House of Commons Hansard Debates for 23 Nov 1994

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is getting less. That must be so, because, according to Professor Minford, since 1979 subsidies for tenanted housing have fallen by 9 per cent. What an indictment.

I hope that, at some time in the future, when introducing a housing Bill, the Government will not try to tell us that they cannot afford to pay housing benefit. They brought the change about. They decided to transfer subsidy from the dwelling to the tenant, and now we are seeing the results, with high private rents having a debilitating effect on the resources available--and heaven knows, those are few enough.

Every Queen's Speech that the Government have produced has shown that they are good at going back to policies with a proven record of utter failure. Bus deregulation is one example, and another is the obsession with trying to transfer tenancies into the private sector. The only time that we have had a good house building programme it was within the public sector, and we shall not get back to that position until the Government change their views.

Anyone who reads any history on the subject will find that, before the big house-building programmes of the 1920s and 1930s, which were carried on until 10 or 15 years ago, the private landlord was detested, because he provided substandard housing at outrageous prices. That is why we went in for public sector housing. That was a success, so, as one might expect, the Government decided to abandon it.

I tell the Minister that, unless something is done about the accommodation problem, the Government are sitting on a social time bomb. Less and less housing is being built and things are getting worse, yet the Government are not interested enough to suggest anything in the Gracious Speech to help alleviate the problem. Finally, perhaps the worst, most spiteful and mean- spirited legislation that the Government propose is the persecution of the unemployed that is being introduced under the euphemism of the job seeker's allowance. I should be interested to know what the connotations of that term are. If we require people to be classed as "job seekers", there should be some jobs for them to seek. That does not seem unreasonable, and I do not think that anyone would disagree. People are being trained, often not very well, for jobs that do not exist.

That is not quite the worst thing. The meanest and most despicable aspect is the fact that, although Government economic policies have created unemployment, the Government now seek to shift the blame on to the people whom they have made unemployed. That is totally immoral, and I have no doubt that, as time goes by, people will become increasingly aware of it.

All that is happening at a time when employees' national insurance contributions have never been higher. Already, employees have to subsidise their own common law damages claims against employers, and then have to refund to the national insurance fund anything they have had in benefits-- benefits for which they have already paid in their contributions. That is an absolute scandal, chicanery of the worst sort.

Now we find that unemployment payments have virtually been cut by 50 per cent. overnight, from 12 months' entitlement to six months. What a deplorable breach of faith. It should not be allowed in any so-called civilised society. However, I was pleased to notice that that cut will not be made until 1996, and by my reckoning we may be rid of this deplorable Government by then.

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I am pleased that there is to be no denationalisation of the Post Office, but I warn my hon. Friends and any Conservative Members who may share my views about that to beware. People such as the President of the Board of Trade are never wrong; they always think that it is other people's fault when they cannot get their own way. Make no mistake about it; the Government will come back to the Post Office in some form or another.

We must be vigilant and wary. The idea has not gone away; we have simply had a stay of execution, as we did with the coal industry. About the coal industry too, apparently, the President of the Board of Trade was right and everybody else was wrong.

I had some sympathy with the hon. Member for Tatton (Mr. Hamilton) when he explained to the House on Monday how he had been ill used by the press and the other media. I share his concerns, although I am talking not about the facts of the case but about the way in which they were presented. However, I should have more sympathy for the hon. Gentleman and other Conservative Members who feel that they have been treated in the same way if they would press the Government at least to make a start and introduce a statutory right of reply. That does not seem unreasonable.

Individuals with no resources who have been attacked unfairly, unjustly, incorrectly and "unfactually" by the media should have a right of reply. So if the Government want to do something about the media, that is an idea for them to consider. It would also be better if we had an independent statutory press or media complaints council, if not both. Self-regulation seems to be all right for the City and for the media, but it is not considered satisfactory for the trade unions or for local authorities. Surely people must realise that that is inconsistent and deceitful.

The Government have had a rough ride from the media over the past two years, but I should have a little more sympathy for them if they had shown any sympathy when others were similarly attacked. We hear Conservative Members saying that it is deplorable how the royal family, the Prime Minister and certain other people are attacked by the media, but they did not say that it was deplorable when Arthur Scargill was being attacked by the Daily Mirror and the "The Cook Report". That was all right, apparently, but it is not all right now. There should be more consistency and more honour in dealing with such matters. I sometimes think that the Government are frightened to attack the media, whether because of the money involved or for some other reason.

The hon. and learned Member for Burton (Sir I. Lawrence) has left the Chamber now, but I must refer to what he said about the demise of the coal mining industry. That affected me directly, because the last colliery in County Durham was in Wearmouth, in my constituency, but it has recently been closed, to everyone's regret.

It is totally unjustified to blame Arthur Scargill or the National Union of Mineworkers for the demise of the coal industry. There is no proof, and if that is some people's opinion, it is not borne out by the known facts. The people to blame are Lord Wakeham and Lord Parkinson, with their deregulation of the electricity supply and distribution industry, and the President of the Board of Trade for refusing to take cognisance of the most important parts of the Select Committee's report on the subject. They are the people to blame. The Conservative Government closed collieries, not the NUM or Arthur Scargill. I speak as a

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Member who is sponsored by the NUM, and I often wonder who sponsors the people who condemn the NUM--I will find out.

I was a little disappointed by the Chancellor's response to my intervention earlier this afternoon. I asked why, if the economy was doing as well as we were being led to believe, he needed to punish the less well-off and the vulnerable in society by the increase in VAT on fuel.

I appreciate that I am not allowed to say that the Chancellor is a liar in the House, but he told me something which I have never heard from any economic source whatsoever. He stated that the poorest in our society were being more than adequately compensated for the increase in VAT. That is what he said, and it will be in Hansard tomorrow. There is not an economist in this country that I have read who comes to the same conclusion. Apparently, it is only the Chancellor who has the information. He should pass it on to all of the learned bodies. I did appreciate the right hon. and learned Gentleman giving way, but I am afraid that his answer was totally unsatisfactory.

8.11 pm

Mr. Richard Shepherd (Aldridge-Brownhills): If the hon. Member for Sunderland, North (Mr. Etherington) will forgive me, I shall not follow on from his remarks entirely. His was a tremendous performance which covered the entire Queen's Speech. We all write our own Queen's Speeches, and we try to commend those things which we wish to support.

I support my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath) in his comments about the Ulster Unionists and their leader, and the role of the Prime Minister and those hon. Members from Ulster who have played a part in a process that is clearly of enormous importance to us all. This is almost the first autumn of my adulthood in which, through hard work and difficult circumstances, we seem to have had a tranquillity that has not been here in more than 25 years. I commend--as did my right hon. Friend--the recent winner of the Spectator award and, of course, my right hon. Friend the Prime Minister.

I agree with what has been said, and these matters are difficult. I am, by instinct, a Unionist, and the thought of the United Kingdom breaking up is as antipathetic to me as anything in the political spectrum. Therefore, one is mindful of the work that the Prime Minister has done.

I know that the debate focuses on the economy, and I also refer to the remark by my right hon. Friend the Member for Old Bexley and Sidcup that this is a country experiencing fear. The observation was made that it is not fear but anxiety, but we all know what my right hon. Friend meant by that. There is great uncertainty. The certainty of our youth--that we would have lifelong employment in one job--clearly is no longer the constancy that is faced by our constituents.

There have been tremendous changes, and a society in transition is having to address issues that have perhaps been postponed, set aside and forgotten. Not a lot has been said today in the context of the Queen's Speech about education, as one day was given over to the subject. In essence, we put our education system into tremendous turmoil and there was a time when it looked as if we were entirely dedicated to working against the grain. I have always believed in the principle--although the Whips do not agree--that we should try to work with the grain.

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In the end, what are we seeking to accomplish with the changes? Are we improving that which we were before, and is that the end of it? What is the benchmark? I used to ask the former Secretary of State for Education that question, because it is important to know the objectives of the changes and revolution. We have not yet heard a Minister say that the aim of all the changes is that the standard of education and training for the average child, across all ability ranges, will match that for Denmark, Germany or any of our other major competitors. That is a formidable benchmark, because Ministers and the performance of Ministries can be judged by a more absolute definition.

The Organisation for Economic Co-operation and Development relentlessly cites how poorly we perform, yet I see that we are not moving up the charts. I have the greatest faith in the present Secretary of State for Education and believe that, by working with the profession, we can identify the benchmarks and dates by which our children will be educated and trained to the standard of our competitors.

There are common outlooks across the Floor of the House, and we are from the same nation--our "ain folk"--and have common perceptions. One such perception is that improvement in training and education is essential, and another is that the level of investment is important. The Government are, of course, endeavouring to attract inward investment as a replacement for our industry's failure to generate capital and apply it.

My hon. Friend the Member for Harborough (Mr. Garnier), a distinguished barrister, closely followed his helpful and prepared notes, and I heard all the things which we have done. All through my political career, we have cited the miracle of our management of the economy. Hon. Members on both Front Benches have cited it, and I am not making a partisan point. We say all the nonsense things, such as, "Between 12.30 and 12.45 on 1 January, we had the fastest-growing economy in Europe," or alternatively, "Between March 11 and 12, for one and a half hours, we had the fastest-rising rate of exports." Those are, in truth, meaningless comparisons. They may stir up the press, and they may be points that we can score against each other, but in truth, our lifetime's history shows an almost relentless comparative decline. We are all engaged in a powerful endeavour to change that around.

I was a student in Italy in the early 1960s. If I had said to my fellow students, "I have a vision: one day, you Italians will be as wealthy and prosperous as people in the United Kingdom," they would have thought that that was perfidious Albion speaking sweet words yet again. However, I again refer to the OECD listings and projections which state that, by 1998, either our economy will be the same size as the Italian economy or the Italian economy will be slightly larger. That transformation has happened.

As we battle our way across the Floor of the House, scoring points against the other side and concentrating on the point that it was not 12.15 to 12.30, but 12.15 to 12.29, the nation knows that it has a task in hand. I believe that that rests on certain things which are, I would argue, conservative principles which are shared across the House--a belief in the community, in the maintenance of

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law and order and in the profundity of our institutions. In fact, the last--the aim of maintaining our institutions-- is the most dedicated task of a Government. I touch only on those points because I do not mean to abuse the Government. They have embarked on an important task, and some of their plans are right, although not all by any means--that is the nature of things.

I reflect with some glee--it may be self-satisfaction--that both the shadow Chancellor and the present Chancellor must be joining the former Chancellor in their baths singing with relief at the release from the exchange rate mechanism. I take it that it was a political fashion that three great parties, dedicated to that one belief, were prepared to bring us the consequences of fixing our exchange rate with the third most-traded currency of this nation, which comes after the United States dollar and our own currency. We linked into that currency which represents less than half our overall balance of trade.

I recommend to the House, although I am diffident about doing this, a course through Skidelsky's second volume of "The Life of Keynes". The arguments are not unfamiliar, even in the history of the House. Throughout the 1920s and 1930s, there were debates on fixed exchange rates, how they were to be fixed and what mechanisms and tolerances would be allowed.

Our economy seems to follow more closely the cycles of the American economy. If we fix our parity to a currency, as we did with the deutschmark, in essence--although it was the exchange rate mechanism--it means that when we get out of kilter, as our economies were, either the exchange rate is propped up by excessive interest rates, because of the needs of the domestic economy, or the reverse happens, as we saw during the Lawson boom.

Constancy of economic management and a clear set of objectives, which are understood by all of us--for example, by small business men, such as I was before I came into the House--are extremely important. Therefore, I give a cheer that, having released ourselves from that burden, we seem to be following a consistent path. That sentiment is, it seems, shared at this moment by those on both Front Benches--they do not want to excite or damage anything that maintains a low level of inflation. Of course, that is set out in the Maastricht treaty, so they can all swear that they are merely acceding to the Maastricht conditions of convergency and that, therefore, we will be governed by that. I support the Government in that policy.

One issue of domestic legislation about which I feel strongly and which touches on another is VAT on domestic fuel. My opposition to it is not based on any grand philosophy, but as a Conservative I believe that the central theme of my party--borne out by the history of the House in the 20th century--is that there should not be regressive tax. That was explained in a rather long-winded way and I am sure that that explanation was more accurate, but, essentially, regressive taxation means that people on lower incomes pay a higher proportion of their income in tax than those on higher incomes. It is an abysmal concept.

That is why, in the early stages in the development of Community funds, budgets and VAT, those things that were absolute basic necessities, the purchase of which represents a higher proportion of expenditure for people on lower incomes, were excluded from such regressive taxation. That seems to be manifestly fair and obvious.

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We exempted food--I must declare at this stage that I am a grocer--because everyone has to buy it. The food bill represents a higher proportion of the family budget for those on low incomes than it does for rich people. The food budget may be trivial for the rich, but it is a substantial cost for those on lower incomes.

Now we have imposed VAT on domestic fuel and heating. It is clear that many of my constituents--honourable people who have worked through their lives, who have no occupational pension and are dependent on savings which have been eroded by inflation, because of our careers in previous incarnations in the House--are grievously affected by that VAT. All the budgetary allowances that are said to exist still do not take away from the basic question, "Is it right or is it wrong?" People like me will say that to impose VAT, at a flat rate, on absolute necessities is wrong.

My right hon. and learned Friend the Chancellor is a cheerful man and, amid the bluster, he often adopts poses. I should like to think that he has enough savvy to understand that, to ride public opinion and to take the British public with him, he must act with a sense of fairness. VAT on domestic fuel is regressive and has been perceived to be so by the nation. After all, if we cannot shout at, rail against and change policy in a democracy, what is the point? The standing of Parliament has been debated in the House and was mentioned by the Prime Minister in his Guildhall speech. If we treat ourselves as if we are nobodies, although we are representatives of truly somebodies--our own people, remember--we are worth nothing. On Monday, we will have a debate on the finances of the European Community. We have not debated that subject since 1988--we could not because it requires a treaty change. That remarkable instrument is taxation by treaty. Somehow that is far more important than any taxation by Budget resolutions, which we shall deal with on Tuesday and subsequently. It takes all sort of precedence over the Budget. Every year, the Chancellor of the Exchequer and the Government must secure the finances of the country. Every Member of the House may speak in those debates, move amendments and try to shift the Budget resolutions slightly. We all know, however, that if a Government fail to secure the finance to maintain the government of the country, they are no longer the Government.

The chairman of the 1922 Committee decided to make a constitutional intervention. He seems to think that taxation by treaty is of such paramount importance that he advised people to prepare for an election. On the face of it, that is absurd, because if there are people who are bound to maintain the revenues of Brussels it is those on the Labour and the Liberal Front Benches and, I regret to say, my own Front Bench. To suggest that Members of Parliament may not move amendments and may not honour the commitments they have given to their constituents is absurd.

For my part, my election address was particular--I know that I am not alone in that. It said that I did not believe in the Maastricht treaty and the arrangements that followed for it. I made it clear that I would not vote for citizenship for my fellow citizens. That is a decision so profound that only we as individuals can make such a step through a referendum. The House will know that, during the Maastricht debate, there was hardly anything in the treaty that I could support, because it purports to

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something that has never been put to the British people--that they should be subordinate constituents of another political organisation. My goodness, I have difficulty enough ever convincing colleagues on my own Front Bench to change a policy, but now power, decisions and laws flitter outside my grasp. I may rail here, but where do I sound? No common language exists, nor common Parliament that can reflect the visions, angers, frustrations and outlook of the British people, my own people.

I am told that the whip will be withdrawn on Monday should I move an amendment or not vote in support of the European Communities (Finance) Bill. I cannot believe that a Government of whom I am a supporter, a party that touches deep into the nature of our people, as does the Labour party, put above the imposition of tax on the people of this country through VAT on domestic fuel, the securing of funds through a treaty for another organisation. I cannot believe that the Government are prepared to do that without being prepared to allow Parliament to exercise the scrutiny and allow the freedom of speech that we expect and demand on the budget of the United Kingdom. It is a curious twist to me. What is the call that puts that demand above our own exigencies and needs?

I am mindful that train fares are going up. They are now so unaffordable that one almost has to take a mortgage out to go to Birmingham. My commuters who must travel will find that their incomes will be squeezed, but that is considered to be of lesser importance than supplying funds to Brussels. I cannot understand that when I try to explain it to my constituents. Why is it that I cannot debate the subject of that money? My constituents do not understand the imperative that makes the Bill the most supreme piece of legislation in the whole programme, which threatens the absurdity of a general election and the withdrawal of the whip. It is a curious balance, which I do not understand.

If we are to stand and reclaim our fortunes with the electorate, it can only be on the basis that we represent someone and something. There has never been a time in living memory when an Administration has been so low in the standing of the people it governs. For me as a Conservative, it is a very important task to reverse that. That is why we cry out.

As for the memorandum from Mr. John Maples, which has been published, I do not know a Conservative Member who has not written large chunks of similar words over the past year. That had no effect, alas, but we will make sure that the views of the people are represented and argued for, because we can make something of them. I hope that, in the winding-up speech, that fellow traveller of mine for an award by The Spectator will be able to say that it is absurd to try to restrict the freedom of speech of his Conservative colleagues by the threat of the withdrawal of the whip.

8.27 pm

Mr. David Hanson (Delyn): It is a great pleasure to follow the hon. Member for Aldridge-Brownhills (Mr. Shepherd). In the short time that I have been a Member of the House, I have always found his speeches to be full of integrity, passion and independence of thought. That is to be commended and I genuinely appreciated his speech tonight.

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In common with my hon. Friend the Member for Easington (Mr. Cummings), I enjoyed the speech of the right hon. Member for Old Bexley and Sidcup (Sir E. Heath). I joined the Labour party because of him, so it was interesting to find that I agreed with him about everything. I am not sure whether I have moved to the right or he has moved to the left, but somewhere down the line there has been a shift in opinion.

The case against the Government on the economy is clear and straightforward. The Gracious Speech covers a number of issues that promise more of the same on the economy, which means a poor deal for my constituents.

Under this Government, millions of British people now face reduced living standards. Tax rises from this tax-cutting Government are being pushed through to pay for economic mismanagement. Unemployment continues to be tolerated, while skill levels are ignored. Each year, £25 billion of taxpayers' money is wasted on unemployment rather put to positive use to create jobs and a better society. Many thousands of people, including many of my constituents, are forced into poverty pay while the Government ignore and, as we have seen this evening, effectively tolerate massive pay rises for executives of privatised companies and others.

The burden of the Government's failure falls on those who are least able to pay. Under the Gracious Speech, public spending will be dramatically reduced and, while much of the Government's policy is deliberate, incompetence still plays a large part in their policy failures.

A Labour Member is expected to criticise the Government, but we have heard much today about what the former hon. Member for Lewisham, West, Mr. John Maples, said in his new role as deputy chairman of the Conservative party. He is a former Treasury man and if we are now going down the pan perhaps he should be given the credit for our reaching this state.

The report, which has been heavily leaked, includes a number of interesting quotes about the state of the economy, to which the hon. Member for Aldridge-Brownhills referred. I hope that I shall not score too many points by agreeing with the hon. Gentleman. Mr. Maples said:

"What we are saying on the economy is completely at odds with experience."

We can all agree with that. He continued:

"The reality is now that the rich are getting richer on the backs of the rest who are getting poorer".

Every Labour Member in the House agrees with that. He went on: "The Conservatives have let voters down, they have been in government too long, are complacent, have lost direction, and have failed to fulfil election promises."

What an epitaph for that former Conservative Member, who paid the price at the 1992 general election. I understand that he is now seeking a place in the House as the possible candidate for the constituency of Woking. He might be better getting a job as a gravedigger.

John Maples is not alone in his views. Today's issue of The Economist covers a number of points that compound the Government's current woes. In the latest economic forecast for Britain, it says that the best is over and that the economy will decelerate in 1995, living standards will

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slip, falls in unemployment will slow to a crawl and the country will slide back to its traditional place near the bottom of the international pile. Incidentally, The Economist is edited by the hon. Member for Kensington (Mr. Fishburn), who may apply for a job as deputy chairman of the Conservative party in the near future. One aspect of the Chancellor's opening speech that I found interesting was that he did not seem to realise that the Government have been in power since 1979. All the points that he made related to the past three months, the past six months or the past nine months--perhaps the past quarter of an hour on the clock, as the hon. Member for Aldridge-Brownhills said earlier. May I put the Government's economic performance in the context of the past 15 years and thus illustrate the enormity of their failure?

Government investment has been lower than that of any other G7 country during the 1979-93 period. Exports have seen their lowest rate of growth since 1979. On skills training, we have the second lowest number of 18-year -olds in further education of all OECD nations, with the exception of Turkey. This year, £119 million has been cut from the training budget, and £400 million has been cut from the training budget in the past three years.

The number of people out of work for more than a year has increased by 50 per cent. to almost 1 million since 1979. Despite recent falls in unemployment, which we all welcome, 2.6 million people are still out of work in Britain. Perhaps the most damaging statistic of all is on poverty, which is a serious issue in my constituency. Since 1979, the number of families with incomes below half the national average has increased from 5 million to 13.9 million. That statistic brings home the misery caused by the Government's economic failure during their period in office.

We still have a trade deficit of £6.1 billion, which, according to Treasury forecasts, will rise to £7.5 billion in 1995. To pay for their prolonged economic failure, the Government in the Gracious Speech make clear commitments for continued public spending cuts and, in next week's Budget and beyond, they plan to impose massive tax rises. What Mr. Maples did not mention is that this is a Government of "pay more and get less". Even before the forthcoming Budget we shall see tax rises in the form of increased national insurance, VAT on fuel, home insurance, car insurance and on mortgage tax relief, with allowances frozen.

For an economy of which the Conservative party are so proud, the tax bombshell which the last election was supposed to bring has brought a Tory tax bombshell of a 7p rise in the effective rates of income tax.

As has been said by many hon. Friends, the most iniquitous issue is that of VAT on fuel. Last Saturday, my local Labour party submitted 6,000 postcards calling on the Government to stop VAT on fuel to houses in my constituency of Delyn. By today, 750 postcards had been returned to me, duly stamped, by constituents who are concerned about the iniquities of that tax.

That protest is in addition to petitions and the general concern that has been expressed about VAT. Every hon. Member knows that people do not send postcards in that number back to their Member of Parliament unless they feel extremely strongly about an issue. I hope that, if we achieve nothing else this evening, we can have a commitment from the Government that that tax will be stopped.

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If it cannot be stopped for domestic customers, I hope that the Treasury will at least say something about the effect that it will have on charities. This morning I received a letter from a constituent representing a church. He complains bitterly about the tax on charities, which cannot claim back that taxation.

Perhaps we should not be upset about that tax but should expect it from a Government who have now imposed tax rises from 34.3 per cent. of gross domestic product in 1979 when my party left office to 37 per cent. of GDP in 1995-96. As has already been said, the taxes are unfair and regressive because anyone who earns £64,000 a year or more now pays less tax than in 1979 whereas nobody earning less than £64, 000 a year pays less tax.

We have also seen public spending cuts on schools, housing and training. As my hon. Friend the Member for Sunderland, North (Mr. Etherington) said in his speech, the pension age for women is to go up. The Conservatives are giving us less for more because of their basic economic failures. The experience of my constituency in north Wales is very much in line with the thoughts of chairman Maples. I want a strong Wales and a strong Delyn constituency, but the position is drastically affected by the Government's economic policies. North Wales has experienced the loss of its economic and industrial base. We have lost textile, steel and coal industries. When I was selected as the candidate for my seat seven years ago, 800 people worked in the coal mining industry in my constituency. Today, less than 160 people work in that industry.

Only today, I received a letter from British Aerospace on the borders of my constituency telling me of a further 200 redundancies. The Government's so- called "economic miracle" is missing my constituency and those whom I represent are paying for the Government's economic failures with their jobs, their livelihoods and tax rises. In my constituency, a quarter of 18 to 24-year-olds are unemployed and 2,500 people who remain unemployed face the job seekers' allowance, which is the only economic measure that the Government can bring forward with confidence. Massive blows have been dealt to the local economy with the transfer of jobs back to America and the deindustrialisation of Raytheon Jets, a British company which has produced British aircraft for many years but which has now been shipped back to America by a purchase on the free market. My constituency remains among the lowest paid regions in the United Kingdom. I am pleased that my hon. Friend the Member for Darlington (Mr. Milburn) is in his place, because I read yesterday, with great interest, the figures that he produced from the House of Commons Library. In Wales, 40 per cent. of the work force earn below 68 per cent. of average United Kingdom earnings--the decency threshold--and Wales is at the bottom of the pay league in Europe. How does that compare with the Government's attitude to chief executives of major companies in the private and public sector? I refer the Minister to early-day motion 87, which has been signed by a number of hon. Members present today.

In the past year, salaries of chief executives have on average increased to £208,000 per annum--an increase of £50,000 per annum on 1993. The Prime Minister has exhorted companies to continue to exercise restraint and to continue to exercise control on chief executives' salaries, yet overall there was a £50,000 increase in the

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average salaries paid to chief executives between July 1993 and July 1994. That statistic does not take into account British Gas's chief executive, Cedric Brown.

I should not be surprised because, since 1979, the top 1 per cent. of British taxpayers have received 30 per cent. of the tax cuts available, from £75 billion in tax cuts paid to those richest sections of our community. I am surprised, however, at the complete failure of the Chancellor of the Exchequer to condemn those pay increases adequately this afternoon, and to call for further regulation by the Government of shareholders' ability to authorise such pay rises at the moment.

We need a radical shift in policy. We need to consider a range of issues to raise the profile of a strong economy and to rebuild that economy for our people. We need to ensure that we release capital receipts to boost housing, because housing is needed for our people. We need to ensure that there is long-term, Government-led investment in infrastructure, in rail and capital health and education projects. We need to ensure that there is a real skills boost for training and a job guarantee for school leavers. We need to ensure that there is public spending on energy efficiency and environmental

improvements--on the things that people need.

The one thing that surprises me in the Gracious Speech is the Government's commitment to reduce the national share of income taken by the public sector and public spending. Public spending provides things that people need. It provides jobs and investment, and we should seek to increase it in the future. We need social justice, we need a minimum wage for Wales and we need to take steps to tackle the salaries of chief executives. We need to ensure that there is fairness and justice in our tax system, that value added tax increases are stopped and that windfall taxes are imposed on the profits of privatised utilities.

We need to ensure that there is fairness in our approach to society. It is blatantly not fair for chief executives to increase their salaries, week in, week out, at the same time as the Government abolish wages councils, do not allow a minimum wage and continue to force people into low-paid, low- skilled employment. It is not fair to have regressive taxation, such as value added tax on fuel, when people in the richest sections of our community are receiving massive tax handouts.

We need to start to tackle unemployment and poverty, not attack unemployed people and poor people. That is why the Government are wrong, that is why they will face a vote this evening on the amendments and that is why I will be proud to support my colleagues in the Lobby.

8.43 pm

Mr. James Clappison (Hertsmere): I welcome the opportunity to take part in the debate and to follow the hon. Member for Delyn (Mr. Hanson), who spoke forcefully about matters that he regards as being important to his constituents. I am sure that they would be pleased to hear him speaking forcefully. I do not know whether Opposition Front Benchers will be quite so happy with what he said.

It sounded very much as though the hon. Member for Delyn was making a strong plea for higher taxation for its own sake and to fund extra public expenditure commitments. Opposition Front Benchers appear hesitant about that. I am not sure that they will welcome the large increases in taxation that will be necessitated by that.

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It is a great pleasure to follow some of the distinguished speeches that we heard earlier, and to follow a former Prime Minister, my right hon. Friend the Member for Old Bexley and Sidcup (Sir E. Heath), and an experienced Member of the House, who spoke forcefully and from conviction, my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd).

If I may, with some temerity as a junior Member of the House, I shall follow what my right hon. Friend the Member for Old Bexley and Sidcup said. Two points in his speech struck a special chord--first about the standing of Parliament and, secondly, about the fear of unemployment.

As for the standing of Parliament, I hope that I shall not be unduly partisan if I say that, had I been one of the television viewers whom my right hon. Friend the Member for Old Bexley and Sidcup took as an example, I would have been somewhat surprised by the debate--at least by the way in which it began. It was supposed to be a debate about economic policy.

As I listened to the opening speech of the hon. Member for Dunfermline, East (Mr. Brown), I waited and waited for mention of economic policy, but very little came. We had a tour around identity cards, executive pay and the public utilities, and we certainly had a lot of the flotsam and jetsam of political tittle-tattle, but we heard little about economic policy. Whenever the hon. Gentleman mentioned economic policy, he moved on as though he had touched on something that was extremely dangerous for him.

The hon. Member for Dunfermline, East and my right hon. Friend the Member for Old Bexley and Sidcup mentioned the fear of unemployment. I think that it is important, although I take some issue with the way in which it has been presented to the House because it is the political fashion of the moment to talk about fear of unemployment. Undoubtedly, such fear exists. It has been driven by profound economic changes that are taking place in the world economy, with changes in technology, developments in technology, developments in the economic process and the rise of new and competitive economies. That has not happened overnight. It was happening long before the pundits of political fashion started talking about fear of unemployment, and it will continue to take place long after they have stopped. I know from my constituency, Hertsmere, that the fear of unemployment was at the forefront of electors' minds at the last general election. My constituency was one of those parts of the south-east that was touched by the recession for the first time after a long period of economic growth and prosperity. I know that that is very much on my constituents' minds.

At the last general election, my constituents wanted policies that would reduce unemployment, and I am pleased to say that since then unemployment in my constituency has fallen by about 20 per cent. There are now 700 more people in jobs, and I very much hope that unemployment will continue to fall.

What is the answer to the fear of unemployment? We cannot turn back the important changes that have taken place in the world. Even though people are in jobs, people are changing jobs more often and job security is not what it was, and that worries people.

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As people enter the work force, we must educate and equip them for the changes in technology and in working conditions that they will experience throughout their working lives. I welcome the profound changes that have taken place in education in the past 15 years. The huge increase in the proportion of young people entering higher education must help in meeting that economic change; so too must the revolution that is taking place in vocational education, and the great importance that has been attached to that through the introduction of national vocational qualifications and general national vocational qualifications. I welcome those developments, which will help my constituents a great deal.

Although there is no mention of new legislative measures for education in the Gracious Speech, I welcome the fact that legislation that we have enacted is driving on a process of reform in education, raising standards and creating new opportunities. I am pleased to see that the Labour party is at last responding to those changes. It must be ironic for the hon. Member for Dewsbury (Mrs. Taylor) that her opposition and hostility to league tables has now been ditched. I look forward to Opposition Members being dragged kicking and screaming towards other reforms that are definitely helping to raise standards.

I hope that the Labour party will reconsider its hostility to grant- maintained schools and assisted places. I feel strongly about that scheme because, as a result of it, many hundreds of children from lower-income families in my constituency now have the benefit of being able to choose an independent education. One way that we must deal with big economic changes is through improving education and revolutionising our attitude to skills and training. The second way to deal with the changes is to create sustainable long-term growth. Even if we have an increasingly well-educated and well-trained work force, they will still suffer if the economic policies are not in place to create sustainable growth, which is such an important part of our future.

The hon. Member for Dunfermline, East mentioned sustainable growth once in his speech and then passed on rapidly. He may feel a certain discomfort in talking about sustainable growth. Even bearing in mind the strictures of my hon. Friend the Member for Aldridge-Brownhills about economic policy and its transience, it is important to keep in place the conditions that are making our industries and businesses more prosperous and profitable, and providing jobs for so many of our constituents. The hon. Member for Dunfermline, East would have done far better to devote more attention in his speech to the conditions for sustainable economic growth and the sort of policies that will nurture it.

Earlier in this Parliament Opposition Members started to talk about some of the constraints on economic policy that traditionally limit economic growth in this country, and have done so for a long period--problems of inflation and balance of payments constraints. The hon. Member for Dunfermline, East did not mention trade. Conservatives can take some satisfaction from the fact that we have introduced policies that are resulting in high growth and low inflation. Although it may be painful, I urge Ministers to keep taking important long-term decisions to keep inflation down. That may be mundane, but it is extremely important because so many times in our recent economic history--certainly up to 1979--growth has been achieved and then blown off course by inflation after a short period.

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It is also important that we should maintain our good balance of trade. Opposition Members have devoted little time to that. Exports are performing well--a fact that bears repetition. Much encouragement can be drawn from the recent good news on exports and our future prospects. That may have a good deal to do with our present competitive exchange rate. Once again, I accept the economic views of my hon. Friend the Member for Aldridge-Brownhills--certainly our increasingly competitive exchange rates have been a factor in promoting exports.

Our position is also explained by the underlying strength of the economy-- the strength in the real economy, manufacturing, production and investment has been reflected in our balance of payments figures. Some measure of the underlying strength of our economy and the successful conditions now in place is reflected in the high level of inward investment in this country. Overseas investors come to this country, see that it is a good place to set up in business, produce and expand, and in turn make a definite contribution to our exports and balance of payments.

I welcome the fact that 36 per cent. of all inward investment in the European Community comes into this country. I also welcome the fact that some of it is at last finding its way to my constituency. Various firms from Germany, the United States and other parts of the world are choosing to set up in Hertfordshire and helping to create employment. Many hundreds of the jobs that have been created in my constituency since 1992 are no doubt due to inward investment. I strongly urge my right hon. Friends to keep in place those policies that are doing so much to stimulate inward investment, which is a tribute to the strength of our economy.

Rather than talk about sustainable growth, Opposition Members, particularly the hon. Member for Dunfermline, East, spent much time talking about the so -called windfall tax and attacking public utilities. Since the election of the right hon. Member for Sedgefield (Mr. Blair) as Leader of the Opposition, we have heard a great deal about new Labour. One of the propositions said to apply to new Labour is that it is friendlier to the market than old Labour, with its tradition of clause IV, high taxation and excessive regulation. But there is not much evidence of that in Opposition Members' approach to the windfall tax.

The best form of regulation of the utilities is competition wherever possible. For that reason I welcome the proposal in the Queen's Speech for the liberalisation of the gas industry. Where competition is not possible, regulation must be applied, but it must be done in such a way as to enable profits to be made and investment to take place. Opposition Members show no enthusiasm for extending and promoting competition and do not talk of regulation; their first instinct is to reach for taxation. That is their answer to the problem, but is it the right one? What effect would taxation have on the privatised utilities?

Those utilities are already regulated, and subject to ordinary levels of corporation tax and other taxation. The effect on them of more taxation would undoubtedly be to take away all incentive to invest and seek a return on capital. It would take away all incentive to keep down cost, innovate and manage affairs efficiently. The effect would be to depress investment in the utilities and depress their performance in providing customer service and lower prices.

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