Speeches, etc.

Margaret Thatcher

HC S [Debate on Address]

Document type: Speeches, interviews, etc.
Venue: House of Commons
Source: Hansard HC [938/10-25]
Editorial comments: 1514-30.
Importance ranking: Key
Word count: 2008
Themes: Monarchy, Parliament, Union of UK nations, Defence (general), Education, Employment, Industry, European elections, Monetary policy, Energy, Public spending & borrowing, Taxation, Trade, Health policy, Labour Party & socialism, Trade unions, Strikes & other union action
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Mrs. Margaret Thatcher (Finchley)

For many years it has been the custom and privilege of the Leader of the Opposition to offer warm congratulations to the mover and seconder of the Loyal Address. This year I do so with great pleasure.

The hon. Member for Leicester, East (Mr. Bradley) is a highly respected Member. Perhaps we do not hear from him quite often enough. We were all impressed today by the courageous and sometimes combative way in which he introduced his ideas. I hasten to say that at certain points he was combating not us but some of his hon. Friends. I know that the hon. Gentleman has more interesting things in his personal political history than he mentioned. I think that he blazed the trial for one young Tory this year. I know from his own history that the hon. Gentleman made a famous speech at the age of 17 years. This year young Tories have gone one better and have started at the age of 16 years. I think that they will be very reassured that they, too, may find a place in the House.

I also know that the mood of the hon. Gentleman is determined by what Kettering Town Football Club does on a Satur[column 20]day. I understand that if it wins he is optimistic during the following week and that if it loses he is pessimistic. Unlike many of us, the hon. Gentleman must have enjoyed the great length of the Summer Recess. I know that one of his great hobbies is the cultivation of daisies and chrysanthemums. However, many of us think that the recess was a bit too long for Parliament to exert its proper control over the Executive.

As the hon. Gentleman reminded us, Leicester was associated with the formation of the earliest Parliament, whose task was to take away power from the then Executive and restore some of it to the people.

I also congratulate with great pleasure the hon. Member for Hemel Hempstead (Mr. Corbett) on his contribution. I am sure that he will understand that when one gropes for his Christian name the name “Ronnie” comes frequently to mind, but there the resemblance ends, because the other one is really rather small. I think that the hon. Gentleman will agree with me that the other one earns a far higher income. However, perhaps the other one does not have an index-proofed pension, which we are fortunate in having.

It struck me forcibly that both the mover and seconder had rather a lot of complaints to make against their own Government, especially about hospitals. It is perhaps noteworthy that in the Gracious Speech the subject of health is scarcely mentioned, except for one small Bill about the General Medical Council.

Following the congratulations that I have just made it has been the custom for the Leader of the Opposition to make some remarks before James Callaghanthe Prime Minister speaks in reply to the Gracious Speech. This year I have a feeling that I think must be shared by many, namely, that whether we look at the background or the remarks in the Gracious Speech, somehow we have been here before and we are going round the same course again.

We have been here before when we consider the background of strikes and problems of that sort. It was perhaps somewhat ironic that in this Jubilee year the people were not able to see the television show of the opening of Parliament. It is also interesting that we have just [column 21]received the strike figures for the first nine months of this year up to and including the end of September. The figures, which give the working days lost, show that we have lost many more days this year than in the same period during 1973. In 1973 we lost 5½ million working days, whereas in 1977 we lost 6,366,000. Some of the problems that many believed to be solved are now rearing their heads again in an even more acute form. We are back to being offered candles and power cuts, which again we have had before.

One other background measure in respect of which the comment can be made “We have been here before” is the mini-Budget. I make just two comments about it. Denis HealeyThe Chancellor has introduced something that is totally new, which I believe is not an advance but a retrograde step. During my lifetime in Parliament—and I believe longer—whenever we have had changes in Budgets—and we have had changes from time to time, although never as many as the present Chancellor has introduced—we have never had major changes in the rates of income tax or the personal allowances during the year. I think that the Chancellor has done a disservice to himself and all future Chancellors by laying himself open to having repeated changes in income tax rates during the year. He will never be able to resist another change.

In the past we have always had Chancellors of the Exchequer who have been expected to make up their minds about the rate of income tax once a year and stick to it. Indirect taxes have been used as regulators. When are we to get the next reduction in income tax? There is nothing now to stop the rate of income tax being reduced more than once a year.

I turn to the exchange rate. Our part of Leeds makes a speech on a Friday and the Government's part of Leeds follows the advice the following Monday. That is what happened with the exchange rate. The Chancellor was right in what he said about the exchange rate.

I shall comment on the criticisms that have been made about the effect of the exchange rate on exports. If one could achieve a successful export record purely by means of an exchange rate policy we should now have an export boom. [column 22]That is because when the Chancellor took over the Exchequer the exchange rate was $2.30 to the pound. It is now $1.85 to the pound.

One really cannot gear the whole of the exchange rate to marginal exports because of the secondary effect that the exchange rate has. The real reason for poor exports is not the exchange rate but the underlying circumstances which may affect a particular firm. These matters must be tackled.

I turn to the contents of the Gracious Speech. The feeling that we have been here before applies to the legislative provisions. The hon. Member for Leicester, East was candid about devolution. Hon. Members will notice the difference in the way in which devolution and direct elections are dealt with in the Queen's Speech. On devolution it states:

“My Government remain firmly committed to establishing directly elected Assemblies for Scotland and Wales.”

On direct elections it states:

“Legislation providing for the election of United Kingdom members of the European Assembly will be re-introduced.”

Apparently, the Government are not firmly committed to direct elections. If by any chance that Bill does not get through in time for direct elections in Europe the fault will be the Government's.

Both these measures appeared in the Gracious Speech last year. Legislation for direct elections was not introduced in time for it to have a chance to be passed. It will have little chance of getting through in time for direct elections this time. In that event the fault will rest with the Government.

We, like the hon. Member for Leicester, East, have noticed the differences between the references to industrial democracy in the last Gracious Speech and those in this Gracious Speech. We agree with the hon. Member's comments.

We also notice that there is no reference to an Education Bill in the Gracious Speech. We were hoping and expecting a Bill to give parents a greater choice of schools. In so far as we now have more schools of the same kind it is even more important to give parents a greater choice and say in the running of schools, both in terms of the curriculum and by becoming governors. [column 23]

There are certain similarities between this Gracious Speech and last year's Gracious Speech in the language used in connection with economic provisions. There is always a reference to unemployment. Last year the Gracious Speech stated:

“… My Government remain firmly committed” to “a lasting reduction in the present level of unemployment” .—[Official Report, 24th November 1976; Vol. 921, c. 5.]

This year the Gracious Speech states:

“My Government's main objectives are the speediest possible return to full employment and a sustained growth of output.”

The same phrases are trotted out each year. There has been an increase in unemployment between last year and this but the same phrases are trotted out and the fundamental deterioration has continued.

In the present economic situation the only hope that the Government have is from North Sea oil. Without it the economy would be running at an even lower level of activity. In the past, trading difficulties have been sorted out in balance of payments terms by running the country into deeper recession. The Government have already put the country in a recession that is deeper than at any time in the post-war period.

One way of judging how badly the Government have done is to imagine what the position would be without the prospect of North Sea oil. The exchange rate would be far lower, and unemployment would probably stand at 2 million. The rate of inflation would have little prospect of being reduced. That is a correct judgment of the way in which the Government have run the nation's affairs. They have neither policy nor strategy. They are running industry into decline, hoping that North Sea oil will rescue them.

We hear ritual phrases about the need for extra investment, but we do not get the policies to encourage it. The solution is to enable industry to run its affairs in order to make a good return on capital. Investment will flow from that. That is the only way to run an enterprise economy, but the Government have forsaken that path and show no signs of returning to it.

We still have some economic problems. I recall a programme on Weekend World [column 24]last week which showed that North Sea oil can lead to serious consequences unless the proceeds from it are put to good effect and not used in the way in which they were used in Holland, when they went on extra public expenditure and extra public services, rather than on strengthening industry. Although the Prime Minister says that he wants that, I do not think that North Sea oil will be used to strengthen industry. The Government are using it merely as a rescue operation to get them out of their troubles.

I turn to what the Gracious Speech states on defence. It is clear that those who write the Gracious Speech have again paid little regard to events in the intervening year. Last year the Gracious Speech stated:

“My Government will continue to contribute modern and effective forces to the North Atlantic Treaty Organisation.” —[Official Report, 24th November 1976; Vol. 921, c. 4.]

This year the Speech states that the Government:

“will continue to contribute modern and effective forces to the North Atlantic Treaty Organisation” .

The words are almost the same. There is no regard to the fact that communiques were signed in the North Atlantic Council stating that the Government would spend 3 per cent. more in real terms on defence. We have had a letter from Dr. Luns castigating us for the successive cuts that we have made and stating that

“It is therefore a cause for disappointment that the United Kingdom Authorities felt obliged to take steps which will have a direct or indirect adverse impact on the United Kingdom front-line forces.”

There have been severe criticisms from NATO. Representatives of the Government cheerfully put their signatures to an agreement for increasing defence expenditure in real terms. Shortly after that happened the Government made more cuts. Britain's prestige in NATO could not be lower, nor could the morale of our forces about their pay and conditions of service. I hope that the Government will quickly give attention to this urgent matter.

Finally, I refer to a point that the hon. Member for Leicester, East mentioned at the beginning of his speech. It relates to the first sentence in the Gracious Speech. On behalf of my right hon. and hon. Friends, I should like to add to the [column 25]hon. Gentleman's tribute. I hope that the Prime Minister will give to the Queen our loyal and affectionate congratulations on the matchless and flawless way in which she has carried out all the Jubilee events. It has been both a triumph and an example.