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Lord Ewing of Kirkford: My Lords, reverting to the question of the noble Baroness, Lady Seear, perhaps, in my usual way, I can be helpful to the Minister by asking him if he is aware that the bonemeal that we use on our gardens is sterilised at an extremely high temperature and is therefore quite safe? In the spirit of the exchanges perhaps I can announce that Lord Ewing of Kirkford, former winner of the Rose Bowl for the best garden in Leven and enthusiastic gardener, will continue to scatter bonemeal on his garden.

The Earl of Lindsay: My Lords, as a neighbour, give or take five miles, of the noble Lord, his horticultural prowess is well known over a wide radius. I am therefore grateful for the wisdom that the noble Lord brings to the discussion on horticultural bonemeal. However, I shall deliver the letter in case the noble Baroness wants a second opinion.

Lord Vinson: My Lords, does the Minister agree that there is some comfort to be drawn from the fact that this disease has been known to be present in sheep for over 200 years and there does not appear to have been any major health hazard in humans as a consequence? Perhaps we can draw deep comfort from that. In fact, we may be talking about a storm in a teacup.

The Earl of Lindsay: My Lords, my noble friend makes a good point that over a 200-year period some

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sheep have been diagnosed as having scrapie and there has never been any evidence of that entering the human food chain. However, the SEAC committee will continue to pursue any area where it believes that the theoretical risk to public safety justifies its exploration. Indeed, the area it identified today is one where, though there is no real evidence, it feels justified in alerting us to the possibilities.

Lord Mackie of Benshie: My Lords, perhaps I can ask a question from the Back Benches. The Statement states,

    "I do not believe that this information should damage consumers' confidence and thus the beef market. But I should say that support mechanisms exist in the Common Agricultural Policy and the Government will monitor the situation closely".
That does not appear to me to be definite enough. If great damage is done to the beef industry, will the Government support it?

The Earl of Lindsay: My Lords, as I said when I repeated the words of my right honourable friend in another place, we will continue to monitor the situation. Nothing has been stated by the CMO or SEAC that can in any way justify a long-term or structural decline of the beef industry in this country. The risk is not proven; there is no evidence; the whole thing is theoretical.

Agricultural Ministers will continue to be concerned for the livelihood of farmers. For instance, the noble Lord will not be surprised to hear that beef makes up 30 per cent. of Scotland's entire agricultural output. The value to Scotland of its exports of beef is around £180 million per year. It has almost doubled in the past few years. It is a valuable commodity. If the farming industry and the beef sector suffer unduly and disproportionately from events such as today, we will be monitoring the situation and seeking appropriate measures.

Lord Annan: My Lords, is this, like the decline in the male sperm count, a case of an issue being hyped up by the media? All the answers given by the noble Earl suggest that the risks are minimal, though the noble Lord, Lord Winston, made an extremely important point.

The Earl of Lindsay: My Lords, in some respects the noble Lord, Lord Annan, makes a good point; that is, that the response by the Government, by those in the public domain such as noble Lords in this House and by the media should be proportionate to the news delivered by the experts. It would be disproportionate and unjustified if they delivered today's announcement from SEAC and the CMO in a light that scaremongered beyond that justified by the evidence.

I have stressed many times the theoretical aspect of this case and that we are talking about a further reduction of an already small risk. There is considerable reassurance in that. In addition, SEAC feels that the most likely way in which the 10 people who are believed to have suffered from a new form of CJD may have been exposed to a possible BSE route or pathway arose from experiences that occurred 10 years ago, perhaps in the 1980s before the measures we took in

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1989. I therefore share the noble Lord's plea that the media and others deal with this whole issue realistically and in the proportion that it deserves.

Economic Strategy

5.40 p.m.

Debate resumed.

The Earl of Longford: My Lords, we have been discussing matters of great national urgency and for myself I am glad that I was not waiting to make my maiden speech. I console myself with the line of the poet that,

    "even the weariest river Winds somewhere safe to sea",
and I suppose that it happened on this occasion. I had the pleasure many moons ago to follow the noble Viscount, Lord Oxfuird, who in his speech recalled my earlier life in the Conservative Research Department. The arguments he was peddling, if I may put it that way, were the ones I was employed to peddle more than 60 years ago. Our favourite message came in a leading article in The Times which began:

    "Unfortunately, wealth is like heat. It is only when it is unequally distributed that it performs what the physicists call work".
That was the argument we were taught to peddle then--the unequal society. I shall come back to that in a moment.

I am not presenting myself as any kind of economist these days, although I once taught at the London School of Economics. I shall leave economics to my noble friend Lord Chandos when he comes to wind up. I shall not present myself as a banker, although I was chairman of a bank for eight years. To console any Left wing people who think that I may have been corrupted then, I was blackballed by the City Club as a socialist, so I retain my virginity so to speak. I shall leave the economic arguments and assessments to the experts, including my noble friend who initiated the debate, and we have other economic experts on our Benches. I shall deal with the social side.

The social facts are surely beyond dispute. The statistical facts are, so far as I know, accepted. Wealth was more equally distributed steadily under various governments, Conservative and Labour, until 1979. Then Mrs. Thatcher came in. She was not solely responsible for what happened but she was the leader of her party. It produced a new philosophy and from then on until now wealth has been more unequally distributed. I do not know whether the noble Viscount, Lord Oxfuird, and others who support that line would be happy with that and would say that that is what they want--more and more unequal distribution. I do not know whether they are pleased with that unequal distribution. I say it is damnable. It is the opposite of social justice.

Despite my early start in the wrong direction, I must mention that I have been a member of the Labour Party for 60 years. I have been a Labour Peer in your Lordships' House speaking from the Front Bench and

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the Back Benches for 50 years. So I think I can call myself old Labour--certainly old and Labour. Therefore, I am entitled to say how much I welcome the New Labour of Mr. Tony Blair. I have long since given up the idea, if I ever entertained it, that all wisdom was delivered to Keir Hardie or indeed to the Webbs. I revere the memory of Clem Attlee, the leader of the party for 20 years, the greatest Englishman I have known. I shall not make a comparison with another hero, de Valera, as he was Irish. I feel confident--it is of course a matter of opinion: it cannot be proved in this life--that Clem Attlee would be very happy with Tony Blair as leader and with New Labour.

What does New Labour amount to apart from a successful vote winning formula? I have no doubt that at 34 points ahead in the opinion polls we shall win the next election. I have no doubt that it is a winning formula, but what does new Labour amount to in terms of social justice? In this House last summer I remember saying--I have said it before now; I said it when I joined the Labour Party 60 years ago--that I am a socialist because I am a Christian. You do not hear much about socialism today. I heard Tony Blair, a member of the Christian Socialist Group, as are several other members of the Shadow Cabinet, speak very eloquently and powerfully at Brighton twice last autumn--once at a TUC meeting and once at the Labour Party Conference. But socialism, so far as I know, was not mentioned. "Socialism" is not now used as a word, yet I have not altered my opinions since last summer when I said that I am a socialist and I am a strong supporter of Mr. Blair.

As I see it now, the real quest is for social justice. It must be a passionate quest, as it always has been, and there must be a total denial of the economics of the Conservative Party which takes pride in Thatcherism and an ever greater inequality of wealth. There is a terrible conflict. Many people occupy middle positions. But between the good loyal Conservative--one or two have spoken already--and the Labour Party there can be no meeting because one wants to see more and more inequality of wealth and the other wants to see more and more equality. There is no meeting point between those two positions.

How do I see the future? How do I approach it in my own mind? I hope we are moving forward with two commitments--one to social justice and the other to the greatest possible increase of wealth. I draw my text from Luke, Chapter 14:

    "But when thou makest a feast, call the poor, the maimed, the lame, the blind: and thou shalt be blessed".
How is that to be combined with winning over the middle classes? It can be done, but it will take some doing. That is the problem and we must face it. The reverend Bishop Sheppard of Liverpool once wrote a book entitled Bias to the Poor. We must never lose sight of that.

We must somehow encourage those who give the employment to give employment; in other words, make business profitable. That means rejecting the idea that "profit" is a dirty word. I do not know whether it is used much now by our leaders. When I was a young socialist the thought of profit was anathema. I say that we must

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allow business to make profit but social justice must always come first. Because I believe that Tony Blair has the root of the matter in him I am very happy to think he will be our leader for years to come.

5.48 p.m.

Lord Acton: My Lords, I should like to congratulate my noble friend Lord Sempill on his splendid maiden speech. When he goes into his new business I am convinced that, if he is as good at business as he is at speaking, he will do very well indeed.

In 1906 Winston Churchill called unemployment,

    "that great and hideous evil of insecurity by which our industrial population are harassed".
In 1996 unemployment remains an economic and social horror, and its current level in Britain is a cause for great concern.

However, the Government seem strangely complacent about unemployment. Again and again we hear from the Dispatch Box that, as the British rate of unemployment is lower than that in Germany or the still higher levels in France and Italy, Britain seems to be doing rather well.

What, then, is unemployment like in Germany? The Financial Times reported the answer on 7th March this year. The article was headed,

    "German jobless total hits highest level since war".
The German Labour Office had given an unemployment rate for February of 11.1 per cent., seasonally adjusted to 10.3 per cent. That report prompted me to consult a book called International Historical Statistics Europe 1750-1988 by B.R. Mitchell. Its table on German unemployment had no statistics from 1941 to 1947. I found that the last year which recorded unemployment in Germany as being higher than today's seasonally adjusted figure was 1935. That is 60 years ago. Bafflingly, we are now told that Britain is doing rather well because its rate of unemployment is less bad than the truly appalling performance of Germany, whose rate now approaches the level seen just two years after the end of the Weimar Republic.

We live in a global economy and it is instructive to compare Britain's performance with that of the large industrialised countries outside Europe. In a Written Answer of 26th February, the Minister kindly furnished me with the then latest unemployment figures for the United Kingdom, the United States and Japan. These comparable unemployment figures, on the International Labour Organisation definition, were published by the OECD.

The rate of unemployment in the United Kingdom was 8.6 per cent.; in the United States, 5.5 per cent.; in Japan, 3.2 per cent. These statistics emphasise just how disturbingly high British unemployment is. I suggest that only when Britain gets down to the American level of 5.5 per cent. will it be time to heave a sigh of relief. But the ultimate goal should surely be a British rate comparable to the 3.2 per cent. of Japan.

When pondering the unemployment rates in the United States and Japan, do the Government really think that we are doing rather well?

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5.52 p.m.

Lord Marlesford: My Lords, I would like to add my thanks to those of others to the noble Lord, Lord Eatwell, for giving us this debate this afternoon. I personally much enjoyed his speech: to me, it had a nostalgic charm. I was mystified at one point because he whetted my appetite greatly by referring to some academic whose name I do not remember. The noble Lord, Lord Eatwell, said that his speech owed much to that academic. I was waiting for these interesting new revelations of new thought from, I believe, the other side of the Atlantic. I was too dim to take them on board, but I shall read the noble Lord's speech carefully tomorrow. If I still fail to pick them up, perhaps he will kindly mark my copy of Hansard for me.

Things have moved on a great deal in the past few years. Perhaps one may take as a bench mark 1975, when Keith Joseph spoke to the Tory Party Conference. He described the middle ground as an object of suspicion. He said that it was a will-o'-the-wisp moving always to the left. Since that time we have something called "New Labour". That is undoubtedly a great deal more reassuring than was Old Labour because many of the aspects of the then middle ground have been discarded, apparently, by New Labour. The Labour Party is no longer divided about socialism, as far as New Labour is concerned. The Tory Party is therefore in a sense no longer united about fighting socialism. That makes matters harder. I believe that the Government will have quite a task in winning the next election because of New Labour.

But now I am not sure because, having heard the noble Lord, Lord Eatwell, we have heard from no less distinguished a place than the Front Bench opposite an example of the authentic voice of Old Labour. I only wish that we could have the noble Lord's speech made by the Shadow Chancellor of the Exchequer, Mr. Gordon Brown, or, better still, by Mr. Tony Blair. It would make the task of the Government in winning the next election a great deal easier.

In the speech of the noble Lord, Lord Eatwell, we had it all. We had all the stuff about the need for consensus; the need for a social contract; and the damage done by the supervisory levels in certain countries. He picked out those which had a low supervisory level as Japan and Germany. There is a conflict there because he went on to have a go at the Bundesbank for trying to control inflation. As regards Japan, one must admit--and I am sure the noble Lord is well aware--that Japan, with whose industry I have a certain amount of contact--is now beginning to face up to some very real problems about its industrial structure. Many leading Japanese industrialists believe that they will need to shed many jobs in traditional Japanese industries. Germany itself, as we have just heard from the noble Lord, Lord Acton, has particular problems.

As I heard about the evils of the supervisory levels, I was reminded of that wonderful invention of Old Labour, with which the noble Lord will be much more familiar than I--perhaps he was one of its backroom architects--namely the selective employment tax, which was introduced by another famous Cambridge

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economist, Professor Kaldor. Noble Lords will remember that that tax was all part of the attack on the candyfloss society. It was said that only those who made things were desirable and that those who performed services were not desirable and that there should be a differential tax. That went on for a few years until it was given up completely.

We had all the stuff about egalitarian societies being better and that equality is efficient. We even heard about our old friend Sweden. That country has had financial difficulties of the greatest magnitude for about a decade now. Quite frankly, I felt that the voice we were hearing was the astonishingly unreconstructed voice of Old Labour. I suppose that one should not be too surprised because the noble Lord, for whom I have great personal esteem, was adviser and economic architect to the last Leader of the Labour Party but two, Mr. Neil Kinnock. I had not realised that the noble Lord was quite such a Bourbon. I much enjoyed his speech and we are very grateful to him for it.

Perhaps I may spend a moment or two on some of the fundamentals. The noble Lord asked whether the Government have a big idea and whether there is a real objective. I believe that the real objective of government is to see that--and I underline those words--all citizens can live in security and in growing prosperity in a way which is sustainable for future generations. I believe that that is the task that government have: not to do, but to see that the conditions are right for it to happen. I do not believe that it is something government can do.

There are certain fundamentals which are very important, and they are part of that framework. I wish to refer to inflation to a much greater extent than did the noble Lord, Lord Eatwell. Inflation is a very great evil. It is only since 1979 that it has been put at the top of the agenda. Despite the fact that inflation is now so low relatively--it is under 3 per cent.--it is interesting that long-term interest rates are so high. I do not know quite what one would take as the equivalent of the 30-year bond in Britain. I believe that War Loan is a good example to take because the interest is paid gross and therefore there is no tax complication. The yield on War Loan is currently about 8.5 per cent., which is remarkably high. Normally, a very big differential between long-term rates and inflation says something about the anticipation of the market concerning future rates of inflation.

I believe that the present Government have succeeded, with one or two little difficulties along the way--

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