Speeches, Interviews & Other Statements

Complete list of 8,000+ Thatcher statements & texts of many of them

1967 Nov 1 We
Margaret Thatcher

HC S [Debate on the Address]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [753/282-302]
Editorial comments: 2101-c2157. MT spoke at cc282-93 and 298.
Importance ranking: Key
Word count: 7146
Themes: Executive, Industry, Monetary policy, Privatized & state industries, Pay, Taxation, Trade, Law & order, Science & technology
[column 282]

Mrs. Thatcher (Finchley)

As is customary in the second day's consideration of the Gracious Speech, we have had an extremely wide debate, ranging from the development areas to the grey areas, to overseas, to underdeveloped areas and to Europe. Each of us is bound to select that aspect which appeals to us most and upon which we believe that we have a contribution to make.

I especially enjoyed the speech of the hon. Member for Stoke-on-Trent, Central (Mr. Cant), who unfortunately is not in the Chamber at the moment. He gave us his usual beautiful demonstration of economic skating on thin ice. I am not [column 283]sure whether the Minister was here at the time, but his hon. Friend gave a dissertation on what he considered to be the disadvantage of a reserve currency without giving any idea of how we could get out of being one, and without even admitting that it is impossible to get out of being a reserve currency. He referred frequently to the Report of the Committee dealing with invisibles. Indeed, he reminded me of the speech of a former Governor of the Bank of England, speaking about what a success story overseas investment had been for this country and how sorry he was that it had been temporarily damped down. He quoted some advice given by a predecessor of his:

“A restriction or regulation may doubtless answer the particular purpose for which it is imposed, but as commerce is not a simple thing but a thing of a thousand relations, what may be a profit in particular may be ruinous in general.”

That was advice said to have been proffered by Sir Francis Baring to Lord North 's Ministry. It is, however, illustrative of the problems which we face today where the short-term expedients may well be against the long-term future of the country.

It has been quite clear as the debate has developed that on this side of the House we feel strongly about the increasing concentration of power in the hands of the Government. We are debating one Gracious Speech, but everyone will agree that it is one of the programme and that it cannot be considered in isolation from what has gone before or from what is likely to come afterwards. We must look at it—and my hon. Friend the Member for Basingstoke (Mr. Mitchell) particularly looked at it—in the light of how much extra power it puts in the hands of the Government. We should all be wary of that, no matter on which side of the House we sit.

In the past there have been considerable increases in the power of the Government, and often in this Parliament the Government have acted considerably to the detriment of individuals. Michael StewartThe First Secretary will be aware of the first fact which I shall mention in support of this theory, and the hon. Member for Liverpool, Walton (Mr. Heffer) will equally know of it because he was with us through the debates on the prices and [column 284]incomes policy which we have often had late at night. I do not think that I shall ever forgive the Government or ever hold them in very great respect again—not that I held them in much respect before, but I have held them in even less respect since—since they were the first Government to make it a criminal offence to keep a bargain. That was one of the worst things any Government could do, to teach the nation how to dishonour its commitments.

That is exactly what the First Secretary did in the Prices and Incomes Act. I do not think he introduced it. It was introduced by his predecessor, who also introduced Part IV which did that. That Section acted very considerably to the detriment of fundamental rights of individuals in this country. Individuals learned that they could no longer look to Governments for support of their rights but had to go to the courts. The courts have been a surer source of liberty than Governments in recent years. The courts upheld the individual, but then we had another Prices and Incomes Act which attempted to put back what the Government thought they had done on the first occasion, again against the individual and increasing power in the hands of the Government.

There have been many other cases of increasing arbitrariness. Whenever we get arbitrariness on the part of the Government the citizen does not know his rights and has fewer and fewer rights. For example, investment allowances are now at the discretion of the Board of Trade. Why discretion? Why is there not a right to get an investment allowance in certain industries?

Everyone in this debate has given a particular example and I have mine. It concerns an Inland Revenue case called the Bates, case, which went to the House of Lords and was decided this year. I mention it for a particular reason. It concerns Section 408 of the Income Tax Act, 1952. Counsel for the Revenue, arguing that case, admitted that as the Section was worded the Inland Revenue could not administer it because it did not make sense. It was repeated in the judgment of four of the Law Lords that as the Section stood it could not be administered in accordance with the terms of the Act because it was too harsh and [column 285]Parliament could therefore never have intended it.

I could give many quotations, but I will give only one to prove my point. In the judgment Lord Reid said:

“so the Inland Revenue have taken it upon themselves to disregard the statute and substitute a method which they think fair and, if I understood counsel rightly, in accord with the spirit of the Act” .

There we have the Inland Revenue saying, “We cannot administer the Section as Parliament made it because it would be too harsh. Therefore we shall administer it according to what we think right” and four out of five of the Law Lords commented on this.

My hon. Friend the Member for Hertford (Lord Balniel) asked James Callaghanthe Chancellor whether he would amend that Section. My hon. Friend and I were absolutely horrified at the Answer which was given. The Answer was,

“No, the decision in this case was in accordance with the intention of the Section.” —[Official Report, 6th July, 1967; Vol. 749, c. 294.]

There was another example which probably, if I had not mentioned it, would not have been known to this House, in which the Government refused to follow the advice of four out of five Law Lords to amend the Section.

There is another example in the Selective Employment Tax by which a Minister has the right to join or separate premises for the purpose of deciding whether they are single establishments or different establishments, and there is no right of appeal. This is a further example of increasing arbitrariness. There is further disrespect of individual rights in the Land Commission Act where the expedited process of compulsory acquisition can mean that a person can be robbed of his livelihood, his farm or business, without a public inquiry. It is significant that before the other place got at it we could also have been robbed of owner-occupied houses without a public inquiry. At least the House of Lords managed to take that provision out of the Bill. We upheld them when the Bill returned to this House.

The final example of increasing arrogance on the part of Ministers and increasing arbitrariness was that given by my right hon. and learned Friend the Member for Hexham (Mr. Rippon) of [column 286]Patrick Gordon Walkerthe Secretary of State for Education and Science saying, “I will change the law and I will change it quickly” . The Secretary of State was told by the courts that his action was “wholly unreasonable” .

It is against this background that we must view the increasing encroachments foreshadowed in this Gracious Speech. The examples I have referred to are encroachments on liberty. There are further economic encroachments which also affect the liberty of the individual. Today we no longer talk about nationalisation, because it is not a very popular word. The public does not like it. I notice that right hon. Members opposite are now talking about “public ownership” , because that sounds much more respectable.

What is everybody's business is nobody's business. Public ownership does not put power into the hands of individual people. It means that the powers may be there but the individuals cannot exercise them, so it results in putting power into the hands, again, of a central clique. Already one employed person in four is employed in the public sector. This is an enormous proportion. Eventually, power over a man's means of support means more power over his will. Once the public sector is extended, more and more people will be dependent upon the State for their wage and salary packets. Ultimately, more and more power can be exercised over their will.

I was interested in the example given by my hon. Friend the Member for Abingdon (Mr. Neave) of the reduction in the research grant for thermo-nuclear fusion. I believe that I am right in saying that one of the reasons why we have not heard much about this is that employees of a public authority are precluded by the terms of their employment from making public statement. If the economic public sector is increased the number of people who can criticise the Government is reduced. This is another example of a great encroachment on individual liberty.

I turn now to a proposal in the Gracious Speech which has already received a good deal of attention, namely, the industrial enabling Bill. It is still difficult to see why the Government want extra powers in addition to those they already have. I understand that the assumptions behind the Bill are, first, [column 287]that the Government can choose successful projects which private enterprise cannot and, secondly, that they can probably inject better management.

I would not accept the assumption that a Government can choose projects likely to be successful in the future which private enterprise cannot. Peter ShoreThe Secretary of State for Economic Affairs and most hon. Members will probably agree that in the past—this has applied to the civil servants who have served both Conservative and Labour Governments—civil servants have not been very adept at costing new research projects. This is because we ask them to do something which we ought not to ask them to do. Civil servants have not been very good at costing some of the very advanced research projects because such projects are new and it is very difficult to cost them in any case. Civil servants have not got the expertise at their disposal which a merchant bank has. If they had such expertise, they would probably be working very successfully for a merchant bank. If a project is a good one, the chances are that some merchant banker or other will support it.

What I fear the Secretary of State will do is support the projects which are not likely to be successful, and then he will be faced with the difficulty which some of us are often faced with—how much bad money should he pour after good, should he pour money in to try to make the project viable? Then more and more money will be poured in.

With regard to the second underlying assumption that better management could be injected, anyone who was in the House during the debate on Thursday relating to the management of the National Coal Board or who has read word by word the Report of the Tribunal on the Aberfan disaster—it is not the disaster as such that I am dealing with at the moment; it is the management—will appreciate that the Report contains one of the most severe indictments of management that one has ever read. I earnestly say to the right hon. Gentleman that if he wishes to concentrate on management, there is enough material in the public sector for him to improve [column 288]during his life in government. It really was an appalling indictment of the management of the National Coal Board. I hope, therefore, that he will concentrate upon making the public sector work.

There might, of course, be an argument for further nationalisation if the present nationalised industries had served the consumer extremely well. But I turn now to a Parliamentary Reply to a Question on Monday, 10th April, 1967, about the rise in prices in the existing nationalised industries from 13th October, 1964, to 21st February, 1967, which was the most convenient date chosen by the Minister who replied. According to this Answer, rises in retail prices of food amounted to 8.8 per cent. We know that it is now up to 10 per cent. The rise in the prices of clothing and footwear was 5.8 per cent., durable and household goods 5.7 per cent., and nationalised industries 14.6 per cent. That was before the latest increases in electricity prices.

I should like to say a word about the reference of those increases to the Prices and Incomes Board. They were not referred to the Prices and Incomes Board, but I understand the future increases are to be. I find it difficult to understand how any Prices and Incomes Board can adjudicate upon those prices without becoming highly involved in the policy decisions of the nationalised industries. The prices are inextricably bound up with the decisions taken on capital investment, the return on capital investment, the validity of the decisions and whether the same objective could have been reached by alternative plans. The alternative plan is often not adequately considered in investment in the nationalised industries. One reason is that it always seems to be the view that there is plenty of money where the previous lot came from.

May I consider the very extensive powers that the Government already have in connection with research and development and investment in industry. They have very wide powers to supply defence requirements under the Ministry of Supply Act, 1939. Under that Act they can promote research and development associated with defence functions. They have further powers under the Civil Aviation Act, 1949. They have powers relating to design and development of civil aircraft and can provide funds for [column 289]financing the development of new aircraft. It is under this Act that the Concord finance was provided. They can do everything except engage in the commercial production of aircraft.

Perhaps one of the biggest sets of powers the Government have is under the Science and Technology Act, 1965. They can engage in research and development and undertake action to further the application of the results. They can also act through the Atomic Energy Authority or the National Research Development Corporation. That Corporation has powers in securing the development or exploitation of any invention, to do anything requisite or convenient including carrying on or assisting someone to carry on a business. It already has an equity interest in firms making hovercraft. These are powers which already exist. We added to them last year in the Industrial Reorganisation Corporation Act. Under Section 2 of that Act there are powers to

“promote or assist the reorganisation or development of any industry”

and in so doing the Corporation may acquire, hold and dispose of securities. Why do we need yet another Act, another acquisition of power? Is it to cut down Parliamentary scrutiny? This is what I suspect it is, a general enabling Measure to cut down Parliamentary scrutiny.

We have not been told about specific projects which the Minister wishes to bring under the Bill, though there have been hints about Beagle Aircraft and about aluminium smelting schemes. I understood from what Michael Stewartthe First Secretary of State said today that speed was of the essence, and the need for speed was one of the reasons for the Government's proposal. This is terrifying. The thought that a Government Department can adjudge and evaluate a complex technological project quickly means that they will quickly spend a lot of money unwisely.

These are highly complex project requiring considerable expertise, expertise which the Minister has not got and which I have not, though I am probably nearer to having it, coming from a family of professional managers, and which some hon. Members behind him may well have in greater measure than he has. But the need for speed is a totally inadequate reason for the Bill if it is to provide finance for complex technological projects. To argue otherwise is absurd. [column 290]

It has been suggested in connection with the Bill that the Government might assist considerably in setting up aluminium smelting plants in this country. This, again, is a highly complex matter. I understand that one of the purposes in the Government's mind is import saving, but I greatly doubt that they have done all the necessary work on what the import saving would be if the money were spent on alternative schemes. This is the question at the heart of the true net import saving, and I doubt that the Government are even capable of judging it or have the staff to do it. We must be careful here not to blame civil servants. So often Governments ask them to do things which they are totally incapable of doing.

It is piquant that at this time there should be a proposal to introduce such a Bill. It is said that private industry has not the money to develop projects and the Government, therefore, should step in. It has been Government policy for some time to cut down the amount of money available for plough-back. What else has been the result of the Corporation Tax and the change in company tax structure, and the deflation of the economy which, by itself, means that there is not so much money to plough back?

Yet, just at the time when there has been a severe deflation and an alteration in tax which has meant that less money has been available to plough back, the Government say, “You have not got the money. We will supply it” . This is absurd. Again I ask: Is the true reason that the Government want to acquire more power?

Shortly after he was appointed, Peter Shorethe Secretary of State for Economic Affairs made several remarks. We all do it. He said that he would force industry to follow the “three Rs” , reorganisation, re-equipment and retraining. This evoked a response from Mr. McFadzeanthe managing director of the Royal Dutch-Shell company, who dismissed such remarks as being merely

“new labels for some old and tawdry economic ideas which even the Soviet Union is in process of discarding” .

He went on:

“In the uncertain and near capricious environment which has been created, it is not surprising that investment has fallen,”

I noted today that the First Secretary of State boasted that it had fallen by only [column 291]6 per cent. from 1966. It is now cause for boasting that the fall was not 10 per cent., as the Board of Trade thought in the first place that it would be. To continue the quotation, Mr. McFadzean, referring to examples of cost savings in the oil industry, said that in the last ten years transport costs have been cut by 50 per cent., productivity has been doubled, and prices cut by 25 per cent. This had not been achieved by Government intervention but, he said, was the result of competitive pressures

“forcing Shell and other members of the oil industry to embrace technological process as the only alternative to gradual extinction.”

The right hon. Gentleman knows how much trouble the efficiency and competitiveness of the industry caused in the House when, seeing the increasing use of oil, some hon. Members demanded protection for coal. There was not any lack of technological advance. There was such advance, and the resources were available from private enterprise to do it. Many a company would go to the wall if it did not make technological advances.

The other day I saw a comment by another very successful businessman, the chairman of Acrow, who was asked by the Government to serve on one of their committees. I think that there are far too many committees. One could spend all one's time on Government committees, trade association committees, or staggering from one committee to another. I need not tell the right hon. Gentleman that Cabinet Ministers are often the worse for this. It seems to me that they go from one committee to another and never have very much time to think about or assess the policies for which they are responsible.

The Chairman of Acrow said that he was not going on a committee, and his reply was a model of what anyone should say to a Minister on such an occasion. In one of the most brilliant summaries of the situation that I have ever seen, he said:

“I do not believe in wasting my time with official committee meetings which seldom result in positive action. There is nothing surprising in the fact that foreign engineering firms are taking such a substantial amount of business here at home. I am chairman of Adamson and Hatchett, in Dukinfield, Cheshire. We can deliver on time but we are not able to compete on price with imported Italian-made pressure vessels. Why? All products and services we have to buy from nationalised [column 292]industries are all more expensive than abroad, particularly in the case I am referring to—Italy. Our Italian competitors can by British steel cheaper than we can … The Ministry of Fuel and Power say they do not know the comparative costs of electricity in England and those countries against whom we are competing…   . At great expense I can give the figures. The power consumed at our works … costs us at present £24,960 a year. Had these works, been situated in the following countries using the same amount of power it would have cost:

The same applies to gas, which is considerably dearer in this country than in our competitors’.”

He went on to deal with S.E.T., saying that as a manufacturer he should get a 7s. 6d. premium but that after an enormous amount of unproductive paper work S.E.T. costs Acrow £5,600. He continued in this vein. One of his main problems is that to which I asked the Minister to turn his attention—high prices in the public sector, which lead to high export costs.

I know that the economic them is the central theme of the Gracious Speech, and we shall almost certainly have some days specifically devoted to the economic situation. But I see nothing in the Speech to cope with our economic problems. Let us remember when we discuss them that the Government have now been in power for more than three years, but the forecast produced by the London and Cambridge Economic Bulletin was one of the gloomiest I have ever read. It came when we had the worst monthly export figure since Harold Wilsonthe Prime Minister's axe fell in July last year, with a very high import figure and the lowest sterling-dollar exchange rate in recent memory, and it was a very severe indictment on the underlying competitiveness of the British economy at the moment.

The Government are doing nothing to increase the competitiveness of the economy. They are bolstering up the inefficient by their premium policy and by the way in which they administer investment allowances. They are giving help to the inefficient when they should be encouraging the efficient and making it difficult for the inefficient to survive. Until that is done we shall not get the economy on an even keel or the surplus on balance of payments that we all wish. [column 293]I see no hope from the Gracious Speech that it will be done, and I shall listen to what the right hon. Gentleman has to say with more hope than faith.

The Secretary of State for Economic Affairs (Mr. Peter Shore)

I agree with the hon. Lady for Finchley (Mrs. Thatcher) that this has been a very wide-ranging debate. I suppose that was inevitable on the second day of the debate arising from the Queen's Speech. Like her, I have observed that hon. Members have moved from fruit machines to the Common Market and, indeed, from the fear of Chinese nuclear power back to the new-found militancy of pacifist demonstrators.

Like the hon. Lady, I should find it almost impossible, much as I should like to do so, to comment on all the very good speeches that have been made. I feel, too—this is a point that I share with the hon. Lady—that the focus of the debate has been broadly economic and social policy although, as we all know, there is to be a further debate on economic policy early next week.

The hon. Lady's speech reflected the basic fear and suspicion of public power which appears to be such a feature of hon. Members opposite. This is not a new theme in public discussion. I recall—I cannot remember the date—a famous Motion passed some time in the 18th century to the effect that the power of the State or Executive had increased, was increasing and ought to be diminished. At a certain level of debate we would perhaps all agree with the hon. Lady, but it is very interesting that under successive Governments—if one takes a broad view of history there is no doubt that this is true—the power of the State in one from or another has increased, and there is no party in the Realm which has contributed more to the extension of state power than that which the hon. Lady represents. Her party has expanded the power of the State until it is very much what it is today.

What matters is the uses to which the power of the State is put. It is the belief on this side of the House that the power of the State can be mobilised to carry out or help carry out the policies that are needed to get this nation right. It is because we believe this that we have [column 294]made the proposals that we have put forward in the Queen's Speech to continue to equip ourselves with certain powers in relation to industry—there is no tyrannical threat here, I assure the hon. Lady—to help in partnership with industry to finance projects which we believe will be in the national interest. We shall hear of this in the next week or so.

We have now got fairly clear the pattern of attack that we are to expect from hon. Members opposite. They begin by painting a picture of more or less unrelieved gloom about the British economy. They point—certainly we understand this, and, indeed, we share any feelings that they express—to the figures of unemployment, to industrial production, to prices, at which they throw up their hands in woe, and also to industrial unrest. But when we turn to these problems we find, as the Prime Minister replied to the Leader of the Opposition yesterday on the subject of industrial unrest, that their vision is curiously distorted and that when they had the power and authority themselves to tackle these problems they signally failed to make use of their opportunities. Having painted that picture of the economy, they then, of course, say that the Gracious Speech is “frivolously irrelevant” —I think that was the phrase—in dealing with the situation.

To us, of course, the Gracious Speech is a very different animal. It embodies the central aims of the Government and the measures which in this Session we intend to take to help achieve them. Those aims are, and have been since October, 1964, to secure a strong economy in Britain, to carry through our own social priorities, and in particular to allocate resources more generously to regions, to groups of the population and to those community services which have been denied resources for too long.

The point I wish to make as strongly as I can is that these two aims—a strong economy and getting our social priorities right—are complementary and not contradictory. My right hon. Friend the First Secretary of State made the point today that, by increasing the supply of housing, we were not only ending the misery of those without adequate housing but at the same time helping the mobility of [column 295]labour which is of considerable economic significance.

In addition to this, I would simply mention that the increases in social security payments—the old age pensions that are going up this week and the increase in family allowances mentioned in the Gracious Speech—are not only good in themselves but help to create that climate of opinion which makes an incomes and prices policy acceptable, because we on this side know that it is not only employment incomes we have to deal with but the whole category of social incomes, which are no less important.

I give another example. The hon. Lady objected to this discrimination, which to her has connotations of arbitrariness, but we know that discrimination in favour of some of the regions not only helps to deal with the problems of high unemployment in those regions but helps at the same time in the general management of the economy. The same argument applies to large categories of social expenditure. Community services, education and so forth are not only good in themselves but help to increase the competitive strength of Britain.

Our aims are a strong economy and, in the widest sense, the social priorities which in themselves add up to a strong economy, and the Gracious Speech concerns the means and strategy to achieve our aims. I want to say what our broad economic strategy is but first I want to say what it is not. We are not embarking upon—and I am not sure that hon. Members opposite would wish us to do so—on a general and unbridled reflation of demand in the British economy.

I see no sign of protest from the benches opposite, so I assume that the Opposition are generally content with the policies we are pursuing, because unless they argue that we should be operating generally on demand and stimulating a demand reflation in Britain, I do not know what they are objecting to in the rest of Government policy. I do not think that they are objecting to it and I want to make it perfectly plain that we are not embarking on a policy of general demand reflation.

This is because we know exactly what happened in 1962, when the Conservative Government did exactly that. In October and November, 1962, the right hon. [column 296]Member for Barnet (Mr. Maudling), then Chancellor of the Exchequer, announced a vast package of public expenditure increases. He slashed Purchase Tax on motor cars from 45 to 25 per cent. and increased enormously the allowances available to manufacturing industry to accelerate its investment. It was all very splendid. It did not make the slightest impact on the level of unemployment in the winter of 1962–63, but it certainly had an impact on the general inflationary boom that the hon. Member for Louth (Sir C. Osborne) so greatly fears. That took place late in 1963 and into 1964 and brought about the crisis and the disaster of that year which the party opposite did not restrain.

My charge against them on that occasion is not that it was too little and too late, but that what they did was too late and too much. One has to adopt a very different strategy, and the strategy that we are adopting is that of selective expansion. This does not mean that we shall ignore or are ignoring the general level of demand. We have already given certain evidence of this in our adjustments of important hire-purchase regulators and in the timing of the increases in certain social security benefits with which my right hon. and hon. Friends are familiar. We are not ignoring the general level of demand, but we are putting a particular emphasis on certain selective measures which we feel give us a much greater hope of success. The first of these are the measures that we have taken and are taking to keep investment in manufacturing industry at the highest possible level. Hon. Members opposite scoffed at my right hon. Friend the First Secretary of State when he reported that investment this year in manufacturing industry had fallen by 6 per cent. The forecast for next year is roughly that we should be able to see no further decline. However, I would remind them that in 1962 investment in manufacturing industry fell by 8 per cent. and in 1963 by no less than 12 per cent.

The important question is: why has investment been holding up as well as it has during the past year and why do the present forecasts show or give us reason to look ahead with a certain amount of confidence? The answer is that we acted at the right time in the most direct and relevant way. Within [column 297]six months of the July measures, in December, 1966, we increased the investment grant to 25 per cent. generally and to 45 per cent. in the development areas. This increase in the investment grant was undoubtedly a very important stimulus. In addition, during the past six months we have brought forward the timing of payment of these grants, by successive reductions from 18 months to 15 months and from 15 months to 12 months.

When one thinks about the importance of investment and relates or connects it with the industrial expansion measure that the hon. Lady is so upset about, I find it very difficult to see why she should do anything but welcome a measure of this kind. One of the major purposes of the Industrial Expansion Bill will be to increase investment to make it possible for us not merely to avoid an admittedly unwelcome, but much more modest decline than they experienced, but to do better and to help stimulate the investment that we need. That is the first thing we are attempting to do.

The second thing—and I make very little of this, because I am sure that my right hon. Friend the Minister of Labour will have a great deal to say—is that we have been greatly stimulating the supply and quality of skilled labour through all the means open to us. I will say something further about this in the development area context, but this policy applies throughout the country.

The next thing that we have been doing is to try to give particular help to industries which, as a result of reports and examinations of various kinds, clearly need special help and special measures to overcome their difficulties. Does anyone doubt that the intervention that the hon. Lady so deplores which has taken place in the shipbuilding industry during the past year has been anything but beneficial in terms of the structure of that industry, in terms of employment within it, in terms of Britain's balance of payments through the earnings that we have been able to keep up or the loss, in terms of extra imports, we would otherwise have had to sustain?

There is no doubt that this has been possible only because of the measures which we have taken. While I do not wish to get involved in old-fashioned doctrinal argument with the hon. Lady, [column 298]when she exhorts me to look at inefficient management in the nationalised industries, which I am very ready to do, I advise her to do a little reading of some of the reports which have been written in the last few years about certain parts of private industry.

Mrs. Thatcher

I take up what the right hon. Gentleman has said about steel and shipbuilding. Am I right in thinking that one of the first actions of the nationalised steel industry was to reduce the steel discount to shipbuilders?

Mr. Shore

I doubt very much whether that is so and certainly I would not accept that just because the hon. Lady has said so, although, of course, I accept that she has made the point in good faith. On the contrary, I am aware of proposals for rebate which have been made by the new Steel Board. That is something which she and I can perhaps sort out between ourselves. I shall look at this at a later stage.

I was mentioning shipbuilding as one example of the kind of aid which the Government are giving to particular industries, and I have no doubt that it has been of great help. In my own more direct sphere we have in the I.R.C. an instrument which is growing in its range of activities and which has already brought off, particularly in the English Electric-Elliot Automation merger, a most successful operation which will greatly strengthen the British computer industry. The same sort of story can be told of many other industries, and in the Queen's Speech are proposals, which I will not seek to elaborate now, which are concerned with reorganising road and rail transport and with reorganising the Post Office on a new and more commercial basis.

Mr. Heffer

I am sorry to interrupt, but I want to ask one very important question. Many hon. Members on this side of the House and hon. Members opposite have made some important points during the debate and have asked certain questions. I am getting a little tired of Front Bench speakers replying to debates and yet never attempting to reply to the points made in the debates. Does my right hon. Friend intend to reply to any of the points which have been made?

[column 299]

Mr. Shore

Obviously, I shall reply to as many as I can, although there is a great deal of ground to cover. If my hon. Friend were fair-minded about this, I think that he would see that there are immense difficulties about covering the enormous area which hon. Members themselves have explored during the greater part of today.

I want to turn to one aspect of our policy which I know to be of great interest to many hon. Members and particularly to Scottish Members, a number of whom have spoken today. I refer now to our regional policy. My right hon. Friend the First Secretary has already outlined a great deal of what we are doing. The R.E.P. is extremely important and it is not just a project getting off the ground, but is already in action. It came into effect in September and the first payments began last month. In addition, during the past few weeks we have authorised a very heavy mini-work programme of some £24 million which has the considerable advantage that it is to be spent in the areas where it is most needed, and the greater part will be spent during this winter when it is most needed.

In addition to this, and I am surprised that this has not been noted by hon. Members, we have introduced a considerable increase in the weekly training grant to workers employed by new and expanding firms in development areas—an increase from £5 to £10 a week. I do not want to dwell for long on the major development area policy because I want to tell the House something about what one might call super development areas or special areas within those development areas.

The House will have gathered that the Government believe that the combined effect of those general regional measures will ensure that, despite the continuing run-down of basic industries, including coal, the economic prospects of the development areas as a whole will improve and the average level of unemployment fall to levels much nearer those in the rest of the country. There are, however, certain coalmining areas where general measures of assistance to the development areas as a whole are unlikely to be sufficient.

These are localities where male employment is at present overwhelmingly [column 300]dependent on coal mining, and which are in many cases situated at some distance from the main urban centres or from centres of new industrial development within the region, so that access to the newly development industries in the development areas as a whole will not be easy. Expected colliery closures in these areas are likely to lead to very high levels of unemployment unless special action is taken. Not every isolated mining community can receive this special help, but where the numbers of people living and working in them are substantial, the Government recognise that they must have a reasonable assurance of their future prospects.

The Government have therefore decided to take further action to deal with the problems facing the localities that would be particularly hard hit by colliery closures. The coverage will include those localities where, unless further measures were applied, unemployment would be likely to rise to a very high level and persist for two or three years. We have made a preliminary selection of such areas from the information available, and I am now in touch with the regional planning councils concerned. The areas concerned will be announced when this consultation is complete.

New industrial estates are planned to serve these areas at selected sites in South Wales, Durham and Northumberland, and are under consideration for Scotland and Cumberland. These sites will be within travel-to-work distance of many of the colliery districts threatened with closure. So long as prospects of securing industry are reasonable there will be a continuing building programme of advance factories in these areas to replace those let.

The Government are also considering whether, and if so, in what form, additional incentives are required for industry moving into, or expanding, in these areas.

The Government are prepared to make extra funds available for improving the infrastructure of the affected areas and for other measures of assistance. The use of these additional funds requires further study to ensure that the localities derive the maximum benefit from them. But it could include such objects as improving the access to the area and clearing derelict land. Immediate steps are being taken to authorise additional expenditure on roads [column 301]in the affected areas in order to improve local travel-to-work opportunities.

As well as these special measures of assistance, we intend to set in hand a more searching and detailed study of the economic prospects and potential of these areas. This would include considering how the funds referred to above for improving infrastructure can best be used and the possibility of additional measures. The studies will be put in hand urgently through the Government's regional organisation and will draw on the advice of the regional councils and local authorities.

I hope that the House will forgive me for giving the text of that announcement, but I think it is one of considerable importance and I hope it will be studied. I must move now to the third aspect of what one might call regional policy, because questions were put to me by a number of Members including the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) about what is Government policy in relation to a third category of area now known as the intermediate, or grey area, and which as the right hon. Gentleman knows, the Hunt Committee was set up to study not long ago. I am afraid that I shall have to leave to my right hon. Friend the President of the Board of Trade a point about the future of the cotton textile industry, to which the right hon. and learned Gentleman referred. He will study it with care.

We are looking at the problem of the intermediate areas. While I do not want to commit myself to taking any action, I should not like to say that because the Hunt Committee has been set up we are debarred from taking action until it has reported. But there are difficult problems of definition and of working out policy. I assure the House, however, that I am prepared to study the matter as thoroughly and as quickly as I can.

I have little time left for one part of the Gracious Speech with which I was most anxious to deal—the prices and incomes policy in the moderation phase which it entered in July. The Queen's [column 302]Speech rightly emphasises the need for an effective policy for prices and incomes. There is a wide range of acceptance of the need for an effective policy. One of the most important developments has been the institutional development within the T.U.C. during the past few months of setting up its own vetting committee, which is most certainly in action. I look on that as a most valuable practical reinforcement of the voluntary side of this policy.

I am quite happy with the hon. Lady's suggestion—we have adopted it—that we should refer the prices of nationalised industries to the Prices and Incomes Board. That is right. But I make the point that it will be my intention wherever it is equally appropriate to refer private industry, too. That is what we intend to do.

I would like to mention the development of the new productivity arrangements in the context of the prices and incomes policy. An enormous amount of work has gone into defining these concepts, and that of the lower paid. I believe that the policy has a greater chance of success in the coming year than perhaps it has had before.

To sum up our policy as embodied in the Queen's Speech, we are trying to get out of the difficulties which we have inherited. We did not create them, we inherited them. In particular, in our policies during the coming year we are aiming to prevent the three dreadful features of previous period of stop in the economy—a collapse in investment, unacceptable high unemployment in the least fortunate regions and the cost-push of inflation—not the demand-pull—which makes our products uncompetitive. All the policies that I have mentioned—our regional policies, our prices and incomes policy and the measures which we have taken to sustain investment—are directly relevant to and bear upon these problems, which we intend to solve.

Debate adjourned.—[Mr. Gourlay.]

Debate to be resumed Tomorrow.