Mr. Speaker

I have selected the amendment standing in the name of the right hon. Gentleman the Leader of the Opposition and the names of his right hon. and hon. Friends.

4.5 p.m.

Mr. Michael Heseltine (Henley)

I beg to move, at the end of the Question, to add: But humbly regret the disastrous proposals for the nationalisation of the aircraft, shipbuilding and off shore oil industries, the establishment of a National Enterprise Board and the imposition of planning agreements, which will lead to bureaucratic interference, further loss of confidence, damage to investment and rising unemployment. The House will agree that it has now become a statement of the obvious to refer to the crisis of liquidity and profitability facing British companies, and any last lingering doubts must have been dispelled by the Survey of Business Opinion in the Financial Times today. But perhaps only this Government could so firmly come to the House committed in the Gracious Speech to an expansion of …pvigorous and profitable public and private sectors of industry believing that this could be achieved by further nationalisation and State control.

The crisis in part is of world proportions but the factors that, in countries broadly similar to ours, have led to anxieties deeper than anything we have seen since the end of the Second World War have been deepened in this country by the squeeze of the last Budget and the intensification of price control which followed. The CBI, the TUC and the Bank of England only reinforce the Government's own statistics demonstrating beyond question that the shortage of cash is now imperilling investment and employment.

If we can agree that the patient is ill—and everyone does—we cannot, however, agree on the diagnosis or, indeed, on which doctor to send for. I suspect that many hon. Members opposite have a political vested interest in ensuring that the patient does not recover. Even the magnitude of the current crisis must not obscure the underlying debilitation that years of inadequate investment in this country have produced. We have consistently spent more and invested less than the equivalent economies of Europe. The latest forecasts indicate that even in the current situation facing us all, the growth rates will be higher in Germany, France and elsewhere in Europe than here. As the real wages in Europe outstrip our own, as the evident capital investment by other European countries manifests itself, and as the gap between the standards of living here and on the Continent widens, so we are faced not only with the need to restore industry's ability to invest but, equally important, to restore the will of industry to invest.

We are faced with the unpalatable duty to tell our people that, if we are to have a hope of keeping our place as a significant European Power, we have to forgo many of the things we want today in order to provide for ourselves a sense of purpose tomorrow. It is always easier for politicians in a democratic society to provide bread and jam today, but we shall not be forgiven if we preside in this House over a society that, year after year, has consumed and now borrowed its way to poverty.

The outdated factories, the slums, the hospital queues, the bitterness of the regions, are the prices that our people pay because, year after year, we have chosen to spend and not save some 5 per cent. more than our neighbours. The overwhelming criticism of the Gracious Speech is that it could have been delivered by any other Labour Government at any time in a good year or bad, in crisis or out of crisis. It sees and sets no challenge, offers no leadership and provides no hope. Nowhere in it are the real problems of industry even hinted at.

Yet the bad industrial relations, low productivity, restrictive practices, the need for a different quality of dialogue between board room and shop floor, and the harsh, unavoidable impact of competitive economics are the issues we should be discussing here. All we are offered is the delusion that more absolute State ownership can protect us and keep us immune from a world in which we have no choice but to compete. After 30 years of experimentation with State ownership, the aggregate of public endeavour is measured by capital losses of over £5,000 million and revenue losses in excess of £2,000 million.

Nationalisation has a record of Government interference for the short-term purpose of achieving political aims. Let us listen to the words of Richard Marsh, speaking in May of this year, when he said: None of the five-year investment plans we have produced has remained intact for more than six months because of the inability and unwillingness of Government to settle investment plans for more than an inadequate period ahead.…The cost to the taxpayer of the present short-term nature of the Government's method of allocating investment to the nationalised industries is frightening. That is the record of reality to which this Government now intend to commit yet further large sectors of British industry.

It is the Secretary of State for Industry who has pointed out that Whitehall lacks entrepreneurial flair—and no man in this House has greater cause to know that! The first priority today is to restore industrial confidence. No matter how careful the figuring or how sophisticated the calculations, there is a critical moment in any investment decision when the cold, arid facts give way to human judgment. That judgment depends upon confidence. That confidence in industry today has gone. Even if next week tax cuts restore the liquidity of companies and industries, they will not restore industry's confidence.

For that to happen there must also be restored the expectancy of profit. No one underestimates the difficulties of bringing this about when world conditions are so uncertain. But world conditions are no longer responsible for the danger that Britain is now moving into its worst-ever period of home-bred inflation which the Government seek to justify as part of a contract recognisable only in the eyes of its architect.

There are four reasons why profitability must be restored to industry. First, without it industry is unable to raise the cash for further investment and there is no way to restore the ability to invest in profitable undertakings without at the same time restoring the working of the capital markets. Secondly, no system of centralised bureacracy can prove so responsive or sensitive to the genuine requirements of industry and consumers. Thirdly, in practice we in Britain know that the machinery of government has proved incapable of exercising effective control of the public sector either for the public at large or even for Members of this House.

The final and most important reason of all is that the strength of the private corporate sector is the only guarantee we have of the widespread distribution of power throughout the community. It is the tragedy of this country that we are the only advanced economy where the sterile arguments for more State ownership are paraded so regularly before us. The most prosperous country in Europe, Sweden, after 42 years of Socialist Government, has achieved its prosperity because it left 95 per cent. of its industry in private hands.

Mr. John Tomlinson (Meriden)

Would the hon. Gentleman agree that when he talks about 95 per cent. of the Swedish economy being in private hands he has totally ignored the 30 per cent. of the Swedish economy in co-operative ownership?

Mr. Heseltine

I will come to the question of co-operation. It is an important point. [Interruption.] Very well, let me deal with it now. I see no fundamental objection to the concept of co-operation but my concern—[Interruption.] I am not denying the figures. My concern is that the experimentation with co-operation in this country is being built upon fragile and genuinely uneconomic projects which the Secretary of State picks up from the debris of companies in collapse.

There are five areas referred to in the Gracious Speech which have a major im- pact on industry. They concern the small businessman, the aircraft and ship manufacturing industries, listed for direct nationalisation, the establishment of a National Enterprise Board and the imposition of planning agreements.

The small businesses already employ 6 million people and account for 20 per cent. of our gross national product. Already rising bankruptcy rates reflect the pressures loading upon this sector. The Gracious Speech heralds the arrival of the wealth tax, which makes numbers of people wonder "Was it really worth the effort after all?" The insurance increases which are threatened in other legislation add to the burden of the self-employed as further Government imposts are put upon them.

There are two industries listed for nationalisation. Perhaps it will be appropriate to deal with the details of those proposals when the Bills are published. Suffice it to say that the presumption upon which these proposals are based must be that the real problems of those industries can be better solved when there is greater Government influence and control. If we look at the second argument —I do not believe there is evidence anywhere in the way we run our public sector that Government ownership or control has led to dramatically effective results. The Government argue that the shipbuilding industry has received £156 million in grants and, therefore, ought to be brought into public ownership.

There is no greater distortion of this argument than the "realities" which the Secretary of State has sought to build into it. Of the £156 million, £109 million has gone to those three shipbuilding companies that are either totally or largely owned by the Government. This leaves £47 million which has gone to the rest. Of that, £12 million has gone in loans at arm's length at market terms of interest and £25 million went on grants to protect our industry against subsidised competition from overseas. At the end of the day we are left with only £9 million to £10 million which has gone to the private sector.

That is the total financial case for bringing 13 companies into public ownership. It totally ignores the fact that virtually no help has been given to the ship repair or marine repairing industries which are also listed for public ownership.

In aerospace the record of Government intervention has been no more successful. Let us be clear that there is without doubt a need for a close relationship between the Government and that industry. It happens wherever the industry exists throughout the world. There is not a shred of evidence that public ownership will add one real dimension to the problems confronting the aerospace industry.

If we look at the areas where the partnership between Government and industry has been closest, in Concorde and the RB211, the reality is that Government and industry have been equally wrong in the forecasts they have made about the costs likely to emerge. The record of British European Airways over the Trident or BOAC over the VC10 destroys the myth of the real benefits that can come from taking companies over and trying to impose State-oriented plans upon the industries.

The damage to the mutual trust between Government and industry—and that trust has been gravely worsened by the threat of nationalisation—cannot be divorced from the difficulties facing Hawker Siddeley in its relationship with the Government. I listened to the Secretary of State for Industry this afternoon saying that he wanted written notice to answer a question about how many meetings he had had on this urgent matter. I was not surprised he sought to avoid answering the question. I should have thought that the right hon. Gentleman would have had a pretty good idea of how urgently he had dealt with the news which had reached him early in July that the Hawker Siddeley project was in real danger.

I should have thought that the right hon. Gentleman would have wanted to tell the House that it was weeks before he even held a meeting with the company and that nearly four months later he has stood back, aloof, more concerned to try to make a point which might have a certain relevance—I do not dispute it —in terms of relationships with the trade unions but which has no relationship to the urgency with which the Secretary of State should have dealt with the prob- lems facing the HS146 once they were drawn to his attention.

I suppose that it is arguable at least that a certain circumspection has come to the Secretary for Industry in the way in which he handles industrial affairs. Gone is the old panache with which he rushed in, without time to consult the industrial advisers provided under the Industry Act, to rescue, we were told, the holidaymakers booked through Court Line. Gone is the old spirit with which the Secretary for Industry regarded his enthusiastic partnership with Rolls-Royce. We have the Secretary for Industry's own words to describe the speed with which he was able to act in relation to Rolls-Royce and its negotiations with the Americans. The House may remember the words. This is the way in which he told it: At 5.30 on Wednesday 27th March, Rolls-Royce came to me and said that Lockheed had decided to go ahead with only two airline orders, and it required another £20 million, which it must have five hours later if it was not to withdraw altogether from the race…I have heard it said many times—…and seen it on television in 'The Power Game' and 'The Plane Makers '—that Governments are very slow when it comes to major industrial decisons, that only businessmen can take big risks at critical moments. Because my memoirs are not appearing in the Sunday Times, perhaps I can he allowed to give them to the House. In fact, five-and-a-half hours later—I noted the time in my diary—at four minutes past 11 that night I rang Rolls-Royce and authorised a guarantee not for £20 million but for £9 million to carry it over that four-week period.…That is the reality of Government-industry relations."—[OFFICIAL REPORT, 23rd November 1970; Vol. 807, c. 39] What a pity the Hawker Siddeley board was not treated with the same dispatch when it appealed for help. The reality has always been the same. The closer the relationship the larger the loss, and corporate wisdom has hardly been enhanced when it has been added to collective wisdom.

Anyone who really wants to understand the fundamental difference between private enterprise and what the Government describe as" vigorous and profitable public sector activity" should have come with me to the last day of the Farnborough Air Show this autumn. I do not need to remind the House of the major international significance of Farnborough to British aerospace. Every chalet was thronged with visitors from all over the world except for one chalet which dominated the show, perched high in the most conspicuous position. That chalet, and it was the chalet of the Secretary for Industry, had closed down—bolted and barred—a defiant tribute to the difference between private enterprise and public apathy.

The argument about public ownership has followed the course that could long have been expected of it. It is no longer enough to conduct frontal assaults on chosen industries. Now the State has to be armed with the ability to pick off individual companies for the National Enterprise Board. There is no more effective way to prepare the ground for this than to suggest that the whole of private enterprise is being subsidised by the taxpayer.

A figure of £2 million a day is produced as the psychological background against which to justify the latest addition to the weaponry of Socialism. Forget for one moment that industry contributes £8 million a day in taxes to the central Exchequer. Forget that private enterprise is a major contributor whilst the nationalised industries are a major liability. It is the underlying fallacy that I resent. For what is this £2 million a day? It is investment grants, which have now been abolished, it is Concorde and the RB211, which are special cases. Other than that it is largely development grants, Local Employment Acts, regional employment premium for industry and help to the regions. In other words, it is the social and political expenditure of Governments to subsidise our regions, to balance the economic compulsion of the South-East, to counteract the decline of traditional industrial patterns and to spread employment more evenly throughout Britain.

No one questions those objectives, but if anyone should be called to account for that expenditure it is we in this House as politicians. Indeed, it is worth while to reflect just how ineffective the House is in monitoring the money which is spent by Governments on our behalf in this way.

It is necessary for the image of industry to be redrawn to pave the way for the new approach which the Government seek to introduce. The rewriting of the language is an important aspect of the attempt to persuade a reluctant public to stomach the Socialist dogma so few people want. A new vocabulary is the familiar tool of propagandists the world over. The term "nationalisation" is unpopular, so let it be renamed "public ownership". The ragbag of earlier State excursions into British companies is glamourised under the heading "National Enterprise Board". Grants to the regions become "subsidies to private enterprise", and a bureaucratic system of planning agreements becomes "the regeneration of British industry". Perhaps most incredibly of all, the Secretary for Industry on television last week told the public that even if his planning agreement covered the top 100 companies, only 1½ per cent. by number of British companies would be affected. That is to equate ICI with the local window cleaner, or Unilever with the family business in which the Secretary of State for Industry learnt the first tricks of salesmanship.

Mr. Neil Kinnock (Bedwellty)

As an active servant of capitalism, does not the hon. Gentleman share the views of Government supporters that it is a bad thing that the 100 companies of which he speaks, although they represent only 1½ per cent. of the total number of companies in the country, control just over 50 per cent. of all the manufacturing facilities and wealth?

Mr. Heseltine

I believe that the British public are much more interested in the jobs they create, the exports they earn and the general sense of affluence they produce.

The Prime Minister's view is that the National Enterprise Board is to be set up to draw a clear divide between the public sector and the private sector, to bring a new commercial skill to Whitehall and to deploy a cool financial judgment to the investment of the taxpayers' money. That may well be the writing on the tablets of stone but they have sunk without trace on their journey to Victoria Street.

Within the past few months we have seen example after example of how that cool financial judgment has worked out in practice. We have seen the use of the Industry Act, when we were told that there was not time to consult the industrial advisers. We were told that in the case of Harland and Wolff there was no need to consult the industrial advisers. In short succession proposals for Meriden motor cycles, Scottish newspapers and Liverpool heating systems were put to the industrial advisers, whose advice was rejected, and the proposals were pressed on with as rapidly as possible. For in reality the Secretary of Industry is more concerned with the public political impact of his policies than with the health of British industry. To force British industry closer to his personal theories he is prepared to scatter taxpayers' money like confetti.

The present wage explosion which, predictably, we have been told the social contract is now not expected to contain, is one of the greatest weapons in the hands of people who wish to see British industry brought to the doorstep of the State. Without doubt, what is needed is a comprehensive review of the pricing policy, without which we shall find industry unable to stand on its own feet and unable to carry on with the job of investing and developing as it should be doing.

As the Secretary of State for Industry so clearly stated in this week's Labour Weekly, the rôle of public ownership is central to Labour's investment drive. It is not only because the unnecessary acquisition of profitable companies is a prime objective of the National Enterprise Board that we reject it. Even more important, we see it as an instrument for the more pervasive use of State power.

It is unrealistic for the Prime Minister to talk of a clear divide between the public and private sectors. The reality of the purpose of the National Enterprise Board is to be found on page 14 of the Labour Party's paper on the National Enterprise Board, the report of a study group published in 1973: The direct contribution of the NEB companies would also be matched by a 'pull' effect on private companies of a kind which previous planning and financial handouts did not promote—both because many private companies would be compelled to follow the NEB companies' lead, or lose market share and profit…".

Mr. Guy Barnett (Greenwich)

Hear, hear. Good competition.

Mr. Heseltine

Competition with the use of taxpayers' money, which is not good competition at all.

The reality was clearly indicated by the right hon. Member for Birkenhead (Mr. Dell), the Paymaster-General, who, on reading the National Enterprise Board proposals, gave his authoritative judgment: The management problems of this conglomerate can perhaps be imagined…one thing it would not be is an instrument of Ministers in solving Britain's regional and export problems…it is a bad idea. It derives from, a vision of monopolistic society, ruled by technocrats. That is the view of a member of the Labour Government who saw clearly the way in which that proposal is likely to work out.

The House will be as aware as I am that the National Enterprise Board is not without parentage. The experiment has been tried before, conspicuously in Italy, where, in the 1930s, IRI was set up. I do not believe that anyone would argue that history has shown that the Italians' regional problems, employment problems and industrial relations problems have emerged as a pattern of encouragement to the rest of Europe. But a fact that has remained lost in the obscurity of history is that the economic adviser to Mussolini at the time IRI was created was no less a personage than Signor Benni.

But the second negation of the Prime Minister's principle of the clear divide is the concept of the planning agreement.

Mr. John Stonehouse (Walsall, North)

Is it not of more significance that Tory Members of Parliament prefer to buy motor cars produced by the Italian NEB to choosing private enterprise cars made here in Britain? Is not that the fact of the matter, which proves that actions are louder than words?

Mr. Heseltine

I am sure that that is a message that the right hon. Member would like to give to people responsible for disrupting the flow of motor cars out of Britain's factories so that customers cannot get them.

I was saying that the second negation of the Prime Minister's principle of the clear divide is the concept of the planning agreement. We are told that such agreements are to be voluntary. Then why is an Act of Parliament necessary to set them up? When Chris Chataway was Minister for Industrial Development he held continuing discussions with our leading companies about their future plans and the impact of those plans on the regions, on investment and on employment. But the great difference was that those discussions took place in an atmosphere of trust. It is that atmosphere of trust which has been destroyed by the present Government.

The only other conclusion is that there are to be inducements or subsidies to companies to accept planning agreements in order to qualify for the grants or subsidies available to their competitors. It would be the proverbial case of an offer that nobody could afford to refuse.

The planning agreements are, of course, the handmaiden of the National Enterprise Board. Any company expected to reveal its detailed future expectation to the Government will be the totally exposed prey of the board. If the planning agreement projects decline, the company will not be able to counter a bid from the NEB. If the company projects succeed, then the NEB will know long before anyone else. The State will become the most sophisticated insider dealer or them all. It only requires the asset stripper to be rechristened the asset reclaimer for the process to have run full course.

The most likely consequence of the creation of a formal agreement is to create an illusion of control in Whitehall that will be completely overwhelmed by the reality. No one can predict the future with the accuracy that a formal agreement implies. But the nature of the Civil Service is to expect a degree of precision which industrialists know to be unattainable. Forward planning is a tentative exercise, but the information will be solemnised by the machine and will assume the rigidity of holy writ by the trade unions. The promises of the planning agreements could all too easily become running sores of misunderstanding and contention in the negotiations between industrial manager and employee.

Where are we to get the staff to monitor these plans? A new breed of technocrats cannot be created by Act of Parliament. Nobody who has the experience of administering the nationalised industries in government has the slightest doubt that there simply is not the apparatus to partner private sector industry in the administration of a concept as sophisticated and as bureaucratic as that of the planning procedures.

Nationalisation, the National Enterprise Board, and planning agreements, are only a part of the weaponry of those who have now forced them into the Labour Party programme. The purpose is not just to experiment with three or four more methods of Socialist control. The real purpose is to bring about a fundamental switch of power from private citizens and individual companies to the State—the irreversible shift of Socialism.

No clearer example of this can be found than in the controversy raging over the proposals for an investment bank. First, by taxing and squeezing industry, the Government destroy the prospect of profit. British investors refuse to invest and the capital markets are destroyed. A detached observer might feel that the urgent requirement was to restore to industry its ability to earn profits and thus to attract investment through a revived capital market. But Socialists want investment and not profit. They want the State and not the market to allocate the resources. Consequently, the Left of the Labour party stands firm in its determination that the capital markets must not be restored, thus, as they hope, forcing industry into the hands of the National Enterprise Board. The rest of the Government try to find a compromise by offering long-term lending without strings so that industry will have the opportunity to by-pass the National Enterprise Board.

In reality, neither proposal will secure the investment so badly needed. For what company will go either to the National Enterprise Board or to the proposed investment bank unless it sees a prospect of profit? The prospects are not there. Therefore, the answer is clear. In the main, only those companies seeking, not funds for investment but funds for survival, will appear at the door of the Government. The weakest will come running in a race to keep ahead of the bank manager, because, faced with a choice between the receiver and the Secretary of State for Industry, the latter will seem the softer touch.

But it is the British people who will pay, not only with the progressive elimination of freedom in society that these policies imply, but with their savings and with their jobs. The Prime Minister may have nothing to say about the Stock Exchange in the Gracious Speech except irrelevant references to attempts to corner national resources by financial manœuvres. But it is because nearly every family in the land have a direct stake in the Stock Exchange through their pensions, their life policies and other savings, which are secured on the value of British industry, that the collapse of the capital market represents a personal tragedy for so many.

But the most far-reaching tragedy which the Government's fiscal and industrial policies have done so much to aggravate is the present menacing level of unemployment. For those of us who sat through the last period of Labour Government from 1964 to 1970 the most bizarre memories were those of Ministers justifying each new level of rising unemployment with the rationale of the technocrat. The "temporary adjustments" became "shake-outs in industry" which, in turn, gave way to the " new opportunities for purposive redeployment". For the ordinary man and woman in British industry it was unemployment by any other name.

The process is beginning again. Falling confidence has always been the first of the storm cones, and confidence is now at the lowest recorded level. Investment cuts follow. The cut-backs are announced daily. No matter what steps the Government now take, the harm already done cannot be undone quickly enough to prevent unemployment from rising to levels not seen in Britain by my generation.

If there were an area of priority which I should have thought the Government would find attractive it is the need for a penetrating and comprehensive reappraisal of our attitudes towards unemployment. More than anything else it is the fear that the job will go that engenders distrust and fosters suspicion on the shop floor. The older the person, the more bleak the prospect. But the Queen's Speech is silent on a new urgency for retraining, on new schemes to encourage mobility, of any word about improving the quality of dialogue in industry.

The briefest survey of this nation's industrial problems leaves the clearest lesson that we in Britain do not have a surfeit of time. Elections and pre-election periods are not the easiest for politicians to make the call on people that the true nature of our crisis demands. Whichever party had been elected would have been expected to make such a call. The Government's response in no way measures the challenge to which the nation yearns to respond.

The Government's proposals are at best imbued with the sense of relevancy with which the sailors varnished the deck-chairs on the state decks of the "Titanic" [Laughter.] The people on the "Titanic" laughed just as hon. Members opposite laugh. They did not appreciate the disaster that was coming. At worst the Government's proposals in the Queen's Speech will divide where they should unite, destroy where they should create and wound where they should heal.

4.43 p.m.

The Secretary of State for Industry(Mr. Anthony Wedgwood Benn)

This is the first major debate on industrial policy held in this Parliament. When the legislation comes forward, there will be opportunities to examine the proposals that the Government intend to lay before the House. Those proposals include, as was clear from the Gracious Speech, legislation on North Sea oil which was forecast in the White Paper, and my right hon. Friend the Secretary of State for Energy, who will be winding up for the Government, will say more about that.

There will also be laid before Parliament a new Industry Bill to establish the National Enterprise Board, and there will be provision in it for the disclosure necessary to make planning agreements possible. This has all been set out in the White Paper published on 15th August which the House has not had the opportunity of debating until today. There will also be legislation to bring shipbuilding and the aircraft industry into public ownership. In that connection, it is clearly in the national interest, and in the interests of the workers and management in the aircraft and shipbuilding industries and of their customers, that in the period until vesting day the day-to-day operations of these two industries should continue smoothly.

I wish, therefore, to give an assurance that in the period up to vesting day no company or person will be penalised as a result of reasonable action taken in the normal course of business and in good faith. However, it is necessary to protect the new undertakings from dissipation of the assets to be nationalised or other transactions which would have the effect of frustrating the objectives of nationalisation. The legislation will, therefore, contain provision enabling any transactions entered into up to vesting day to be reversed if they are considered to be disadvantageous to the new undertakings, unless the Secretary of State has consented to them.

It has already been announced that these provisions will apply from 31st July 1974 for the shipbuilding, ship repairing and marine engineering industries, and they will apply as from today to the aircraft industry. The Government are ready at any time to discuss any problems which may arise in connection with these provisions with the companies concerned or with the representative organisations of the industry. We shall be prepared to augment these provisions in whatever way we consider necessary to safeguard the assets to be nationalised against dissipation.

The new undertaking will take over the companies to be nationalised as going concerns. Their commercial contracts will remain binding. Shareholders and long-term debenture holders will be compensated. Customers, collaborative partners, suppliers and other commercial creditors can be assured that obligations will be fully honoured under the new arrangements. There will be no lack of continuity in this respect.

Mr. Cranley Onslow (Woking)

I am grateful to the right hon. Gentleman for giving way. He has evidently finished dealing with that point, but can he tell us what arrangements the House of Commons is to have to monitor all this while it goes on?

Mr. Benn

I think that if the hon. Gentleman will allow me to complete my speech he will see not only that there will be legislation on all these matters but that the provisions of the legislation, as has been made clear in the White Paper, will provide for a high degree of parliamentary accountability. I shall be very surprised indeed if the hon. Gentleman—or the House—found it difficult to contribute continually to the debates on these matters, because it is my hope that that will happen.

The hon. Member for Henley (Mr. Heseltine), who opened for the Opposition today, was critical of our proposals. I must do the hon. Gentleman the honour of recognising that he has consistently been critical of these proposals—and I make no complaint about that—but the House will recognise that the Government have consistently advocated these policies. There has been no attempt on my part or on the part of my right hon. and hon. Friends to conceal our policies in any way from the electorate, and, therefore, nobody should be surprised that they are being brought before Parliament with a view to implementing them in full.

Unless every debate—as I feared would be the case when I heard the hon. Gentleman—is to be a perpetual re-run of the election campaign, we should use this debate to establish early what are the real arguments about our proposals—what are they really about, what are we not arguing about and on what should the House expect to find agreement?

Let me begin with this aspect: on what issues should the House expect, in the course of these debates over the forthcoming Session, to find itself in agreement? One must, surely, be the depth and extent of the industrial problem that confronts the United Kingdom. There is no question but that our industrial problems lie at the heart of many of the problems which we now describe as part of the gravest economic crisis since the war. In many cases industrial problems lie at the heart of the problems of inflation, of exports and of productivity. It has to be seen against a long-term, relative industrial decline which has gone on under Governments of all parties, including that of the Tory Party, when they had full opportunity to develop their policies with a working majority. There is another aspect: this country's industrial future needs and prospects.

Figures quoted by the right hon. and learned Gentleman the Secretary of State for Consumer Affairs before the February election forecast for Britain a standard of living that would be below that of Italy and just above that of the Republic of Ireland by the early 1980s. There has been a steady industrial decline for 25 years, and poor investment in private manufacturing industry has played a large part in that decline.

The wider problems of industrial relations have also been touched upon; not only wages negotiations but the whole question of relations within industry is clearly connected with this central industrial problem. If we add to that the intensification of those long-term problems by the oil crisis and the effect of the rise in oil prices last year, the confrontation associated with earlier legislation, and the three-day working week, we get some measure of the magnitude of the task that confronts us as we debate our industrial problems.

We may differ on the remedy but on the magnitude of the problems that face us the House should find some measure of agreement.

Mr. Tom King (Bridgwater)

Does not the right hon. Gentleman realise that all hon. Members accept what he said but that the words he has just uttered increase the magnitude of the problem to British industry? The longer the politicians continue to say how disastrous the state of British industry is—those words are read widely abroad—the harder is the problem. Would it not be fair of the right hon. Gentleman to recognise that this country faces problems—as do all other industrial countries in the world at present—and draw some comfort from the fact that this country exports a larger proportion of its gross national product than any of its major industrial competitors?

Mr. Benn

I appreciate what the hon. Gentleman says, but a Minister presenting an argument to the House involving substantial changes in industrial policy must be allowed, in presenting them, to do so against a background of real problems that go back a generation. I shall not make a point about whether the crisis was concealed from the public. My view is that we should all speak candidly to each other, without hyperbole. I have said what I genuinely believe, and I have, in doing so, indicated not any pessimism but the magnitude of the task that confronts us.

There is no disagreement between the two sides of the House on the principle of Government intervention in industry. Let us be absolutely clear on that point. No Government in peace time or in war time have ever intervened so directly and so intimately in the workings of private manufacturing industry as the Conservative Party when it was in power. It intervened directly through the Industrial Relations Act right into the workshop. It intervened through the Counter-Inflation Act right into every pay settlement. I think that it would be sensible, as we approach these debates over the next 12 months, if we could get clear from the beginning that it is not a matter of argument between us as to whether Government should involve themselves in industry.

The Labour Government have begun their period of office by reducing the intervention in the two key areas to which I refer; namely, by the repeal of the disastrous Industrial Relations Act and by the abolition of the Pay Board. I know many managers in industry who found that the Pay Board interfered more directly with their rôle as managers than any other single act of intervention.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

What about the Price Commission? Is that not the body which has done more damage to British industry than the Pay Board? When are we going to shop that down the river, too?

Mr. Benn

I was not claiming that the Labour Government had withdrawn all intervention. I said that in two key areas—[Interruption.] The hon. Gentleman has honourably Benn engaged in an argument with his own colleagues about this matter and now carries the argument to us. But it is no part of my argument that that withdrawal of intervention would be in the public interest.

What, then, is the argument about? This is what we need to have clear before we begin this session of debates. This argument is about four issues: first, in whose interests should one intervene; second, with what objectives; third, by what methods; and, fourth, with what reasonable expectation of success?

Mr. Eldon Griffiths (Bury St. Edmunds)

rose—

Mr. Benn

Allow me to finish this point. Our industrial policy constitutes a wide-ranging and, in our judgment, long overdue programme of industrial reform, and it is to the issues that divide us that I should now like to turn.

Mr. Eldon Griffiths

I am obliged to the right hon. Gentleman for giving way. To the four questions which he has posed would he add two more and be sure to give the House an answer this afternoon; namely, fifthly, what will it cost, and sixthly, who will pay?

Mr. Benn

The hon. Gentleman will have been in the House at Question Time today, when this question was put, and I think I must be allowed to develop my own argument in my own way. It is open to the hon. Gentleman to intervene as he has done in this debate publicly and in Parliament.

To come to the first question—in whose interests should intervention and industrial policy be pursued?—I am very surprised when I hear hon. Gentlemen opposite speak of industry as if the only spokesmen for it were the directors of major industrial companies. Clearly, British industry is the British people at work, and it is certainly with that in mind that we begin our approach to industrial confidence. We are arguing—it is a very big change and there is a wide difference between us on it—that those who invest their skills, energy and their lives, including managers, in British industry are entitled to at least as great a say in its control as those who invest their money in it. That is the first point we put before the House. The skills are not fully used—

Mr. Onslow

Mines?

Mr. Benn

If the hon. Gentleman wants to intervene he will have an opportunity to do so, but continual heckling does not contribute usefully to our debate. If he wants to speak perhaps he will rise to his feet and intervene.

What we are saying is that our industrial policy must be based upon the recognition of that fact of collective effort and joint decision, and that is the industrial component of the social contract.

Mr. Peter Rost (Derbyshire, South-East)

The right hon. Gentleman has referred to the social contract. Would he not agree that the millions of people who contribute their savings to industry to which he has referred, also have the right to be consulted under the social contract? What has the social contract done for those millions of people who have had their savings wiped out by inflation and the collapse of the capital market?

Mr. Benn

All I can say to the hon. Gentleman is that the first product of the social contract was the pension increase, which the trade union movement put at the head of its campaign, and anyone who observed the issues raised by the Labour movement and the Labour Party in the period of opposition will recognise that all the policies advocated were in the interest of the comunity as a whole. I shall return to that question again.

I come now to the question of the objectives which should now be adopted by us. The four traditional macroeconomic objectives of the balance of payments, full employment, stable prices and economic growth have been debated many times in the past. The Opposition's view has generally been that these problems were soluble by stimulating and guiding the market mechanism to make it work more perfectly. In practice, however, when in government, when they have come to seek to apply the principles —even those described today—they have abandoned their philisophy and adopted one of direct and. I might add, usually—as last time—unsuccessful intervention in order to resolve these problems.

The reason why we reject this approach is that it has not dealt with the growing problem of monopoly to which reference has been made—the 100 companies producing 50 per cent. of our output. It has not resolved the problem of regional unemployment. In the case of the last Conservative Government it has not brought investment up even to levels as high as when we left office in 1970, and it ended with a breakdown of consent. It is this failure that gives us the starting point for the presentation of our new policy.

We must explore new objectives, and I want to take up what has been said by the hon. Member for Henley in opening the debate. There must be a much greater emphasis upon jobs in our industrial policy. It is more than full-employment as a macro-economic goal that we must adopt. It is the recognition that it is through work that a man expresses his skill, acquires his self-respect and status, and gains his security. Therefore, it must be a key factor in any industrial policy to sustain jobs, create jobs, make jobs more secure and, furthermore, to see jobs not just as one of the balancing factors in a complicated national equation but as the heart and core of the needs of people and thus of our industrial policy.

I emphasise this with the threat of a recession ahead where we shall have to accept that, rightly, the British people will not again go through the experiences of the pre-war years. The arguments about the monetary solution, which are discussed within the academic circles of the Conservative Party and in their weekend speeches, which would involve deliberately creating unemployment in order to tackle the problems of inflation, are wholly and absolutely unacceptable. I am putting a point of view to the House. Whatever interest there may be in these debates about monetary solutions, they are absolutely alien to the policy which we are putting forward, and the British people will not accept them.

Mr. John Peyton (Yeovil)

The right hon. Gentleman is using brave words, but I wonder whether he would explain to the House how these disasters are going to be staved off?

Mr. Benn

My speech is an opening up, for the benefit of the House, of the arguments that we are having between us. If the right hon. Gentleman will listen he will find they are not about intervention. As I have said, they are about these other matters.

I want to offer the House my analysis. This is the beginning of a long series of debates. It is not the end of the matter. We shall be pursuing it further. Charles Wilson said "What is good for General Motors is good for the United States", and what we say is "What is good for working people and their families is good for Britain." There is a substantial difference between those approaches. For all of us, jobs come first.

That is not a theoretical matter. It is a practical matter that presents itself to Ministers on a day-to-day basis.

Mrs. Elaine Kellett-Bowman (Lancaster)

rose—

Mr. Benn

I have given way several times. I must be allowed to continue. Has the hon. Lady a question?

Mrs. Kellett-Bowman

Is the Minister aware that the measures in the Chancellor's Budget for squeezing cash liquidity are causing severe de-stocking throughout the land? That is adversely affecting many firms in my constituency, and many are on a three-day working week and many are declaring large-scale redundancies. Would he please ask his right hon. Friend to do something about that most urgently in his November Budget? We shall otherwise be facing far worse unemployment in Lancaster than we have had since the 'twenties.

Mr. Benn

As unemployment rose to more than I million in 1972, in addition to the three-day working week in January, which led to enormous lay-offs, the hon. Lady will recognise that the industrial problems facing Britain go back some time. I made that point earlier.

I want to come to the practical effects of what I have said. As in the case of Court Shipbuilders, for example, where 9,000 jobs were set at risk by financial speculation in the company, it is absolutely right for the Government to intervene to safeguard jobs.

According to Press reports, two brothers own 56 per cent. of the shares of Ferranti. Suddenly, that great enterprise, with some 14,000 jobs in development areas, is in difficulty, and it is absolutely right for the Government to go in and ensure that the necessary operation is carried through.

In the instance of Alfred Herbert, 6,500 jobs are at stake in a company whose problems are very deep-seated and go back to before the February election. The imminent problems of that company were the first to be put on my desk in February. It is right for the Government to go in to safeguard employment.

Other examples are the firm of George Kent, the motorcycle workers at Meriden, and the people at IPD. IPD has had six or seven different owners over the past 12 years. The men have been thrown on to the mercies of the receiver on two or three occasions. The male unemployment rate in Merseyside; is 9.5 per cent. I make no apology to the House for approaching the responsibility that I have in this field by seeing that jobs are sustained, created and strengthened in practical terms, and that is what I intend to do.

Mr. William Molloy (Ealing, North)

Would the Minister be good enough to add to his list the firm of Rockware in my constituency? It was driven out—I know it is funny to Conservative Members when 1,000 men lose their jobs—and the glass container industry savagely damaged because of the predatory activities of people like Slater Walker, who drove Rockware to the point of having to sell its factory to keep another two, while the products that were made at Greenford are now being made in Western Germany.

Mr. Benn

I, like my hon. Friend, regard it as totally unacceptable that workers should be regarded as pawns in a game, the principal objective of which is simply to make money in some other way. It is absolutely wrong, in my judgment, that workers who have devoted their lives to an industry should come—as often happens, and is happening all the time—to their place of work and find a notice announcing a redundancy as a result of a decision that, in many cases, has been taken months earlier and has been taken for reasons that have no bearing whatsoever on whether these people could earn their living by the exercise of their skill.

Mr. Greville Janner

rose—

Mr. Benn

I must not detain the House too long. I know that there are many hon. Members, of different parties, who at one time or another will be coming quite properly to the Department of Industry with examples of this kind themselves, and they will be correctly speaking on behalf of those whom they represent in Parliament.

I know the argument that if one is too concerned with saving jobs there will be some ossification of the industrial pattern. I have heard the argument put very strongly. Against that, I ask the House to consider that if it is generally thought —particularly at a time when world unemployment levels may be rising—that the Government are not concerned with jobs, ossification may be avoided but at the same time the arthritis of restrictive practices throughout industry will be reinforced, and they derive most of their strength from the fear, which unfortunately is correct, that unless people defend themselves in some way they will have no chance of retaining their jobs.

In every case, in so far as it is open to me to do so, I shall seek time to examine the real nature of the problem, which is not at all revealed by what may be the short-term market situation, and see whether it is possible to find an answer to these problems.

The Tory Party totally misunderstands the mood of salaried management if it does not realise that salaried management is as keen that this should be done as are organised workers in industry, because salaried managers who do not own the businesses in which they work have far further to fall if they become the victims of closures or redundancy. They do not find in the hon. Gentleman's rhetoric the comfort that they find in believing that we shall look at the firms in which they work with a view to giving them a long-term future through higher investment and higher productivity; and if public money goes in on that basis, frankly there should be full accountability for it.

Mr. David Crouch (Canterbury)

rose—

Mr. Benn

The hon. Gentleman must excuse me. I have a little more to say, and I do not want to prevent other hon. Members from speaking.

The third difference between the two sides of the House is difference of method. I said in March when I spoke on the Queen's Speech, and I say it again, that, as a Minister responsible for this policy, I reject absolutely the way of confrontation which characterised the previous Conservative Government in their industrial relations legislation. It was a disaster to try to impose upon industry a legal framework, with the lawyers coming in and enforcement by law in an area which requires a measure of consent.

I intend, and I believe, that our planning agreements and the National Enterprise Board in their actual operation will win wide consent in British industry. Our interest is not, and never has been to have civil servants running British industry. The hon. Gentleman should read what is said more carefully. If there were 20,000 civil servants with Ph.Ds. in business studies at the disposal of the Department of Industry, it would not raise British production by 0.0001 per cent. That is not what it is about. That is never what it has been about.

What we are determined to ensure is that those who have devoted their lives to industry shall not be excluded, because they are not shareholders in the firms in which they work, from exercising the right to shape and plan the work they do, and the re-equipment of the firms in which they work, and to secure for themselves, their children and the communities in which they live greater security than they can achieve under the unacceptable face of capitalism, of which we have seen so many examples.

At the heart of our proposals lies not the vast apparatus of bureaucracy but the simple measure of disclosure, because if there were comprehensive disclosure to workers in industry the information available to them would be the basis on which they could make their influence felt and at the same time contribute constructively to the development of the firms in which the work. It is the extension of the industrial franchise that really lies behind our concept of this shift of power, not the transfer of power from management to Ministers but the sharing of power by those who work in industry—at least a sharing—with those who own.

In this first general debate I would say to the House that, for my own part, it is not the mechanics that are important but the objective. It is not the details of the legislation that should excite us at this moment, but the fact that we are seeking to set a new course upon which we recommend the nation to proceed.

I turn now to individual cases. The hon. Gentleman spoke earlier of planning agreements. I told the CBI and the Association of British Chambers of Commerce last week that 90 per cent. of the value of planning agreements will come from what is contributed by workers in the firms concerned, and 10 per cent. will come from the Government. What is that 10 per cent.? It is the simple requirement that any Government of any party would wish to inject into industrial decision-making— investment, exports, location. It will not be an attempt to manage firms in which planning agreements will operate.

As to the National Enterprise Board, I must say to hon. Members of all parties who represent areas of high unemployment that there is no chance whatsoever of dealing with the deep-seated problem of unemployment—in Merseyside, the North-West, in Scotland or Wales—if we rely solely upon the market system, even if it is amplified and assisted by general regional aid.

Mr. D. E. Thomas (Merioneth)

Can the right hon. Gentleman give us an indication whether the powers of the NEB in Wales will work through the proposed Welsh Development Agency?

Mr. Benn

Yes. That is clear from my White Paper and the reference in the Gracious Speech to the fact that we do not even intend the NEB to be centralised in its operations. I assume from the hon. Gentleman's question that he, too, wishes to see the direct generation of employment in areas of high unemployment by public enterprise, which will itself be fully decentralised to meet need.

When, as it will, this message finally gets through the great cloud of distortion that has surrounded our policy on areas of high unemployment—and no one has done more than the hon. Gentleman to obscure what this is about—those areas will see the National Enterprise Board and the planning agreements as a means of bringing jobs to them and of sustaining and creating jobs. With all his market mechanism, the hon. Gentleman could not possibly hope to achieve that, however much he intervened.

Mr. Heseltine

I wonder whether the Secretary of State will understand that, no matter how comprehensive the machinery he sets up, no matters how good the intentions and how general the verbiage, he will do nothing to help the regions if he does not allow a thriving, profitable industrial base to be recreated in the private sector.

Mr. Benn

All I can say is that if I had the hon. Gentleman's past, I would share his pessimism. But I do not feel that such pessimism is justified; I do not share it. The hon. Gentleman tried his methods. There were two periods of policy—the Selsdon and the intervening periods—and neither succeeded in dealing with these underlying problems.

Finally, I put to the House as carefully as I can an assessment of the prospects of success for this policy. We are confronted by a very difficult situation. There is certainly no easy or quick way to reverse a 25-year decline. I believe that a five-year industrial recovery programme, starting now, has some reasonable prospect of success. We would not advocate it unless we believed that. There is certainly no Act of Parliament, not even a new Industry Act or an NEB, that provides a short cut forward, but we offer this programme to the House, and through the House to the country, as being relevant and in the national interest. We believe that there is much support for it now and that the support will grow. I commend it to the House.

5.21 p.m.

Mr. Nicholas Fairbairn (Kinross and West Perthshire)

There falls to me the rare honour of paying a universally heartfelt and greatly deserved tribute to a former Prime Minister and a most distinguished and successful Foreign Secretary, Sir Alec Douglas-Home, one of the greatest statesmen and conciliators of this century, a most respected Member of this House, and a beloved representative of my constituents in Kinross and West Perthshire. Sir Alec's counsels will be greatly missed in the public life of Great Britain, and his inspiration places upon me the special duty of making such contribution to the deliberations of the House and the life of this country as my meagre abilities may provide.

The life work of Sir Alec Douglas-Home illustrates how much greater is the contribution that Scotsmen can make to world affairs through the indissoluble partnership of the United Kingdom than they could make in isolation, and the great benefit to the reputation of Scotland which our right to representation in the Parliament of Great Britain obtains for us.

There is in this great, powerful and inventive nation a crisis, but I believe that it is a crisis not so much of economics as of confidence and morale. I see in prospect in the last quarter of this century a great period for our country in the service of civilisation, if we will but be true to our principles and traditions. The briefest glance at the recent voting figures discloses that the people overwhelmingly voted for a Parliament of statesmanship and not for a Parliament of politics, and there lies, I humbly believe, on each one of us, but especially upon the Scots, who look forward with bright hope to the future, the duty of inspiring the national renaissance.

I believe that the people of this country now realise that the division is not between right and left, or worker and management, or class and class, but between the tolerant and the intolerant, the self-disciplined and the indisciplined, the self-restrained and the self-seeking. I greatly regret that the inescapable conclusion which the Gracious Speech forces upon me is that it is the intolerant, the indisciplined and the selfish who have, for the moment, won the day.

The tenor of the threatened legislation seems to move our way of life from a free country where what is not generally condemned is freely permitted to a State where what is not compulsory is forbidden. The announcement by the Secretary of State for Social Services that private beds are to be forbidden is a foreboding omen of the slide to a dirigiste society whose main fetter is nationalisation, a process which removes power and ownership, not from some hands into all hands, but from any hands into the amorphous clutches of bureaucracy and the State, and thus restricts the liberties and choice of us all.

I suppose that the oldest State industry is the Forces of the Realm. The Gracious Speech proclaims the Government's intention of ensuring the maintenance of a modern and effective defence system while reducing its cost as a proportion of our national resources. That would be a commendable achievement at any time, an impossible one at a time of rampant rising costs. Either we are to have the same for less or we are to have less for the same. If, as I fear, it means the latter, none will be more pleased than those to the east of us who are continually intent on the weakening and destruction of this country as a power and democracy.

But if it means that we are to get the same for less, can we hope for a similar miracle in the other nationalised industries? Can we hope that the coal, electricity and transport industries will give us more for less, or will the taxpayer receive inferior services for an ever-increasing proportion of his income and of our resources?

The first result of nationalisation is centralisation of decision, usually in London. I am dismayed that the localisation of governmental decision should be proposed in the same breath as the centralisation of industrial decision, with the inevitable destruction of such Scottish firms as have, to their credit, resisted the seductive advances of the sirens of English and foreign companies.

The second result of nationalisation is that the State, or, as the public see it, the Government, becomes the employer. As employers, Governments have neither the heart to be fair when the employee has a tradition of discipline and service —as nurses, police and now teachers in Scotland will confirm—nor the guts to be strong when the employee is powerful and Left Wing, such as the militants in the NUM who are demonstrating for the second time in a year—what the Prime Minister calls the "big battalion philosophy". With or without the productivity deal, it looks like being a cold, expensive and bitter winter.

There are at work in the country forces of revolution and disintegration, ruthlessly determined to secure their interests and the interests of their dominies. Against these forces the Government have raised and wave, with perhaps genuine but, nevertheless, naive feebleness, the already shredden banner of appeasement and surrender—a social contract.

For all its much vaunted magical powers, this now tattered remnant of hopeful haberdashery did not deflect or diminish by even a penny the suicidal settlement of the lorry drivers' disputed claim in Scotland, now spilling into England, for an increase of 40 per cent. to 50 per cent. on basic rates—suicidal not just for employers and the community but, much more tragically, for the families of the impendent beneficiaries.

It is almost as if we wanted to pull down the pillars of the temple and revel in the rubble of our national collapse. The first victims, if not the intended first victims, will be those who show discipline and self-restraint, are self-employed or self-sufficient, who set high standards for themselves and higher horizons for their children, in the forefront of whom is the farmer.

I note that Further measures for the protection of consumers will be brought forward. But what of the producer? The best protection of the consumer at this time is the salvation of the producer. We are promised continued discussion with the farming industry. Banks do not lend on security of continuing discussions. In my constituency for an increasing number of farmers even help now may be help too late, and the continuing discussions will be but a requiem on their bankruptcy.

The Government are forcing the farmer this autumn to kill the cow that lays the golden calf, and while initially they will reap only the bitter anguish of the farmer, in two years their prize will be the wrath of the consumer whom they have attempted to seduce at the producers' expense. The greatest act of statesmanship that any Government can undertake at this time is to set in motion plans to ensure that we are self-sufficient in food by the end of the century, by which time, with the doubling of world population, those nations which are not will not eat.

I desperately request the Minister to forbid the import from Ireland of live cattle of unknown origins and increasing number, and to permit the export of live British cattle to Europe, from which so many of the so-called Irish cattle come; and I desperately urge him to come to the rescue of the most restrained, dedicated and essential industry in our land.

I note also at this time of necessary national thrift that Legislation will be introduced to provide additional protection for people booking overseas holidays and travel who suffer loss as a result of the failure of travel organisers. Why should such people, who could for a trivial sum insure their holidays, obtain protection at the expense of those who pay tax on the meagre income from their savings, of their already taxed life-time incomes, who have never had the means to enjoy, or who, on account of their thrift on behalf of their families, have forgone such luxuries and taken their holidays—if any—in our own country? In my constituency, which is as beautiful a part of God's earth as may be found, there are many men and many women who after a lifetime of service have suffered great loss in the value of their savings, their businesses or their shops, particulary since February, many who invested in the nation in the time of peril by buying War Loan, many who bought an annuity, or saved for a modest pension, many who invested in beef production, who have suffered great loss. Are they, in reward for their diligent lives, to be protected, or is protection only to be for the foreign holidays of the industrial worker who expects the community to provide for his retirement and whose unresisted demands enable him to book a holiday abroad?

The Prime Minister, in his ministerial broadcast, promised a partnership between the Government and the whole of our national family. Are those who have done their best for their families and been the most diligent, enterprising and self-sacrificing to be omitted, or are they to be included only for the plunder of what they have saved? Let us be clear that the promise in the Gracious Speech about the redistribution of wealth is a promise for the reduction, or the destruction of capital saved and invested. Upon confiscation, the accumulated savings of the nation will be spent by the Government on nationalisation, if nothing else, and no other person in the community, however humble, will be its new recipient.

While on the subject of capital, may I observe that in his eloquent maiden speech, the hon. Member for Perth and East Perthshire (Mr. Crawford) advised the House that an independent State of Scotland would have one of the lowest interest rates in the the Western world. With a rate of 15 per cent. or more in the neighbouring kingdom of England, that should effectively ensure the flight of all risk capital from the little tartan, oil-fired, Ruritanian tax haven that is to come and make Scotland a land of disillusion, deprivation and despair, but with this distinction—there will be no British Government to blame for it.

I repeat that there are forces of anarchy and disintegration at work in our country. I observe with relief that Her Majesty's Ministers will continue to act decisively against terrorism and lawlessness. I trust, therefore, that the Home Secretary will be able to assure the House that yesterday's speculative reports that he is considering parole for the so-called "flying pickets" who were convicted of lawlessness backed by terror are without foundation, for the people of this country will not stand for that. Last week saw three examples of the cowardice and horror of terrorism—one in England aimed at a Minister of the Crown. One in Northern Ireland aimed at the forces of the Crown. And one across the Channel in Scheveningen. The characteristic of the perpetrators of these outrages is that they are cowards. There are no applicants for martyrdom amongst their seedy and fanatical ranks. They are as jealously concerned for the salvation of their own lives as they are contemptuous of the lives of their random victims. The one decisive step which the Government can take is to treat all acts of terrorism as acts of treason or acts of war, for which the appropriate penalty is death, and to enter into international agreement that all such acts will be treated accordingly, for who can deny that the events in Scheveningen could not have occurred if the malefactors had been executed in the first place?

I hope that I have said nothing in the course of these remarks which offends the traditional generous indulgence and indulgent generosity of this House. What I have said I have said from my heart, and what I have said, I trust, reflects the beat of the heart of the people of our country.

5.35 p.m.

Mr. R. E. Benn (Rochester and Chatham)

I am sure that the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) will not expect me to comment on his remarks, since I rise to make my first speech in this House.

I begin by paying tribute to the former Member for Rochester and Chatham, Mrs. Peggy Fenner, who represented the constituency for four years and in that time served with distinction, rising to junior ministerial rank, which is no mean achievement in this Chamber.

As most hon. Members will be aware, the principal employer in my constituency is Chatham Dockyard, or, to give its modern title, the Navy base. During the recent election campaign, there was a great deal of talk about the delay of the Government in publishing their defence review. There was irresponsible speculation, nationally and locally, about the possibility of one or more of the dockyards being closed. I am glad to say that the electors of Rochester and Chatham accepted the assurances of the Under-Secretary of State for Defence for the Royal Navy and of the Prime Minister that the future of Chatham Dockyard was safe. But defence rôles and demands are changing. The modern warship is much smaller than its counterpart of 20 years ago. It is composed far more of electronics and computer equipment. So the traditional skills of the shipwright, the boilermaker and other trades are no longer in such demand. The Government are aware of this and have taken steps to ensure that outside contracting work comes into the dockyards. At Chatham the first contract is due later this month.

There is another change on the industrial scene in my constituency—that of North Sea oil. Hon. Members may be surprised to see that this comes so far south. A company has been established on the banks of the Medway to construct a jack-up rig. Other companies have expressed an interest in moving into the Medway area, undoubtedly attracted by the skill and talent in Chatham Dockyard. I hope that the Government are aware of this, because there is the danger that highly skilled men will be attracted away from the dockyard, thus upsetting its stability.

I think that we have an opportunity in the Medway of realising the full potential of the dockyard, but it needs investment and management expertise. I am sure that we can carry out some of the necessary North Sea construction work in Rochester and Chatham. I read reports about the future expansion of the North Sea oil industry and that it is threatened by the shortage of skilled labour. Again, Chatham Dockyard can make a contribution here. For many generations now it has provided skills and training unequalled anywhere in the country. These skills are needed even more today. In my view, the Government should consider expanding this side of the dockyard's activities.

My main interest, however, is in the building industry. I was interested to read a speech made outside this House by the Secretary of State for the Environment in which he spoke of introducing means to speed up the housebuilding programme. There can be no doubt that we need to speed it up. The latest statistic prove that it now takes a quarter of the time longer to build the average local authority house than it did just four years ago.

The present housing and construction statistics contain another interesting fact. It is that no fewer than 81 different types of industrialised or rationalised systems are in use at present. That is far too many. If we followed continental practice, we could cut the number down to fewer than 10, and I suggest that that should be one of our first priorities. A body set up with Government help in 1963 called the National Building Agency was founded for this very purpose. Unfortunately, after doing a great deal of work in the 1960s and early 1970s, its sphere of influence was changed in 1972 to concentrate on the rehabilitation of housing. In my view, the time has come to review this policy, and perhaps the agency should be given back its old rôle of examining new construction methods as well as the problem of rehabilitation.

I speak as one who is familiar with the building industry, and I appreciate the pledge in the Gracious Speech to look at "the lump" and to introduce new legislation. But that is just the tip of an iceberg. The safety record of the building industry is scandalous. The Chief Inspector of Factories in his report published last week quoted the staggering increase in the number of accidents in the industry. In fact, 40 per cent. of deaths from industrial causes are in the building industry. I hope that the Chief Inspector will take a much stronger and more stringent attitude.

The training and apprenticeship position in the industry is also scandalous. We are failing the nation. But, most of all, we must examine the industry's capabilities. A report earlier this year in the Financial Times showed that from 1970 to 1973 demand on the building industry increased by 33 per cent., yet its capacity increased by barely 10 per cent. If we in this House expect to overcome our housing problem and achieve new roads and hospitals, we must look at the industry's capabilities. As at present composed, it will fail us. I hope that the Government will conduct a short-term and a long-term survey and make radical changes so that we can tackle the problem.

5.41 p.m.

Mr. J. Grimond (Orkney and Shetland)

It is my happy duty to congratulate on behalf of the whole House two maiden speakers—the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) and the hon. Member for Rochester and Chatham (Mr. Bean). I greatly welcome their excellent contributions.

The great naval dockyards have always had a special place in Britain's affections and those of this House. We cannot but regret the disappearance of Peggy Fenner, but she clearly has a worthy successor, one well able to stand up for those great naval traditions which Sir Winston Churchill once summed up in a moment of irritation as being composed of " rum, sodomy and the lash". There are, we believe, other goings-on in the Navy, and with modern devices no doubt some of these activities have become out of date. I was particularly glad to hear what the right hon. Member for Rochester and Chatham said about the building industry, and I hope that we shall hear more from him on that important subject.

I also welcome the speech of the hon. and learned Member for Kinross and West Perthshire. He achieved a narrow squeak at the election, no doubt due to adequate hot tea at the count. He gave us an excellent, vigorous and, I think he hoped, impartial or non-controversial speech. Next time, he should address his attention to his own party; that is the way to get out of any difficulty about being too controversial.

May I add a word to the hon. and learned Member's happy tribute to his predecessor? I do not think that we need tonight give any funeral oration on Sir Alec Douglas-Home. He is pretty indestructible. I have known him for a long time. He had a serious illness, from which he recovered, and I expect that he will turn up in another place as the fifteenth, sixteenth or seventeenth Earl of Home. He was a great friend of many hon. Members. He had a long and distinguished career in the public service. He was unfairly viewed as a man of great charm and experience but lacking in shrewdness. He was, in fact, a very shrewd man indeed.

Looking around my colleagues in this place, I sometimes think "Here they are in charge of the nation, but which of them would you actually consult upon any matter of important private business?" There are some, not necessarily those in the highest offices of State. Alec is a person to whom one would have gone both for his undoubted unselfishness and for his shrewdness on many practical matters.

To take up again the general theme of the debate, I would say that to listen to the opening speech from the Opposition one would not have thought that it is only nine months since the Conservatives were in power. We heard a vigorous attack based on the total loss of confidence in the country. That loss of confidence began at least in 1973. Many of our troubles today are due to Mr. Barber—a very nice man, a very capable fiscal Chancellor, but in economics the most irresponsible Chanc