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5.37 p.m.
Viscount Weir: My Lords, perhaps I may first join with other speakers in complimenting the noble Lord, Lord Currie of Marylebone, on his excellent maiden speech. Secondly, may I humbly take issue with the noble Lord, Lord Healey? He made distinctly uncomplimentary remarks about the performance of British industrial management. With the greatest diffidence I tell him that plenty of us in industry take a similar dingy view about the performance of many politicians.
Lord Healey: My Lords, will the noble Lord allow me? He will recall that the present Secretary of State for Trade and Industry made exactly the same point that I made in a speech the other day. It was also made by my noble friend Lord Currie; namely, that there is a small number of well-performing managements, but the bulk of British industry management is below the international level, with some far below.
Viscount Weir: Thank you. My Lords, today I should like to speak about the private finance initiative. First, I must declare an interest. It arises because I am chairman of BICC, which, with its subsidiary, Balfour Beatty, is heavily involved in PFI projects as successful or preferred bidders for road schemes, hospitals and other jobs to a total of over £600 million.
Had I been speaking a fortnight ago my comments on PFI would have been almost wholly critical. In the past 10 days, however, my right honourable friend the Chancellor of the Exchequer has come forward with some proposals which the industries concerned welcome. Although I do not believe that the Chancellor has gone nearly far enough yet and I am still not at all sanguine that anything like his target of £14 billion-worth of schemes by 1998-99 will be met, nevertheless the proposals must be of some help in moving matters forward.
One bugbear has been the cost of bidding. The successful bidder can absorb his cost, but when there are numerous bidders there is, in national terms, a large loss from the wasted costs which the unsuccessful bidders incur. Those costs are a very serious matter. In the first half of 1995, the total operating profits of the construction divisions of the 10 largest contractors were a pitiful £7 million on a turnover of £4.5 billion. Indeed, it is quite likely that last year the combined PFI bidding costs of just a handful of the larger contractors totalled more than the entire operating profits of their industry. That can be neither helpful nor healthy. Those wasted costs damage the contracting industry, which is today in its weakest state for years. They also erode the pool of risk capital which must be available if PFI is to succeed. Clearly, there is also the cost of lost opportunity, where skilled engineers, estimators and surveyors are tied up and are not available to tender for overseas projects, for example. Apparently, bidders will in future be limited to a maximum of three, save in exceptional cases. That is to be welcomed in principle. It will help to reduce the waste.
At an earlier date the Treasury appeared to encourage the clients of PFI projects to make at least a partial refund of bidding costs. Save in the case of the Channel
fast rail link, where a very modest refund was made, I have no evidence of any other bodies making such refunds. The Chancellor has now said that there will be no refunds at all. I do not believe that that will help him in meeting his own objectives.Other complaints have related to the length of the adjudication process for bids, lack of clarity on contract conditions and, in some cases, the spirit in which the adjudication has been carried out. The cost to bidders is partly in proportion to the length of time the adjudication process takes and to the level of detailed information that is required. None of us wants to see sloppy or hurried award procedures, but to save wasted costs and time it is absolutely essential that the preferred bidder must be identified at the earliest possible stage.
It is also welcome news that the Treasury will now clarify some aspects of contract conditions. I hope, however, that these will not be framed or interpreted in too inflexible a way and that they will be derived from experience rather than theory.
Although it is rational that a PFI scheme which has a heavy weighting towards construction costs should be led by a contractor, in many cases the ongoing running costs are the main cost element. Therefore, I hope that as experience is gained and PFI becomes better understood, companies which are primarily providers of services will become much more willing than today to lead bids.
There have also been difficulties on the strictly financial side of PFI. One problem relates to the conditions under which the successful bidders for a particular scheme can eventually sell on their interest so that the limited risk capital available can, in effect, be recirculated. The Chancellor's proposals here are certainly welcome but, again, they have to be interpreted with flexibility and imagination if they are to be effective.
Two other interrelated financial problems are the degree to which a particular project is readily bankable and the cover provided if, unfortunately, a PFI client eventually has difficulty meeting his commitments towards the PFI scheme. I know that those subjects are being addressed, but a much clearer position needs to be developed quickly.
Rather more difficult than the mainly practical issues which I have mentioned so far are both the spirit and the level of competence with which some public sector clients have approached the whole scheme. I regret to say that some clients have looked at it as little more than an opportunity to conduct a Dutch auction. I have already said enough about the financial state of the contracting industry to have, I hope, made it clear that the industry simply cannot afford Dutch auctions. It is nothing but an abuse of ethical contracting procedures to adopt such an approach and it is no more likely to produce a satisfactory end result than confrontational contract management by a client ever does.
On the question of PFI clients' competence, it is essential that clients are certain that they need the project and that they are sufficiently clear about just
what it is that they do need and what they can actually afford. That is particularly important in the health and hospital field.Quite apart from that, clients need to be clearer than some seem to be in understanding the nature of risk and risk transfer. Without going into a very complex field, I would just say that it is pretty useless for a PFI client to try to allocate risks to the contracting party which the latter can neither ascertain nor control. The end result can be that the contractor, who does not have a strong balance sheet, is forced by prudence to take so pessimistic a view of risk that the costs are needlessly inflated.
Clients should also be clearer as to the real nature and potential of the PFI and not just regard it as simply a form of leasing or hire purchase. In that context, I was not much impressed by the suggestion that I saw last week that the MoD should consider leasing battle tanks.
Currently, the PFI requires skills not previously often needed by those in the public sector. To make up for that requires both training and the proper dissemination of experience. On the latter point, the Chancellor's remarks were encouraging. Many people in the public sector must now be prepared to be much more decisive and to take more risk than they have traditionally been asked to do. There also needs to be a proper and real willingness by some public bodies to release control of projects once they pass into the PFI scene. I can, of course, understand that it is not easy for an authority to accept that a new PFI-built road does not actually belong to it.
In conclusion, I remain a strong supporter of PFI. I want it to succeed. I am sure that most taxpayers will share that sentiment. As I have tried to say, however, this is a complex area and one that is still fraught with difficulties. I therefore support what the Chancellor is trying to do through his recent proposals to improve the situation, and if I am forced to say that he has not yet gone nearly far enough and that much remains to be done I hope that that will not be considered a meanspirited comment on my part.
5.48 p.m.
Lord Barnett: My Lords, perhaps I may advise the noble Viscount, Lord Weir, that I too would like to see the private finance initiative being more successful. The trouble is that, whether he likes it or not, the Chancellor is using PFI as a means of cutting public expenditure. That is what it is about as far as the Chancellor is concerned. He is taking account of billions of pounds which he may or may not obtain. That is the real problem, but I do not want to go any further down that road.
I say to the Minister that in the sense he put it the economy is strong. I do not dispute it. Of course, he omitted to tell us with what he was comparing its strength. It is strong compared with the past 17 years of recession. He forgot to mention that. He talked about growth with low inflation. My noble friend Lord Currie, in a notable maiden speech, pointed out that in the coming year we might have a high rate of growth but what mattered was the average. The average of the past
17 years has been about 2 per cent. That is far too low if we are to get anything out of the economy to help those in desperate need.My noble friend Lord Peston--perhaps it was my noble friend Lord Healey--pointed out in his brief remarks that low inflation was not really low in the sense that we needed it. While I am delighted to see unemployment coming down, employment is not going up but down compared with what it was. That is an important matter which was not touched upon. He also did not touch to any great extent on the exchange rate. At the moment it is strong. It may be too strong for the reasons referred to by a number of noble Lords. Moreover, manufacturing industrial investment is poor on the basis of any examination of the subject. Despite the words of the Minister, although inward investment is good one would like to see it sustained in future.
That leads me to the vital decision to which no one has so far referred other than my noble friend Lord Healey. As usual, I do not necessarily agree with every word he has spoken. Having worked with him rather closely for five years, he will not be surprised that I do not agree with everything he has said. I was sorry that neither of the two Front Benches touched on the vital decision that will face whoever is in government next year. I hope that it will change in May of next year, if not earlier. I believe that my noble friend Lord Peston touched briefly upon this subject but not sufficiently. The real question that faces this country is whether it will be in or out of the economic and monetary union. Certainly, inward investment would be hit rather badly if economic and monetary union succeeded and this country was outside. I will come to that and take on board the points raised by my noble friend Lord Healey about the decision to be taken. That decision will have to be taken fairly quickly after the next general election. For that reason, it is unfortunate that both parties, including my own, have left open the subject, although in a recent important speech Mr Robin Cook left the matter a little less open than in recent times.
I suppose that the only decent outcome of the General Election would be the intervention of the Referendum Party. While I do not welcome it, during the course of the election it might provoke discussion on the important topic of whether we should be in or out of the economic and monetary union. I should like to see a successful economic and monetary union and Britain part of it, but I have considerable reservations. First, I have a very strong reservation about the European central bank. I am concerned about the control, accountability and power of that bank. The powers must take account of much more than just inflation. It would be disastrous for the economy of Europe if the European central bank was concerned only with inflation, as appears to be the case with Mr. George and the United Kingdom's central bank. To make prices alone the concern of a European central bank is far too restrictive. Indeed, the constitution of the Bundesbank and the Federal Reserve in the United States must take account of much more. They have to take account of other economic objectives--which I should like to see happen here--including growth and employment.
My second reservation before we join is that there should be sustainable convergence, not just in the United Kingdom but in other countries. My noble friend Lord Healey referred to fiddles and cooking the books--something about which I know nothing, as he will be aware--to get borrowing within 3 per cent. of GDP. I forgot to mention in the context of the Minister's speech that public expenditure is now higher than when I left it in 1979. That is their great success story. I do not complain, because I cannot think of any areas of public expenditure today that I would like to see cut.
But sustainable convergence must occur not just in the UK--I should like to see that too--but elsewhere. As my noble friend Lord Healey pointed out, it is by no means certain that Germany will achieve it without cooking the books. That certainly applies to France. If there were economic and monetary union without us, or even with us, and Herr Waigel, the German Finance Minister, sought to impose penalties on those countries which, having forced their economies to fit within the criteria, then fell outside them, his idea simply would not work. I noted that in a recent discussion in the Commission agreement could not be reached on what the penalties should be. If one has to invoke very heavy penalties, frankly the whole of EMU will fall apart.
Another important problem which dominates the arguments of the Eurosceptics is the political one. It is said that there would not just be a federal state of Europe but the abolition of nation states and we would lose not only the pound but the benefit of the UK itself. I am bound to say to those Eurosceptics--including one or two very distinguished noble friends with whom I constantly disagree--that in practice, apart from perhaps Herr Kohl, most other states in Europe do not want to see their states disappear. It will simply not happen. I do not accept what the Eurosceptics say in that sense. There will continue to be a union of nation states with a great deal of subsidiarity, which I would have thought the sceptics would have wanted to see. Without transferring power to a democratic--I emphasise "democratic"--European Union, I would not be alarmed if that transfer were made. What I consider to be alarming from the point of view of the UK's economy is the prospect of a European Union with a strong economic and monetary union but with the United Kingdom outside it. I would be particularly concerned about that and would be alarmed by it.
It is a great delusion on the part of the sceptics that there would be a loss of sovereignty. Frankly, in the economic and fiscal sense we have very little sovereignty at the moment. I suppose the idea is that if we stayed outside we would be free to devalue. In the situation in 1964 to 1967 I strongly wanted devaluation. But the idea that somehow devaluation is a panacea is nonsense, as most of us will understand. Of course it is not. For the most part, when it has happened the benefits have been dissipated very quickly. Without EMU the pound has lost one-third of its value since the UK joined the European Community (as it was then)or certainly since 1979. I concede at once that both governments have frittered away the benefits of devaluation.
Certainly, the present Government had a substantial devaluation--it was called "floating down"--following the disaster of the exchange rate mechanism.Provided we have the right kind of criteria and conditions, I should be willing to join an EMU, and be happy to see us in it. But first we should not be forced in by foolish action to meet a 3 per cent. Maastricht criterion; secondly, when we do meet it, it should be sustainable; thirdly, the European central bank should have its powers changed and there should be control and accountability in the way I have described; and, fourthly, we should have real low inflation, real higher growth, and real falling unemployment, different from the current situation, and the exchange rate should not be too high, unlike the rate at which we went into the ERM.
It may well be impossible for us to join the EMU in the first phase, and I would regret that. It would not be a disaster provided the right economic policies were pursued from outside to enable us to join at a fairly early stage. I believe--I am not sure about my noble friend Lord Healey--that the economy is reasonably strong. It is stronger than the one we inherited in 1974. I see that he is nodding. In that one sense, we agree with the other side. It is slightly stronger, but not relatively in the economic sense, than what we left in 1979.
The vital economic decision we have to make is whether we should join the EMU. It may not happen by 1st January 1999. There is a strong political momentum in France and Germany, together with four or five other countries, that may ensure that it will happen, despite the enigmatic smile of my noble friend Lord Bruce of Donington. But if the UK does not join, for the reasons I have given, I hope that we shall play an active part in all areas so that it will be a better EMU when we are ready to join, which I hope will not be long delayed.
6.2 p.m.
Lord Clark of Kempston: My Lords, I add my congratulations to the noble Lord, Lord Currie of Marylebone. At the same time I should like to add my congratulations to the mover and seconder of the humble Address (my noble friends Lord Gray and Lord Colwyn).
The debate gives one the opportunity to look at the country's economic situation. I should have thought that the main thing to which people are now looking is the forthcoming Budget. Let us look at the state of the economy. Inflation is low. I do not care much for the criticism of the Benches opposite. When they were in power the inflation rate was over 25 per cent. Ours has been under 4 per cent. for many years. Unemployment is falling. One of the reasons for that is that we have a competitive advantage over our European partners in that our welfare costs, welfare taxes and so forth--the on-costs--on wages are not so great.
While talking about competition and our competitive position, I must say that it would be stupid to sign up to the Social Chapter. That is what is giving us our competitive position, or helping to. The minimum wage is misconstrued by many people who think that the minimum wage stops at the minimum wage. If the
minimum wage goes up the gap between the higher paid worker and the lower paid worker narrows. It would mean that the differential would have to be passed on to the higher paid workers.Many noble Lords have spoken about the single currency. I do not believe that there is any question but that that would lead to a loss of jobs in this country. I agree with the noble Lord, Lord Healey, that the amalgamation of the ostmark and the deutschmark, with the re-unification of Germany, is not analogous to joining a single currency. The trouble with the amalgamation of the ostmark and the deutschmark was that Chancellor Kohl insisted on a stupid exchange rate. He wanted one for one. Helmut Pohl, who was chairman of the Bundesbank, would not have it. After a suitable period he resigned. There was a compromise, but even so, unified Germany's monetary system was upset because of the number of ostmarks exchanged: one for one up to 5,000, and one for two over 5,000. What the German bankers did not realise was that it was not just the number of ostmarks in the banks, but the number under the mattresses. They came out as soon as the East German savers could exchange them for deutschmarks.
Mention has already been made of our strike record. There is no doubt--I do not think anyone denies it--that it is due to the action of the Government under my noble friend Lady Thatcher. We should compare our strike record with that of our competitors abroad. Compared with France, Germany and Italy, we are in a better position. We have not lost many days in strikes.
The balance of payments is important. Our exports are going up. Some Labour critics say that too much investment from this country is going abroad. I would remind your Lordships that in many cases to break into an export market one has to have a financial base in the country. The only way one can achieve a base is to invest. In the long term, that is good. One should compare outward investment with inward investment. There is far more investment coming into this country than is going out. Why is that? Apart from our competitive position, there is our low rate of corporation tax--the lowest in Europe--at 33 per cent. with a lower rate of 24 per cent. Our unit labour costs (the costs of production) are much lower in this country. They are favourable. That is why this country receives 40 per cent. of all investment into the EU. As was said by my noble and learned friend Lord Fraser, not only are Japan, Taiwan and Korea investing in this country many US firms are also investing here.
One thing we are inclined to overlook is the role of the City of London in our economic performance. Our invisible earnings are extremely important. They are as important as our visible earnings. The exchange turnover in the City is greater than that of Tokyo. In addition, there is tourism. In 1995, 24 million came here. They spent £12 billion. That is a boost to our economy. As has already been mentioned, our production is up. On the latest figures it is up 3 per cent. The building industry is stirring. Orders are up.
The success of the economy is not as regional as it was. The economy is improving all over the UK. If we compare the totality of this Government's economic
policy with 1979, the standard of living of every man, woman and child in this country has increased. The UK economy is healthy. That has been confirmed by the IMF. It gives the Chancellor of the Exchequer the opportunity to make prudent tax cuts.The number one priority for any government is to control public expenditure. We have had some success in controlling public expenditure. I am worried that in many cases the tendering price for a contract given by the Government is being exceeded by many millions of pounds. There should be tighter control and anyone in charge of such a tender should be replaced.
Each department has a budget which I hope is monitored every three months. If there is an overspend which cannot be explained economies should be introduced immediately. However, we are inclined to overlook the underspend in budgets. A budget is only an estimate made at the beginning of the year and a continuous underspend might mean that the initial estimate was wrong. I believe that such a budget should be reduced. That would stop departments in the last quarter of the fiscal year issuing contracts in order to eat up the balance of the budget, thereby retaining their budget for the ensuing year.
Furthermore, as regards the control of public expenditure, more emphasis should be placed on the percentage of administrative costs to the workforce of all departments. Before any Budget the Chancellor of the Exchequer and the Chief Secretary to the Treasury receive a great deal of advice. The noble Lord, Lord Barnett, will know that such advice is phenomenal. People ask how much the Chancellor has to give away. He does not have a farthing to give away--he has no money. All he can do is reduce taxation, but that is the wrong emphasis. I believe that in the forthcoming Budget the standard rate of tax should not be reduced and advantages should be targeted towards families and small businesses. For too long there has been in our fiscal policy a divide between married couples and the remaining taxpayers. I wish to see any prudent reduction in taxation geared towards the married person's allowance. It is part of Conservative policy eventually to abolish inheritance tax. That will not be achieved this year but the Chancellor could make a start by increasing the threshold of £250,000. I should like him to examine the 40 per cent. inheritance tax and to have a differential between direct descendants and other people who benefit from an estate. The rate should be reduced for children, grandchildren and great-grandchildren in the direct line.
One of the jewels in our economic crown is the growth of small businesses. There are 1 million more small businesses than there were in 1979, making a total of 3.6 million in the UK. It is the only area of our economic structure in which we can continue to reduce unemployment. It would be a great help to small businesses if the threshold for VAT was increased. Furthermore, we have been promised less bureaucracy but I believe that the introduction of self-assessment for income tax will cause chaos. In many cases, the documents relating to self-assessment are gobbledegook and I believe that they will add to bureaucracy.
I should like the Chancellor to examine capital allowances. There was a loophole as regards leasing and the 100 per cent. capital allowance, but it is not beyond the wit of the parliamentary draftsmen to ensure that that is closed. I should like to see the figure of 100 per cent. reimposed. Being close to a general election, the Chancellor must be careful about his Budget, which will be a tricky one. It must not be a giveaway Budget but it should give confidence to the voters. A mixed Budget to help families and small businessmen would be welcome and within the capacity of the economy. I am delighted that the gracious Speech indicates that we shall continue with firm financial policy.
Finally, I do not know where the noble Lord, Lord Peston, has been during the past few years. I believe that tabling an amendment suggesting that our reputation abroad has decreased indicates that he has not been abroad very much. Our economy, in particular our privatisation, is the envy of most countries and many countries are following our example. Therefore, I do not believe that we need bother about our reputation abroad being harmed.
I was delighted that the noble Lord, Lord Barnett, mentioned devolution. The CBI says that devolution in Scotland will harm business and consequently it should be scrapped. We have a healthy economy and I hope that we shall continue with our firm policy of the past few years. It would be folly to throw away the golden opportunity before us by introducing the social chapter or the minimum wage. We as politicians should stop running down our country's economic achievements and should start talking up our economy.
6.17 p.m.
Lord Bruce of Donington: My Lords, while I was listening to the noble Lord, Lord Clark of Kempston, I wondered not only whether he was of this country but of this world! His remarks appeared to be nothing more than a blanket endorsement of the opening speech of the noble and learned Lord, Lord Fraser of Carmyllie. The noble Lord's speech was extraordinary. One wondered whether he was living with us at all because, according to him, for the past 40 years this country has never been in better financial and economic shape. He selectively quoted some figures and I picked up in particular on the figures relating to unemployment which he said is decreasing. The Government appear to be getting away with their contention about unemployment decreasing and the press has not been discerning in picking up the deception. Of course, when the Government refer to unemployment they refer to claimant unemployment and not to actual unemployment. Whenever they want to reduce the unemployment figure all they do is tighten up the claimant rules, which automatically produces that result.
The Government have made 32 changes in statistical definitions of unemployment since they came into office in 1979. Earlier this year, the Royal Statistical Society was good enough to publish details of the consequences of the changes which have been made in the statutory definition of unemployment. It detailed its conclusions and that resulted in the artificial deflation of the
unemployment figures by more than 1.5 million. Therefore, far from unemployment--and I mean real unemployment--going down in this country, the reverse is true: unemployment has remained substantially static at between 3 million and 3.5 million. The only thing that has varied and reduced the figure is the redefinition of what is a claimant.The Government and their supporters make statements that we have never had a sounder economy for more than 40 years. I wonder how that squares with the observation which they have made, and made officially, concerning the measures which they have taken. They say that if it is not hurting it is not working. More recently they, or Conservative Central Office, have come up with the slogan "It hurt but it worked".
On looking at the Benches opposite, I do not see any signs of particular physical injury. I do not see that anybody there has been hurt in the slightest, nor have the sections of the community from which they normally derive their political support. I do not see those whose salaries in the City have risen from £100,000 to £300,000 being hurt in any way. Therefore, what is meant when it is said that it hurt but it worked? Whom did it hurt? The answer is that it hurt the poorer people of this country, the underclass of something between 30 per cent. and 40 per cent. of our population, of which 14 million are living below the poverty line. That does not sound to me like a whole and healthy community; it is they who are being hurt.
I hear economists, some amateur and some professional, making the statement that we must not have a consumer-led boom. What do they mean by that? They mean that consumption must not increase. But of course, if the 14 million people living below the poverty line are to have any relief, it means that their consuming power will increase. Therefore, when a stabilisation of consumer demand is advocated, in fact what is advocated is a continuous condemnation of that section of the population to a standard of life of which we in the democracy of the United Kingdom should be thoroughly ashamed.
In that connection, I am a little less happy than usual. I have been in politics since 1931, which is rather a long time. Some of my noble friends say that I am now out of the mainstream of British politics, whatever that may mean. But it simply will not wash. We should not allow 40 per cent. of the population to continue to exist in that social framework for longer than necessary. It is far better that we take risks to better their lives and to increase their consumer power than it is to obey the somewhat arid dictates of the banking community.
I am very often fascinated by the devotion that is apparent for bankers. I am bound to say that that is so among all sections of the community. In my experience, bankers are not divine. I seem to remember over the years a number of errors which have been of such astronomic proportions as to cast serious doubt on the profession as a whole, as of course distinct from the distinguished individual bankers which we have in your Lordships' House. There is an uncritical acceptance of the omnipotence and, indeed, the wisdom of bankers. And yet, provided that we comply with the existing drift
towards economic and monetary union, if there is 100 per cent. accession to the single currency, we shall be giving complete power without any outside interference whatever for eight years following their appointment to 15 of those bankers. I have seen what bankers have done in six months. But to give a gaggle of them eight years free of any democratic control whatever seems to me to be rather daft.I note the gradual conversion of my noble friend Lord Barnett, with whom I have had many exchanges on this matter. My noble friend is not ashamed to say--and all honour to him because at least he does not sit on the fence--that he believes in a single currency but he now qualifies that by saying provided that there is more democratic control over the European central bank, which he knows under the text of the treaty is completely forbidden; and provided that extra convergence measures are taken in order to make the economies move closer together, and he knows that that is not in the treaty and would require treaty amendment. Nevertheless, I must say that I take his conversion almost as a personal compliment, since I have been a member of his sub-committee for three or four years. That is all very gratifying.
Gratifying too are the observations of my noble friend Lord Healey. I could hardly believe my ears when I heard such distinguished support for the arguments that I have been seeking to put before your Lordships for the past four or five years. Indeed, that fills me with new hope and expectation.
We are getting near the election. One of the things which makes me depressed is the quest of all the political parties for the high moral ground. I object to that. The way to take the high moral ground is to advocate and take specific measures which in themselves tend to make society a more moral place within which to live. There are fields of action rather than fields of ambiguity. And yet, that is what is happening.
At the moment, we have the somewhat indelicate spectacle of seeking to outdo one another in the degrees of moral probity to which we should like to ascribe ourselves. The effect is not fascinating. At present we are in a position where great generalities are being uttered but we hear very little on specifics. My prediction in that connection would be that those parties who think that they can get the British people interested in supporting the ideals which they are putting forward will be sadly disillusioned if they continue not to define the things that they want to do with some precision; that applies also to the things that they will not do. That is the way to treat an adult electorate. I sincerely hope that that may happen.
I cannot really close my remarks without making some reference to the line that I and some of my colleagues have ventured to take, though not always so popularly as today, with the whole Maastricht Treaty. Here we have one of the most contentious treaties involving further limitations to our liberty and further limitations to the field within which we have to operate economically and in which we have to operate in trade, in the professions and indeed in culture, education and
so on. Yet no party other than the Liberal Party--whom heaven preserve in triplicate--is prepared to abandon neutrality on the Maastricht Treaty. My own party supported the treaty on the ostensible grounds that it would contain the social chapter if they got back into power. Therefore, we should not be against Maastricht because it was capable, provided that we were returned to office, of embracing the social chapter for Britain. The party opposite invited support for the Maastricht Treaty because, otherwise, the opt out from the social chapter would not come into operation. I do not believe that that is the kind of attitude that a serious political party ought to take.Although it may seem a long way back, I can well remember the time when Parliament was alive with the clash of ideas. One could put forward one's own views and convictions with as much clarity and indeed documentation as one wished. Our greatness as a parliamentary democracy fundamentally depended upon that fact. It was spread among all parties--the Churchills, the Atlees and the Bevans. But now we have a namby-pamby fear of committing ourselves to anything. I hope that that will not last.
6.32 p.m.
Lord Cockfield: My Lords, it is always a pleasure and indeed a relief to follow the noble Lord, Lord Bruce of Donington. When he rises to speak, one always experiences a slight tinge of fear that one day he might find a chink in the Government's armour. When the noble Lord sits down, we know that we have survived to fight another day. On this occasion, like my noble and learned friend Lord Howe of Aberavon, I have transferred my allegiance from the debate on foreign affairs to the debate on the economy. That is not just because, as I have argued before, it is very odd to debate the European Union, of which we are members, under the title of "foreign affairs" but principally because my right honourable friend the Chancellor of the Exchequer in his recent speech at the party conference in Bournemouth said that we ought to be concentrating on the economy. Indeed, that is what I propose to do.
However, before I go any further, perhaps I may just say that I regard Mr. Kenneth Clarke as outstandingly the best Chancellor of the Exchequer that we have had in this country since 1945. But he has had the inestimable advantage of the sound foundation provided by my noble and learned friend Lord Howe of Aberavon on which to build. When I draw attention to a number of problems which beset us at present, perhaps I may also make it clear that these problems are largely ones that he has inherited from his predecessors, both distinguished and undistinguished.
I should like to say a few brief words about the amendment tabled in the name of the noble Lord, Lord Peston, which technically is what we are debating at the moment. It is really most interesting. Here we have a distinguished economist eschewing the economy and economics (which is an intellectual discipline requiring rigour of analysis) and transferring his affections to
social cohesion. That is one of those broad moral arguments that allow all men of good will and long speech to waffle away to their heart's content.
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