deaths? There are more than 2,000 cot deaths a year throughout Britain. Recent evidence from New Zealand shows that, when the New Zealand Government mounted a nationwide television and publicity campaign advising mothers to put their children to sleep on their backs or sides, not to smoke and to breast-feed, the number of cot deaths was cut by half. Although the British Government accept that evidence, they have refused to fund a nationwide publicity campaign. Five children in Britain may die today in that way, yet their mothers and fathers are ignorant of that evidence. Why are not the Government acting urgently to publicise that information?

Mr. MacGregor : I am sure that we all share the hon. Gentleman's anxiety about cot deaths. His point about publicity and advertising could be raised in a variety of ways in the House, but I shall draw it to the attention of my right hon. Friend the Secretary of State for Health.

Mr. Bob Cryer (Bradford, South) : May we have a statement next week on the Bradford hospital trust, which is deeply in debt, has lost 300 jobs, closed a baby unit in St. Luke's hospital and is now in crisis because the chief executive, Dr. Mark Baker, is resigning and moving elsewhere before the whole thing tumbles down around his head? May we have an urgent statement about the absurd policy which brought a crisis to Bradford hospitals and a diminution of service to the people?

Mr. MacGregor : We have had opportunities for many debates on and questions about trust hospitals, and there will be other opportunities for the hon. Gentleman to raise points about that matter.

Mr. Dennis Skinner (Bolsover) : Why does not the Leader of the House throw his weight about with the Minister of Agriculture, Fisheries and Food? I have asked the Minister about half a dozen times to make a statement on dioxin in Bolsover and contaminated milk. Now he knows that Bolsover Coalite will close its incinerator at the end of the month. It will be revealed today in a television programme that there is a cluster of breast cancers among women in the area where the dioxin was found--50 per cent. more than in other parts of Derbyshire. Contamination levels in the River Doe Lea are 1, 000 times higher than the appropriate safety levels. It is high time that a statement was made. The Leader of the House should tell the Minister of Agriculture, Fisheries and Food to make one so that he can be cross-examined.

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Mr. MacGregor : I have of course raised the issue with my right hon. Friend the Minister of Agriculture, Fisheries and Food, because the hon. Gentleman has raised it before. As the hon. Gentleman knows, the problem involves three farms, and since the statement was made to the House last June, a detailed research programme on the affected and neighbouring farms is being undertaken by the Ministry of Agriculture, Fisheries and Food. Tests are also being undertaken by Her Majesty's inspectorate of pollution. The results of the initial testing by the Ministry of Agriculture, Fisheries and Food's programme were published on 2 October.

However, the analytical work is complex and time-consuming, and the results of the research programme are unlikely to be available before the new year. I assure the hon. Gentleman that they will be published as soon as the work is completed. It is obviously complex work, but I assure him that the results will be published as soon as the work is done.

Mr. Brian Wilson (Cunninghame, North) : Do the Government intend to debate the MORI report commissioned by the Department of Social Security to investigate the plight of 16 and 17-year-olds as a result of the Government's decision to deprive them of the right to benefit, in view of the fact that that policy, which I regard as probably one of the cruellest and most irresponsible pursued by this or any other Government, was the personal work of the present Prime Minister? In view of the fact that the MORI report commissioned by the Government found that decision to be the major cause of destitution among young people, is it not appropriate to debate it? As it is a Government report commissioned at considerable expense, would it not be an extraordinary waste of public money if the report were not debated in the House so that its terrible findings might be acted upon?

Mr. MacGregor : I have not especially studied the report, but, as I have said, Government time in the next few weeks is very short. Clearly other opportunities are available to hon. Members to raise such issues if they wish to do so.

4.10 pm

Prime Minister

Mr. George Foulkes (Carrick, Cummock and Doon Valley) : On a point of order, Mr. Speaker. Is it within your power to draw the Prime Minister's attention to the fact that his first responsibility is to the House of Commons, that there is a Prime Minister's Question Time every Tuesday and Thursday and that we have a Foreign Secretary and a Secretary of State for Defence who are quite able to deal with international and defence commitments overseas? The Prime Minister should be here at Prime Minister's Question Time--or is he afraid of the Leader of the Opposition?

Mr. Speaker : That is patently not a point of order for me.

Mr. Foulkes : But it is.

Mr. Speaker : Of course the House of Commons is important, but the interests of the nation are equally important.

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The Lord President of the Council and Leader of the House of Commons (Mr. John MacGregor) : Further to that point of order, Mr. Speaker. It is right to say to the House and to the nation that the Prime Minister is presently with the President of the United States and the Heads of State of most European Governments and others. They are discussing important matters which affect the future defence not only of this country but of the western world. I think that the vast majority of the nation would expect my right hon. Friend to be there with the other leaders.

Statutory Instruments, &c.

Mr. Speaker : With permission, I will put together the Questions on the statutory instruments.

Motion made, and Question put forthwith pursuant to Standing Order No. 101(3) (Standing Committees on Statutory Instruments, &c.). That the draft Building Societies Act 1986 (Modifications) (No. 2) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.

That the draft Disability Living Allowance and Disability Working Allowance (Northern Ireland Consequential Amendments) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c. That the draft Merchant Shipping (Prevention of Oil Pollution) (Amendment) Order 1991 be referred to a Standing Committee on Statutory Instruments, &c.

That the Students' Allowances (Scotland) Regulations 1991 (S.I., 1991, No. 1522) be referred to a Standing Committee on Statutory Instruments, &c.

That the Bathing Waters (Classification) (Scotland) Regulations 1991 (S.I., 1991, No. 1609) be referred to a Standing Committee on Statutory Instruments, &c.

That the Testing in Primary Schools (Scotland) Amendment Regulations 1991 (S.I., 1991, No. 1682) be referred to a Standing Committee on Statutory Instruments, &c.

That the Child Minding and Day Care (Registration and Inspection Fees) Regulations 1991 (S.I., 1991, No. 2076) be referred to a Standing Committee on Statutory Instruments, &c.

That the Immigration (Carriers' Liability Prescribed Sum) Order 1991 (S.I., 1991, No. 1497) be referred to a Standing Committee on Statutory Instruments, &c.

That the Family Credit (General) Amendment Regulations 1991 (S.I., 1991, No. 1520) be referred to a Standing Committee on Statutory Instruments, &c. -- Mr. Neil Hamilton.]

Question agreed to.

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Orders of the Day

Debate on the Address

Order read for resuming adjourned debate on Question [31 October].

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. Peter Walker].

Question again proposed.

The Economy Mr. Speaker : I have selected the amendment in the name of the Leader of the Opposition and also, for a Division only, the amendment in the name of the leader of the Liberal Democrat party.

In view of the pressure of time, I shall have to limit speeches to 10 minutes between 7 o'clock and 9 o'clock. I hope that the hon. Members who are fortunate enough to be called before will bear in mind that limit in fairness to their colleagues.

4.13 pm

Mr. John Smith (Monklands, East) : I beg to move, at the end of the Question, to add :

But humbly regret that the Gracious Speech seeks to continue economic policies which have caused a deep and damaging recession, falling output and investment, rising unemployment and record levels of business failures and house repossessions ; and call upon the Government to adopt a programme for recovery which will encourage investment and rising levels of employment by the promotion of sustained investment in the manufacturing sector, by encouraging industrial innovation through the application of science and technology and by fully exploiting the potential of the neglected regions through vigorous regional policies, and by providing new opportunities in education and training which are crucial to Britain's economic recovery and future prosperity.

Once again, in his autumn statement yesterday, the Chancellor of the Exchequer was forecasting an economic upturn. There is, of course, nothing new in that. Month after month, as the British economy has languished in a deep and damaging recession, the only reaction from a puzzled and beleaguered Government is the claim that it is not as bad as it seems and that good times are round the corner.

Right from the beginning, it was even denied that there was a recession at all. At the time of last year's autumn statement, both the Prime Minister and the Chancellor of the Exchequer were deeply involved in just such an exercise. When it could no longer be denied that there was a recession, the Chancellor retreated to his second line of defence. He told the Treasury and Civil Service Select Committee that the recession would be "shallow and short-lived". As we know, however, from the evidence contained in yesterday's autumn statement, the recession has been deeply damaging to Britain's economy.

In 1991, growth disappeared, falling to minus 2 per cent., instead of taking the upward direction predicted by the Prime Minister when he was Chancellor, only 12 months ago. Fixed investment has collapsed by almost 11

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per cent. Manufacturing investment has fallen by almost 20 per cent. Manufacturing output is expected to decline by 4.25 per cent. this year.

No one could possibly pretend that this debilitating economic experience was, or is, shallow or short-lived. But never a word of apology, let alone a word of explanation, ever comes from Ministers whose incompetence has caused Britain to be at the bottom of the league tables among the leading industrial nations : bottom of the league for growth, bottom of the league for investment, bottom of the league for job creation. Not a word of apology, or even of explanation, to those who have suffered the consequences of their mismanagement of the economy--those who owned and worked in the 45,000 business enterprises that failed this year, with 860 failing in every week of the year, and the 85,000 families who have lost their homes as a result of the record level of repossessions, running now at 1, 635 every week.

Mr. Conal Gregory (York) : Will the right hon. and learned Gentleman also confirm that this Government have achieved the highest fall in inflation of any country in the European Community ?

Mr. Smith : But it was a fall from a very high level of inflation. In case the hon. Gentleman's purpose is to divert me from the consequences of the recession, let me remind him that I was referring to the 85,000 families who have lost their homes.

Most of all, however, one should have regard for the 750,000 people who have lost their jobs since last year's autumn statement, which blithely proceeded on the wholly mistaken assumption that there would be no increase in unemployment. Once again--as the Chancellor revealed in a reply yesterday to my hon. Friend the Member for Durham, North (Mr. Radice)--the Government are assuming, in this year's autumn statement, that there will be no rise at all in unemployment in the year ahead. Frankly, no one should take that seriously. None of the economic commentators who the Chancellor claims agree with him in his assessment is prepared to go along with that assumption. That is an error right at the heart of all the calculations in the autumn statement, just as it was an error right at the heart of all the calculations in last year's autumn statement.

Mr. Tony Marlow (Northampton, North) : The right hon. and learned Gentleman says that he is concerned about unemployment. We accept that he is concerned about unemployment, but he knows--although I am sure he will not admit it--that if the heavens were to fall in and there were to be the return of a Labour Government, there would be the mother and father of a financial crisis. In those circumstances, what would the right hon. and learned Gentleman do? Would he increase interest rates and abort the recovery? Would he devalue the pound and embark upon another cycle of inflation? Or would he--the only other alternative available to him--cut the necessary expenditure on sensible and sensitive issues like the national health service? What would he do?

Mr. Smith : My concern about unemployment is so generous that I am prepared to consider the future of the hon. Gentleman, who I think is going to be unemployed a little sooner than he thinks. He is one of those who are arguing for the general election to be delayed for a personal reason. What I shall be concerned about in the

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economic policies that I shall follow will be to seek to rescue this country from the financial consequences of this Government's period in office. The next Labour Government will not have a fortunate inheritance, but the hon. Gentleman cannot blame Opposition Members for that. The Conservatives have been in power for 12 years ; it is a little late for the hon. Gentleman to notice the problem. The price of the recession has been and remains high in economic, political and human terms. After all, this is the second worst recession since the second world war, exceeded in severity only by the recession in the early part of the Government's period in office. Neither the Government nor the hon. Member for Northampton, North (Mr. Marlow) should be under any illusions that the public may be in an easily forgiving mood.

Indeed, I notice that one business man is so furious and frustrated with the Government's economic mismanagement and its effects on his business and livelihood that he is suing the Treasury in the High Court. As was reported in the Financial Times on 1 October, the Government sought to have the action struck out before the High Court, but the motion failed and the case appears to be proceeding. The plaintiff is a Mr. Mark Harries, a Cardiff business man. He accuses the Government of, among other things, the following errors :

"Selling valuable public industries, such as water and the telephone service, at one quarter of their worth".

[ Hon. Members :-- "Guilty."] Mr. Harries has a strong case, as the House will realise as I proceed through his pleadings. The other charges are :

"Creating a false economy in the 1980s and causing property prices to inflate at a time when he purchased four properties on mortgage ; Not keeping proper control over the Bank of England, so that interest rates almost doubled and he had difficulty keeping up payments on his mortgage loans ;

Creating an economic climate in which demand for properties diminished dramatically, so that he was deprived of his collateral and was unable to borrow more money or diversify into other business ;

Causing continual and increasing unemployment which deprived him of enough customers with money to use his services ;

Causing him great emotional stress owing to the danger of total business failure and subsequent unemployment, penury and destitution'".

These views are wholly objective :

"Mr. Harries says that he has no political affiliations and no personal animosity towards the government or any of its members." In saying so, he shows himself a man of great generosity as well. I remind Treasury Ministers that the case is still proceeding and they may have to give evidence at some stage. After the initial hearing, Mr. Harries said :

"We are prepared to go the whole way to win the point. It will cost thousands of pounds, but it's a matter of principle. You can forgive the odd one or two mistakes, but you can't forgive mistake after mistake, blunders all the time."

How true.

The case will be interesting. I shall be fascinated to see what defences the Government produce to Mr. Harries's case. I must confess that I would not mind presenting the case in the High Court myself, even though I see some potential problems. Too many witnesses will probably want to give evidence against the Government. Those

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could include the 45,000 businesses that have gone under this year, let alone the 85,000 families who have lost their homes and the 750, 000 extra unemployed people.

I wondered whether the Chancellor had remembered that litigation when he presented the autumn statement yesterday, for that could provide useful material for the plaintiff and his advisers. After all, it revealed how much of a confidence trick last year's autumn statement was. When he speaks today, the Chancellor should have a care not to undermine further the Treasury's case for the defence. I have in mind some of the misleading answers that the right hon. Gentleman gave to questions following his statement yesterday. The House may recollect an exchange that took place between my hon. Friend the Member for Neath (Mr. Hain) and the Chancellor during questions on the autumn statement yesterday. My hon. Friend asked the right hon. Gentleman about the Government's prospective intentions to increase VAT, and asked him to answer the question yes or no. A similar matter was canvassed on the "Today" programme on Radio 4 this morning. In reply to my hon. Friend's allegation, the Chancellor said :

"The hon. Gentleman is totally wrong",

and went on to give us this pearl of wisdom :

"One can increase spending and cut taxes at the same time. I do not know where the hon. Gentleman has been--he has not been in this House very long- -but we have been doing that ever since 1979."--[ Official Report, 6 November 1991 ; Vol. 198, c. 468.]

That is simply not true. The Government have not been cutting taxes since 1979. In fact, it is not a matter of dispute between hon. Members on each side of the House that the proportion of national income going in taxation has risen--from 34.25 per cent. in 1979 to 37.75 per cent. in 1991. How can the Chancellor have been cutting taxes since 1979? When the Chancellor was taxed with the matter this morning, he said that the Government had been cutting taxes since the early 1980s. That is the oldest trick in the book.

The Government get into power in 1979. They increased national insurance contributions by 2.5 per cent.--[ Hon. Members :-- "Come off it."] They do not like to hear this : they hope that the public have forgotten all this. The Government increased national insurance contributions by 2.5 per cent., which is almost the direct equivalent of 2 p on the standard rate of income tax : to most people, it means much the same thing. The Government then almost doubled VAT, from 8 to 15 per cent. Although they had said in the election campaign that the Labour charge that they would double VAT was deplorable gutter politics, they did it within a couple of weeks of getting into power.

Mr. David Ashby (Leicestershire, North-West) : Will the right hon. and learned Gentleman give way?

Mr. Smith : Before the hon. Gentleman leaps to his feet, I should just like to finish my point.

The change in the proportion of income going in taxation since 1981 is quite different from the change since 1979, and to use 1981 as the starting point is conveniently to leave out the years in which taxes were actually increased. The House and the nation need to be treated

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somewhat more seriously than the Chancellor has been treating us. We are not as gullible as all that.

Mr. Ashby : Will the right hon. and learned Gentleman say by how much he would increase taxation were a Labour Government to get into power?

Mr. Smith : We believe that we need to introduce a much fairer system of income tax, and we have spoken about that on many occasions. [Hon. Members :-- "How much?"] The proposals are well understood by the public.

Mr. Ian Taylor (Esher) : The right hon. and learned Gentleman says that he will increase public expenditure--presumably over and above the increases announced yesterday. To finance such a move, he will have to have recourse to higher taxation or higher borrowing and interest rates. By how much will taxation be increased? How much more will the basic rate taxpayer have to pay under his Government?

Mr. Smith : The hon. Gentleman completely fails to take account of how much of yesterday's public expenditure increase was committed to the costs of recession--about £4 billion of that money was committed to such costs. The answer to his question is that, if we run an economic policy that does not lead us into recession, we shall have the resources to increase public expenditure.

Despite the Government's recent experience, they appear to have learnt very little. Once again, when they talk about the future of the economy, they advance a case based on bogus reassurances about sustained and successful recovery. It is the same technique as they have used month after month, as the recession has deepened and spread through all parts of the economy and all parts of the nation. In June, the Chancellor detected what he chose to call "vague stirrings" of recovery, which he thought would first manifest themselves in the housing market. He told David Frost on his morning programme, "The signs are there."

Hon. Members will recall that in an earlier debate I referred to the robust rubbishing of that proposition by the president of the House-Builders Federation, Mr. Upsall. When Mr. Upsall heard about these "vague stirrings", particularly in the housing market, he wrote to the Chancellor the following day :

"I have consulted widely within the housebuilding industry and there is no foundation whatsoever for your assertion."

In case the Chancellor believes that that is the only evidence that I am going to introduce on that point, I noticed that, undeterred by the Chancellor's experience of being rubbished by the president of the very industry on which he was commenting, the Secretary of State for the Environment, that bold gentleman, claimed only this week that recovery was evident in the housing market. In The Guardian on 5 November, he claimed that the evidence of housing starts

"powerfully reinforce the Chancellor's message."

He went on to say :

"They herald renewed hope for all those anxious to move house. Britain is pulling out of recession."

However, the House-Builders Federation was once again alert to the Government's claims. I am glad that it pays such close attention to Ministers' comments. The federation represents builders accounting for 70 per cent. of national output. Again on 5 November in The Guardian,

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Mr. Roger Humber, a director of the federation, gave an equally sharp response. He said "Rubbish" to the Secretary of State for the Environment. He also said :

"Customer confidence is falling, house sales are weakening, and confidence is clearly undermined by rising unemployment." So much for the "vague stirrings" that we were promised last June. In support of the case made by the House-Builders Federation, house prices fell for the third month in succession in September. According to the Halifax building society, there is no sign of an early recovery. The latest figures for mortgage lending issued by the Building Societies Association show a further decline in September.

Mr. Dennis Skinner (Bolsover) : I am pleased that my right hon. and learned Friend has referred to the housing market. The situation has become so bad that the ex-Prime Minister has her house in Dulwich on the market and she has had to cut its price twice. According to the newspapers, she has now resorted to placing it in the Evening Standard's small ads in an attempt to sell it.

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