Inside Parliament: Coal takes a symbolic step: Cook condemns 'vindictive' Bill - Smith taxes Prime Minister's memory

The Coal Industry Bill was given a Second Reading by 319 votes to 282 in the Commons last night after a debate heavy with the symbolism of the last major state industry beginning its legislative journey back to private ownership.

Promising the sale of the pits to a Conservative conference in 1988, Lord Parkinson described it as 'the ultimate privatisation'. Michael Heseltine, President of the Board of Trade, introducing the Bill yesterday, used the occasion for an ideological essay on the end of nationalisation.

'Today the concept of state control is bankrupt,' he declared. But Robin Cook, Labour trade and industry spokesman, said nationalisation of the mines was part of the post-war settlement. The Bill was a display of 'dogma and vindictiveness'.

'The public ownership of coal will be seen as part of a brave attempt to provide decency and dignity at work in the foulest conditions and to give expression to the common purpose of the nation by asserting the right of the nation to own the sources of its energy,' Mr Cook said.

Mr Heseltine said the transfer of 'the commanding heights of the economy' to state control had been an essential feature of post-war Labour governments, but few would now deny the policy had imposed intolerable burdens on the economy. 'The naive political rationalisation at the time was that control would be vested in the people. In reality, power rapidly shifted to monopoly bureaucracies and monopoly producer units.' In virtually every case, key industries withdrew from, or were denied access to, world markets. 'Across the world, country after country is turning to the discipline of the market place as they seek to dispose of their nationalised industries. And even the Labour Party has lost the will to fight for this arcane concept of industrial organisation and management,' Mr Heseltine said.

'They parade and re-parade the weary arguments that a tiny body of their constituents and, of course, their union paymasters want to hear, but they know that the tide of freedom that we have brought to the nationalised industries is now irreversible.'

Maybe it was the prospect of shedding an industry which has caused him so much strife, but Mr Heseltine exuded a more relaxed confidence than in any despatch box appearance since his heart attack last summer. He did, however, have to endure a thorough working over by Mr Cook, who accused him of ducking past mistakes by failing to tackle the 'rigged market' against coal.

The Labour spokesman repeatedly challenged ministers on how many pits would be left for privatisation and on reports that six more closures will be announced next month. The 50 pits operating at the last election would be down to 15 and the number of miners from 44,000 to 10,300, he said.

'On Friday, the Chief Secretary to the Treasury (Michael Portillo) provided us with a timely warning of the threat of this great institution of Parliament being undermined by cynicism. What undermines this House is the cynicism of ministers who will not tell this House what is common knowledge in their department,' Mr Cook said, as Mr Heseltine and his coal deputy, Tim Eggar, remained silent.

At Question Time, John Smith, the Labour leader, linked Mr Portillo's speech on the New British Disease of national cynicism with John Major's evidence to the arms-to-Iraq inquiry. He urged the Prime Minister to make a 'special effort of memory' to recall tax promises and whether he was informed by the Treasury that freezing allowances would force 400,000 low-paid people into income tax for the first time.

'I know it is hard for the Prime Minister with all these papers crossing his desk. But can he not struggle to recall the repeated promises he made to the British people, that he would not increase income tax, not increase national insurance or extend the scope of VAT? Is not the breaking of these promises the reason for justified public cynicism and anger at this discredited Government?'

Mr Major said take-home pay for people in all strands of income had risen. 'Mr Smith is beginning to sound like a very worn record. What is absolutely clear is that the standard rates of tax under this party have dropped dramatically since his party was in government.'

But the Prime Minister's fiercest assault came in response to David Winnick, MP for Walsall North, who said the one back-to- basic attitude people craved for was the restoring of integrity to public life, and it was clear they were not going to get it from Mr Major's Government.

Labour members spread smear and innuendo on a week-by-week basis with complete disregard for the truth, the Prime Minister retorted. 'Smear and innuendo are the hallmark of political cowardice and they have become the trademark of the Opposition.'

Party hostilities were put aside for just 10 minutes as Michael Fabricant, Conservative MP for Mid Staffordshire, introduced a measure to prohibit the imposition of service charges to restaurant bills.

Almost half its sponsors are Labour MPs. 'Tipping for good service, not tipping for bad, seems to me like getting back to basics,' Mr Fabricant said, in perhaps the least emotive redefinition of the doctrine so far.