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Mr. Wareing: The Prime Minister will be aware that in 1983 I introduced a private Member's Bill to outlaw all discrimination against disabled people, but that it was outrageously attacked by the Government and Conservative Members were dragooned into the Division Lobby to oppose it. The same thing happened to the Bill recently introduced by my hon. Friend the Member for Kingswood (Mr. Berry). I was told at the time that education and persuasion represented the way forward.

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The Queen's Speech says only that the Government will introduce a Bill to "tackle" discrimination. It is not enough simply to select employment and one or two other aspects. Will the Prime Minister give an undertaking that the legislation will make it illegal to discriminate against disabled people, as it is to discriminate against people on the grounds of race, sex or religion?

The Prime Minister: I have set out what will be in the Bill, and the hon. Gentleman will have the chance to read it as soon as it is published. The Minister for Social Security and Disabled People will make the details clear.

Mr. Tom Clarke: Will the Prime Minister give way?

The Prime Minister: I am replying to the hon. Member for Liverpool, West Derby. If the hon. Member for Monklands, West (Mr. Clarke) will do me the courtesy of listening, I shall contemplate giving way to him when I have finished.

I have set out the details of what will be in the Bill, and I advise the hon. Member for West Derby to wait until he sees those details, which will be debated fully in the House and in Committee.

Mr. Tom Clarke: Is the Prime Minister aware that nothing that he has said corresponds with the measures in the Bill that my hon. Friend the Member for Kingswood sought to introduce, which was disgracefully talked out by Conservative Members? As a former Whip, and as a former Minister responsible for disabled people, will he discourage The Guardian from saying that simply because the Government have introduced a Bill nobody else can introduce a Bill on the same subject? Does the right hon. Gentleman accept that if my hon. Friend or any other hon. Member introduces such a Bill, he should discourage the Government Whips from talking it out and denying the rights of 6.5 million disabled people and their carers?

The Prime Minister: I have limited influence over The Guardian , as recent events have shown; the hon. Gentleman must take up his complaints about The Guardian with that newspaper. As for the position of disabled people, he, too, would be wiser to wait and read the Bill before making judgments on it.

The remainder of the legislative programme will honour a number of important commitments that we have given. The Criminal Justice (Scotland) Bill will be another important step in the Government's battle against crime.

Dr. Norman A. Godman (Greenock and Port Glasgow) rose --

The Prime Minister: I shall make some progress now; I know that many hon. Members wish to speak.

Dr. Godman: Will the Prime Minister give way?

The Prime Minister: Not on this point.

Like the Criminal Justice and Public Order Act 1994, the Criminal Justice (Scotland) Bill will crack down on those who offend on bail, increase the courts' powers to confiscate the assets of crime and streamline the operation of the courts.

The Environment Bill will set up an environment protection agency and a Scottish environment protection agency. I suspect that that will be widely welcomed in the House and elsewhere.

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The Health Service Bill will take forward our programme of reform by streamlining the national health service management structure. The right hon. Member for Sedgefield spoke about expenditure in the national health service on administration. I look, therefore, for his support for the abolition of one entire tier of the management structure in the regional health authorities. They will be abolished while the district health authorities and family health authorities will be merged. We shall judge whether the right hon. Gentleman's words are matched by his actions in the Division Lobby as we seek to cut administrative expenditure.

We will introduce a Bill to provide for the supervision of those discharged under the Mental Health Act 1983. This is to ensure greater security for the community and better welfare for those recovering from mental illness. Many hon. Members will be aware of the problems that have arisen in that area. I believe that the Bill will be warmly welcomed and I am grateful for the intimations from the Opposition that they will help to speed the Bill through to law. There are three important additional measures that we intend to introduce under the general heading of law reform. The Criminal Appeals Bill follows the Government's acceptance of the recommendation of the Royal Commission on criminal justice that a new body is needed to consider possible cases of miscarriage of justice. The new body will be independent of both Government and the courts and it will be able to review wrongful convictions.

The Children (Scotland) Bill will ensure a comprehensive reform of child care in Scotland. It follows the reports of the inquiries into the Orkney and Fife incidents, and the White Paper of my right hon. Friend the Secretary of State for Scotland, "Scotland's Children: Proposals for Child Care Policy and Law", published last year.

Dr. Godman: Will the Prime Minister give way?

The Prime Minister: If the hon. Gentleman will forgive me, I shall tell him bluntly that I shall not give way to him on this occasion. The Bill's welfare measures include the introduction of more flexible arrangements for local authorities to care for children in need and the introduction of more stringent criteria for taking children into care.

We shall also introduce a Medical Act (Amendment) Bill to introduce new procedures to enable the General Medical Council to deal with the very small minority of doctors whose performance is found to be seriously deficient.

Those are measures of reform which, I believe, will command widespread support in the House. I am encouraged by the overt support already given to these Bills across the House and I trust that we shall be able to agree speedily on their handling. Those are some of the things that are important across the House.

The right hon. Member for Sedgefield spoke of many things, but we did not hear a great deal about practical issues from him. We have heard a great deal from the right hon. Gentleman about new Labour, although no one seems quite sure what that means. We are now getting some clues. I was especially interested in the way in which the right hon. Gentleman allocated his shadow Cabinet portfolios.

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Whom did the right hon. Member for Sedgefield choose as his shadow Foreign Secretary--Britain's ambassador abroad? He picked the hon. Member for Livingston-- [Hon. Members:-- "Hear, hear."] I agree: it is a choice entirely appropriate for the Labour party. Surely the hon. Member for Livingston is not the man who, as the cold war was heating up, "pleaded with" and "begged"--his words--the Labour conference to vote for unilateral nuclear disarmament. Surely this is not the same man who spent much of his political life equivocating over whether Britain should be in the European Union. Apparently, the answer is yes. There is not much new there.

The hon. Member for Livingston is not the only clue--

Mr. Campbell-Savours: Tired old arguments.

The Prime Minister: They are tired old arguments, I know, but they are the best that the Labour party has got.

The hon. Member for Livingston is not the only clue; there are other square pegs in round holes. Let us take the shadow defence team. What do they have in common? The answer is consistency. They are consistently against Britain's nuclear defences. The hon. Member for South Shields (Dr. Clark), the man to whom the Leader of the Opposition would entrust Britain's nuclear defences, is a member of parliamentary CND. Indeed, he is not alone. I have a list, which my hon. Friends may care to hear. It includes the right hon. Member for Derby, South and the hon. Member for Holborn and St. Pancras (Mr. Dobson)-- [Hon. Members:-- "More."] There are lots more Opposition Members who are against our nuclear capacity. I am just telling the hon. Member for Workington (Mr. Campbell-Savours) who they are. The list includes the hon. Members for Peckham (Ms Harman), for Oldham, West (Mr. Meacher), for Islington, South and Finsbury (Mr. Smith), for Edinburgh, East (Dr. Strang), for Blackburn (Mr. Straw) and, of course, the right hon. Member for Sedgefield. All that gives a new meaning to being brothers in arms. They would scrap our nuclear weapons.

It is another clue-- [Hon. Members:-- "You have missed one out."] I missed one out. I apologise to the hon. Gentleman. I am not sure who the hon. Gentleman is, but someone will tell me. It shows that they are not only against Britain's nuclear capacity but are proud to be against Britain's nuclear capacity and would scrap it. Why did we hear so much about Rosyth from Opposition Front-Bench spokesmen if that was the case?

Mr. Campbell-Savours: Yesterday's arguments.

The Prime Minister: The hon. Gentleman says that they are yesterday's arguments. They do not care about Rosyth now. The hon. Gentleman should keep quiet. He is digging himself a bigger hole by the minute.

Another clue to Labour's new team is the right hon. Member for Sedgefield's choice for his shadow Treasury team--the team responsible for setting and collecting taxes.

Dr. Reid: He said something about taxes.

The Prime Minister: I shall say something on taxes in which the hon. Gentleman will be interested. Only a fortnight ago, the hon. Member for Bristol, South (Ms Primarolo) was talking about the importance of collecting tax--absolutely right, vitally responsible. But, some small thing nagged away at my memory. Was not it the hon.

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Lady who supported a campaign urging people not to pay their community charge? So there we have it--new Labour. The person that the right hon. Gentleman has put in charge of collecting tax was part of the campaign inciting people to break the law and refuse to pay their tax. So, there is not very much new about Labour there either. Over the past four years, I have consistently pursued a number of long-term objectives.

Mr. Campbell-Savours: Tell us then.

The Prime Minister: I am about to. They include low inflation. For the first time, we may be in a position where we have broken the inflationary psychology that has damaged this country time and again since the war. We have pursued objectives of supply side reform for lasting growth, a better quality of life for all our citizens, a higher standard of public service and a lasting peace in Northern Ireland. They remain at the centre of my objectives for this year and for the future. The programme outlined in the Gracious Speech will take those objectives forward and I warmly commend it to the House. [Interruption.]

4.22 pm

Mr. Paddy Ashdown (Yeovil): I shall wait for all hon. Members to leave.

Madam Speaker: Order. Hon. Members leaving should do so quietly and quickly.

Mr. Ashdown: It is tradition, but pleasurable on this occasion, that we pay tribute to those hon. Members who opened the debate. I agree with the comments of the Prime Minister and the right hon. Member for Sedgefield (Mr. Blair), the leader of the Labour party, about the hon. Members for Dartford (Mr. Dunn) and for Aberdeen, South (Mr. Robertson), neither of whom I see in the Chamber. [Interruption.] I beg the pardon of the hon. Member for Dartford, as he is present. Those who know him will recognise his speech as characteristic of him. I recall very well sitting opposite him--self-evidently--when we took GERBIL, the great Education Reform Bill, through Committee. I cannot say that I necessarily enjoyed the occasion, but I often enjoyed his interventions.

The hon. Gentleman is the man, as I recall from a 1970s party conference, who demanded the total commitment of the Conservative party to the selling of council houses and who said that those Conservatives who did not follow that idea would be disgraced and exposed. I do not suppose that we can necessarily hold him responsible for the fact that his hon. Friends and Westminster city council have perhaps taken his advice a little too literally. The hon. Member for Aberdeen, South, a new hon. Member, rightly drew attention to the fact that his predecessor, who also seconded the Loyal Address, did that only once because he lost his Scottish seat and now represents a seat in England. The hon. Member for Aberdeen, South is more interesting because of his predictions, three of which were drawn to my attention recently.

In May 1987, the hon. Member for Aberdeen, South predicted that Thatcherism and Mrs. Thatcher were here to stay and would capture the hearts and minds of the

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people of Scotland. I do not think that that prediction was borne out by subsequent elections in Scotland. In October 1990, still supporting Mrs. Thatcher, he predicted that the poll tax would work if only we kept it in place long enough. However, when the Prime Minister's predecessor was bundled out of office, the hon. Member for Aberdeen, South declared:

"I've been telling them all for a year. Give me a new leader and I'll give you a majority of 5,000."

The hon. Gentleman was wrong again: his majority was 1,154. If I were the Prime Minister and I heard the hon. Member for Aberdeen, South committing himself to undying loyalty to the Prime Minister's cause, I would run for cover immediately on the basis of his predictions and his sense of consistency in those matters. The start of a new parliamentary year provides the House with an opportunity to review what the Government have done and to look forward to what they will do. I am not sure which makes the bleaker prospect. Behind us lies a period of almost unparalleled weakness and bad government. Ahead of us, based on the Gracious Speech, lies a programme of timid measures and uncertain commitments.

Only in Northern Ireland can the Prime Minister and the Government claim a success. As the House will agree, the Prime Minister is entitled to feel satisfied with what he has achieved for peace in Northern Ireland. It would be fair to say that much of that has been a personal achievement in respect of his personal patience and commitment. With the Irish Prime Minister, the right hon. Gentleman has opened a way to peace and reconciliation which many of us--I speak as an Irishman and as someone who served on the streets in Northern Ireland as a soldier--did not believe that we would see again. My party and I have supported the Prime Minister fully and we will continue to do so as long as he holds, as we believe he will, to his present policies.

However, the Government go further in claiming successes, as we heard from the Prime Minister. They would have us believe that their second claim to success lies in the economy. I am told that, in private, the Prime Minister is much given to bewildered complaint about why the British public do not recognise that success and begin to like him all over again. The reason for that is very simple: the public are not that easily fooled.

The recovery may now be under way. As some have argued, we may be seeing the start of the fabled virtuous circle, but there is a long way to go before that is clear and proven. However, everyone knows who is responsible for what has happened to the British economy over the past few years. Of course, there has been a world recession, but everyone knows that, thanks to this Government, Britain went into that recession first, stayed in it longest, went down deepest and has suffered more harm and damage than any of our major competitors. Everyone knows that our present recovery has taken place not because of the Government, but despite the Government.

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Of course, an economy will become more competitive if its Government devalue its currency by 20 per cent. To be forced to devalue the currency because of economic incompetence and then to claim a triumph because our goods are cheaper is something of a cheek.

The Chief Secretary to the Treasury (Mr. Jonathan Aitken): Will the right hon. Gentleman give way?

Mr. Ashdown: If the right hon. Gentleman will forgive me, I want to make a little progress and then I will happily give way to him. The ordinary person in Britain has taken a severe battering from the Government over the past five years: lost jobs, threatened homes, cut services, burgeoning crime and swingeing taxes. If now the economy is improving, people can be expected to feel relieved, but it is a bit much for the Prime Minister to ask them to feel grateful.

Mr. Aitken: Before the right hon. Gentleman gets away with that typical Liberal Democrat catalogue of exaggerated incompetence on the part of the Government, would he please explain, first, why unemployment has been coming down steadily for 20 months, with the fall now exceeding 406,000, and, secondly, why Britain's share of world trade is increasing and why exports are rising at record levels of 10 per cent? That is not a picture of a Government doing anything but enjoying success.

Mr. Ashdown: The answer to both the right hon. Gentleman's questions is that, because unemployment in this country peaked so high, only now are other countries coming to that point. Also, our economy went so low that it is hardly difficult to make progress from the position in which the Government put it. I draw the right hon. Gentleman's attention to one of the underlying figures for our economy. Investment per head per annum in Britain is £2,800. In France the relevant figure is £3,800, in Germany £4,500, in the United States £5,500 and in Japan £6,500. One of the facts of Britain today is that, although our wages are lower, our unit costs are higher. That is because this country has not made the investments in capital machinery and improved techniques that it should have made. That is what will beset the economy as we go into the next phase of the recovery.

It is already the case--surely the right hon. Gentleman will accept this if he will not accept the other point--that, with more than 2.5 million unemployed, British firms are hitting a skill gap and, therefore, cannot make use of the recovery that is now in place. We could not have a bigger indictment to lay against the Government. The question now is this: what happens next? The Chancellor tells us--he has done so several times--that there will be no tax cuts this year. Everyone knows that that is because he wants to save them until closer to the election. That, incidentally, is not just my view, a cynic's view or the view of an opposition Member of the House of Commons. Long-term interest rates make it clear that that is the view of the markets as well. They think that, by next year, Chancellor Clarke will be preparing to make the same mistake as Chancellor Lawson made in 1987--tax cuts, a pre-election consumer boom, once again leaving Britain to pay the price in higher mortgages, lost jobs, higher interest rates and tax rises after the next election. As the Chancellor plays the miser this year, to make merry with tax cuts next year, the country would be

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well advised to remember the old Russian proverb: free cheese comes only in mousetraps. That is what is now being prepared.

We believe that, where the Chancellor has room for manoeuvre, it should be used not to boost consumption for the next election but to invest in Britain for the next century. That is why the right economic policy and the economic policy for which we will press this year and next year must be to restrain consumption, to keep unit costs down and to increase investment.

Over the past few years, and especially over the past few months, we have seen more than just damage to our economy. Against the background of a widening gap between government and governed and falling respect for politics, we now have a Government who seem to believe that they can operate below acceptable standards and beyond the law, and do so with impunity. Does the Prime Minister really believe that, when it comes to answering legitimate questions about the activities of Ministers, those Ministers should treat the truth as something that has to be dragged out of them like a rotten tooth? Does he find it acceptable that the answers, when they come, are at best incomplete and at worst unconvincing?

In a Government more careful of their honour and less desperate to cling to power, the kind of things that have been tolerated in the past few months would have been simply unacceptable. Always, the Prime Minister reacts behind events, never ahead of them, driven to action by a small group of Back Benchers here or a collection of newspaper reports there. It seems that the Prime Minister's chief calculation is not what is right or what is wrong, but what he can get past his divided and warring party.

Is not it a comment on the Government, on Conservative Back Benchers and, I am bound to say, on the House as a whole that, when it comes to stopping the Government doing something wrong, something stupid or something illegal, it is not this Chamber that stops them but, more frequently, the other place or, indeed, the courts? In the past week, the present Home Secretary, a former Prime Minister, a former Defence Secretary, a former Foreign Secretary and the present Foreign Secretary have all been judged to have acted either illegally or beyond their powers, or both. Perhaps that is what the Prime Minister means by conviction politics.

I do not much care what damage the Prime Minister does to the Government or to the Conservative party. Frankly, I do not think that there is much that his Government could do that would surprise the British people. But I care very greatly about the severe damage that all this is doing to our political system. I welcome the fact that the Prime Minister has established the Nolan committee. I just wish that he had done it earlier when it was first proposed by my hon. and learned Friend the Member for Montgomery (Mr. Carlile). Whatever the outcome of Nolan, its work will be deficient unless it includes not only the conduct of those in public office but the funding of political parties. Whatever the Prime Minister's personal sincerity on this matter--I do not doubt it--he will not set new standards in public life so long as he ducks that issue in the interests of the Conservative party as a whole.

Looking ahead to the forthcoming year, it is clear--indeed, it has already been the subject of some debates on both sides--that the issue of Europe and foreign affairs will play a large part in our business. I have some brief

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points to make on those subjects. First, on overseas aid, I can only assume that the commitment in the Queen's Speech to use aid "to promote sustainable development and good government" has been left in because the speech went to the printers before the Foreign Secretary was hauled over the coals by the High Court last week. More appropriate would have been clear proposals to separate the disgraceful-- what was it?--"entanglement" of arms and aid. Secondly, Hong Kong is now within three years of being handed over to the Chinese, yet we have not even debated Hong Kong in the Chamber during this Parliament. I wonder whether in all our history there has ever been a similar occasion on which the House has had such responsibility for the future of 5 million people to be handed over to another nation and so comprehensively ignored it. The Government must bring the matter to the Floor of the House for debate. I hope that they will do so soon, preferably before the end of the year. Thirdly, Europe is the battleground where the Prime Minister has now allowed open warfare to develop within his party and his Cabinet. That is his affair. It has been brought about in large measure by his weakness. What is Britain's affair is our future in Europe. We have no confidence in the Government or their policies on Europe. If this Government fell, it would be of their own making, and it would result in a Government who were bound to have more constructive European policies and more unity than this Government. We want to see, and we will vote for, a more competitive, decentralised, democratic Europe. We will support measures to improve efficiency, give better value for money and fund the Union effectively. We will continue to support measures which lead to closer co-operation where it is in Britain's interests.

One area in which such measures will prove increasingly important is defence co-operation. Once again, as on the issue of petrol taxation and so much else, the Government are doing in secret what only months ago they criticised us for proposing in public. They are pursuing closer European defence co-operation, in this case with France. The United States' unilateral lifting of the arms embargo in Bosnia is a grave development for the long-term future of that country and of security in Europe. Its practical and immediate effects on the ground may not be great, but its long-term political effects could be very serious.

First, that lifting of the arms embargo will accelerate the breakdown of the fragile ceasefire in Bosnia. Secondly, it will make a wider, and much more dangerous, war in the Balkans more likely. Thirdly, it will make the position of UN troops, including many British troops, more dangerous, and the likelihood of a UN withdrawal more certain. Fourthly--in the long term, this is perhaps the most important--it will open the way to a weakening of the Atlantic alliance and the withdrawal of the United States once again into isolationism. That is not what we seek, but we must confront the fact that it is likely to happen. We do not welcome that, and we must respond to it. We in this party recognise that that makes closer military co-operation among European nations necessary for Britain's defence and Europe's security.

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There are provisions in the Queen's Speech which we shall support, including measures to provide greater competition in the gas industry and a Bill to protect the rights of disabled people, provided that it is effective and not, as we fear, a fob-off. The sadness of the programme is not what is in it, but what could have been in it. We could have had a commitment to an independent Bank of England; nothing would do more to assure the markets that the Chancellor does not intend to risk the economy next year for Conservative tax bribes before the next election. We could have had legislation on the late payment of bills, for small businesses. We could have had a commitment that the Government will put their money where their mouth is, and begin to invest now in the education and skills which are lacking and which are holding back British industry. However, education was not even mentioned in the Gracious Speech.

We could have had a commitment that followed the Prime Minister's own words and made certain that we provided the resources necessary to give early learning opportunities to every three and four-year-old, but there was nothing on that. We could have a commitment to reform the discredited Child Support Agency legislation or a commitment to an energy conservation Bill to begin to build a clean economy in this country and to shift resources away from road building towards investment in our railway infrastructure. We could have had a commitment to build the integrated information super- highway which this country so badly needs.

We could have had a commitment to create a framework for a broader public- private partnership, now that the death of Post Office privatisation has marked the end of ideologically driven privatisations. We could have had a commitment to reform our antiquated constitution, to decentralise power and to open up the system. The Government could have provided for a Bill of Rights, and made sure that there were Parliaments in Scotland and Wales so that real trust could be rebuilt between politics and the people of this country. But we have had none of those.

This is probably the halfway point of this Parliament, but, judging by their timid programme, it is the beginning of the end of the road for the Government. We have seen in this Queen's Speech the last splutterings of an ideology that has run out of ideas, energy and steam. When Governments lose their nerve, they lose their purpose. The next thing that happens is that they lose office.

The programme illustrates clearly that this Administration are not the master of events but are at the mercy of them. They are led by a Prime Minister to whom things happen, rather than by one who makes things happen. He is a weak Prime Minister, who cannot command a wilful Cabinet or reunite a divided party. The Government have lost both the trust of the nation and confidence in themselves. They cannot go too soon.

4.43 pm

Sir Patrick McNair-Wilson (New Forest): Before my right hon. Friend the Prime Minister leaves, may I congratulate him warmly on his speech and on the way in which he pointed out the successes of the economy over which he has personally presided for so many years? I am delighted to be able to congratulate him on those and other matters to which I shall refer later.

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Thirty years ago this month, I made my maiden speech in the House. The Labour Government of 1964 had just been elected, and there was talk of national plans. Ministers patrolled what they deemed to be the commanding heights of the economy and there was a belief that somehow a new socialist crusade had started. Having listened to the speech by the Leader of the Opposition this afternoon, I can see that all the crusading zeal of the Labour party has now totally evaporated.

Not only is it not concerned with the commanding heights, but the Labour party does not even want to rediscover them, and certainly does not want to reoccupy them. The Leader of the Opposition is, I have no doubt, a charming and articulate person, and one could be forgiven for believing that he came from an eccentric wing of the young Conservative movement. But he is certainly not the sort of socialist who I confronted here 30 years ago when that Government were elected. The Labour party go on repeating the old mantra of criticism, but it clearly has nothing to put in place of what was in the excellent speech today.

I was delighted by many of the proposals. The Prime Minister has been praised for it already, but he should be praised again for his initiative in Northern Ireland. This time last year, many were saying that he had embarked upon the impossible, that he had taken on a poisoned chalice and that he could never make it succeed. We have come a long way since then and, regardless of whether the policies outlined in the Gracious Speech regarding Northern Ireland come to fruition, the fact is that the argument has been moved to a totally different place. There is no question of going back to where we were before.

I was delighted also to see the proposal for legislation dealing with discrimination against the disabled. As a trustee of Flying for the Disabled--the aviation group for tetraplegics and paraplegics--I know how keen disabled people are to play a very real and full part in ordinary communities, and to be able to enjoy as near as possible the facilities which everybody else takes for granted. I regard that as an important milestone, and those who have complained about what has happened in the past should realise that we were then talking about a private Member's Bill. We are now dealing with Government legislation, and that is extremely welcome.

I also welcome the section dealing with the delivery and strengthening of environmental policies. I represent an area which is perhaps as environmentally sensitive as any. Although the Government were good enough to give us national park status on planning matters just before the recess, my area is surrounded by sites of special scientific interest which do not always enjoy the protection that that title might imply. I very much hope that legislation will strengthen SSSIs in this country.

Finally, I come to points on which I should like to dwell for a moment. Like everyone on this side of the House and--I would guess--in the country at large, I wish the Government to continue their firm financial policies. We have seen booms disappear into inflation in the past, but this time we appear to be on course for something very different; sustained growth with low inflation. That is a prize which I have not seen any Government achieve for any length of time in the 30 years which I have been in this place. That prize is certainly worth the effort which it inevitably will require.

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The juxtaposition of that section in the Gracious Speech and the preceding paragraph jars somewhat. I listened with care to what the Prime Minister said about the Bill dealing with the European budget that is likely to be put before us. I recognise that the agreement at Edinburgh had, more or less, the support of the whole House. But we were not as aware then as we are now of the level of extravagance, fraud and waste inside the Community. We should not merely rely on discussions among ourselves in this Chamber or elsewhere in Parliament, or allow those discussions to detract from the fact that the ordinary people of this country find it impossible to understand how we can contemplate spending more money on Europe, given the amount of waste that seems to take place.

The Audit Commission's report on fraud does not merely identify individual accounting errors or a slip of the pen in some small office. It identifies institutionalised fraud, which means that British Steel must compete against nations that still subsidise their steel industries. Until that fraud is stopped, we will never persuade the ordinary people of this country to become Euro-enthusiasts.

Mr. Wolfson: Does my hon. Friend agree that it is absolutely essential for the Community to develop teeth by imposing substantial fines on the countries and people responsible for perpetrating such fraud? I could not agree more with his view that the ordinary people of Britain will not buy the concept unless that is done.

Sir Patrick McNair-Wilson: I agree. My hon. Friend is correct. I go further and draw his attention to page 2 of the Gracious Speech, which tells us that the Government

"will promote budgetary discipline in the Union and combat fraud."

Would it not be better if we could have a taste of that before we commit ourselves to paying even more money to that organisation?

Mr. Beith: Is not the problem for Euro-sceptics the fact that dealing with fraud--much of it carried out with the connivance of national Governments--needs stronger, not weaker, European institutions?

Sir Patrick McNair-Wilson: As one who believes in the "Europe des Patries" that President de Gaulle promoted so well when he was alive, I would never have got to that point in the first place.

The sort of Euro-lunacy that worries my constituents is exemplified by the reports that appeared in most newspapers today--the story that British acorns are no longer any good. The British oak tree provided the ships in Nelson's navy--many were built at Bucklers Hard in my constituency. The New Forest has just had almost the biggest acorn crop on record, but we are now told that the acorns are no good and that we must import them from eastern Europe. That is absolute lunacy and it must be fought beak and claw. Hopefully, we shall do so under the section of the Gracious Speech that deals with promoting the principle of subsidiarity. The pigs are having a wonderful time in the forest and the bumper acorn crop means that the pannage season has never been better. No one in my constituency can understand why we are being told that there is something wrong and that we must import acorns from eastern Europe.

Mr. Enright: I know nought of pigs and acorns and will leave that specialty to the hon. Gentleman. Does he

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agree that national Governments and institutions were supposed to detect fraud? I totally agree that they have failed lamentably. Therefore, it behoves us to create a fairer system to dig out fraud. Surely that must be done, as the Prime Minister suggested, by appointing more people to the Court of Auditors who can get a grip on fraud and eliminate it. Perhaps they could also eliminate the common agricultural policy, which would get rid of fraud at one stroke.

Sir Patrick McNair-Wilson: I agree. I am concerned about the fact that fraud is institutionalised and not accidental. As hon. Members may know, I have a home in France. I have a good relationship with my neighbours. I do not know how French people think, but I know of my neighbours' concerns about the European Community and they are almost the same as mine. No one will persuade a French wine producer to cut back on production. No one in the French Government would try to do so, for all sorts of good political reasons.

The situation cannot be controlled by a group of detectives looking for fraud. We know where it is. We know about the 19 billion bottles of wine that no one wants and the steel subsidies that the managing director and chief executives of British Steel mentioned the other day. We know that those things are happening. I do not want pious words from the Government or anyone else. I want real action. Let us tell those organisations, "Change your ways. If you don't, you won't get our money." It has to be as simple as that.

Ultimately, we must be prepared to withhold our funds until the problem is sorted out. Otherwise, I am convinced that it will continue and that, as we widen the Community by bringing in new eastern European countries, it will increase. I am concerned about the proposals for widening the Community because, sadly, they may well mean bringing in countries that will dump their agricultural produce on this and the other developed countries of Europe. That would ruin farmers here, in France and elsewhere. We must be careful.

As the hon. Member for Hemsworth (Mr. Enright) said, we want teeth. If there is fraud and malpractice, they must be matched by a national Government refusing to keep upping the ante to pay for it. If we do not do so we will create the greediest monster that the world has seen. It will dwarf anything that the Marshall aid people produced for Europe after the war.

The facts are simple. The Prime Minister is reported to have said that he is the greatest Euro-sceptic of them all. There is nothing wrong with being sceptical about Europe. Nine tenths of our population are sceptical and so are at least 50 per cent. of the Swedish people, as was proved the other day. Euro-scepticism is common sense.

We must back up the provisions in the Gracious Speech and ensure that they are not merely a form of words to keep us quiet, but result in real action to stop the hole in the boat that will ultimately sink our economy as well as everyone else's.

Otherwise, the Gracious Speech has much to commend it and I hope that it will receive a speedy passage.

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4.57 pm

Mr. Roy Hughes (Newport, East): It is always a pleasure to follow the hon. Member for New Forest (Sir P. McNair-Wilson). My experience of the House goes back as far as his. We probably both entered at the same time. Since then, my experience of political developments has been a little different from his, but I think that we would both agree that the Bill to increase the United Kingdom's contribution to the European Union is the most controversial in the Gracious Speech. On principle alone, it is difficult to justify any increase in our contributions while the scandal of frauds that run into so many billions of pounds continues. In such circumstances, it is sheer impertinence to ask for additional contributions. I also agree with the remarks that the hon. Member for New Forest made about the steel industry.

Much interest will centre on an important omission from the Gracious Speech --the vainglorious attempt by the President of the Board of Trade to privatise the Post Office. Those 20 or so Tory Members who said that, in all conscience, they could not support such a measure deserve the grateful thanks of the nation.

That incident also shows what a lame duck Administration this Conservative Government have now become. There was every indication that people of all political persuasions throughout the country opposed privatisation of the Post Office. As my right hon. Friend the Leader of the Opposition pointed out this afternoon, commercial freedom is one thing, but the Post Office has served the nation well for many years and it should be left in the public sector. It would not be unfair to say that the country is becoming heartily sick with the word "privatisation". That applies particularly to people employed in Government establishments. They are constantly threatened with such a proposal, which is bound to affect morale. Those who work in numerous establishments in south Wales are being made to feel uneasy, as I know from personal experience. The Patent Office in Newport should, for commercial reasons alone, be left in the public sector, but it is not mentioned in the Queen's Speech and is therefore left in limbo. A clear and categorical statement should have been made that it was to be left in the public sector. The proposals to privatise the Crown Agents and the commercial activities of the Atomic Energy Authority are part of the same pattern. There have been rumblings of discontent, too, about the future of the Passport Office, Companies House and the Business Statistics Office. The gas industry, which is no longer in the public sector, was brought out of the Victorian era and, while in public ownership, developed into a highly successful enterprise.

Mr. Nigel Evans (Ribble Valley): Will the hon. Gentleman give way?

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