Tag: Taxation

Below is the text of Mr Major’s contribution during the Commons Debate on the Loyal Address, held on 31st October 1991.

---

PRIME MINISTER:

The Prime Minister (Mr. John Major) : I join the Leader of the Opposition in congratulating my right hon. Friend the Member for Worcester (Mr. Walker) and my hon. Friend the Member for Thanet, South (Mr. Aitken) on their splendid speeches in moving and seconding the Loyal Address. I am also grateful to the Leader of the Opposition for his generous remarks about Alick Buchanan-Smith which will have been much appreciated by his family and by all of us on the Conservative Benches. The right hon. Gentleman’s tribute to his colleague George Buckley was moving. We share that tribute and express admiration for his courage.

My right hon. Friend the Member for Worcester has been a distinguished Member of the House for 30 years and he was a Cabinet Minister for almost half that time. To all the posts that he held he brought not only an acute mind, but an intensely independent one. He brought genuine concern to the problems that he faced. Twenty years ago when my right hon. Friend was Secretary of State for the Environment and I was a local councillor, I saw those qualities at first hand in Lambeth and I am happy to thank him for them all these years later.

I was intrigued by my right hon. Friend’s reference to Oliver Cromwell’s ill-treatment in Worcester and by his subsequent invitation to visit his constituency. I will reflect on that invitation and recall that Cromwell was the Member for Huntingdon and perhaps take some care.

More recently, my right hon. Friend the Member for Worcester served as Secretary of State for Wales. At the time, some thought that that appointment was surprising, but it turned out to be inspired–both for my right hon. Friend and for Wales. He developed a great affection for the Principality and found that it was reciprocated. He got to know Wales extremely well in a series of unscheduled visits. On one occasion when a startled shopkeeper said to him, “You don’t half look like Peter Walker”, my right hon. Friend replied, “A monstrous slander.”

When I was Chief Secretary to the Treasury I learnt that Wales was the first priority of my right hon. Friend the Member for Worcester. Public spending control came perhaps a narrow second during those turbulent years. It was therefore always a relief when he applied his powers of persuasion overseas to attract record levels of inward investment to the Principality. He attracted the money and then he opened the factories. He opened so many that when I visited Wales recently, I heard him referred to affectionately as “Peter the Plaque.”

My hon. Friend the Member for Thanet, South ably seconded the Loyal Address and, as he said, followed a family tradition. His father, Sir William Aitken, proposed the Loyal Address 29 years ago and referred to a subject in terms that may be familiar to the House today. He referred to it as

“a matter of controversy in the days, weeks and months to come.”–[ Official Report, 30 October 1962 ; Vol. 666, c. 11.] He was referring to Britain’s negotiations with the European Community–plus ca change, as my hon. Friend the Member for Thanet, South implied earlier. [Interruption.] Travel broadens the mind.

My hon. Friend the Member for Thanet, South is also something of a political forecaster. In his book many years ago, “The Young Meteors”, he picked as rising stars three men then aged 30 or under. They are now my right hon. Friends the Chancellor of the Exchequer, the Secretary of State for Social Security and the Leader of the House. My hon. Friend’s percipience was very remarkable so many years ago. It says something, perhaps, of my hon. Friend’s independence of mind that, although he has sometimes taken a sceptical view of politics, he has always taken a very vigorous stand for the interests of his constituents, of this House, of Britain and of Europe. I believe that he showed that again today in his remarkable speech.

I will refer to the substance of the Queen’s Speech in a few moments, but before I do so, I wish to respond to some of the points which the Leader of the Opposition made. He said, as he has said on a number of occasions in recent weeks, that he would like to have an election. But what is he going to tell people about his programme? Who was it who said in 1983,

“If we were to abandon the definition of our Socialism and the policies that go with it there is no reason why anybody should vote for us”?

It was the right hon. Gentleman. So upon that test, does he still believe, as he said then,

“We want out of Europe”?

There was some hilarity a few moments ago as the right hon. Gentleman tried to reconcile his past with his present on that subject. Does he still believe in what he referred to as

“a major extension of public ownership of control”,

or has he ditched that as well? Does he still say :

“We do not subscribe to the effective defence of our country by the possession of nuclear weapons”?

Will the right hon. Gentleman confirm that he still believes those things– that he is still an anti-European nationaliser who believes in unilateralism? If not, is there any reason why, in his own words, anybody should vote for him because of what he said earlier? We have heard today the speech from a Front Bench that is prepared to surrender any principle, abandon any commitment, and promise anything to anyone and, indeed, everything to everyone. Opposition Members can promise, but, when it comes to the election, they will not deliver. That is not our way, for we will keep to our principles and the lasting values that underpin them.

Mr. Alexander Eadie (Midlothian) rose–

Mr. Dennis Skinner (Bolsover) rose–

Mr. Alistair Darling (Edinburgh, Central) rose–

The Prime Minister : I shall give way a little later.

We will keep to an enterprise economy, the power to choose and the right to own, for our philosophy has not collapsed around the world, as has the right hon. Gentleman’s socialist philosophy. Our philosophy is getting stronger while socialism disappears in the dustbin of history. Our policies emphasise our belief in personal ownership.

Mr. Eadie rose–

The Prime Minister : I shall give way later.

We must give each and every person the chance to build up for themselves and for their families something of their own–their own home, their own pension, their own shares, their own stake in the future–a stake that they can pass on without fear of penal tax rates, soaring inflation or interference by the state. It is that principle which most clearly distinguishes this Government from that Opposition. The Opposition fought the right to buy and conceded defeat only grudgingly. They fought against the campaign for personal pensions and they threaten them still. They campaigned against privatisation while they bought their shares on the quiet. The right hon. Gentleman says today that he believes in choice, but he would never have given the choice to people and they would never have been able to exercise it.

Mr. Eadie rose–

The Prime Minister : No–[Hon. Members :- – “Give way.”] No. The Labour candidate in Hemsworth–not just any old candidate, but the candidate who was specially selected and imposed in a flying visit by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley)–bought BT shares, and good for him. But why?

Mr. Eadie rose–

The Prime Minister : Just a moment. The hon. Gentleman can intervene when I have finished this point.

But why did that Labour candidate buy shares? His minder told us why. He said :

“He bought them when they came on offer because he has a family of four and wanted that security.”

But what about the security of the 8 million people who have bought shares and who the Labour party will threaten with its policies at the next general election? The Labour party’s motto is clear. It is, “Don’t do as I do, do as I say.”

Mr. Eadie : I am grateful to the right hon. Gentleman for giving way. Based on what he is telling the House about the confidence that he feels in his Government when he compares their policies to those announced by the Opposition, can he tell us why he decided to announce to the nation in that clandestine way that he would not hold an election in November if he is so confident about what he is telling Parliament today?

The Prime Minister : It comes ill from a party that is now committed to fixed Parliaments to complain that we are going on–[Hon. Members :– “Answer.”] I have just answered. Let me pursue the point that I was dealing with–[Hon. Members :– “No, answer that point.”] I have, and this is germane to that point. I have here a leaflet that will help us during the campaign and– [Interruption.]

Mr. Speaker : Order. The Prime Minister.

Hon. Members : Answer.

The Prime Minister : I have here– [Interruption.] Perhaps in a moment the Leader of the Opposition will answer this point– [Interruption.]

Hon. Members : They do not like it.

The Prime Minister : The Leader of the Opposition and his right hon. and hon. Friends may not like it, but they are going to get it. I have here a leaflet that is a remarkable endorsement of Conservatism. It states :

“Many people today are wealthier than they imagine, especially those who have been able to buy their own home.”

I am very glad to have that endorsement of Conservative success. It comes from the Labour party. But the people of this country might feel more reassured if that same political party was not at the same time threatening to increase taxes on ordinary people–on their income, on their savings and on their wealth. The leaflet– [Interruption.] Let me just refer to the leaflet– [Interruption.] I am prepared to wait until Opposition Members will listen. The leaflet– [Interruption.]

Mr. Barry Sheerman (Huddersfield) : On a point of order, Mr. Speaker. Are you in a position to know whether the Prime Minister is quoting from a Labour party leaflet or from some brief that he has been given by Conservative Central Office? Is he quoting or not?

Mr. Speaker : That is not a point of order. The House should now get on and settle down. I call the Prime Minister.

The Prime Minister : I shall show the House a leaflet explaining how legacies can help the Labour party. It states :

“Whatever the size of your donation to the Labour Party, no inheritance tax whatsoever is payable on it.”

Of course, what Labour does not state is that under its plans inheritance tax would be paid on smaller legacies and at a higher rate than today. So now we know ; under Conservative legislation, one can pass on one’s wealth to the Labour party–that is permitted–but under Labour plans, someone passing it on to his children would be taxed and taxed and taxed again.

A year ago this month Britain entered the exchange rate mechanism. In the debates which followed, the shadow Chancellor made it clear that he accepted that we were right to join the ERM. He agreed with the rate at which we entered. He asked me to forecast the benefits of membership and posed two perfectly fair questions. “Was it my judgment”, he asked,

“that the rate at which we agreed to join is sustainable?”–[ Official Report, 15 October 1990 ; Vol. 177, c. 930.]

We now know the answer. Sterling has remained firm against other Community currencies and the mechanism has given business the exchange rate stability that it wanted.

The right hon. and learned Gentleman also asked whether the balance of payments deficit would be progressively reduced. Yes again. Our exports to the rest of the Community have shot up. Our imports have fallen. Our trade deficit with Europe has been slashed and manufactured exports, far from declining, recently hit record levels.

Of course, some of the right hon. and learned Gentlemen’s colleagues were less cautious. The Leader of the Opposition asserted that inflation was still rising. Wrong. I said that we would bring it down. We have done so and we will carry on doing so–down below the Community average ; down to the levels of the best in Europe. When we joined the ERM and cut the interest rate the Leader of the Opposition called it a cynical expedient. That was distinctly odd, for three days before he said that we should “cut interest rates” and

“be negotiating entry into the ERM”.

What changed in those three days other than that we did what he had advised us to do? What changed was the right hon. Gentleman. He may or may not have changed his mind. But he certainly changed his tune.

Mr. Foulkes : The Chancellor of the Exchequer made a major announcement yesterday that there had been an increase–a seasonally adjusted increase–in optimism. How do the Government measure optimism and how do they seasonally adjust it?

The Prime Minister : If the hon. Gentleman looked at the surveys from the Association of British Chambers of Commerce, the Institute of Directors and the Confederation of British Industry, he would see the return of confidence that is coming and the way in which it will lead to a return of growth. During the past year our policies within the exchange rate mechanism have brought inflation down to 4 per cent., allowed eight reductions in interest rates, reduced our balance of payments deficit and kept sterling stable. That has set the basis for steady growth with low inflation in the years of Conservative government that lie ahead.

Mr. Stuart Bell (Middlesbrough) : Will the Prime Minister give way?

The Prime Minister : Not at the moment.

Getting inflation down is not easy. It is painful. But the measures are unavoidable and necessary for stable growth in the future. It is always tempting to call for interest rate cuts and the easy course, but that carries great dangers. We are not prepared to play fast and loose for some short-term gain, for we know that inflation is the tax which bears hardest on those in society least able to afford it. As inflation falls we are moving out of recession and back to stable growth. The Opposition need not just take my word for it. They should listen to British industry and what the chambers of commerce and others are saying. As the Association of British Chambers of Commerce has said :

“The country is unmistakably experiencing a turnround in economic performance commerce and industry is on the road to recovery”.

The Institute of Directors says the same and so does the CBI. The CBI’s latest survey shows business confidence up, more businesses expecting new orders, more businesses expecting to increase investment and more businesses intending to take on new workers. The International Monetary Fund also forecasts that our growth next year will be as good as or better than that in France, Italy and Germany.

Mr. Bell : The House is listening with great interest to the Prime Minister on the state of the economy and our relations with Europe. If things are so good, why cannot he give us an election date?

The Prime Minister : Things will get better and then the hon. Gentleman will get one. Britain is getting back on track again, back to the growth that provides the only way of putting people back in permanent work so that we can add to the 800,000 extra jobs that we have created since 1979.

Mr. Bell : Jobs are being lost.

The Prime Minister : The hon. Gentleman talks about jobs. We will turn to that. The Leader of the Opposition says that he is concerned for the unemployed. Let us test it. Let us put it into action now. He could persuade his own union, the Transport and General Workers Union, to drop its boycott on youth training, employment training and the training and enterprise councils. Will he do it? No, he will not. Let me try him on another point.

Ms. Dawn Primarolo (Bristol, South) rose–

The Prime Minister : The right hon. Gentleman could tell the Trades Union Congress that it was wrong to boycott employment action even before the scheme had started. Will he? The right hon. Gentleman will not.

Ms. Primarolo rose–

The Prime Minister : Perhaps most importantly of all, the right hon. Gentleman could drop his plans for a statutory minimum wage.

Ms. Primarolo rose–

The Prime Minister : The hon. Member for Sedgefield (Mr. Blair) says that no jobs would be lost as a result of that policy. But that is not what every independent commentator says. It is not what the CBI says. The CBI says that the first phase would cost 200,000 to 300,000 jobs. “Oh, no”, says the hon. Member for Sedgefield,

“it will make industry more competitive”.

There is a gem of Labour newspeak–adding to one’s costs makes one more competitive. That is Labour’s understanding of the economy.

Ms. Primarolo rose–

The Prime Minister : We hear a lot from Opposition Members about the supply side. When they are not lecturing the CBI or threatening to sack the Governor of the Bank of England they are keen to quote those sources. Earlier this year they were very keen to quote the CBI as saying that we were in recession. They can update that. They can tell us who said recently :

“There is at present one economy in Western Europe where manufactured exports have been increasing faster than world trade ; where import penetration remains below that in West Germany ; where investment in skills and innovation is at record levels and still rising ; where private sector inflation is under 4 per cent. and falling.”

Opposition Members do not like to hear such words because they can only talk the country down, but those were the words of the director-general of the CBI.

Ms. Primarolo rose —

Mr. Frank Cook (Stockton, South) rose —

Mr. Speaker : Order. The Prime Minister is not giving way, so the hon. Lady must resume her seat. I understand that the hon. Gentleman is anxious to participate in the debate. Let us get on with it.

The Prime Minister : I shall give the hon. Lady her chance in just a moment. The words that I quoted were those of the director-general of the CBI and the country about which he was speaking was Britain, a country which attracts more investment from America and Japan than does the rest of Europe put together.

Ms. Primarolo : Earlier this week the Prime Minister revealed his deeply held conviction that it is necessary to further the equality of women in our society. If that was a firm pledge, why are there no legislative proposals in the Queen’s Speech to further women’s equality, such as a proposal to introduce universal child care?

The Prime Minister : The hon. Lady should not doubt our commitment on that issue. She had better wait and see.

The Opposition like to talk about investment. What they usually mean by investment is more public spending of taxpayers’ money.

Mr. Cryer : Will the Prime Minister give way?

The Prime Minister : The hon. Gentleman’s hon. Friends had the opportunity to intervene on several occasions. I invite him to wait a while.

It is interesting that the principal paymaster of the Leader of the Opposition, the TGWU, refuses to welcome investment from Japan, especially in Scotland and Wales. What do they call it? [Interruption.] What do they call investment from Japan? They call it “alien”. That is what Japanese investment in Scotland and Wales is called. Perhaps the right hon. Gentleman can tell us : does he personally think that Japanese investment in Scotland and Wales is alien? Does he want to see the £4 billion that Japanese investment adds to our trade balance, and the 400,000 new jobs that it could bring to this country, or not? Which does he back : the TGWU–his paymasters–or Japanese investment? Let him tell us.

Mr. Kinnock : I had the great good fortune to have the first Japanese-owned factory in Wales, Takiron, opened in my constituency back in 1973. Since then, as the right hon. Member for Worcester (Mr. Walker) and others know, I have worked assiduously to secure such inward investment. I am delighted to say that Aiwa is flourishing in my constituency. I should like the Prime Minister to introduce policies on retraining, transport, technology, research and development, and science that would make our country more attractive not only to Japanese investment but to British investment.

The Prime Minister : It is under our policies that that investment has come here. I assume that the right hon. Gentleman now condemns the TGWU motion.

The House and the country face a clear choice on the supply side. The Opposition propose new levies, new regulations and new quangos. We believe in lightening the burden on new business. The Opposition want to extend new powers to the unions–enforced recognition and complete immunity from dismissal for strikers. Those are powers which even the right hon. Member for Blaenau Gwent (Mr. Foot) dared not introduce in the 1970s. In contrast, we believe in giving managers the right to manage and in giving the unions back to their members. The Opposition propose a new tax on savings. We know that savings are the fuel for the very investment that they claim this country needs. They propose higher taxes on earnings. We accept that that would enrich industries and laboratories, but it certainly would not enrich them in this country. It would just send scientific and managerial talent abroad.

The Opposition still believe in nationalisation–the only party east or west of the old iron curtain that still does. We know where that policy ends. The private sector of industry would be the bit that the Government controlled and the nationalised sector would be the bit that nobody controlled.

Mr. D. N. Campbell-Savours (Workington) : Will the Prime Minister give way?

The Prime Minister : Not at the moment.

In the months ahead we have a full programme for a Session of Parliament. Within it, we intend to carry forward the citizens charter, to extend parental choice, to raise education standards and to establish a stable and lasting relationship between local and central Government.

First, the citizen’s charter. The best guarantor of effective service to the consumer is competition. That is why we have already extended competition in telecommunications and why we are taking powers to end the monopoly in gas and we are increasing competition in the water industry. The legislation will also bring the powers of all the utility regulators up to the level of the strongest, so that they can set guaranteed service standards and secure compensation, if those standards are not met. The legislation will also include enabling powers to resolve disputes between the utilities and individual customers about the accuracy of bills.

The legislation will put more power in the hands of the individual. That is the essence. That is central to the citizen’s charter. The charter applies not just to the privatised utilities, but throughout the public services. We do not intend public service to mean second-best service.

Several Hon. Members rose —

The Prime Minister : I have given way amply.

As well as making the big utilities more responsive to their customers, we shall give parents a greater say in their children’s schools and make local councils provide a better service to their electors.

This Session we can put to the test the Opposition claim to care about public services.

Mr. Frank Cook : Will the Prime Minister give way?

The Prime Minister : I have said to the hon. Gentleman, who appears not to understand, that I do not propose to give way to him now. We will wait with interest to see how the Labour party votes. Will it vote with us for the charter and for the public or against us, as usual, and for the trade unions and the second rate?

We shall introduce three Bills on education this Session. We will require the publication of local league tables on exam results, staying-on rates and truancy rates for all schools. Parents have a right to that information and they will get it. They also have a right to short, clear reports on their child’s school prepared by independent inspection teams, and they will get that, too. [Interruption.] I must say, Mr. Speaker, that if the public at large could see the behaviour on the Opposition Benches, they would know why Labour Members are unfit for government. [Interruption.]

Mr. Speaker : Order. I ask the Opposition not to point across the Chamber. It is very bad behaviour indeed.

Mr. Skinner : The Prime Minister has sent the hon. and learned Member for Colchester, North (Sir A. Buck) off to sleep.

The Prime Minister : This coming year we will begin to introduce national vocational qualifications to schools, bringing in the high calibre technical qualifications that have been missing in education for so long– [Interruption.] Opposition Members may not regard further and higher education as importantly as we do–[Hon. Members : — “Hurrah.”] Perhaps they could cheer this. We will give further education colleges and sixth form colleges the same freedom from town hall control as we gave to the polytechnics. [Hon. Members :– “Hurrah.”]

I wish that we could get the support of the Opposition for those policies, but I doubt that we can. The Opposition voted against the teachers’ pay review body and in favour of strikes. They voted to take schools out of the hands of head teachers and governors and to put them back in the hands of NALGO officials. They voted against the national curriculum and against simple tests. There is no doubt that they will vote against parents getting reports on their child’s school. For the Opposition, parental ignorance is bliss. They simply do not trust parents to have the interest in their children that we believe parents should have.

In the national health service we will put patients first. The right hon. Member for Islwyn (Mr. Kinnock) may care to listen as he professes such an interest in the NHS. The Opposition fight our reforms because they believe that compassion and efficiency are incompatible. In that they are wrong. Compassion without efficiency is mere sentimentality. Compassion with efficiency delivers more and better health care. That is not a new principle ; it is an old principle. It was understood very well 140 years ago by Florence Nightingale, but if the Labour party had been around then, it would undoubtedly have opposed her reforms with the same vehemence as it opposes ours.

Mr. Tony Banks (Newham, North West) rose —

The Prime Minister : For our part, we will continue with our reform of the NHS because only by doing so will patients get the best possible care from the resources that we devote to the NHS. No one can honestly doubt the Government’s commitment to the NHS. It is a commitment to the 1 million patients who use the service each day. It is a commitment that is re-emphasised in the patients’ charter, published only yesterday. It is a commitment reinforced by our determination to modernise the service. We are modernising the service and have no intention of abandoning it. Labour Members know that modernisation is necessary, but they have no policy whatever to achieve that.

Mr. Graham Allen (Nottingham, North) : Will the Prime Minister give way?

The Prime Minister : Not at the moment.

As a result, the Opposition trot out the old canard about privatising the NHS.

We have seen that sort of trick before previous elections. Colleagues may recall the scare that we would reintroduce conscription, that no roads would be built in Britain and that we would stop raising pensions in line with inflation. Then in 1983 from Labour’s health spokesman came a real scare–that if the Conservatives were re-elected we would, within five years of 1983, end the NHS. Well, it is now 1991, and the health service is going strong, with £32,000 million worth of resources from the Conservative Government. If the right hon. Gentleman does not have the grace to admit that Labour were wrong before, does he have the grace to accept it now when I say that there will be no charges for hospital treatment or for visits to the doctor and that there will be no privatisation of health care in whole or in part? Does the right hon. Gentleman have the grace to accept that?

Mr. Kinnock : Will the Prime Minister at last acknowledge that where there were once free services, and those free services are no longer available, so that people are obliged to purchase, because of the pressures of the system, he is privatising the health service and will continue to privatise it?

The Prime Minister : Were the Labour Government privatising in 1951 when they introduced charges? The right hon. Gentleman knows that there is no privatisation actual or intended in the national health service and that he is deliberately trying to scare people again and again.

The right hon. Gentleman’s retreat on privatisation has been matched only by his creeping retreat on funding. Last month the Labour health spokesman affirmed that party’s commitment to restore fully what he called the

“underfunding of the past decade”–

an amount that Labour has not identified and cannot identify. They have slithered back from that. Now the hon. Member for Livingston (Mr. Cook) says :

“We very much hope to”

and

“we will seek to”.

Even that is too much for Labour Treasury spokesmen, who say that only “some” of the alleged underfunding could be put right. What weasel words.

Even that game of grandmother’s footsteps came to an end when the hon. Member for Livingston admitted :

“We shall do it next time because we did it last time”.– [Official Report, 21 October 1991 ; Vol. 196, c. 673.]

What did Labour do last time? They put up waiting lists, cut nurses’ and doctors’ pay and slashed the hospital building programme.

The Conservative party has increased the share of the nation’s wealth given to the NHS. I give the House this further pledge now : in each and every year the NHS will, under us, get a real increase in its resources for patient care. That is what a Conservative Government can promise. Labour cannot promise, for their record shows that they cannot.

Mr. Allen rose–

The Prime Minister : I have given way enough already.

Our local government legislation will put the council tax in place. That system will reflect ability to pay and ensure that most people contribute something to council services. It will be certain and fair. It will be in place from 1993 and bills will be restrained. When we introduce the council tax my only regret will be that my former colleague Richard Holt, who played such a part in helping us to frame so many of the proposals, will not be here to see them carried through. We shall all miss him very much.

We shall extend competition into more council services and give new powers to the Audit Commission so that it can name names, authority by authority and service by service, so as to spread best practice and root out incompetence. We shall reform the structure of local government to give people councils with which they can identify, to which they can feel loyalty, and which deliver good services at a reasonable cost.

Mr. Dave Nellist (Coventry, South-East) : Will the Prime Minister tell us whether the council tax legislation will include the existing provision in the poll tax legislation for the imprisonment of non-payers? Is he aware that of the 84 people who have so far served a prison sentence, many have been pensioners? The oldest such person is Richard Northover, who, at 80 years old, was sentenced to 30 days in Her Majesty’s prison in Dorchester, although he had paid his poll tax. He was the first person, at 80 years of age, to be sent to prison for not having filled in the registration form two years earlier.

As the Prime Minister voted to abolish imprisonment for debt under the Debtors (Scotland) Act 1987, will he now give a commitment to transfer that measure to England and Wales and stop this medieval barbarity?

The Prime Minister : That question comes ill from the hon. Member for Coventry, South-East (Mr. Nellist), who has played such an ignoble role in encouraging people to get into debt and not to pay their bills. Much though we may sympathise with the hon. Gentleman at the way in which his Front-Bench colleagues have treated him, he should not give such a bad example while he sits in this House as a law-maker by encouraging people to be law-breakers. The law is set and it must be obeyed or the penalty paid.

The Opposition like to pretend that services do not have to be paid for– the hon. Member for Coventry, South-East is living proof of that. However, too many of the Opposition and their councillors do not pay. Even as those councillors were setting inflated bills for others, they would not pay–but not any more. We propose to stop that abuse and to do so in this Session– if they can’t pay, they won’t vote. That will happen this year.

Recent years have brought home to people the simple truth that high bills do not always mean better services, usually the reverse. Some councils are excellent, but too often standards are unacceptable. Shoddy service comes with the ready-made excuse, “We have special problems”. Let us look at two services that the social composition of a borough does not affect.

Mr. Frank Haynes (Ashfield) : Will the right hon. Gentleman give way?

The Prime Minister : No, not even to a friend.

Why does it cost nearly three times as much in Labour Camden to empty the bins as it does in Conservative Wandsworth?

Ms. Mildred Gordon (Bow and Poplar) : On a point of order, Mr. Speaker.

Mr. Speaker : I have heard nothing that is out of order. What is the point of order?

Ms. Gordon : I want to check whether I heard the Prime Minister say, “If they can’t pay, they won’t vote.” I want to make sure that Hansard does not alter that.

The Prime Minister : The hon. Lady knows exactly what the policy is ; if people won’t pay–

Mr. Nellist : The right hon. Gentleman said “can’t”.

The Prime Minister : The hon. Gentleman has set a standard of stupidity in this House that is rarely excelled. He knows what the policy is. He should not try to follow the lead of the Leader of the Opposition in another area and try to pervert what that policy is. Why does it cost seven times more in Lambeth to issue a library book than in the most efficient councils?

Mr. Brian Wilson (Cunninghame, North) : On a point of order, Mr. Speaker.

Mr. Speaker : I have heard nothing out of order. Is it a matter with which I can deal?

Mr. Wilson : It is a genuine point of order arising from the point of order raised by my hon. Friend the Member for Bow and Poplar (Ms. Gordon). The House is not interested–nor, I am sure, are you, Mr. Speaker- -in what the Prime Minister meant to say. What we and the Hansard writers are interested in is what the Prime Minister did say. There is no doubt that he said “can’t pay, won’t vote”.

The Prime Minister : Let me make this quite clear to the hon. Gentleman so that he will not find himself in the position of being able to scare people over this matter. The policy applies to councillors. That is perfectly clear and it is well known to the House. I am happy to reiterate that now. If, by a slip of the tongue, I said otherwise, I am happy to correct it in the interests of ensuring that the Opposition do not, as has been their habit elsewhere, seek to scare people with what is expressly not Government policy. Let me make it clear to the hon. Gentleman that we are referring to councillors. We are also referring to people who are in a position to pay, but do not. There is a full range of rebates in the scheme we propose.

Mr. Allen : Will the right hon. Gentleman give way–on rebates?

The Prime Minister : The hon. Gentleman will not tempt me. The Opposition are clearly determined, if they can, to disrupt as much as they can. I think that that will be evident to anyone listening to this debate.

In the Labour party’s own words, it says that Labour councils “demonstrate as far as the public is concerned what a Labour Government would be like”.

There can be no more awful warning for people as we come to the next general election.

On developments in the European Community–

Mr. Haynes : Will the right hon. Gentleman give me further consideration?

The Prime Minister : Tempting though the hon. Gentleman is, I wish to discuss the European Community and Britain’s place in forthcoming developments.

Britain belongs to the mainstream of Europe and must remain at the heart of the Community. In the past 20 years, despite many frustrations, we have gained enormously from our membership–

Mr. Frank Cook rose–

Mr. Speaker : Order. I must tell the hon. Gentleman that he puts his place on the list in jeopardy if he continues to interrupt in this way.

Mr. Cook : On a point of order, Mr. Speaker. With the deepest respect for you and for your position in the Chair, I remind you that the Prime Minister said that he had no intention of giving way to me at the moment. He said nothing about giving way later. He said that at 4.19pm.

The Prime Minister : I believe that it is within the knowledge of the House that I have given way rather more often than the Leader of the Opposition did. I now wish to consider something that I believe is of acute importance to every Member of the House and to millions of people beyond it –the negotiations in which we are currently engaged on the intergovernmental conferences.

In the past 20 years we have gained enormously from our membership of the Community. I believe that the Community has gained also from our membership because Britain has determined its direction in so many ways–on budget reform, on reform of the common agricultural policy, on the single market, on free competition within Europe and on free trade with the rest of the world. Too often we overlook the extent to which Britain leads the Community and too frequently we recall the difficulties we sometimes face in it.

Mr. Frank Cook : Will the right hon. Gentleman give way?

The Prime Minister : I shall not give way to the hon. Gentleman at the moment; not in this speech.

I do not doubt that over the next 20 years the Community’s evolution will be as marked as it has been in the nearly 20 years since we joined. We cannot dictate what our children will make of the Community, but we must leave them in a position where they can effectively influence the shape of Europe, and that Europe must be one in which we retain our distinct national identity.

The intergovernmental conferences now under way raise vital issues for the future of this country. They involve hard judgments of where our best interests lie. In our approach to those negotiations, we have been guided by the views expressed in debates in the House. We have made progress in a number of areas. We are working to achieve an agreement at Maastricht in December, but it must be an agreement that I could make in the confident expectation that I could commend it to the House.

On economic and monetary union, it would be irresponsible for any Government to ask the people of Britain to decide now that we should adopt, at a future date, a single European currency which will have far-reaching implications for the conduct of monetary and economic union. A move to a single currency that was not backed by convergence between the two economies of the member states of the Community would be a recipe for economic disaster. That is not in the interests of this country, or of our partners in Europe.

This country is in the first rank of the European Community and will remain so. But I am not prepared to commit our country to a single currency. We must be able to judge nearer the time–Parliament must judge nearer the time–whether a single currency is in the interests of Britain. We should not achieve what is best for Britain or the Community by giving up now our right to independent judgment then.

There is still some way to go before we have an agreement on economic and monetary union, but the discussions so far have shown that it is possible to thrash out a sensible position in negotiations. It is our aim to do the same on the draft treaty on political union. The issues raised are more diverse and just as difficult. They include the conduct of defence and foreign policy, and the powers of the European Parliament, the Commission and the European Court. We have to satisfy ourselves that, if we reach an agreement, it is an agreement in the overall British interest. It must be in Britain’s interest to work more closely with like-minded European countries on foreign policy, defence and security.

Mr. Paddy Ashdown (Yeovil) : Will the right hon. Gentleman give way?

The Prime Minister : I shall give way to the right hon. Gentleman in a moment.

It would not be in our interests to set up new defence structures that would undermine the role of NATO in safeguarding our defence.

Mr. Ashdown : As the Prime Minister has been commenting on changes in policy, I congratulate him and the Government on having moved so far on Europe since the summer. On the subject of defence, may I remind him that less than a month ago he signed an agreement containing the following words :

“Political union implies a common foreign and security policy and stronger European defence identity with the longer term perspective of a common defence policy”?

The Prime Minister said that on 5 October this year. Will he confirm that it remains the Government’s objective?

The Prime Minister : The right hon. Gentleman is taking that statement out of context and is not listening to what I am saying. I shall be explicit in a moment and then again later on these points. It makes sense to co-operate with other European countries on judicial, police and immigration matters; but at a time when more and more member states are concerned about illegal immigration, the spread of drugs and the threat of terrorism it makes no sense to agree to measures that would weaken the unique and effective controls in this island. It makes sense to recognise that the European Parliament, directly elected, will have an increasing say in the conduct of European business, but it would not make sense to give the European Parliament powers of decision-making equal to those of the Council of Ministers. The European Parliament should have a larger role in curbing the undemocratic powers of the Commission. Commissioners are answerable to the Commission, not to the Governments who appointed them. The Commission is effectively answerable to no one. It must be answerable to an elected body and that body can only be the European Parliament. The European Parliament must be able to make its influence felt, but it must be the Council that decides on the Community’s policies for the future. At Maastricht the issues may not be laid out in black and white ; there will he hard judgments to be made. The crucial judgment for the Government will be to determine what is in the best interests of Britain and acceptable to this House. That is why we are arranging a two-day debate on 20 and 21 November. I and my right hon. Friends the Foreign Secretary and the Chancellor of the Exchequer will set out in detail the issues at stake and where Britain’s interests lie. This will be a vital opportunity for Members to set out their views. It will also be an opportunity for the Opposition to let the people of Britain know where they stand, if anywhere, on issues vital to the future of our country.

The Labour party has consistently sold Britain short in Europe. Out of Government, its members opposed membership ; in Government, they bungled the negotiations on fair terms for our country. Now the Opposition have gone to the other extreme–“If it’s made in Brussels, it’s good enough for the Labour party.” No money back and no questions asked.

Nowadays the Opposition try to pass themselves off as modern and moderate. They say that they now accept the agenda which we set through the 1980s and which we will continue to set through the 1990s–but who can believe them? Who could trust them? Are they political chameleons or political turncoats?

We know that what this country needs is sound money, competitive industries, accountable public services, the extension of ownership and choice, and strong defences–and everyone knows who can be trusted to provide these things : not the half-hearted, reluctant converts among the Opposition, but a Government who genuinely believe in these things, a Government who will do what is right for this country without flinching, this year, next year and for years to come. That Government will remain on the Government side of the House after the election.