House of Commons Hansard Debates for 26 Feb 1992

Mr. Quentin Davies (Stamford and Spalding) : How is increasing the tax burden on savings income supposed to increase investment?

Mrs. Beckett : The hon. Gentleman knows perfectly well that our proposal for a charge on investment income above--[ Hon. Members :-- "A tax."] A charge. When the Conservatives put up national insurance contributions

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from 6.5 per cent. to 9 per cent., was that a tax? Conservatives did not say that it was a tax. If a charge is a tax, so is that on national insurance contributions, which the Conservatives increased from 6.5 per cent. to 9 per cent. That was a tax increase. I return to the question put by the hon. Member for Stamford and Spalding (Mr. Davies), as hon. Members clearly prefer me to deal with that point. We have made the point on many occasions in the House that the proposed charge will simply put people with investment incomes on individual investment holdings of probably well over £30, 000 on the same basis as those who have similar sums of earned income. That seems to us to be fair and that is why we propose it. Mr. Mellor rose --

Mrs. Beckett : No, I shall not give way because I am in the middle of a point about inflation. I will come back to the right hon. and learned Gentleman.

In June 1983, the date of the general election, inflation was brought down by those methods to 3.7 per cent. and interest rates were 9.5 per cent. Within two years of the 1983 election, in June 1985--

Mr. Oppenheim : Will the hon. Lady give way?

Mrs. Beckett : No.

Mr. Oppenheim : Why not?

Mrs. Beckett : Because every time I give way to the hon. Gentleman he asks the same silly question. I am bored with it.

Mr. Oppenheim : I have a new question.

Mrs. Beckett : I do not believe it.

Within two years of the election, in June 1985, interest rates were back at 12 per cent. and inflation had doubled to 7 per cent. Once again, the pattern was emerging of increases in rates and water charges--within the Government's purview--and those increases were well above the rate of inflation. Again, by the time of the election in 1987, interest rates were down again to 9 per cent. and inflation was at 4.2 per cent. The Government were making claims. The Prime Minister himself wrote in the election campaign that year in the Huntingdon Post :

"Inflation has gone. The economy is sound. Unemployment is falling."

People voted on that basis.

In October 1987, after the stock market crash, the Government took the step of cutting interest rates, which they now claim is almost their sole mistake in all these years. In the 1988 Budget, they claimed an economic miracle and cut taxes afresh to their present level. Flushed with money and rhetoric, companies and individuals went on a credit spree and the Government went on feeding inflation. The Government went on cutting money for public sector housing and forcing councils to increase rents. They went on cutting transport subsidies and forcing up fares. They insisted on price increases for gas, which were followed by increases for water and electricity to fatten those industries for privatisation. They also made hikes in prescription and other charges, and they pushed up interest rates to 15 per cent. and kept them there for a year. With that, they pushed up mortgages, mortgage debt and

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repossessions. They pushed up unemployment and business failures, yet still they went on with inflationary own goals.

Mr. Oppenheim : Will the hon. Lady give way?

Mrs. Beckett : I cannot resist finding out whether the hon. Gentleman really has thought of a new point. I give way.

Mr. Oppenheim : I thank the hon. Lady for her graciousness in giving way. As the hon. Lady is clearly wedded to the exchange rate mechanism, will she confirm that a future Labour Government, if such a Government should come to power, would raise interest rates to defend sterling within the ERM if necessary? Yes or no?

Mrs. Beckett : The hon. Gentleman knows perfectly well that we have long expressed the view that, if the exchange rate is properly managed, there is no need to take that step-- [Interruption.] Let the hon. Gentleman put that question to his right hon. and learned Friend the Chief Secretary if he chooses.

Mr. Mellor : Is the hon. Lady aware that her answer is one of the most extraordinary cop-outs? She would not be able to hold office in the Treasury for 10 seconds unless she was prepared to improve on that.

Mrs. Beckett : The right hon. and learned Gentleman seems to have managed it.

The Government went on inflicting inflationary own goals.

Mr. Mellor : Will the hon. Lady give way?

Mrs. Beckett : No. Once is enough on that subject.

I have a cutting from the Financial Times of 12 May 1990 which makes the point admirably. The article says :

"Hardly ever, outside wartime, can a government have done so much to push up the inflation rate in a single month as this administration has achieved in the April calculation of the General Index of Retail Prices."

The Government went on inflicting inflationary own goals and within two years of the 1987 general election interest rates were back at 15 per cent., inflation had doubled again to 8.3 per cent. on its way to its 10.9 per cent. peak and, once again, we were heading for recession with the then Chancellor, now the Prime Minister, saying only that if it was not hurting, it was not working.

In the Financial Times article an additional comment was made. Drawing on the inflationary own goals that the Government had inflicted in a short time, the writer points out that that contrasts oddly with the Budget speech by the then Chancellor, now the Prime Minister, in March when he set out the Government's economic policy objectives. The article says that the first objective

"is to bring inflation down again."

The commentator then writes :

"But perhaps that aim should have been more explicitly stated : to reduce inflation just before the next General Election ." This is a Jekyll and Hyde approach to inflation control. With the advent of an election and in the pre-election period, Dr. Jekyll takes over and everyone is very good about inflation. Once an election is safely over, within two years, Mr. Hyde is letting rip and we see the effects on inflation and on interest rates. Conservative Members dislike that comparison so much because, sure enough, as today we approach yet another general election, interest rates are at 10.5 per cent.

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and we are waiting, yet again, for the Chancellor to decide when it will be politically beneficial to the Conservative party, rather than when it will be most advantageous to the economy, to cut them--and inflation is around 4 per cent. again. On 16 February, The Sunday Times said :

"Any fool can reduce inflation if he is prepared to lay the economy flat on its back."

Of course, we know the fools who have.

Growth was down in 1991 by 2.5 per cent., the worst fall in a calendar year since the great depression of the 1930s. Unemployment is at 2.6 million and on its way, most people forecast, to 3 million.

Mr. James Arbuthnot (Wanstead and Woodford) : Will the hon. Lady give way?

Mrs. Beckett : No. I know that hon. Members do not want this on the record, but I am determined to put it there.

Three thousand jobs have been lost every day since the Prime Minister got his new job ; 75,500 homes were repossessed last year, 72 per cent. up on the year before ; perhaps a million people are said by the building societies to be in serious mortgage debt, that is, up to two months in arrears ; and 47,800 businesses went bankrupt in 1990, the highest on record and a 65 per cent. increase on the year before. Manufacturing investment has fallen by 14 per cent. and is predicted by the CBI to fall again this year by perhaps 6 per cent. in this quarter. Today's Chancellor calls all that a price well worth paying to suppress inflation, without even a syllable of apology for the incompetence and mismanagement that pushed it up. We believe that it is vital to keep inflation low. That is one of the reasons why we urged the Government to join the exchange rate mechanism of the European monetary system. But while low inflation may be a necessary condition for economic success, it is by no means sufficient. Too much money chasing too few goods is the classic definition of inflation. The Government have relied solely on one side of that equation--the supply of money. They have ignored the supply of goods and services, leaving it all to the market. If we allow our productive capacity to be further reduced--and as people begin again to want to purchase goods and services-- inflation is bound to rise again. Even in recession we have inflationary bottlenecks and skill shortages. What is the Government's response? It is to go on cutting Government support for training, for industry and for the regions and to ignore falling levels of investment.

Professor Brian Reading pointed out some time ago in his evidence to the Treasury Select Committee that

"reducing demand through lower investment cuts inflation in the short run but increases inflation in the long run."

Mr. Beith : The hon. Lady has not yet made clear what a Labour Government's response would be if the circumstances that she has described were to take place. She has cast doubt on whether such a Government would even be prepared to take the steps necessary to defend Britain's position in the exchange rate mechanism. What would a Labour Government do if they were confronted with inflation rising at a time of recovery?

Mrs. Beckett : The hon. Gentleman is being ridiculous. He knows perfectly well that we have made it clear on the record and consistently that we would maintain the exchange rate. He aspires to be considered a senior

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commentator on Treasury matters. He should know better than to cast doubt on the wish of any prospective Government to maintain the exchange rate.

Mr. Mellor : Will the hon. Lady give way?

Mrs. Beckett : Again?

Mr. Mellor : I shall make the same point that I made earlier to the hon. Lady. The way in which currency levels are managed is by interest rates. That is the way it is done throughout the ERM. I am astonished that the hon. Lady is not prepared to give the commitment that the Chancellor has always given--one cannot have a commitment to the ERM unless one does.

Mrs. Beckett : We have given a commitment that we will maintain the exchange rate. We have given it consistently and the right hon. and learned Gentleman knows that perfectly well.

We must maintain low inflation and stable conditions so that business can plan ahead, address the supply side failures and, above all, avoid inflationary own goals. What about the Government's own policy? What are they going to do? What can we learn from the motion? Not very much, actually. In the motion is the claim that Labour will inevitably increase inflation. The Government have doubled it three times in 13 years. In the motion is the claim that Labour will push up interest rates. Interest rates and mortgage rates have been pushed up between elections in each of the Government's terms of office. Interest rates under them have averaged 12.4 per cent. as opposed to 10.7 per cent. under the previous Labour Government, and mortgage rates have reached the highest levels on record.

In the motion the Government claim that Labour will increase unemployment. Unemployment is double the rate that we left--and climbing--even though the Government have changed the way it is counted 30 times. They claim that our policies to promote investment, research and development, and on inflation and education and to improve the transport infrastructure, to create the wealth to enable us better to fund our public services will not work here when they are working in every successful economy in the world. They claim that we alone cannot make what is best practice in Europe common practice here.

Mr. Ian Taylor (Esher) : Will the hon. Lady give way?

Mrs. Beckett : I shall not give way. I am almost at the end of my speech.

What is the vision that the Conservative party offers to the people of Britain in the 1990s? "Look at our record over 13 years," they say. "Re- elect us," they say, "and we will do it all again." They say, "We will shove up interest rates again and double inflation again." To show that they really mean it, we have that felicitous statement from the Chancellor, "If we'd known how it would turn out, we wouldn't have done anything different." There could not be a better statement of their arrogance. Let it be their epitaph.

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5.6 pm

Sir Ian Stewart (Hertfordshire, North) : The hon. Member for Derby, South (Mrs. Beckett) will live to regret the extraordinary performance that she has delivered to the House this afternoon. Instead of the clear commitment which she should give to the methods necessary to maintain sterling in the exchange rate mechanism, if there were a Labour Government, we have been answered by evasion and prevarication. When she was asked, by not only my right hon. and learned Friend the Chief Secretary to the Treasury but my hon. Friend the Member for Amber Valley (Mr. Oppenheim) and the hon. Member for Berwick-upon-Tweed (Mr. Beith), whether a Labour Government would defend sterling within the mechanism by the use of interest rates, she found every possible means of avoiding an answer. Unfortunately, that is not a casual lapse.

The Labour party's approach to inflation has been careful to avoid making any of the commitments necessary to justify its claim that it would maintain sterling within the permitted bands. That is one of the main reasons why all commentators and serious analysts who looked at the figures, policies, proposals and statements of the Labour party have concluded that inflation would be higher under a Labour Government. My right hon. and learned Friend the Chief Secretary quoted many commentators this afternoon. They may differ in the amount by which they think that inflation would increase or the amount by which they think interest rates would have to rise in order to gain control of inflation, but none of them disagrees with the basic proposition that inflation would be higher under a Labour Government. It is not difficult to see the reasons why.

It is the stated policy of the Labour party to increase public expenditure by an enormous amount, not just by £5 billion, £10 billion or £20 billion but by between £30 billion and £40 billion. I lose count because Labour Members frequently change their commitment and priorities, but the latest estimates are approaching £40 billion in annual terms. Of course, it is not possible for a party which is committed to those spending priorities to convince the markets or independent commentators and analysts that its approach to economic management and monetary policy is sound unless it is prepared to explain how it would finance it. On top of making public expenditure commitments, Labour Members have encouraged almost every inflationary wage claim that has been made by public sector employees ; yet they expect to be able to hold down wage claims in the public sector--with all the consequences that such claims have on public expenditure--as soon as they come into office. It simply is not a credible approach. Above all, the Labour party has not understood the practical implications of its extraordinary policy for a minimum wage. It does not seem to understand that a minimum wage would not only squeeze out jobs at the lower end of the scale and impose extra costs on employers who retain labour at higher wages but have a knock-on effect on differentials all the way up the scale.

If a person who earns 10 per cent. less than someone else receives a 10 per cent. wage increase under the minimum wage provisions, does the Labour party believe that other workers who previously had a 10 per cent. differential would calmly accept that without putting in a claim to maintain their differential? All economic analysis

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of the minimum wage proposal has concluded that a minimum wage would achieve an astounding double : it would put up inflation and unemployment simultaneously.

Mr. Derek Enright (Hemsworth) : Will the right hon. Gentleman explain why a high wage economy such as that of West Germany, as it was then, was so successful, had such low inflation and had proper manufacturing jobs instead of some of the cheap-jack jobs that we have here at present?

Sir Ian Stewart : I can give two answers to the hon. Gentleman. The first is that in Germany a responsible financial and monetary policy has been pursued for many years. That is something which the Labour party seems unable to recognise as necessary for sound economic management. Secondly, we are not talking about the continuation of a wage system, with or without minimum wages ; we are talking about the effects of introducing a minimum wage system. The effect would be not only to put up the cost to employers in respect of existing employees and deny the labour market to some of those who in current circumstances are able to enter it but to create an upward pressure on the wages of many people who earn wages slightly above those affected by the minimum wage proposals. That is difficult to quantify exactly, but it is unavoidable that the consequence of a minimum wage would be an increase in wage costs which would work a long way up the scale.

The Labour party has not begun to understand the implications of its proposal. It is not surprising, therefore, that it does not realise why its policies are so incompatible with the commitment to which it says that it adheres--keeping sterling within the exchange rate mechanism. If ever there were any credibility in the Labour party's protestations on that subject, it was blown apart this afternoon by the extraordinarily evasive answers given by the shadow Chief Secretary to the Treasury. I am sorry that she felt it beyond her to respond to a Conservative Member, but she might at least have responded to the hon. Member for Berwick-upon-Tweed when he asked, perfectly reasonably, how she could justify her party's commitment to the ERM if she was not prepared to will the means as well as the ends.

Mr. Marlow : My right hon. Friend is setting out some of the grave disadvantages of a Labour Government, if elected. But is not the immediate price that we would have to pay the fact that, fairly or unfairly, reasonably or unreasonably, the financial markets would not trust a Labour Government, as they do not now? In any circumstances, there would have to be a higher rate of interest under a Labour Government than under a Conservative Government. What effect would that have on the recovery? What effect would it have on those people who are already having difficulty paying their mortgage? Would not it have a devastating effect within two weeks, six weeks or two months of the election of a Labour Government? Sir Ian Stewart : The impact would be both early and severe, as my hon. Friend rightly points out. That is another reason why I suspect that the Labour party's commitment to maintaining membership of the ERM, with sterling at the present level, is not sincere.

I suggest that if the Labour party wants to be taken seriously, it must look again at its contradictory policies.

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It says that it has massive public expenditure priorities. It intends to introduce a minimum wage and take steps which would undoubtedly put upward pressure on inflation. At the same time it constantly avoids admitting that it would take any other steps necessary to deal with inflation or, indeed, to protect the exchange rate of sterling.

I suggest that the Labour party does one of two things : either it should scale down its public spending commitments to a credible level and drop its proposal for a minimum wage or it should admit that it is not committed to the ERM. So long as it continues to try to have it both ways, it will not be believed on either of those commitments. The reason why the Labour party is not believed on its commitment to the ERM is simply that the rest of its economic policies are clearly incompatible with that commitment. So it should clear up the mess. I do not know whether the hon. Member for Derby, South let out of the bag a kitten or a cat this afternoon, but I am afraid that in her carefully evasive replies she showed that the Labour party has no underlying commitment to maintain the ERM parities for sterling. I came here this afternoon hoping that the hon. Member for Derby, South would give us a more coherent exposition of the Labour party's economic policies. As inflation was the subject of the debate, I hoped that she would speak about the Labour party's approach to inflation and how it would control it and continue to bear down on it. I suppose that I was over-optimistic. Of course, we have been disappointed again. But one or two chinks of light have been seen on the Labour party's real approach to economic policy. Many people have pointed out that there is a yawning gap at the centre of the Labour party's economic policies because it has not reconciled its expenditure commitments with either its plans for taxation or its approach to borrowing and interest rates.

I suspect that at the heart of the Labour party's policy is the policy that dare not speak its name--printing money. That is the only way out that the Labour party has left.

Mr. Radice : I am interested to hear what the right hon. Gentleman has to say, but will he comment on the fact that the public sector borrowing requirement is likely to be well over £20 billion under a Government who are apparently committed to balancing the budget?

Sir Ian Stewart : I will do so but only briefly because it is not the subject of my speech. I did not hear the hon. Gentleman complain when the public sector debt repayment figure was large. That is something which his party never achieved. Of course, at certain points in the economic cycle there will be a surplus and at others a deficit. I believe that an acceptable deficit at this point in the economic cycle is the correct policy. I hope that my right hon. Friends will follow that. We have never raised the public sector borrowing requirement to anything like the percentage of gross domestic product to which the Labour party raised it when it was in office.

The Labour party says that it will not increase taxes other than those to which it has already committed itself. It says that it will make public expenditure increases within the amount that it can afford. The figures do not add up. The Labour party must accept that, unless it is prepared to explain how its policies will be implemented, its commitments and expressions of adherence to the

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exchange rate discipline of the ERM will not be believed. Unless it is prepared to sort that out before or during the election, it will not be able to argue that it has a coherent or responsible policy for economic management and, therefore, that it is credible and could be trusted with the government of Britain.

Mr. Stuart Randall (Kingston upon Hull, West) : Will the right hon. Gentleman give way?

Sir Ian Stewart : Yes, but I am under pressure of time.

Mr. Randall : I have listened carefully to the right hon. Gentleman. His speech so far has been based on the completely false assumption that the Labour party will go ahead with a spending programme based on a Tory propaganda figure--£35 billion, £50 billion or whatever. That is an utterly false assumption, so the validity of everything that he is saying is out of court. I wish that the Conservative party would stop peddling its propaganda in that way because it results in worthless debating time.

Sir Ian Stewart : The hon. Gentleman is a decent chap, and I do not want to pin the blame on him, but if he wants his party to be taken seriously he has to persuade the leadership of the Labour party to stop its spokesmen saying in every debate and at meetings throughout the country on health, education, transport and everything else that they have massive spending priorities for an incoming Labour Government. If the Labour party is prepared to scrap all that, to rip it out of its policy documents, and not to mention it in manifestos, Labour would attract greater credibility. Until it does so, one can only take the Labour party at face value.

If Labour Members spell things out in such detail and if their spokesmen go to such great lengths to explain what they want to do, it is not surprising that people will believe them. Labour has undermined its credibility by having internally inconsistent policy objectives, and I am trying to point that out. I am trying to be helpful to Labour because its policies would be more credible if the party faced up to that central problem.

I have been too generous in giving way to comply with the request of the Chair that we should not speak at great length. As we approach the Budget, the question is : would it be inflationary to have some reduction in taxation? My view is that it would not. At this stage of the economic cycle it is clear that the savings ratio is high. Consumers, for many reasons-- not excluding the fact that they live in fear of the Labour party's tax policies--are reluctant to commit themselves to expenditure of the kind that would assist in bringing about further economic recovery.

If my right hon. Friend the Chancellor concludes that it would be possible to reduce personal taxation in this Budget, he would be right to do so on economic grounds. That is the right economic response to the present position.

Mr. Radice : It is deathbed Keynesianism.

Sir Ian Stewart : One problem with the policies advocated by Lord Keynes was that they were always applied in one part of a cycle but not in the other part. Lord Keynes never said that one had to stimulate the economy with extra borrowing and public expenditure not

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only when it needed to be given a stimulus but also once it was growing at a satisfactory rate. That is why the so- called Keynesian approach to economics fell down.

The correct time for adjustments in personal taxation is not only when they can be afforded because of the fiscal position but when it is the right moment in the economic cycle. I can only recommend reductions in personal taxation if they are accompanied by a commitment to keep firm control on public expenditure as the economy recovers, so that the public sector borrowing requirement reduces as the recovery takes place. Without such a commitment I would not make that recommendation, but with it I have no doubt that it would assist in the approach to consumer confidence which is a necessary part of the platform for economic recovery that the Government are putting in place.

In those circumstances, I regret that, in an economic debate, the Labour party has once again failed to tackle any of the central issues in a way that would inspire confidence in its proposals and lead to economic recovery. Labour has dodged the issue of how it would tackle inflation and has added to the confusion about its monetary and exchange rate policy. This afternoon the Labour party has demonstrated that it is even more unfit to come into government than I thought before the debate and the debate will certainly have helped to ensure that it does not.

5.24 pm

Mr. Michael Foot (Blaenau Gwent) : I hope that the first speaker from the Government Front Bench will be kind enough to return to the House. In years gone by, we had an old custom that the main speakers in a debate used to stay to listen to replies to their questions, but perhaps that has changed. Possibly the Chief Secretary will return. I shall try to discover why this debate has taken place. It is certainly something of a mystery. However, it would be rude of me if I did not also comment on the speech of the right hon. Member for Hertfordshire, North (Sir. I. Stewart). I understand that he has been a great defender of the Government's monetarist policies in the past decade. Five or 10 years ago, during debates on this subject, Government spokesmen made great speeches--I dare say that the Chief Secretary to the Treasury, or whatever he calls himself, who has just left us, made many speeches on the same topic--but how different was their allegiance and the economic policies which they followed. We are witnessing the biggest somersault of the monetarists in history. The next Budget will be produced on full-blooded Keynesian lines, although it is rough on Keynes that his name should be used in such disreputable circumstances. Even so, they are using good Keynesian arguments now. Those of us who were brought up on Keynes think that the application of his doctrines should be more carefully considered, and I hope that the Government will do that before they proceed along those lines.

I heard every word in the speech of the right hon. Member for Hertfordshire, North. He said that he was convinced by the Government's case, but that he was not at all convinced by the case which my hon. Friend the Member for Derby, South (Mrs. Beckett) put so well. Well, he must be a hopeless case. He is beyond all recovery.

Mr. Marlow rose --

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Mr. Foot : I shall give way to the hon. Gentleman in a moment if he is so anxious to interrupt.

I should have thought that any normal person listening to the two speeches by the Chief Secretary and the right hon. Member for Hertfordshire, North would have been insulted. I thought that the House was insulted by the speech from the Treasury Bench but, as is the custom, the speech by my hon. Friend the Member for Derby, South was different. Never in the history of Oppositions has there been such a settled, deliberate and determined case-- she presented the figures to the nation so that people could balance the different sides of the equation. This Opposition and my hon. Friend have done that more skilfully than any other Opposition. She has put the case on behalf of the entire official Opposition. That is one of the reasons why the Labour party will win the next election.

Mr. Marlow : I am grateful for the right hon. Gentleman's courtesy. He says that he is impressed by the case put forward by his hon. Friend the Member for Derby, South (Mrs. Beckett). Could he tell what that case was, because I do not think that any of us heard her put a case? Could he tell us how she would maintain the parity of sterling within the ERM? What would she do with interest rates in those circumstances--would she use them?

Mr. Foot : I recommend that the hon. Gentleman reads the case put by my hon. Friend--[ Hon. Members :-- "He cannot."] If he could not hear her, I hope that his eyes will be able to rectify the position and that he will study exactly what she said. Anyone comparing the two cases put by the Front Benches could see the difference, and could see that my hon. Friend's was a first-class case.

I have discovered the reason for the Chief Secretary's difficulties. I may be the only Member of Parliament who has discovered the origin of this debate. The secret was out in a newspaper report which I read the other day. It said that the Prime Minister had set up a special committee to advise him on election tactics. The names in the report made an interesting list. Such an auspicious committee should have a fitting name ; perhaps it could be called the "flagship committee", because that has a good auld lang syne ring about it. All its members are strong supporters of the poll tax, and no doubt that is one of the qualifications for membership. The flagship committee has serious problems to solve. For example, what will be done with the right hon. Member for Finchley (Mrs. Thatcher) during the election? Is there still a helicopter to take her to Southend without running the risk of a forced landing in Old Bexley and Sidcup on the way back? For such an old-fashioned debate the chief cook and bottle washer of the Conservative party, the Chancellor of the Duchy of Lancaster, the right hon. Member for Bath (Mr. Patten), should be here. We all remember his wonderful speech in defence of the poll tax when the right hon. Member for Finchley sat beside him. He spoke for one and a quarter hours without a single note, without hesitation and without a single principle. No doubt he is fully qualified to sit on the flagship committee.

Some people used to think that the Secretary of State for Education and Science, who represents a Nottinghamshire constituency, was not sufficiently ardent in his Thatcherism. He goes to committee meetings waving his emblem. No doubt he waves his wallet and they know that he is a proper Thatcherite at heart.

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It is customary for Chancellors of the Exchequer to sit on such committees, and apparently the present Chancellor has been invited. However, the Prime Minister could have been forgiven for thinking that there was a case for saying that it would not be too heavy a cost to bear if the Chancellor were not on the committee. It would be a price worth paying, shall we say? Perhaps the Prime Minister considered it on those counts. The people of the committee are a remarkable lot.

The Chief Secretary to the Treasury was not even invited. He was sent along here but, having listened to his speech, I wish that the exchange had been the other way round. The Secretary of State for the Environment spoke a few days ago, and I thought that we would get him again today. He was in tremendous form ; I thought that at any moment he would make off again with the Mace. Oliver Cromwell did that only once but I thought that the right hon. Gentleman was about to do it for the second time.

I do not hold the Mace episode against the right hon. Gentleman, and I have often thought that it was the best thing he ever did. It was certainly the most dangerous military action in which he was engaged after he was in the Ministry of Defence. Some of us recall the right hon. Gentleman coming to the House with the mud and blood of battle on his tunic from Greenham Common. He thought that he had managed a wonderful victory and that that should have made him Prime Minister. It is certainly a better reason than the others that he seems to be advancing.

If the flagship committee is not as successful as it should be, I hope that some others will be invited to help. We do not see him often in his place, but what about the right hon. Member for Plymouth, Devonport (Dr. Owen)? He seems to be at a loose end at the moment. He could be invited to come along, and I am sure that he would not charge anything, although he might insist on one of Lord Young's sweeteners being arranged after the election. Perhaps that bargain has already been sealed. If the right hon. Member for Devonport appears on a Conservative platform, or even the Prime Minister's platform, during the election campaign, we can conclude that such a bargain has been made, and we shall all watch to see whether it will be kept.

The Prime Minister himself is on the flagship committee. At the weekend, he spoke feelingly about his passion for maintaining the unity of the United Kingdom. Not all of us have been able to see whether he has a heart, but when he went to Scotland he expressed his passionate support for maintaining the unity of the United Kingdom. Was his passion still burning, or had it burnt out after discussions in previous flagship committees about whether the poll tax should be applied to Scotland?

It would have been an apposite moment to bring up the matter if someone had said, "Hold on a moment. Do you think that it is a good thing for the unity of the United Kingdom to go ahead with this horrific tax and impose it on the Scots even before it has been worked out for England?" If the Prime Minister is such an eager supporter of the unity of the United Kingdom, it might have occurred to him three or four years ago when the matter was being discussed by the flagship committee of those times.

Another of the Chief Secretary's qualifications for being on the committee is that he has been a strong supporter of the poll tax and has voted for every poll tax measure that has been guillotined. I do not say that he was

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