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Taylor, Mrs Ann (Dewsbury)

Thompson, Jack (Wansbeck)

Timms, Stephen

Tipping, Paddy

Turner, Dennis

Tyler, Paul

Vaz, Keith

Walker, Rt Hon Sir Harold

Wallace, James

Walley, Joan

Wardell, Gareth (Gower)

Wareing, Robert N

Watson, Mike

Welsh, Andrew

Wicks, Malcolm

Wigley, Dafydd

Williams, Alan W (Carmarthen)

Williams, Rt Hon Alan (Sw'n W)

Wilson, Brian

Winnick, David

Wise, Audrey

Worthington, Tony

Wray, Jimmy

Wright, Dr Tony

Young, David (Bolton SE)

Tellers for the Noes: Mr. Jim Dowd and Mrs. Barbara Roche

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Question accordingly agreed to.


That this House welcomes the spending plans announced in the Budget statement by Mr. Chancellor of the Exchequer on 29th November; congratulates Her Majesty's Government on its firm control over public expenditure, its drive for greater efficiency and economy in all areas of government, and its progress in reducing the share of national income taken by the public sector while improving key public services; and commends the Government's determination to maintain sound public finances.

Madam Speaker: I call Mr. Conway and Mr. Jon Owen Jones to come to the Table.

Mr. Derek Conway ( Lords Commissioner to the Treasury ): I have to report that in the Division on the amendment, the numbers for the Ayes were incorrectly reported as 279. The figure should have been 297.

Madam Speaker: I direct that the correct figure of 297 be recorded in the Votes and Proceedings.

Mr. Kenneth Clarke: On a point of order, Madam Speaker-- [Interruption.] I see that voting against all the tax increases and against all the spending reductions has cheered up the Labour party, but it might actually help the House if I gave a brief explanation of how I think our proceedings will now go ahead.

During the Budget debate, I mapped out a clear path for reductions in public borrowing and emphasised the importance of sound public finances to the achievement of a strong and sustainable recovery. Nothing said in the course of the debate tonight has changed our commitment to take all the necessary measures to put the public finances on a sound footing and nor, indeed, has the outcome of the vote.

However, it is only right that we should listen to the views expressed here tonight. I have therefore decided not to proceed with the second stage of value added tax on

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fuel and power. The Government will be bringing forward a resolution to hold the rate at 8 per cent., together with the requisite new clause.

The shortfall in the public finances must be made good. I shall be bringing proposals to the House on Thursday, designed to ensure that the public sector borrowing requirement remains on the course that I mapped out in my Budget statement. Proceeding in that way is essential to keep the recovery on course in order to achieve the prosperity and jobs that we need in this country.

Several hon. Members rose --

Madam Speaker: Order. The Chancellor of the Exchequer rose to catch my eye on a point of order. I judge what he has said to be a short statement, and I shall treat it as such.

Mr. Gordon Brown: Further to that point of order, Madam Speaker. Now that VAT at 17.5 per cent. has been stopped dead in its tracks, is that not a humiliating defeat for the Cabinet, for the Chancellor and for the Prime Minister? Having tried for 18 months, in three successive Budgets, to impose the unfair VAT tax, does the Chancellor agree that VAT on fuel should never have been imposed in the first place? Does he agree also that promises made by political parties at elections should be kept? The Government will have to listen to the British people.

Does the right hon. and learned Gentleman agree also that no hasty and ill- considered measures--cobbled-together compromises--should be brought to the House by the Chancellor? If he believes, as he says, that there is an obligation on us to come forward with proposals, why does he not consult us before he brings proposals before the House on Thursday?

This is not just a defeat for the Budget. This signals a turning point in the politics of this country. Conservative Members may remain in office, but they are tired, they are discredited and they are out of touch. It is the Labour party that now represents and speaks for the people of this country.

Mr. Clarke: The Labour party may produce proposals slowly, but they are certainly cobbled together when they come. The hon. Member for Dunfermline, East (Mr. Brown) has made his proposals to deal with the public finances--loopholes, windfalls and zero rates on rollercoasters in theme parks. They are unlikely to feature in my statement on Thursday.

On Thursday, I will produce what the hon. Gentleman has never produced, which is a package of spending and taxation measures designed to keep borrowing on course and to regain confidence in the strong recovery of this country. The hon. Gentleman, in all his speeches on this matter, has made it clear that he will be utterly unfit to take forward the affairs of this country. He has no responsible suggestions to make on either spending or taxation. His vote this evening has been irresponsible and opportunist. He may gloat today, but we have the responsibility of keeping British industry on course tomorrow.

Mr. Malcolm Bruce: Will the Chancellor accept that the defeat of the Government tonight was inflicted by the votes of Members from all nine parties in the House?That demonstrates a monumental rejection of the Government's policies. What ingenious new taxes will the

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Tories now introduce? They have become the party of tax. If it moves they will tax it, and they will go on taxing until it stops moving. Does he accept that he is a member of a discredited Government who are rejected by the House, by his own party and by the people? There is only one place for him and his Government to go, and that is out.

Mr. Clarke: The Liberal Democrat party was the first political party in this country to advocate the imposition of value added tax on domestic fuel. The Liberal Democrat party remains committed to a carbon energy tax which would impose equivalent taxation in terms of domestic fuel and would also impose huge costs on British industry, damaging our competitiveness in world markets.

The hon. Gentleman asked me a question. He asked what taxes I might bring forward. In effect, he is asking me to advertise tax increases in advance in an utterly irresponsible way. The Liberal Democrat party is no better than the Labour party at producing thought-out proposals of its own and the hon. Gentleman illustrates his own irresponsibility by asking me to trail tax changes in advance of their being announced. I cannot do so today, any more than I could do so before a Budget.

Sir Peter Tapsell (East Lindsey): As the Labour party is committed to harmonising all taxes with those in the European Union and as every country in western Europe has a value added tax on fuel, is not it absolutely clear that a future Labour Government would introduce the tax which the House has just rejected?

Mr. Clarke: As my hon. Friend says, if the Labour party stood by the commitments that it incurred in the European Parliament, that would indeed be the case. But Opposition Members shake their heads at the idea that they are committed to anything. Throughout five days of debate they never said that they would repeal the tax if we introduced it, and they engaged in pure political opportunism without offering any alternative proposals of their own.

Mr. Peter Shore (Bethnal Green and Stepney): Now that we have a minority Government, does not the Chancellor think that it is rather premature to bring forward new proposals this Thursday? Would not he be better advised to give himself more time to consult not only Opposition parties, but within his own party before he presents further proposals?

Mr. Clarke: I see no alternative Government--nothing resembling an alternative Government-- before me. I see no political party ready for office which could be responsible for this country's economic affairs. I have heard the Labour party's propositions: the windfalls, the loopholes, the zero rating of funfairs, and the restoration of the tax on champagne. They are preposterous. Of course, better suggestions will be considered if the Opposition can think of any between now and Thursday.

Mr. Alex Salmond (Banff and Buchan): Has the Chancellor had time to reflect upon the wisdom of the petulance which led him to defend an indefensible tax increase to the last ditch? If that was a marginal part of the Government's programme, should not the Chancellor consider his own position in leading his party to such

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humiliation? If it was a central part of the Government's programme, should not the entire Government face the people in a general election?

Mr. Clarke: Because of the compensation I announced-- and actually would have improved during the debate-- pensioners were one group in this country who would not have borne the full weight of the proposal. Indeed, about one fifth of pensioners would have received more compensation than the VAT they would have been likely to pay. The principal beneficiaries of this evening's vote will be people living in large houses with large central heating bills.

Mr. Duncan Smith: Does not my right hon. and learned Friend agree that when he brings forward his package on Thursday he should consider the fact that we are determined to bring down public expenditure, while the Opposition spokesman, the hon. Member for Copeland (Dr Cunningham), said that public expenditure was too high, and other Opposition Back Benchers said that taxation is not high enough? Does the Chancellor agree that that shows the Labour party's absolute hypocrisy in this area?

Mr. Clarke: My hon. Friend is quite right: the hon. Member for Copeland (Dr. Cunningham) made the extraordinary statement that, in his opinion, public expenditure was too high. He said-- he repeats it now-- that public expenditure on social security was too high, which I think bodes ill for old-age pensioners. He then went through the Division Lobby with his hon. Friends and voted against every public expenditure reduction that we had proposed. As I said a moment ago, the Labour party's position is preposterous--and other adjectives leap to mind quite easily.

Mr. D. N. Campbell-Savours (Workington): In so far as Ministers were predicting a substantial increase in interest rates in the event that they lost the Division, is that still their view or were they just threatening Back Benchers in an irresponsible way?

Mr. Clarke: If there is one thing dafter than asking the Chancellor of the Exchequer questions about possible tax movements two days before he announces them, it is asking him about likely movements in interest rates. There is scarcely a Labour Member who would be capable of running a whelk stall, let alone the Exchequer. Several hon. Members rose --

Madam Speaker: Order. We shall move on to petitions.


Population Control

11.45 pm

Ms Judith Church (Dagenham): I wish to present a petition from Mrs. Helen Descombes of 129 Ballards Road, Dagenham, signed by 36 constituents, against the use of overseas aid funds for the Chinese population control programme.

Wherefore your petitioners pray that your Honourable House will ensure that no further funds from the Overseas Aid budget are disbursed to the United Nations Population Fund and the

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International Planned Parenthood Federation whilst these organisations support, encourage or act as apologists for the Chinese Population Control Programme.

To lie upon the Table .

Imtiaz Begum

11.46 pm

Mrs. Audrey Wise (Preston): I rise to present a petition from the constituents of Preston. There are 3,084 signatures attached to it, led by the mayor and mayoress of Preston, the leader of the council and the town clerk.

The petition declares that Imtiaz Begum should not be deported from the United Kingdom. She is a young woman who, because of head injuries sustained in an accident, cannot walk unaided or care for herself. She is being cared for in Preston by her brother, his wife and her parents, all of whom are British citizens. Her brother bears all the costs. She has no relatives in Pakistan who could care for her and so a deportation order would be a death sentence.

The petitioners therefore respectfully request the House of Commons to call upon the Home Secretary to revoke the deportation order.

To lie upon the Table .

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Electoral Reform

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

11.47 pm

Mr. Graham Allen (Nottingham, North): It was something of a surprise to draw this Adjournment debate, which I put in for some 18 months ago, as the spokesperson on democracy. It was recycled and finally pulled out of the hat last week.

One reason why I put in for the debate was that the House of Commons very rarely talks about matters to do with democracy and the way in which we govern ourselves. I thought that it would be useful to give the House the opportunity to discuss and debate an important question on part of our democracy, which is the system that we use to elect not just this House but our other institutions.

I was delighted over the weekend to note that there is a growing view that our democracy needs to be talked about, looked at and, perhaps, reviewed. For some time, Labour has had a wide-ranging package of measures on how to improve our democracy. I was pleased over the weekend to read the words:

"Labour's democratic agenda is the most extensive package of constitutional reform ever proposed by a British Government." Those were not the words of my right hon. Friend the Leader of the Opposition; they were not a quotation from our former leader, the late and greatly lamented John Smith, the former right hon. and learned Member for Monklands, East, but the words of the Prime Minister. It appears that there is a consensus that Labour has the most radical package of constitutional reform, even if there is no agreement that it should be implemented.

In my opinion, that package is designed to reinvent democracy in the United Kingdom. It stretches across all our institutions, to end the command politics that persist in this country. We have seen command economics wither and die in eastern and central Europe, and so, too, we shall inevitably see the highly centralised, one-track, winner-takes-all politics prevalent in our society wither and die. It must give way to a more open, diverse and plural system in which we are prepared to listen to all voices, which could be our salvation, rather than pretend and assume that someone in Whitehall or in No. 10 Downing street, regardless of party, possesses sufficient wisdom to answer all economic, social and political questions. That is the direction in which not only politics but any industry or international organisation is going.

In other countries, people are looking for answers, diversity, independent budgeting and accounting, and team work. Only our political system looks for centralised delivery of answers to all our problems.

Radical democratisation of our society and politics would free up the talents that could help us to move towards a more developed economy. If deference and hierarchy were ended and the terrible burden of our class structure were lifted, we would free people to liberate their talents, and make them more self-confident and assertive. They would then be more mobile, entrepreneurial and able to meet our economic needs. At present, people are held captive in the stranglehold of our unitary political system, often unable to express their politics other than once every four or five years, in a vote that is highly mediated by the media.

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An incoming Labour Government would bring the victory of pluralism over centralism, which has failed our country over the years. It is time to consider a system that operates in not only western Europe but north America, to liberate the talents that could be our country's salvation.

The package of measures involved would include a review of the powers of the Executive. In the last couple of days, Crown prerogative and prerogative power have been confused with the future of the royal family. The two are quite distinct. Executive power is exercised almost without constraint in this country, and certainly without proper scrutiny by Parliament. We must ensure that international treaties, the ability to go to war and other aspects of Executive power are scrutinised by the House-- not necessarily to obstruct or delay the exercise of those powers but to legitimise them.

If this country were to go to war, it would be appropriate for the Prime Minister or someone else to come to the House to seek ratification of that action by the elected legislature. The same applies to international treaties.

Another central part of our package is a Bill of Rights. It is remarkable that our country still does not have clear, written rights for all individuals. That makes us subjects rather than citizens. We should adopt the European convention on human rights, as most other countries have done, and then go further. We should ensure, through an all-party commission, that a British Bill of Rights is drafted, so that citizens have the ability to know and to defend their rights--and so that young people in school and elsewhere grow up know, to understand and to exercise their rights in a way that does not happen now. If we are to do that, the next question is: what do we do about the judiciary? I am careful not to stray too far and incur your wrath, Mr. Deputy Speaker, but the judiciary needs to be examined carefully in terms of how it is selected, appointed and trained. Then, I believe, it would be capable of defending the civil and political rights that we would like to see in law.

In addition, we need to examine our own institutions, not merely in the other place--the second Chamber. We need to ensure not only that the hereditary principle is ended, but that the Chamber is fully and properly elected. I shall mention the method by which it should be elected in a moment. What is good for the Lords is also good for this Chamber. Far too often, we are complacent that, somehow, we do not need reform. Just about every other institution in our society may be pointed at as needing reform, but the House of Commons somehow escapes scrutiny. I believe that the reform process must begin at home, in this Chamber. We must give teeth to our democratic institutions. We must do what Gladstone said many years ago. He said that the role of the House of Commons is not to run the country, but to hold to account those who do.

By that clear criterion, we are failing in our duty in the House. The Labour party would like to introduce a package of measures to make this place more relevant, more accessible to people and more secure in the job that it should be doing as a legislature in the constitution.

We need also to look at the package of measures on the future of local government. Local government currently is just a creature of the centre. It needs to be given its own independence, its own ability to raise money. It is nonsense that only 20 per cent. of local expenditure is raised locally. We must ensure that local authorities are

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given not merely the powers to carry out their duties adequately on behalf of their electorate, but the finance to do so. Without those two criteria existing together, we shall not have genuinely independent local authorities. I would go as far as saying that we need constitutionally independent local authorities. I believe that that certainly could be done were there the will in this place to ensure that it would be done under an incoming Government. That raises the further prospect of what should happen at regional level in this country. My party is committed to a Scottish Parliament and we shall introduce legislation to that effect in our first term. We are also committed to a Welsh Assembly, and that will also take place in the first term. But the English regions present some other difficulties, which need to be overcome. I suggest that they could be overcome not by imposing regions on the English people, but by encouraging the development of regions by local action--in other words, ensuring that they develop from a menu of powers rather than from some centralised blueprint imposed from above.

That would have a liberating effect in the regions. It would also mean that people would find it far more difficult to repeal those regions, because they would be built up by the people themselves and would be backed and supported by them. Nothing would be more certain of instant repeal than a region imposed on an unwilling, and often unaware population, in a region of England.

Finally, I suggest that we also need to be very serious about what we want to do to democratise the European level. The European project has been the province of an elite, a minority of self-proclaimed visionaries, and that has meant that the project has lost touch with people, not just people in our country, but throughout Europe. We need to reclaim our vision of what a peaceful Europe could be, and that means involving those people. It means involving the electorates of those people and their national Parliaments and democratising the institutions of the European Parliament. Again, my party has made a distinct set of proposals to ensure that that takes place. If I were permitted to do so, I would go a little further and discuss the possibility of the 1996 intergovernmental conference producing what would, in effect, be a written constitution. One exists now, fractured in 20 or 30 parts, in treaties and directives; why not pull something together that defines competence not only in Europe but at national, regional and local level? A package of pluralist measures could reinvent democracy in our country, and I believe that such a package is long overdue.

The central part of tonight's debate, however, should concern a further element of that package--the electoral systems that should govern our country into the new century. As one who served on the committee on electoral systems chaired by Professor Raymond Plant, now Lord Plant, I am very pleased that a long-serving, long-suffering colleague from those days- -my hon. Friend the Member for Dagenham (Ms Church)--is present tonight. Indeed, I shall be pleased to take interventions from colleagues as I talk about electoral systems. Labour's policy on the matter is now crystal clear. As a result of its 1993 conference decision, embodied in composite resolution 31, it is committed to a proportional representation system based on regional lists for the second Chamber, and to the same system for the European

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Parliament--which I hope will be active in the next European elections in 1998. Labour is also committed, through the same conference resolution, to a referendum to identify the electoral system that people want for the first Chamber. In many ways, that was the legacy of Professor Plant and his committee. The Plant proposals were taken further by the former leader of the Labour party, John Smith, and I think that that batch of proposals constitutes a coherent approach to electoral systems.

We talk of developing a plurality of institutions in the United Kingdom, but it is remarkable that some people--particularly Conservative Members-- are still afraid of the possibility that there will also be a plurality of electoral systems. It is a question of horses for courses. The one thing that the year or two in which I served on the Plant committee taught me, and, I suspect, my colleagues, was that there is no holy grail, no perfect electoral system. In certain circumstances, proportional representation may be appropriate; in others, first-past-the-post may be appropriate. How we match electoral systems with the institutions that we wish to build and develop in a new pluralism is entirely a matter of political judgment and the wisdom of people, not least those in this place.

Probably the first new electoral system will be that for the Scottish Parliament. My party is rightly and thankfully committed to instituting a Parliament in Scotland, and I very much hope that that commitment will be honoured rapidly, in the first year of Labour government. We feel--ours is a view of some generosity--that we would not want a first-past-the-post system in Scotland; we would want the "additional member" system. That would mean a constituency-based system which would be made good, as it were, in terms of proportionality: the number of people elected directly would be topped up, possibly with losing candidates.

That means that the Labour party has forgone the possibility of developing a one-party state in Scotland. That is highly commendable. It will come on top of the discussion and activity that now takes place under the single transferable vote system, which is operative for European elections in Northern Ireland. So, civilisation as we know it has not collapsed where proportional representation systems or systems different from first-past- the-post have been exercised. I hope that that is something that people with an open mind will understand and appreciate.

If we were to have a regional list proportional representation system for the second Chamber, under Professor Plant's analysis, that would produce 322 Members. That would be in place of the current 1, 203 peers, of whom 774 are hereditary and, of the remainder, 300 are Conservative and 100 are Labour. That is an important reason for us to move quickly to the second phase of our policy programme, which is to bring in an elected second Chamber. We could be faced with the ludicrous possibility of having 300 of the most partisan Conservative life peers outnumbering the 100 or so hard- working Labour life peers. That would necessitate the nomination of another 200 life peers just to balance the books. I do not think that any Labour Government would want to countenance that. We do not want to see a repeat of events under the last Labour Government, on whom 350 defeats were inflicted. That would surely be revisited were we to have a Labour Government, particularly one without a substantial majority.

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Let me give a flavour of how the second Chamber might look. An elected Chamber would help to break down the existing metropolitan bias. For example, my region of the east midlands could elect 23 Members and the west midlands could elect 30. Throughout the whole of the midlands area, 53 people could be elected. To my knowledge--I am happy to be corrected--there are no peers representing my immediate area in the second Chamber now. There would be people representing the north, the north-west and other areas that are currently unrepresented. That would be great progress. It would also assist the representation of people who vote for parties that do not have any representation because of the first- past-the-post system. So, we would be operating a different system from that in the first Chamber.

Were we to have a system of proportional representation in the second Chamber, one operative in the European Parliament and another in the Scottish Parliament, we would see the decision on the referendum on the first Chamber in a different perspective. Right now, people will say that one may feel obliged to prove one's democratic credentials by supporting proportional representation in the first Chamber rather than to make a decision on a clear and honest basis.

Mr. Deputy Speaker (Mr. Geoffrey Lofthouse): Order. I hesitate to intervene on the hon. Gentleman, but he is leaving very little time for the Minister to reply.

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