House of Commons Hansard Debates for 11 Mar 1992

Miss Emma Nicholson (Torridge and Devon, West) : Does the hon. Gentleman agree that only 2.3 per cent. of all mortgagees are over six months in arrears and therefore liable to repossession ; and that the additional measures for the business expansion scheme announced in the Budget will go a long way towards remedying that? The problem is much smaller than he would have us believe.

Mr. Smith : I am surprised to hear the hon. Lady write off the problems of 270,000 home owners so lightly. Thousands of families are falling victim to repossession or are struggling to make their mortgage payments--as a direct result of the interest rate decisions taken by the Government.

Every working day in Britain, 3,000 people lose their jobs, 200 businesses go bust and 300 homes are repossessed. That is what life is like in Conservative Britain after 13 years.

The Budget revealed the extent of the difficulty that our economy is in. What emerged eventually from what the Chancellor said in giving that £28 billion PSBR figure and then revealing that he was only giving a stimulus of about £1.5 billion within that figure was that the underlying PSBR, the one that existed even before he got to his feet yesterday, was £26.5 billion. That was a much worse figure than any commentator, anyone in the City, any of the analysts, had been expecting, and it revealed the sheer extent of the difficulty that faces us in our economy.

In such circumstances the overwhelming, overriding priority should have been a Budget for recovery, a Budget to build our way out of recession. My hon. Friend the Member for Sheffield, Attercliffe (Sir P. Duffy) in his fine speech focused on the issue of what the Budget should have done. When he introduced it, the Chancellor said that it was a Budget for recovery, and the Chief Secretary repeated that this afternoon, but, of course, it was not a Budget for recovery. Against the test of whether the Budget will help to provide an engine for economic recovery, it fails miserably to live up to the task.

Mr. John Garrett : Is my hon. Friend aware that, after I left the Chamber this afternoon, the Chief Secretary to the Treasury implied--said, I believe--that I was partial to a 20p tax band? He was joined in that contention by the hon. Member for Norwich, North (Mr. Thompson), whose sole purpose in the House, as far as I can tell, is to

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make his colleagues feel dynamic. I have since checked with the journalist to whom I gave the interview, and what I said was that a lower tax band was a good idea. Who would disagree with that? It was a good idea in principle, but my constituents will not benefit from the palliative, given the depth of the recession that has hit my constituency for the last 18 months, the prospect of which is never ending.

Mr. Smith : My hon. Friend makes a valid point and usefully puts on the record a correction of the misinterpretation which has been placed on his supposed remarks by some Conservative Members. The Budget will not be of any real help to the 3,000 people who will have lost their jobs today. I doubt whether many of them will find that their jobs have been saved by what the Chancellor did yesterday. Of course the Budget offered a little help to business. The measures on the uniform business rate, for example-- deferring increases which will none the less subsequently be levied, so it is a deferral rather than a cancellation of uniform business rate levies-- are welcome. But we must point out that it was the Government who invented the uniform business rate in the first place and who forced it in along with the poll tax, and now they expect us to cheer because they have had to sweep up some of the debris that has resulted from it.

The car tax measure is also welcome for the motor industry. It is not particularly well targeted, because it applies to foreign-made cars every bit as much as it applies to British-made cars. None the less, it is a welcome measure, as the car industry has been suffering grievously over recent months. Apart, however, from those measures and a few bits and pieces relating to value added tax--most of which are indeed welcome--the Budget contained little for business, industry, investment and recovery.

Many things that should have been done in the Budget were totally ignored, or in some cases rejected, by the Chancellor. He could have used it to provide improved first-year capital allowances for investment in manufacturing industry. Many people up and down the country have called for such an improvement, and a Labour Government will wish to provide it. The Government could have used the business expansion scheme, rather than cancelling it completely, as they have now decided to do in two years' time : they could have switched it into support for growing businesses, especially in manufacturing industry.

I must say that it was a bit rich for the Chancellor to say that nowadays only a small part of the total invested in the business expansion scheme goes to small businesses. Who is responsible for that? It was the present Government who brought in provision for BES investment in private rented housing ; it was the present Government who gave it a £5 million limit, as opposed to the general limit of £500,000 for BES investment. It was the present Government who threw the direction of BES completely out of kilter. Now, having realised some of their mistakes--about which we have been telling them for years--they say that they will cancel the scheme completely. The Budget could have included incentives for investment in research and development. It could have made real provision for the imposition of penalties for late payment of bills by firms to other firms. It could have set out a national programme of training and work experience

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to get some of our young people back to work and to give them the skills that they need to compete in the modern industrial world. The Budget could have provided a real deal for pensioners, rather than a restricted deal aimed only at those receiving income support, and ignoring the genuine difficulties experienced by pensioners who are just above the income support level and who are suffering very much at present. It could have included a programme of phased release of capital receipts, as my hon. Friend the Member for Normanton (Mr. O'Brien) suggested. Such a programme would not only provide the construction industry with a much needed boost : it would help to house some of our homeless families. All that would have been a real agenda for a Budget for recovery, but none of it was done. My hon. Friend the Member for Walsall, South (Mr. George) said that the Budget would not reverse the decline of our economy. He was absolutely right : the Budget represents a savagely wasted opportunity. Some measures in it, most of them small, are welcome none the less, the first and most important being the combining of tax and spending decisions in a single exercise. We have called for that for years, but the Government have hitherto rejected it totally ; now they have seen the light.

There is also some welcome help for the film industry. Although I note that the comments this morning by some people in the industry have not been ecstatic, they welcome the fact that their position has been eased somewhat.

The Budget rightly recognises the need to use a scale other than engine size for company car scales of benefit. There is also a welcome indication of a preference for diesel over leaded petrol, along with the introduction of a wider differential between leaded and unleaded petrol, and the welcome removal of the VAT that is levied when a choice is offered between a company car and salary. There is the removal of the £3,000 limit on the amount that can be invested in a personal equity plan via unit trusts and investment trusts.

We have been advocating all those measures for a substantial time, and we are pleased that the Government recognise the need for them. Mr. John Townend rose--

Mr. Smith : I will not give way, because time is short. An element of choice is introduced into the distribution of the married couple's allowance. We have been asking for that change ever since the allowance was invented by the previous Chancellor in 1988. Every year we have advocated it, and every year the Government have said that it was impossible. Now, they say that they will do it, and that is welcome.

We need to lay to rest a few Government myths about the Budget. First, the Conservatives claim that theirs is the party of low taxation. It is not. The Red Book gives it away. It shows that the overall tax burden as a percentage of GDP has increased from 34.75 per cent. in 1979 to 37.25 per cent. last year and 36.75 per cent. this year. We have known that for some time.

The Red Book also reveals that, in 1996-97, the proportion of national wealth taken by the tax burden is scheduled to increase to 38 per cent. The Government have not only put up the overall tax burden, but it is scheduled to go up even further during the next few years if they remain in office.

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Secondly, the Government claim that they are giving special help to the low-paid by the tax measures in the Budget. The 20 per cent. band will apply to everyone, not just to the low-paid. For people at the very bottom of the income scale, there is a real and devastating tax and benefit trap. Those on family credit, housing benefit and poll tax benefit and those facing rent rises such as those described by my hon. Friend the Member for Glasgow, Springburn (Mr. Martin) will find that virtually all the trumpeted tax reduction will be gobbled up by their loss of benefit entitlement.

Hundreds of thousands of people will be cruelly deceived by the Government saying that the tax change will be an enormous benefit to them. It will not. Some people are likely to be worse off after the change than they are now. Taking account of the spending tax increase that the Government are introducing, 250,000 taxpayers could be up to 76p a week worse off after the Budget.

Thirdly, the Government claim that they will balance the budget over the cycle. I shall repeat the question that I asked the Chief Secretary earlier : what precisely do the Government mean by "the cycle"? The Red Book shows that public sector finances are scheduled to be in deficit by £28 billion this year, by £32 billion next year, by £25 billion the year after, by £19 billion the year after that, and by £6 billion the year after that. All that assumes a 3 per cent. rate of growth, and I shall be surprised if the Government achieve that. Where does the cycle end? It is off the scale. The Government predict that, in five years, the public sector will still be in deficit.

Perhaps that is what the Chief Secretary meant in evidence before the Select Committee on 25 November, when he said :

"If you are asking me to say how long the next cycle is, I am not being perverse when I say I do not know, because we do not know." That is revealed by the borrowing figures in the Red Book. The essential priority of the Budget should have been the building of economic recovery from recession. It should have been the restoration of our public services. It should have been investment in industry. It should have been ensuring that our young people can get the training and jobs that they need. It should have been the ending of the nightmare of repossession and homelessness. It should have been paying attention, just for once and just for a change, to the needs of manufacturing industry, which were so eloquently identified by my right hon. Friend the Member for Morley and Leeds, South. Those are the choices that should have been made. Instead, the Chancellor chose the route of tax cuts,and of borrowing to finance them. That is not sensible economics and it will prove not to be sensible politics.

The Budget was best summed up this morning by a business man on Radio 4, who said that the

"economy was in a mess before the Budget. It's still in a mess after the Budget."

That will be the verdict of the voters in four weeks' time. A Labour Government will then take over and begin to sort out the mess and set us firmly on the road to recovery.

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9.41 pm

The Financial Secretary to the Treasury (Mr. Francis Maude) : This has been a fascinating day's debate, not always perhaps at fever pitch, but one has sensed that much of the drama has been going on elsewhere than in the Chamber.

It has been notable for a number of splendid speeches. My hon. Friends the Members for Bridlington (Mr. Townend) and for Amber Valley (Mr. Oppenheim) and many others made fine fighting speeches. It has been notable also, as the hon. Member for Islington, South and Finsbury (Mr. Smith) said, because a number of right hon. and hon. Members made what they predicted were their final speeches in the Chamber. I join the hon. Member for Islington, South and Finsbury in paying tribute to them, particularly to my right hon. Friend the Member for Hertfordshire, North (Sir I. Stewart) and to my hon. Friend the Member for Somerton and Frome (Mr. Boscawen). I had the privilege of serving in the Whips' Office with my hon. Friend the Member for Somerton and Frome, and I count it a great honour to have had him as a colleague and friend. The House will miss him, my right hon. Friend the Member for Hertfordshire, North and the other right hon. and hon. Members who are leaving the House at the election. It may be helpful briefly to set out how the Government propose to handle the Finance Bill in the light of today's announcement. We propose to introduce a short Finance Bill with 11 clauses containing the Budget measures that we judge essential to become law before Parliament is dissolved. Principally, they are the Chancellor's proposals for excise duties, most of which were implemented at 6 pm yesterday, and for income tax, including the provision of a lower rate of 20p. In any case, income tax requires renewal before 5 May each year.

Mr. Beith : Will all stages of the Finance Bill be taken on Friday?

Mr. Maude : I am sure that my right hon. Friend the Leader of the House will make a further business statement to set out the arrangements.

The Budget contains a number of measures to help business. It has rightly been described as a Budget for the recovery not only by my right hon. Friends but by many others. Rather than rely on the words of politicians, perhaps we should consider what business people have said. For example, the chief executive of the Weir Group said : "I think the general conditions of the economy are absolutely right for recovery. Perhaps the thing we need most is to get the election out of the way."

The chairman of Williams Holdings said of the Chancellor : "He was right not to attempt to stimulate the economy too much, because I think we are coming out of the recession anyway." Of course, there are a number of measures already in the pipeline which will have substantial benefits for business in the coming year : the reductions and changes to corporation tax in last year's Budget will come through this year in the shape of reductions worth in the region of £1 billion to businesses, which is a substantial benefit ; the changes to the uniform business rate, which have been widely welcomed, will benefit no fewer than 900,000 business properties and that, again, has been widely welcomed ; allowing more businesses to make quarterly

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payments of tax deducted under the pay-as- you-earn scheme so that now 750,000 businesses are able to do that ; the four measures that we announced to encourage prompt payment of debts, another long-running problem to which we are bringing the possibility of a solution ; and the changes to inheritance tax will enable those who work hard to create businesses to feel able to hand them down to their families. We have heard very little from the Opposition about that, and it would be interesting to hear whether they propose to support the measure which has been widely welcomed by the business community as one that would be of great benefit. I do not know whether any Opposition spokesman wishes to say whether the Opposition support that measure. [ Hon. Members :-- "Answer."] Perhaps they are dithering on that as on so many of the important economic issues that face us.

Let me say a word about the motor industry in this country. It has made many substantial advances in recent years. There has been a lot of inward investment, and Nissan recently announced that it is to begin exporting engines from its car factory in Sunderland for the first time this year, in addition to exporting cars.

A lot of the changes that have occurred are revealed in the fact that our motor industry became a net exporter in the last quarter of 1991. Last year, exports of cars went up by 20 per cent. and imports went down by 29 per cent. That shows a very good story, but we recognise that, due to the recession, the car industry has been under pressure so we have taken some measures to assist which have been widely welcomed : the changes in car tax and in capital allowances and some VAT changes add up to a major boost, as the car industry has recognised.

The chief executive of Peugeot said :

"The car industry employs 1 million people in this country and they will benefit one way or another from this cut in car tax. It is going to be a real boom for the whole economy. This Budget is good for our industry."

The Society of Motor Manufacturers and Traders said :

"We believe that about 70,000 extra sales should result, with all the implications this has for employment."

Therefore, we have introduced a worthwhile package of measures which will be of substantial benefit.

The same is true for the film industry, which has many merits. We have one of the finest film industries in the world but it has been going through a difficult period. Clearly, the long-term future of the industry depends on the industry's talents being fully and productively used, but there is one issue where the Government have decided that it is right to act. Therefore, we have announced a substantial package to boost incentives for the United Kingdom film industry : relief for all pre-production expenditure and the writing off over three years of production expenditure from the time of completion of a film. Those measures offer substantial assistance, especially to smaller companies but also to the British film industry, and the film industry in general has warmly welcomed them overall. The Budget has been good for business, and that has been recognised by what businesses have said rather than the self-styled experts in the Opposition--people who actually run businesses have said how much they welcome the Budget. The president of the Association of British Chambers of Commerce--never an organisation to support the Government slavishly, but ready to be critical when it thinks right--said : "The combined effect of these measures will provide considerable assistance for businesses fighting their way out of

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recession. United Kingdom business believe the Chancellor is wholly justified in his continuing priority of defeating inflation. The Chancellor has the full support of British firms".

The country is entitled to place some reliance on words such as those. The truth is that Britain is now a very good place in which to do business--in particular, it has increasingly become a good place in which to manufacture.

Let us look at the figures for inward investment. In 1988-89 the United Kingdom accounted for 39 per cent. of total inward investment by OECD countries in the European Community. Much of that investment came from Japan. We welcome that. Not for us is the knee-jerk reaction of the TUC, which describes such investment as "alien". We have constantly and continually invited Labour Front-Bench spokesmen to dissociate themselves from those extraordinarily offensive and damaging remarks, but on every occasion they have chosen to remain silent--craven in the face of those disgraceful remarks ; craven and afraid to dissociate themselves from the words of their paymasters. The benefits of that inward investment can be seen, for example, in the fact that we are now a net exporter of television sets. The trade balance in cars is set to be in surplus by the mid-1990s. What do investors see? They have a free choice to go wherever they choose. What do they see that makes it so worth while to come to Britain? First, they see the transformation of Britain as a workplace. It used to be a country riddled with ailments, restrictive practices, red tape and market distortions. But it has now transformed itself.

The twin symptoms that most people saw were the strike record and the poor productivity. Now we have a record on both which is the envy of the world. In the past 10 years, productivity has grown by more than half. In the 1980s, our growth in productivity was the fastest of all the G7 countries, whereas in the previous two decades Britain had the slowest growth. That, and our natural skills base, explains why people who have to make choices about where to manufacture goods choose to do so in Britain.

What would happen under Labour? Would those who have that choice still freely elect to manufacture in Britain? What would they face? They would face a strikers charter, which would blow away our new record in industrial relations which is, as I have said, the envy of the world. They would face a minimum wage, adding endlessly to business costs, and a Government committed to the social chapter of the Maastricht treaty, which would impose on businesses huge additional costs about which businesses in Europe are just beginning to become alarmed. They would face all the red tape of the 283 quangos that the Labour party proposes to set up--and all those disadvantages come well before we have even considered the question of taxation.

What does business think of that? It is worth finding out what those who make the decisions say. Not the Government, but a City firm--no doubt one that has had the benefit of the attentions of the Labour Front-Bench spokesmen--asked 105 people who take decisions in large and important businesses what they thought. One of the questions was :

"Do you think a victory by Labour would be good for the economy?" I have to give credit where credit is due, and admit that 5 per cent. thought that it would be good, and that 9 per

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cent. had no view. However, 86 per cent. thought that a Labour victory would be bad for the economy. The next question was : "Do you think a victory by Labour would be good for your business?"

Again, to give all due credit, the results there were better for the Labour party. Sixteen per cent. thought that a Labour victory would be good for their business, and 21 per cent. had no view. Only 63 per cent. thought that it would be bad for their business. The respondents were than asked :

"under a Labour Government would you be more or less optimistic on the outlook for"

a number of matters. Labour came closest to getting a positive result in the area on which the party majors--on the question whether people would be more or less optimistic about the outlook for investment spending. But even there, more people thought that a Labour Government would be bad for investment spending.

Mr. Michael J. Martin : Would the Minister be prepared to do a survey on all the companies that have gone bust in 13 years of Tory Government? Would he ask them what they think about the Tory Government?

Mr. Maude : The number of businesses is, after all, at an all-time record. The hon. Member for Islington, South and Finsbury, with his notorious gloom, talked about the record number of business failures. He failed to talk about the record number of business successes. There are one third more businesses in existence and flourishing today than has ever been the case--certainly more than was the case when we came to office. There is a good record.

Those surveyed were also asked what they thought about Labour's plans to introduce tax incentives to encourage investment spending. They were asked whether that would encourage them to invest more. Some 17 per cent. said yes and 68 per cent. said no. We know that a case has been made for additional capital allowances and for speeded-up capital allowances. The system is already generous. Obviously, many people want to be enabled to pay less tax, but all the evidence shows that faster write-off of investment and capital allowances would not generate significant extra investment. If one is talking about ways in which to encourage investment, one cannot think of a better way in which to discourage it than to introduce extra taxes on savings, because savings are needed to provide investment. What is Labour's answer? It is to increase the tax on savings. That is the worst discouragement to investment of which one can think.

Labour talks as if investment is its own property and its own strong suit. It talks as if it is the party of investment. Incredibly, Labour claims to be the party of private investment as well as of public investment. A brief look at the facts is worthwhile. In the three years to 1989, business investment rose by 45 per cent., the fastest ever such rise over such a period. Even last year, a recession year for investment, we still devoted more than 14 per cent. of our total resources to business investment, compared with under 13 per cent. in the best year under the previous Labour Government. Even in a poor recession year, investment was higher as a proportion of GDP than it was in the best year that

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Labour could manage. The case is clearly proven. There is more investment under a Conservative Government than there ever was under a Labour Government.

One might think that public sector spending should be good ground for Labour, but when one studies the matter it begins to look a bit different. General Government capital spending fell by 45 per cent. under the previous Labour Government--an average of 11 per cent. a year. The hon. Member for Islington, South and Finsbury is avid for news. I tell him that general Government capital spending fell under this Government--by less than 1 per cent. a year compared with Labour's average of 11 per cent. The reason is that privatisation has transferred much previous public sector investment into the private sector. Investment in public services is up under this Government compared with the record under Labour, when it was slashed. It is revealing to consider one or two specific areas. In education, real capital spending per pupil fell by 60 per cent. under the Labour Government. It has risen by a total of 13 per cent.--1 per cent. a year-- under this Government. There is the same story in the health service. We see the same story in infrastructure, roads and transport. There were falls under Labour and rises under the Conservatives. On virtually every measure, investment has been down under Labour and up under the Conservative Government.

The Labour party says that it is okay to borrow for investment. Let us consider Labour's investment plans. What Labour means by investment is not investment at all ; it is spending. It means spending other people's money. It does not mean spending money on building the future, as Labour claims. Let us not buy that rubbish. It means spending taxpayers' money on swelling the pay packets of the public sector trade unions. Labour speaks about £1 billion extra on the health service, yet not a penny would go to extra patient care because of the effects of introducing the minimum wage, of scrapping competitive tendering and of scrapping charges. Some £1 billion extra would be spent on the health service before a single pound would be spent on improving patient care.

Let us consider income tax. The Leader of the Opposition dithered yesterday about what stance the party would take on our new lower rate band of 20p. There has been disarray today.

The hon. Member for Norwich, South (Mr. Garrett), who has prudently left the Chamber, made a valiant attempt to safeguard his position. It is clear that many members of the Labour party support what we are doing indeed, the Labour party's own policy document supports it. Pride of place in its pocket guide is a move towards a starting income tax rate of 20 per cent. What will we see? Will it be an erratum slip inserting "not", or an apology stating, "We may have inadvertently given the impression that we thought that this was a good idea. It is a jolly good idea, but we are going to vote against it. This is a really respectable position"? If they think that it is a good idea, when will they do it? Will they do it when a Labour Government have the Budget in balance, as if that could ever happen under a Labour Government? If they do not mean it, they are conducting a deliberate fraud on the British people, and they should apologise for it.

It being Ten o'clock, the debate stood adjourned.

Debate to be resumed tomorrow.

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PETITIONS

10 pm

Mr. John Home Robertson (East Lothian) : I come to the House with the hon. Members for Berwick-upon-Tweed (Mr. Beith) and for Roxburgh and Berwickshire (Mr. Kirkwood), and in association with my hon. Friend the Member for Wansbeck (Mr. Thompson), to present petitions calling for the upgrading of the A1 road. The petitions bear about 40,000 signatures from both sides of the border. I pay a special tribute to Lothian regional council, East Lothian district council, the Edinburgh Evening News and the local press for their vigorous support and assistance in mounting this important petition. The Government held a press conference about the A1 last week, but the people who signed the petition want action not words. The petition states :

The Humble Petition of road users and other citizens in Scotland and England,

Sheweth that the A1 trunk road between Musselburgh and Morpeth is intolerably dangerous with an average toll of one death each month ; and seriously congested, to the detriment of the interests of local communities and other travellers.

Wherefore your petitioners pray that your honourable House should : --

Deplore the loss of 133 lives in ten years on the single carriageway section of the A1 between Edinburgh and Newcastle and Demand that Her Majesty's Government should implement a programme to improve the whole of the A1 between Edinburgh and Newcastle to dual carriageway standard as soon as possible.

And your Petitioners, as in duty bound, will ever pray &c. I notice that the top two signatures on one sheet of the petition are those of my constituents Mr. and Mrs. Bell of East Linton, whose daughter was killed on the A1 in 1985. That is what the petition is all about.

To lie upon the Table.

10.1 pm

Mr. A. J. Beith (Berwick-upon-Tweed) : It is my privilege to present 20,000 signatures of the same petition relating to the A1 road, which have been gathered in co-operation with local authorities on both sides of the border, the Members of Parliament on both sides of the border and the people who live along and use the A1 road. Also, 4,450 of the signatures were collected by The Journal , a Newcastle newspaper which has fought a vigorous campaign, and other local newspapers have been closely involved. The petition deplores the loss of 133 lives in ten years on the single carriageway section of the A1 between Edinburgh and Newcastle.

Since the petition was printed and distributed, more lives have been lost on the single carriageway section of road. Announcements have been made about the desirability of dualling it, but no commitment at all has been made to that dualling. Therefore, the allegations in the petition remain true--that highly dangerous single carriageway on an important strategic road should not be allowed to continue.

Many of my constituents and people from neighbouring areas have added their names to the petition, and I strongly support their plea that that road should be brought to a reasonable dual carriageway standard.

To lie upon the Table .

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10.3 pm

Mr. Archy Kirkwood (Roxburgh and Berwickshire) : It is my privilege to follow my hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) and the hon. Member for East Lothian (Mr. Home Robertson) in respect of the A1 trunk road petition. I, too, have a number of constituents who have lost members of their families. Some of my own friends have been injured or killed in the recent past on the stretch of the A1 that passes through my constituency. Therefore, it is with that aspect in the background that I

Deplore the loss of 133 lives in ten years on the single carriageway section of the A1 between Edinburgh and Newcastle, 20 or 30 miles of which run through my constituency. Like the hon. Member for East Lothian, I pay tribute to the cross-community support that the petition has received and in particular to the professional support that has been given by the relevant roads authorities to the efforts of those who organised the petition in each of our parliamentary constituencies.

Therefore, I subscribe these extra few signatures gathered in my constituency, to add to the demand that Her Majesty's Government should implement a programme to improve the whole of the A1 between Edinburgh and Newcastle to dual carriageway standard as soon as possible.

To lie upon the Table .

Sunday Trading

10.5 pm

Mr. Donald Anderson (Swansea, East) : It is my pleasure to present a petition about Sunday trading. The petition has been signed by a substantial number of Christian citizens of Swansea who are worried by the decision of the Attorney-General to take no action on illegal Sunday trading. They say that that amounts to a licence for the law to be ignored with impunity by those who wish to do so. It is also their view that the decision puts pressure on retailers who wish to obey the law to open on Sundays or suffer an unfair loss of their market share. They beieve that the decision of some major retailers to continue to defy the law constitutes a challenge to the rule of law, which the Government are wilfully ignoring.

Hence the petition calls on the House to take notice of the case urged by me and by other hon. Members from all parties and to require that the law be enforced until amended. The petitioners urge that it should be amended on the basis of the REST principles--that is, the principles advocated by the "Keep Sunday Special" campaign. To lie upon the Table.

Mifegyne

10.6 pm

Mr. James Wallace (Orkney and Shetland) : I have the privilege of presenting a petition of approximately 100 of my constituents who are worried that a product licence has been given to the drug Mifegyne, known as RU486. This is one of several similar petitions which have been presented from many parts of the United Kingdom.

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My constituents deplore the fact that the drug causes the death of unborn human beings. The petition prays that the House,

which is committed to upholding respect for human life and protection of the weak and vulnerable, will do everything possible to prevent the distribution and use of Mifegyne (known as RU486) and any other drugs which, like it, are produced with the deliberate intention of destroying innocent human life.

To lie upon the Table.

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Insurance Companies (Supervision)

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Boswell.]

10.7 pm

Mr. Michael Colvin (Romsey and Waterside) : We shall need a bigger petition bag, Mr. Speaker. You were in the Chair when I made my maiden speech many years ago and it is my singular pleasure that you are in the Chair for the Adjournment debate this evening. I am sure that the House will join me in wishing you well in your retirement. You have fulfilled your office with great distinction over the years.

The subject that I wish to raise is the supervision by the Department of Trade and Industry of insurance companies, particularly in relation to home equity schemes. I shall keep my remarks brief as the hon. Member for Redcar (Ms. Mowlam) hopes to catch your eye later, Mr. Speaker, and both I and my hon. Friend the Minister for Corporate Affairs, who is to respond to the debate, hope that she will succeed.

In two sectors of finance--pensions and insurance--the Financial Services Act 1986 provides for self-regulation. Neither I nor the thousands of people--many of them pensioners--who have lost money and are at risk of losing their homes because of home equity schemes believe that the system of self-regulation is working as it was intended.

Originally the home equity scheme was based on a mortgage with a fixed rate of interest. The money borrowed was invested in an annuity to produce a fixed return for the rest of the pensioner's life. Such schemes enabled pensioners who were just managing to survive on their state pensions to release the capital tied up in their homes to provide extra income. The problem was that the rules on annuities ruled out those people between retirement age and 70, so the alternative investment bond scheme was devised, enabling money to be raised on remortgage and reinvested in a unit -linked investment bond--in other words, in the stock market.

Following the Wall street crash on black Monday in October 1987, high interest rates, falling stock markets and the collapse of the property market have meant that those stock market bonds were bound to be unable to provide the income to cover the costs of the mortgages. The result was that pensioners needed to use their capital to make the necessary payments. That compounded the problem. It ate up the capital and reduced the income in a rapidly increasing spiral which could exhaust funds within three or four years. Very often the client had no idea what was happening because of the inadequate information.

The schemes were designed not by rogue high pressure salesmen or by dubious companies, but by household names such as Royal Life, Guardian Royal Exchange, Norwich Union and Cheltenham and Gloucester, to name a few.

Throughout the late 1980s insurance companies increasingly deployed high pressure salesmen on a naive and financially unsophisticated public. The salesmen were given intensive courses in sales techniques, but little instruction in the intricacies of the financial services industry. Business cards and letter headings which pronounced them to be financial advisers and representatives of leading insurance companies gave them a cloak

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