The Prime Minister (Mrs. Margaret Thatcher)
I join with Neil Kinnockthe Leader of the Opposition in congratulating my right hon. and learned Friend the Member for Hexham (Mr. Rippon), and my hon. Friend the Member for Oxford, East (Mr. Norris) on proposing and seconding the Loyal Address. They did so with great humour, great eloquence and distinction. [column 17]
I was very pleased indeed when my right hon. and learned Friend the Member for Hexham agreed to propose the Loyal Address. We knew that we would hear from him a speech which we enjoyed enormously, and we did, in all its parts. He ranged extremely widely from his historical research to his great experience of regional aid; and, of course, he negotiated our entry into the Common Market. But I was interested that he also said, that he was pleased to take part in the Council of Europe, which has a wider and larger membership. We fully support everything that he said about the defence of the realm.
We thank my right hon. and learned Friend for his historical research. I suspect that he will find it regurgitated in many after-dinner speeches, as tends to happen when these treaties come up. He spoke about Palmerston's reluctance to go to his constituency. There was a time when my right hon. and learned Friend was standing as a candidate for the London county council. He was taken very ill at the beginning of the campaign and was unable to take any part in it. He was subsequently returned with the highest Conservative swing in London. I hope that not too many people will follow his example in that respect.
It was good to see my right hon. and learned Friend in such buoyant and vigorous form today and we are grateful to him for the skill and wisdom that he has brought to a generation of post-war politics.
I also thank my hon. Friend the Member for Oxford, East, who spoke deeply about education. We know from what the Leader of the Opposition said that his education was remarkable and we are sure that it enlarged his experience in many ways. We shall, of course, take to heart his comments on and references to the needs of our schools and the potential of our schoolchildren, especially given his constituency background. We thank him very much indeed and congratulate him once again on his contribution.
I noted that at one stage the Leader of the Opposition compared me to Wellington. I am very grateful to him. Wellington won many famous victories, particularly in defence of Britain, so I should like to think that his comparison was rather apt.
I found it difficult to find my way through the right hon. Gentleman's rather rambling speech. I notice that he was very critical of our manufacturing performance. I remind him that manufacturing output has risen by 10 per cent. overall since the 1983 election—[Interruption.] Yes, it is going up and up and up, and doing very well. Since we were returned by the people last time, manufacturing output has risen by 10 per cent. overall. How hon. Members loathe good news.
What is more, manufacturing investment grew by 5.5 per cent. in 1985. Manufacturing productivity has increased each year since 1979 at an average rate of 3.5 per cent. a year. Manufacturing export volumes are at record levels. Manufacturing profitability is at its highest level since 1973. Why does not the right hon. Gentleman acclaim those who take part in our manufacturing industry and who are doing so well with that excellent record?
The right hon. Gentleman also referred to the assets from North sea oil and their investment, and he did not seem to approve of it. I remind him that overseas assets have gone up from £12 billion in 1979 to £80 billion now—an excellent record. I remind him also that, in spite of what he said about poverty, Britain enjoys a higher [column 18]standard of living now than it has ever known, and when he speaks of those unfortunate to be on supplementary benefit, I remind him that supplementary benefit is way above the levels of the previous Labour Government.
The Gracious Speech sets out a full programme of legislation for a Session. We shall be introducing a wide range of measures and building on the successes that we have already achieved. Those measures and policies are further to strengthen our economy; to encourage wider ownership; to improve the education of our children and young people; to care for those who need help; to conserve and improve the environment; and to protect our people from crime and the fear of crime.
Every Gracious Speech under this Government has stated our commitment to prudent financial management, and this Gracious Speech reaffirms that commitment. The right hon. Gentleman had something to say about public spending, and so have I. Public spending as a share of national income will continue to fall, as it has done since 1982. As my right hon. Friend Nigel Lawsonthe Chancellor of the Exchequer said on Thursday,
“… the PSBR in 1987–88 will be held to 1¾ per cent. of GDP.” —[Official Report, 6 November 1986; Vol. 103, c.1088.]
That was the figure indicated at the time of the Budget in March. In other words, there will be no expanding of public borrowing. When public finances are consistently sound, the economy can and does withstand sudden pressures, such as the war in the Falklands, a year-long coal strike, and the halving of the oil price.
Nevertheless, even as recently as the debate last Thursday some of the Opposition claimed that the Government's achievements were built almost solely on North sea oil. Yet, in spite of the dramatic fall in the price of oil, we enter this new parliamentary year with good prospects for growth, exports, investment, for low inflation and a more promising outlook for unemployment.
Mr. Heffer
Would the Prime Minister say that the Government's policy has been an outstanding success—[Hon. Members: “Hear, hear.” ]—in Knowsley?
The Prime Minister
The hon. Gentleman has had his answer from the Benches behind him.
Mr. Heffer
rose——
The Speaker
Order.
The Prime Minister
Opposition Members give only a grudging welcome to the fact that inflation is down to 3 per cent. and is set to stay low. Obviously, we want to see it lower still. Opposition Members do not seem to welcome the prospect of 3 per cent. growth next year, showing the increasing strength of the part of the economy which is not related to oil, which of course is most of it. Next year's 3 per cent. growth will be the sixth year of growth at close to that average level. Since 1981 Britain's economy has grown faster than that of France and Italy, and a little faster even than that of Germany.
The Opposition do not like the fact that employment has grown by more than 1 million jobs since 1983. It is the growth in new businesses and new jobs which really offers hope to unemployed people.
The Opposition cannot bear the fact that the nationalised industries are now less of a burden on taxpayers. The losses at British Steel alone were many [column 19]hundreds of millions a year when we took office. Last year, British Steel made a profit; and people like to work for an industry that makes a profit.
Total investment is at record levels. That is another fact which does not fit the prejudices of the Opposition. It is forecast to rise still further next year. But there is one fact Opposition Members simply cannot stand and that is the ever wider spread of ownership among the British people. That is flatly against the spirit of the Labour party's clause four and its objective of extending the powers of the state and increasing Government control over people's lives.
Under this Government there are 2.5 million more home owners now than there were when we took office; the number of accounts in building societies has increased from 31 million to 52 million since 1979; some 1.5 million employees are sharing in the success of the businesses in which they work; and share ownership has doubled since 1979. That is just a start. Millions more people are considering buying shares in British Gas.
Next year, British Airways, Rolls-Royce and the British Airports Authority will follow British Gas into private ownership. Personal equity plans start in January to encourage small investors to own shares in business on the basis that their dividends and capital gains will accumulate free from tax.
Labour Members cannot stand this spread of ownership, which has come about under Conservative Government. They dislike the independence from Government that it brings to all our people. The despise the wealth creators. They look for every opportunity to undermine the people who do so much to create our national prosperity. The Opposition want to take power back from managers and workers and give it back to the union bosses. They want to put penal taxation back on the shoulders of those who lead the way to growth and jobs. They want to put newly privatised industries back in the hands of politicians, and to compel nationalised industries to put people back on the payroll regardless of whether or not there is a job for them to do. Always back—back to the very policies which nearly broke Britain. Those are not the policies that Britain needs or wants.
Ours are the policies which are creating efficient industry and commerce, which is the only basis for sustained advance.
As the Gracious Speech says, a Bill will be introduced to abolish domestic rates in Scotland. We are determined to reform the existing system of rates and local government finance. The reform in Scotland comes ahead of that in England and Wales because Scotland has suffered a revaluation, with all the hardship which that entailed.
The present system is unfair. It is unfair on domestic ratepayers since on average only one in two local electors pays rates, and in some cases—Liverpool and Lambeth, for example—the number is fewer than one in five. And it is unfair on business ratepayers who are at the mercy of high spending local councils.
The rate support grant system has become so complicated—for example, involving 68 different indicators—that voters can see no clear link between the rates they pay and the quality of services they receive.
The Government's proposals provide a clear solution to these problems. The new community charge will be [column 20]payable—at least in part—by all local electors; and our proposals for controlling business rates will protect businesses from the ravages of high spending councils.
We shall also reform and simplify the system of grants from central to local government. Local government will gain the stability that it needs and local councils will be made more clearly accountable to their electorates. Indeed, one sometimes wonders to whom some councils are accountable.
It was three Labour councils—Haringey, Lambeth and Hackney—which invited Sinn Fein representatives and gave a platform to terrorism. It is some Labour councils which seem more interested in lavishing ratepayers' money on anti-police propaganda than in helping the police to protect local people from drug pushers and muggers.
It is in Labour council chambers that we see the tactics of bullying and intimidation—as in Southwark and Camden last year, and in Haringey only last month. That is what today's Labour party is really like when it is in power.
Mr. Robert N. Wareing (Liverpool, West Derby)
The right hon. Lady has said that only one in five of the citizens of Liverpool and Lambeth pays rates. Would she care to explain why that is?
The Prime Minister
The hon. Gentleman is aware that some people receive a total rebate of rates and under the new community charge there will be a major rebate but people will pay something on the community charge which we believe is right.
The Gracious Speech refers to legislation on teachers' pay and conditions. The Opposition have said that they will oppose the legislation that will come before the House. For the past two years the teachers' unions have been campaigning for higher pay, and some of them, but not all, have been using the disruption of children's education as a weapon.
My right hon. Friends Kenneth Bakerthe Secretaries of State for Education and Science and Malcolm Rifkindfor Scotland have set out for the teachers' unions and management a package which offers, first, a clear definition of their duties and responsibilities and, second, substantially higher pay for teachers with greater rewards for better teachers and head teachers. The pay proposed is fair and reasonable, indeed generous. The duties and responsibilities are those which any conscientious teacher could reasonably be expected to fulfil.
I hope that the employers and teachers will take this opportunity to put the profession on a much firmer footing, with better pay, a new career structure and proper terms and conditions.
Sir Russell Johnston (Inverness, Nairn and Lochaber)
The right hon. Lady spoke about the offer of a package on wages and conditions. Is it not equally the case that in Scotland the Main report offered a package which the Secretary of State said was indivisible and from which the teachers could not pick and choose? However, he did pick and he did choose.
The Prime Minister
My right hon. Friend Malcolm Rifkindthe Secretary of State accepted virtually the whole of Main. He staged its benefits—the wage and salary increases—in a way that most people regard as reasonable. In Scotland, that would mean a 30 per cent. increase over about two years. [column 21]In England and Wales, it is about 25 per cent. over 18 months. Most people in Scotland would accept the reasonableness of staging the increases.
Part of the problem we face in England and Wales arises from the very structure of pay negotiations. Pay is negotiated under one set of arrangements and terms and conditions of service are negotiated under another. As the Gracious Speech makes clear, we shall introduce legislation to repeal the Remuneration of Teachers Act 1965 and to introduce new arrangements to settle teachers' pay and conditions of service within the resources available.
This legislation will tackle a long-standing problem. There is now a real chance to make a great advance in education performance, and to restore to teachers their standing and prestige in the eyes of their pupils, parents and the community as a whole.
Mr. Martin Flannery (Sheffield, Hillsborough)
Does not the right hon. Lady realise that the teachers are in the midst of negotiations with their employers? In the midst of those negotiations the impatience of the Minister was such that, having issued a diktat a fortnight ago, he said that the negotiations were a waste of time and that he would veto anything coming out of them. That attitude is not acceptable to any of us, let alone the teachers.
The Prime Minister
As the hon. Gentleman is aware, the negotiations had dragged on and on. In Scotland there had been the Main report. There was danger of disruption. My right hon. Friend told the House of his very generous offer. He said that the money would be made available on the conditions that we had always maintained, that there would be a reasonable career structure for teachers in order to keep the best teachers in front of the classes and to make certain that the better teachers were paid more. He also said that it would be dependent upon what we have said for a long time, a proper definition of duties and conditions of service. In spite of saying those things for a long time, we find that the negotiations have not come to a fruitful conclusion. My right hon. Friends the Secretaries of State for Education and Science and for Scotland laid before the House their plans for a fair and generous offer.
Mr. Geoffrey Dickens (Littleborough and Saddleworth)
Is it not a fact that when this Government took office the teachers' salary structure was 13 per cent. below Houghton and that the result of the offer that is on the table is that teachers will be 10 per cent. above Houghton?
The Prime Minister
I understand that my hon. Friend's figures are correct. I am grateful to him for pointing that out.
The centrepiece of the legislative programme in the Gracious Speech is the Criminal Justice Bill. In the battle against crime, Government must provide the necessary level of resources and ask Parliament to give the police and the courts the powers they need.
The Government have provided substantially increased resources and more were made available in the autumn statement. This Bill will represent a further strengthening of society's defences against the criminal.
Mr. Gerald Kaufman (Manchester, Gorton)
Will the Prime Minister give way?
The Prime Minister
No, not at the moment. [column 22]
The Bill will have three main themes. First, it will build on the foundation of the Drug Trafficking Offences Act 1986 and give the courts greater powers to confiscate the proceeds of all other types of crime from which substantial gains are made. It is unacceptable that criminals, after serving a prison sentence, should be able to live comfortably on the proceeds of their crime.
Second, it will strengthen the jury system by abolishing peremptory challenge, a facility now clearly open to misuse and against the interests of justice.
Third, the Bill will contain far-reaching proposals to help the victims of crime. For the first time, it will give victims a statutory right to compensation for serious injuries. And by allowing children who have been the victims or witnesses of sexual or violent attacks to give evidence to a court by way of a television link, it will make it more likely that the perpetrators of these horrifying crimes are brought to justice.
Mr. Kaufman
Will the right hon. Lady give way?
The Prime Minister
No; I want to reach the end of this section, please. It is a very close-knit argument.
Like many others, I have been appalled by the terrible cases of child abuse. Crimes against children fall to depths of evil which place them in a category of their own. Together with so many others, both inside the House and outside, I have long supported the National Society for the Prevention of Cruelty to Children and long hoped that as time went on the need for its work would fade away. Alas, the need is as great as ever.
Everything the Government, the police and the courts can do to bring the offenders to justice, and to stretch out a helping hand to their victims, will of course be done. But we as citizens and neighbours must be ready to respond ourselves to signs that a child may be in peril and need help.
Mr. Tam Dalyell (Linlithgow)
Will the right hon. Lady give way?
The Prime Minister
No.
The Criminal Justice Bill will show that we are resolute in our commitment to increase the protection given to the citizen, and I believe the help for victims and the tougher penalties in the Bill will be welcomed throughout the country.
Mr. Dalyell
Will the Prime Minister give way?
Mr. Kaufman
rose——
The Prime Minister
I give way to the right hon. Member for Manchester, Gorton (Mr. Kaufman).
Mr. Kaufman
Since the right hon. Lady has spoken about the Government's concern for victims, will she explain why the changes in the criminal injuries compensation scheme will reduce by 28 per cent. those who are eligible for criminal injuries compensation?
The Prime Minister
The right hon. Gentleman must wait for the Bill in order to discuss these matters.
Additional money has been made available to enable this scheme to come into operation.—[Interruption.]
Mr. Kaufman
rose——
Hon. Members
Sit down.
Mr. Speaker
Order. The Prime Minister is not giving way.
Mr. Kaufman
rose—[Interruption.]
[column 23]Mr. Speaker
Order.
The Prime Minister
The Gracious Speech——
Mr. Dalyell
rose——
The Prime Minister
I will not give way. I am moving on to defence now. The Gracious Speech says that the Government
“will maintain the United Kingdom's own defences and play and active part in the Atlantic Alliance.”
Mr. Dalyell
rose——
Hon. Members
Sit down.
Mr. Speaker
Order. The hon. Gentleman knows that if the Prime Minister does not give way he must resume his seat.
The Prime Minister
When I meet President Reagan at Camp David in a few days' time——
Mr. Dalyell
rose——
Mr. Speaker
The hon. Gentleman well knows that if a Front Bench spokesman or any hon. Member does not give way he must resume his seat. I ask him to do so.
Mr. Dalyell
rose——
Mr. Speaker
Order. Please remember that if the Prime Minister does not give way the hon. Gentleman must remain in his seat. I ask him again to do so.
The Prime Minister
When I meet President Reagan at Camp David in a few days' time, we shall be discussing the way forward on arms control after the Reykjavik meeting.
The significance of Reykjavik is that, after many years of talking about arms control, there is now a prospect of major arms reductions—provided that the Soviet Union does not make agreement on all arms control measures dependent on others accepting the constraints it wants to put on the strategic defence initiative.
The next step is to negotiate specific and detailed agreements—agreements which take account of the West's vital concerns: with balance and with effective verification.
The Government would support the conclusion of an intermediate nuclear forces agreement, which would set limits on medium-range nuclear missiles or even eliminate all such weapons in Europe and the western Soviet Union. But such an agreement must be accompanied by credible and effective verification; strict limits on Soviet SS20s in the Far E* and by agreement on how to deal with shorter-range nuclear missiles, of which the Soviet Union has many more than NATO—and it is worth remembering that large areas of Britain are within range of those weapons.
An agreement on INF weapons would be a vindication of the policy of firmness; a policy in which this Government gave a lead and in which they were supported by Britain's allies—but not of course by Labour Members. Their only policy is one-sided disarmament. If we had followed their advice, if we had not stationed cruise and Pershing, there would have been no question of getting rid of the SS20s targeted on Europe.
The Government also welcome the commitment at Reykjavik to seek agreement permitting 50 per cent. reductions in strategic nuclear weapons, subject again to strict verification. That would meet our long-standing aim of preserving deterrence at lower levels of nuclear [column 24]weapons. But while the Warsaw pact retains its massive superiority in chemical and conventional weapons, and while the basic causes of conflict between East and West are undiminished, we shall continue to rely on nuclear deterrence for Europe's defence.
Mr. Denis Healey (Leeds, East)
The right hon. Lady has said that she would support a 50 per cent. cut in all strategic nuclear weapons. Would a 50 per cent. cut, which as she rightly says would change the whole shape of things, be the sort of deep cut which she has told us many times would justify putting British nuclear weapons on the negotiating table?
The Prime Minister
If there is to be any question of that for strategic ballistic missiles—I hope that there will be—it will have to be subject to effective verification. As the right hon. Gentleman knows, that will not be easy to attain. However, I hope that it will be attainable. When we get there we will consider the other question. I must make it clear that I believe that Britain must continue to maintain its independent deterrent at a necessary minimum to make it effective. There is no point in us giving up all our few nuclear weapons for the Soviet Union only to keep even as many as half of what it has now.
Yet, the Labour party would have us give up not only Britain's own nuclear weapons but the protection given by the American nuclear umbrella. Let me quote Neil Kinnockthe Leader of the Opposition, speaking on 28 September:
“If we're not prepared to use the weapon system ourselves we certainly wouldn't be asking anyone else to jeopardise themselves by the use of that nuclear weapon. I think it would be immoral to do so.”
What the right hon. Gentleman means in plain language is that a Labour Britain, alone in the NATO Alliance, would have no answer to nuclear blackmail. Labour Members go to great lengths, indeed absurd lengths, to fudge the truth about their policies. When their defence spokesman——
Mr. Dalyell
rose——
The Prime Minister
was asked whether——
Mr. Dalyell
rose——
The Prime Minister
When their defence spokesman——
Mr. Dalyell
rose——
Mr. Speaker
Order. The Prime Minister.
The Prime Minister
When their——
Mr. Dalyell
rose——
Mr. Speaker
Order. I ask the hon. Member for Linlithgow (Mr. Dalyell) to resume his seat, please.
The Prime Minister
When Labour's defence spokesman was asked whether, in the light of some of the comments of the right hon. Member for Leeds, East (Mr. Healey). the Labour party's policy on nuclear weapons was multilateral or unilateral, the right hon. Member for Llanelli (Mr. Davies) said:
“Well, these are long words, aren't they, and Denis is a bit of an intellectual. I try and avoid the words multilateral and unilateral.”
I bet he does! Let me remind him what “unilateral” means. It means giving up our nuclear defences while letting the Soviet Union keep its nuclear defences. That is the way in which the Opposition would undermine Britian's security.
[column 25]Mr. Dalyell
rose——
Mr. Speaker
I order the hon. Gentleman to resume his seat.
The Prime Minister
The hon. Member for Linlithgow (Mr. Dalyell) is doing everything that he can to stop one getting across what Labour policy is on defence.
The truth is that one cannot be a loyal member of NATO while dissociating oneself from its strategy. And no one knows that better than the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who said in 1983:
“There is an inherent inconsistency in saying we will remove all foreign bases from this country while we have the NATO commitment in our policy” .
I agree with that. The truth is that one cannot expect others to stand by one unless one stands by them. The truth is that the United States' commitment to Europe would be fatally weakened by a Labour Britain contracting out. The truth is that the Opposition's policies would lead us inexorably down the road to a fearful and a fellow-travelling Britain.
Mr. Dalyell
rose——
The Prime Minister
Let me remind Denis Healeythe right hon. Member for Leeds, East of what he said in 1981. He was asked what he would do if Labour adopted a policy of unilateral disarmament. He replied:
“I would fight to change the policy before the General Election and if I failed then I wouldn't accept office in a Labour Government” .
Hon. Members
Oh.
Mr. Dalyell
rose——
Mr. Speaker
Order. I have already ordered the hon. Gentleman to resume his seat.
The Prime Minister
Is that still the position of the right hon. Member for Leeds, East? Or has he joined the unilateralist bandwagon that has swept to control the Labour party with Neil Kinnockthe Leader of the Opposition holding the reins?
Mr. Dalyell
rose——
Dr. M.S. Miller (East Kilbride)
rose——
The Prime Minister
This Government know where their duty to our country lies. We have a duty to keep Britain's defences strong; a duty to our allies in NATO; a duty to keep faith with our armed forces of whose superb professionalism and dedication we are so proud. We shall continue the modernisation of Britain's conventional forces.
Dr. Miller
rose——
The Prime Minister
We shall maintain our independent nuclear deterrent and we shall ensure that the NATO Alliance is able to continue to play its indispensable role in defending freedom.
Mr. Dalyell
rose——
Dr. Miller
rose——
The Prime Minister
We on this side of the House know, and the country knows, that strength is the surest foundation on which to work for peace. There is only one party in Britain which is united in support of a clear and strong defence policy for Britain.
Dr. Miller
rose——
[column 26]Mr. Dalyell
rose——
The Prime Minister
I shall give way to the hon. Member for East Kilbride (Dr. Miller).
Dr. Miller
I am grateful to the Prime Minister for permitting me to intervene. Will she tell the House whether her Government's nuclear policy is based entirely on her postulate that the Soviet Union is ready to attack us?
The Prime Minister
The hon. Gentleman shows that he does not begin to understand the policy of nuclear deterrence. That explains a lot about the Labour party's unilateral disarmament policy.
The proposals for the coming year carry forward our programme for encouraging enterprise on which the new jobs depend, for a wider spread of ownership, for rolling back the powers of state, for providing effective care for those in need, and for supporting the institutions which uphold the law. This Government will press ahead with all those policies in the coming year and, Mr. Speaker, in the years beyond.
Mr. Andrew Faulds (Warley, East)
On a point of order, Mr. Speaker. There is a long-standing convention in this House that hon. Members give way to other hon. Members who wish to intervene during their speeches. Although the House will understand why the Prime Minister is frightened of allowing my hon. Friend the Member for Linlithgow (Mr. Dalyell) to intervene——
Mr. Speaker
Order. The hon. Gentleman knows that the convention in the House is that if an hon. Member who is on his feet does not give way the hon. Member who seeks to intervene must resume his seat.
Mr. Faulds
Further to the point of order. It is quite clear that the Prime Minister was prepared to——
Mr. Speaker
Order. The hon. Gentleman has had the convention explained to him. He knows it very well. I do not need to repeat it.