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3.19 pm
Mr. John Major (Huntingdon): Parliament is only a few days old, yet we have already lost one of our most distinguished senior colleagues, Michael Shersby. Many of the new Members present today may not have known Michael, but those old or new Members who did know him knew a kind, gentle and good House of Commons man. We will all miss him.
We will also miss other hon. Members whom we lost towards the end of the last Parliament. I recall particularly my colleague, Barry Porter, and Martin Redmond, both of whom showed the most incredible courage in the face of inevitable defeat by their similar, dreadful illnesses. Every-one who spoke to them or knew them during that dreadful time was moved by the immense courage shown by them and their families. There was also my colleague, Iain Mills, who died so tragically towards the end of the last Parliament. We remember them with affection and respect for their service to their constituents and their country.
The right hon. Member for Manchester, Gorton (Mr. Kaufman) moved the Loyal Address with his customary skill and wit and in his customary suit. When
he was speaking, I suddenly remembered how much he loves ice cream, and now I think I know why. What the right hon. Gentleman did not disclose was his clear financial interest in the change of Government. It is a substantial interest, because the right hon. Gentleman stands to make rather a lot from the future sales of his book "How to be a Minister". I can thoroughly recommend it. When he wrote it, he had just left office and I thought that, having just lost an election, he had rather a cheek to write such a book. Now I am not so sure that that is the case.
The book is in hot demand and I can thoroughly recommend it. [Interruption.] The Foreign Secretary has woken up. Let me tell him that one can always prepare. To those on the Front Bench who are after the Library copy of the book, I must say that I have it. It is available for private sector loan to anyone requiring it. It contains some excellent advice on such everyday subjects as how to get on with No. 10. That is useful reading for any new Minister. How to get on with the press is clearly best not talked about while the Minister without Portfolio is around. There is also a chapter on how to lose office gracefully, to which new Ministers may not wish to turn for a week or two, but I advise them to tuck it away.
There will have to be changes to the right hon. Gentleman's excellent book, because it was written a long time ago and things have changed. We then had Prime Minister's Question Time twice a week, which is specifically mentioned in the book. The chapter on working with No. 10 says:
The chapter on working with the press is intriguing, because it goes back to the time when colleagues in Parliament were allowed to meet or lunch with journalists without the approval of the chief press secretary or other senior Ministers. I know that the Prime Minister is anxious to keep close control over his Ministers and his parliamentary colleagues. I want to tell him discreetly--I have learned that if one wants to keep something discreet, one says it in the House of Commons and no one reports it--that I have some sympathy with him in that objective and some doubt as to whether he will be able to achieve it over time.
The right hon. Member for Gorton is a formidable opponent, as I have found to my cost from time to time. When I first became Foreign Secretary--thought at the time to be a somewhat surprising appointment, which lasted for a glorious 94 days--the right hon. Gentleman was generous enough to say that I had never been beyond Land's End. He was speaking in Bognor at the time. He would have been right to say that I had never been to Land's End, but I think that he was seeking to make a point, which he did with great effectiveness.
Only a few weeks ago, I saw a moving article by the right hon. Member for Gorton about his mother. I believe that she would have been very proud of what he had to say today, and very proud of the way in which he said it. All who heard his speech heard a remarkable parliamentary performance, and I congratulate him on it without reservation.
The hon. Member for Sunderland, South (Mr. Mullin) spoke very well, and rather charmingly. He is a man of conviction, and he has even publicly conceded that he was a socialist. These days, therefore, he is something of a visionary. I do not share many of his political convictions, but I admire the courage and persistence with which, over the years, he has frequently and often with great success pursued unfashionable causes. He has often been proved right, despite incurring much odium along the way, and I much admire him for that.
As the hon. Member for Sunderland, South said, his result was the first to be announced in the general election. I heard that result, and I shuddered for new Labour, although perhaps I did not shudder quite as much as the Government Chief Whip. Nevertheless, the result was an intriguing prospect for those who have heard so much about the Government's programmes and know so much about the hon. Gentleman's convictions.
The hon. Member for Sunderland, South referred, with some charm, to the stories in The Sun about him, one of which he still has hanging on the wall of his house. I fear, however, that he is a little out of date on that newspaper. Perhaps he should visit Australia to discover precisely the current allegiance of The Sun. He will be in very serious trouble if he continues to attack it in that manner.
The hon. Member for Sunderland, South was also burgled. Like me, he lived for a while in Brixton--of which we are both very fond--and, at one stage, he was burgled regularly there. He put a note on his door, with his customary humour, which allegedly said, "I've been robbed so many times, if you find anything of value, you're welcome to it." I know how he feels. On policy, I almost put up a similar note--[Laughter.] I had planned on saying that I nearly put up a similar note on the door of the Cabinet room when I left it, but the House anticipated me.
The hon. Member for Sunderland, South--like the right hon. Member for Gorton--is also a prolific and distinguished author. He mentioned his excellent book "A Very British Coup". It was rather unwise of him to mention it, as it was unwise of the Prime Minister, or the Chief Whip, to invite him to second the Loyal Address. For those hon. Members who have not read the book--I am happy to publicise it also; I hope that it is still generally available--it is an excellent read. For those who have not read it, it is a political novel about a Labour Prime Minister, with an absolutely huge majority, who makes a complete muck-up of it and is deposed in a plot involving the Chancellor of the Exchequer. I believe that the Prime Minister's friends called him "Harry".
We have heard two excellent speeches in support of the Loyal Address. As the right hon. Member for Gorton said, it has been 23 years since we last heard two Labour Members move and second the Loyal Address. They were such excellent speeches that I believe that they would last for the next 23 years, if we were not to have the pleasure again for some time. The right hon. and hon. Gentlemen can be proud of their efforts.
I should deal with other matters. First, however, it is appropriate to congratulate the Prime Minister and the Labour party on their success in the general election, and I do so warm-heartedly. They have a comprehensive mandate to introduce their programme, but I hope that they will be careful about how they use their substantial majority in the House. I understand the attractiveness,
having achieved such a significant success in the general election, of moving speedily on many fronts. I also understand the attractiveness of sweeping aside some of the normal conventions to accomplish some of the goals about which the Prime Minister and his colleagues feel passionately.
The Prime Minister has made some political appointments to his private office, political appointments as his chief press secretary and other press secretaries, and changes--rather arbitrary changes--to Prime Minister's questions. I believe that the Prime Minister is right to consider the issue of Prime Minister's questions. I had no objection to that decision, although I share the view expressed by colleagues in a number of parties earlier that it would have been better if consultation had taken place before the decision was announced.
I believe also that it was unwise to rush ahead with a decision on the Bank of England that, similarly, was not discussed or considered in the House, or announced to it, or foreshadowed in the Labour general election manifesto. Those individual decisions are understandable, and no doubt taken in the first flush of enthusiasm, but I hope that the Government will reflect on the fact that the strict impartiality of the civil service is of great importance and the rights of Parliament should not be bypassed. I hope that that will be borne in mind for the future.
Although the Government have a mandate, so do Opposition Members. When the Government act sensibly, they will deserve cross-party support, and I hope that they can expect such support when it is in the national interest; but when it is not, they can expect, and will certainly be given, vigorous opposition.
This morning's Gracious Speech was made against a very unusual background for an incoming Government: the longest run of low inflation for 50 years, the lowest basic rate of tax for 60 years, rising employment and falling unemployment--down to 5.9 per cent. this morning after the success of the first fortnight of Labour Government--improving standards of health and education, the most competitive industry for decades and the lowest interest and mortgage rates for a generation, although, of course, before handing over to unelected officials one of his most important responsibilities, the Chancellor did raise interest rates, and with them the cost of mortgages.
The programme placed before the House and the country today is a mixed bag. It contains a great deal that we can support; indeed, if I may say so to the Prime Minister, some of the policies seem rather familiar. Strong defence based on NATO, the completion of the single market, reform of the common agricultural policy, a wider and more open Europe and, of course, a determination to pursue a peaceful settlement in Northern Ireland are among the matters on which the Government can legitimately look to wide cross-party support.
We also share some aspirations with the Government. I say that because, in many ways, although the desired outcome may be the same, we would seek to achieve that desired outcome in a very different way from that proposed by the Government. No one would disagree with the aim of higher standards in schools, although we would not necessarily agree with the way in which the new Secretary of State for Education and Employment would wish to achieve it. Better care in the health service and lower unemployment fall into the same category.
During this Session of Parliament, there will be many debates in which the objectives sought by Members on both sides of the Chamber are the same, but there may be fierce debates because we shall disagree about the means of achieving an undoubtedly desirable end.
The road to hell is paved with good intentions, and today's Gracious Speech is full of good intentions. It also contains some very bad policy. It heralds three new taxes--one retrospective, even before the emergency Budget, which must be something of a record for an incoming Government. It has a flawed devolution package, which I believe will be the subject of much debate. It reintroduces trade union immunities which will damage competitiveness, with a statutory right of recognition on a plant-by-plant basis.
Returning to the hon. Member for Sunderland, South and The Sun, with statutory trade union recognition on a plant-by-plant basis, one shop steward in one plant could prevent The Sun from being printed. That may not worry the hon. Gentleman much, but I believe that it would put the Treasury Bench in a great spin at the moment.
There are other areas of some importance. The reform of the social security system will continue to be one of the most important long-term questions confronting the Government. Let me say to the Prime Minister, we will welcome adventurous plans for reform that control costs and encourage the putting of people into work, and we will seek to be as constructive and co-operative as possible on that. I understand that the new Minister for Welfare Reform wishes every person to have his or her own personal pension fund. That is an admirable idea, but I cannot help remembering that, when we proposed that, the current Prime Minister and his colleagues turned it into one of the most outrageous scare stories of the last general election campaign. It would be a remarkable irony if the Prime Minister implemented that which he had previously denounced.
We have also been promised a Finance Bill. Next month's Budget will be only the first of a series of tax-raising Budgets to come. The Chancellor and the Prime Minister have made promises on tax; we shall see whether they are able to keep them. I predict that taxes will rise and rise because, with the pressures on them from their colleagues, the Government will not be able to keep public expenditure down.
The first tax increase is, of course, the retrospective windfall tax which we have been promised for some time. It is to be levied on an unknown number of companies at an unknown rate, but it will certainly come in the near future. It is presented as a tax on fat cats. It is, in fact, a tax on jobs, fuel bills, pensions and investments. We do not know precisely how much the Chancellor seeks to raise. Figures such as £3 billion, £5 billion and £10 billion have all been floated at different times. If £5 billion is to be raised and only half that tax is passed on in higher bills, the average household bill will rise by around £50. The real figure could be double or even quadruple that.
Labour Members may think that that is not very much for the use of that £5 billion, but 3 per cent. off VAT on fuel will cut bills by only 36p a week--a tiny offset of the likely increase in fuel bills to be caused by the windfall tax. I hope that the Prime Minister will tell us whether pensioners and others will be compensated for
any increase in fuel costs that follows the introduction of the windfall tax. We provided such compensation when VAT was increased.
The windfall tax also has rather magical properties. It is a one-off levy which is to fund expenditure year after year. Plainly it cannot. Either the job subsidy that it will fund will go or other taxes will rise--unless the windfall tax or some other tax is to become an annual event. Perhaps we can be told which it is to be.
Subsidised jobs, which is what the tax will pay for, will exist only while the subsidy lasts, unlike the 900,000 new jobs created without subsidy in recent years. Even the subsidy is inefficient. It is likely to force current employees out of their jobs, to be replaced by new employees who carry the subsidy. If Labour Members think that that is just a Tory scare, I refer them to the work of the National Institute of Economic and Social Research, which has concluded that such displacement would occur and the Government would achieve only around 40 per cent. of their jobs target--a figure that takes no account of job losses in the utilities that will be newly taxed.
What is to be the net result of the new windfall tax? It is likely to be higher fuel bills, which we might charitably regard as ironic after all that was said about VAT--although I doubt that those paying the higher bills or those losing their jobs as a result will feel that way. As I said, the road to hell is paved with good intentions.
That brings me to the Chancellor of the Exchequer and his extraordinary decision to hand over control of monetary policy to the Bank of England. The first question is whether there is a case for such a change. I concede that there is a case. I think that it is a bad case, but of course there is a case for handing the policy to the Bank of England. It is that politicians--Governments--cannot be trusted to keep inflation low. The previous Government kept inflation low, but the Chancellor clearly believes that that will not be possible for him. He may be right. For the sake of the country, I hope that, on monetary policy, he is right and that the move is a success, but I strongly doubt it.
Some commentators were surprised by the Chancellor's decision. I share their surprise. Only two or three months ago in a set-piece speech--not a casual answer to a casual question early in the morning--the Chancellor said that the Bank's recent record on monetary policy had been mixed. He said:
The Chancellor claims that he is taking politics out of interest rate decisions. Glossing over the fact that I wonder what he thinks politicians are for if not to take decisions that affect millions of their fellow citizens, I make the point that he has not taken interest rate decisions out of politics at all. The decisions will be taken by a nine-member monetary policy committee headed by the Governor, appointed by the Chancellor, plus two deputy governors, appointed by the Chancellor, plus four experts,
appointed by the Chancellor, and two other Bank of England directors, appointed by the Governor who is appointed by the Chancellor. So much for taking politics out of interest rate decisions!
Will this historic change actually work? My fear is that it will work only too well. The Bank will meet its remit; of that we can be reasonably confident. To do so, it will if anything over-perform. It will over-deflate the economy to ensure that it meets the particular remit that the Chancellor has given. As a result, unemployment will be higher than it otherwise would be and growth will be lower than it otherwise would be. I fear that I must tell the Chancellor, from experience, that he will still get the blame for interest rate and mortgage rate rises, because when they go up, the Bank will blame spending or tax policies, or some other real or imagined horror that has emanated from the Government, so there will be no gain for the Chancellor there.
The Chancellor has handed a very important political power to unelected officials. He has damaged his choices as Chancellor of the Exchequer; he has taken a vital choice away from himself. He has damaged his choices in managing the economy, he has ensured that unemployment will grow and that growth will be held back, and he has done all that without debating with, considering or consulting the House of Commons on the decision. Although I know that the decision was well-meaning, I believe that the Chancellor will live to regret it because it is profoundly mistaken.
The Queen's Speech stated that education was to be a high priority. Again, I agree with that aspiration. Everyone wishes to see higher standards, and I am delighted that the percentage of pupils getting good examination results has doubled over the past few years. Here again, however, we share the aspiration but not the way in which to achieve it.
For example, the previous Government aimed to give more power to parents and to take it away from town halls, whereas the Prime Minister proposes precisely to reverse that process. Hundreds of thousands of parents have voted for their schools to be independent of local authority control, but the Prime Minister proposes to ride roughshod over their wishes.
That is not all. Local education authorities will have new powers over development plans and admission policies specifically at the expense of parents and school governors. The Government intend that despite the fact that, over many years, the worst-performing education authorities have consistently been Labour-controlled.
The changes offer a bleak prospect for the improvement of education standards. The assisted places scheme is to go because the Government do not believe that children from less well-off families should have the opportunity to attend good public schools. Such advantages for low-income families are plainly unacceptable to Labour. Only children whose parents can afford it can go to public schools. Under new Labour, the size of the wallet matters most in education.
The reason for that bit of ideological spite is, allegedly, to save money to reduce class sizes generally; but the figures do not, of course, remotely match, as the Chancellor and the Secretary of State for Education and Employment will find out. The children who will not get an assisted place will go elsewhere to be educated, putting up class sizes in the short term and eating into the savings.
Some independent estimates--not mine--suggest that to meet the Government's objectives on class sizes, they will need £250 million over and above the savings that will arise from the abolition of the assisted places scheme. Where will the money come from? The answer will be either higher taxes, more borrowing or cuts in other programmes, but their objectives certainly cannot be met without extra money.
The Government's education priorities are very lopsided. They include worthy aims such as higher standards and the new targets set by the Secretary of State for Education and Employment--which are similar to the ones that we would have set had we won the election, as we announced during the election campaign. Other objectives may prove worth while, such as a general teaching council, but alongside that lies the traditional enmity of the Labour party towards grammar schools, city technology colleges, grant-maintained schools and parental choice through vouchers and assisted places. The overall balance of the Government's education programme is very negative and, frankly, rather depressing.
Let me now turn to the centrepiece of the Government's programme--devolution. I concede that, on devolution, they have always had the best slogans but the worst arguments. The Gracious Speech provides for referendums in Scotland and Wales on a devolved Scottish Parliament and a Welsh Assembly. If the proposals are approved, legislation will follow.
As the Prime Minister knows, I believe that it is a profoundly dangerous policy, but he has clearly won the right to put it before the House of Commons. I hope that he will share with us the importance of the issue and the fact that, before voting in the referendums, the people of Scotland and Wales need to know all the implications involved.
Can the Prime Minister now confirm to the House that constitutional Bills will be taken here on the Floor of the House in accordance with convention? Can he please do so this afternoon? The Minister without Portfolio wriggled unmercifully on the radio the other day without giving any coherent answer to that plain, straightforward question. So I repeat it: can the Prime Minister confirm that the Bills will be taken on the Floor of the House? Can he promise that they will not be smuggled upstairs to a Committee stacked full of enthusiasts who will not properly examine the measures?
Can the Prime Minister tell us why he favours a tax-raising assembly in Scotland and a non-tax-raising assembly in Wales? Can he tell us why Scottish Members should be able to vote on such matters as health and education in England and Wales, whereas English, Welsh and Northern Irish Members will not be able to vote on those matters as they affect Scotland? It is not just the West Lothian question; it is the west Dorset, west Hampshire and west Lancashire question, and we still await an answer.
When the Prime Minister was asked for his answer to that question, he said that it was the same as he had always given, but he has never given an answer. Will he do so this afternoon? Will he let Scottish Members sit as Ministers running Departments and managing English affairs? The Foreign Secretary once memorably said that, as a Scottish Member, he would not be able to do that if there was a Scottish Parliament. Does the Prime Minister
agree? Why is it Government policy at present to have a tax-raising Parliament in Scotland, which the Welsh Secretary described as "economic illiteracy" in Wales? Can the Prime Minister answer those and the many other questions that will follow about his devolution policy?
Devolution of power, whether to Scotland, Wales or the Bank of England, inevitably takes power from the House of Commons, as does the Government's known policy for the Amsterdam summit in a month's time. In various important matters, our veto--in essence, our right to say no unilaterally if we choose to do so--will be unilaterally abolished. It will go on environmental policy, social policy, industrial policy and regional policy. Our right to stay out of the working time directive and the social chapter will go--an extraordinary policy for a Government claiming to be business friendly. With three new taxes, new trade union rights, a muddled policy on late payments and more taxes to come, that is a dubious proposition. If that is their idea of being friendly, thank heavens we do not have a Government who are hostile to business.
Of course there is a genuine disagreement between the parties over many European policies, but once a veto is surrendered at Amsterdam, Britain will have no right at any stage in the future to say, "No, we do not want those policies here," or to reverse those policies if they fail. The Prime Minister knows that. I therefore have a suggestion, which I hope he will find helpful. If he thinks that the policies are right, why does he not bring legislation before the House and let hon. Members decide through free debate and discussion? If we get it wrong, successive Governments can change it; but if we surrender the power to our partners, we can never change it--regardless of whether it proves to be right or wrong. Will the Prime Minister bring the measures before the House of Commons?
In the debate on the Gracious Speech, many of my right hon. Friends will want to raise a series of detailed points about the plans that the Government have set before the nation. The Opposition will do so, as far as is practicable, in a spirit of friendly co-operation. None the less, we will raise questions to which legitimately not only the House but the country require an answer. I hope that, notwithstanding the size of the Government's majority, Ministers will be prepared to give free and frank responses to such questions during the debate.
"Your meeting with the Prime Minister is over. You are now a member of the Government. What will your relationship be with the Prime Minister who has just appointed you? Clearly it cannot be what it was just 10 minutes ago".
In those far-off days, there was no such thing as "Call me Tony" in the mind of the right hon. Gentleman.
"the Bank must demonstrate a successful track record in its advice and build greater public credibility"
before it could control interest rates. By the time the Chancellor took his historic and, I believe, mistaken decision, he had seen the Bank demonstrate a track record. The only problem was that it was a track record of four days only. Two of those days were the weekend and one was a bank holiday. I am unsurprised, therefore, that the commentators were surprised.
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