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Address in Reply to Her Majesty's Most Gracious Speech

My Lords, first, I congratulate the Government on winning a really very satisfactory majority. One advantage of being in your Lordships' House is that one can take a semi-detached attitude towards party politics. We can perhaps unite in putting as our first priority, on both sides of the House, the opening sentence of the gracious Speech, which aims to, "pursue economic policies which entrench stability and promote long-term grown and prosperity". I am assessing the election in the context of that objective. So far as I am concerned, this debate should be about how we enable business to flourish. It is on business activity, not government activity, that our prosperity depends, and I hope that that at least is common ground between my party and new Labour. The other conceivable results that we might have got from the election would not in my view have been as favourable to business. Had my party scraped home, it would have been an unstable government, not in the national interests or the interests of the Conservative Party. The party which would most have benefited is the Liberal Democrat Party, which is in my view the party which should have least chance of getting into government. I agreed with the Prime Minister when yesterday he said that the Liberal Democrats in urban seats try to be on the left of the Labour Party and in rural seats on the right of the Conservative Party. They failed in most rural areas, but they succeeded to some extent in the urban seats, having been greatly strengthened by having Mr Brian Sedgemore, an old friend of mine whose antics as a paid-up member of the awkward squad in the other place I watched for many years. He is somebody who claims to feel comfortable in that party—and that was reflected in how some on the left voted Liberal Democrat in the election. Of course, a hung parliament would not have been good either, and I should not have wanted to see a small Labour majority of under 30—less than a five-year majority. That would have meant that the Prime Minister would have had to go very rapidly, and the credibility of the Chancellor, who has some real economic problems looming, would have been undermined. That, too, might have benefited the Liberal Democrats. We would not have wanted to have a large Labour majority; that is, more than 100. I believe that the prerequisite for getting a different government is a general feeling—I recall my own memories of these things—that it is "time for a change". That feeling was not around in the country at this election but I believe that it will be next time. That would be a very good thing. The important point about new Labour is that it has at least attempted to build, and with some success, on the Thatcherite model of low taxation. Mr Healey left behind a top taxation rate of 98 per cent; Mr Lawson introduced a top rate of 40 per cent in 1988. We still have that top rate of 40 per cent and the Government have pledged to retain it for the next Parliament, unlike the Liberal Democrats who wanted instantly to increase it to 50 per cent and to add a further unspecified local income tax on top.