DEBATE ON THE ADDRESS

HC Deb 06 November 1957 vol 577 cc178-299

[SECOND DAY]

Order read for resuming adjourned debate on Question [5th November]: That an humble Address be presented to Her Majesty, as follows: Most Gracious Sovereign, We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Northern Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament—[Lads Tweedsmuir.]

Question again proposed.

Mr. Speaker

I think it would be for the convenience of the House if I were to say that the debate today on the Motion for an Address will be of a general character. I understand that it is intended tomorrow, Thursday, to deal with defence in particular, and, on Friday, to deal with foreign affairs and disarmament.

These are only suggestions for the convenience of the House which appear to meet the wishes of both sides.

3.35 p.m.

Mr. James Callaghan (Cardiff, South-East)

As you emphasised, Mr. Speaker, this is a general debate today, but I hope that hon. Members will not mind if I devote at least a little attention to the affairs of our Colonial Territories, which are of such supreme importance at the present time.

If I may just give an advance indication so that those who are not interested may leave the Chamber, I wish to refer to one or two other matters also. I shall particularly wish to return to the question of collective bargaining, especially in the public services, and to ask the Government some more questions about that. Also, I propose to address some observations to the House about the consequences to this country of the artificial satellite which is circling the earth and is, I believe, almost over the House of Commons at this moment.

First of all, I should like to make it clear to the Government, lest there should be any doubt in their mind on the question of pensions, that we believe the figure of 10s. increase to be a niggardly sum which does not represent the increase which should be conceded in order to give old people the standards which they have a proper right to expect. It is the view of the Labour Party, which has been expressed many times, that any increase in pension should be of the order of £1 on the basic rate, and that, in fact, what the Government should have aimed at is a basic rate of £3 a week.

We recognise the difficulty of the Government in providing for the proper increase so long as they cling to a system of flat rate contributions, and it may well be the very fact that the Government find it difficult to increase the contributions by more than 2s. a week which has of itself limited the amount of the increase conceded to old people.

If it is the amount of contribution which is to be, at any rate, a limiting factor in this respect, then clearly consideration of the Labour Party's superannuation scheme or something similar is overdue. There, at any rate, is a substantial attempt, well thought out, to get rid of the flat-rate contribution system and to relate contributions to ability to pay. We shall not know until we hear the debate, but it may well be that we shall have to say to the old people that they cannot have a proper rate of pension until we move over to a rate of contribution related to wages. I leave that point with the House for the moment.

The second factor we regard as vital in any fresh reconsideration of the pension system is that there should be transferability of pension rights and expectations from one employment to another.

Thirdly, we have seen, as a result of the investigations which have been carried out—notably by those economists and experts in the social sciences who assisted the Labour Party in the preparation of its document—that there is a growing gap between the standard of life enjoyed by those entitled to some measure of private pension and the standard of those dependent purely on the State pension.

In fact, there are arising two nations In old age, as it were, and it seems to us that it should be the intention and aim of the Government, as it certainly is our aim, to remove that gap which is now growing and producing such a disparity that we find there are two quite different standards of life in old age. With that, I leave the question of pensions because I understand that it is to be a subject of legislation. What I was talking about, Mr. Speaker, was, of course, a superannuation scheme which is not the subject of legislation, though I and my hon. Friends very much wish that it were.

Yesterday, we had a rather languid oration to support a rather tepid Queen's Speech. The Prime Minister was very bold. He attacked my right hon. Friend the Member for Ebbw Vale (Mr. Bevan), in his absence. I have no doubt that, if he had been here, my right hon. Friend would have made a suitable retort to the Prime Minister. As he is not here, I should like to repeat what I believe would have been his verdict of the Prime Minister's speech, a verdict which he passed upon another Cabinet Minister's speech a little earlier. About that other speech, my right hon. Friend said that it was a badly written essay read in a turgid monotone. On behalf of my right hon. Friend the Member for Ebbw Vale, I should like to repeat that today.

It will be remembered that about three years ago, the hon. Member for Aberdeenshire, East (Sir R. Boothby) got into awful trouble for walking out in the middle of the speech of the then Prime Minister. Yesterday, fifty people walked out but nobody even noticed. I am bound to say that none of us could have felt inspired by what we heard yesterday nor about what the Prime Minister had to say concerning a number of our problems. As far as his great conception of a new international system of government is concerned, I merely say that I will wait until I see it. The first reactions that have come from Mr. Dulles this morning are, at least, not very hopeful. I believe this to be another piece of the Prime Minister's showmanship of which his occupation of the post of Premier has become such a striking exhibition.

I want to turn to the question of collective bargaining. The Prime Minister said yesterday that increases in wages must be determined by, and be dependent to some extent upon, an increase in productivity or they must be financed out of savings or by a cut in services. How do the Government relate this test of the necessity for an increase in productivity to those services, public and otherwise, whose effort cannot be measured in terms of productivity?

It is all very well to announce the intention to relate wages to productivity in, say, engineering establishments, although even there, if the economic policy of the Government is designed to curb an expansion in production, they may well be asking for two directly contrary things. In the public services, however, that is a much more difficult test to apply and the millions of people who are engaged in the public services of one sort or another are entitled to a little more explanation from the Government of the tests that are to be applied to their levels of remuneration.

Let us take some examples. The remuneration of probation officers is fixed by regulation. As I understand what has happened in the Health Service case, if the probation officers were to secure an increase in remuneration, following the example of what the Minister of Health has done in the Health Services case, the Government would rule out the making of a regulation in respect of probation officers.

How is the probation officer's productivity to be measured? Has he to reform more criminals? What has the fireman got to do? If he is to put out more fires, somebody must start them in the first place. The policeman, of course, has to arrest more criminals. On that test, the police are entitled to an increase in pay, because arrests went up last year.

What about nurses? Are they to nurse more patients? Is the test to be more beds per nurse? What is to be the test of productivity that is applied in these occupations where productivity cannot be measured or production increased in the way which the Prime Minister told us must be the test by which increases in pay are to be determined? This is a question upon which the House and those employed in the public services are entitled to more explanation than we have had so far.

Now, I come to the next question. It is a simple question which was asked first last week by my hon. Friend the Member for Newton (Mr. Lee). It was repeated by my right hon. Friend the Leader of the Opposition and it was asked again by my right hon. Friend the Member for Blyth (Mr. Robens) of various Ministers, but we still have not had an answer to it.

Where the Government are interested in wage claims—that is, in the public services—or where they are indirectly interested in wage claims, as, I suppose, in the case of the Health Service, are their representatives to continue to consider claims on their merits or are any special instructions to be given to representatives of the Government on wages councils of one sort or another that, irrespective of the merits of the claim, the claim itself cannot be considered?

This question has been asked more than once. I repeat it again this afternoon and I press the Government for a reply on it. What instructions are being given to the Government's own representatives when they are considering claims made by the public service? It is a simple question and can be answered quite simply. Are these claims to be considered on their merits or are the Government saying that whatever their merits, the economic position of the country is such that they cannot be conceded? It seems to me, from what has happened in the Health Service case, that it is the second test which has been applied, because the Health Service employees, from what I have read of their last arbitration case—I read the whole of the case last December—and from what I can make out from the correspondence which has passed on their latest claim, have established a claim on merits.

Every one of us knows that the public services are never in the vanguard of wage increases. They are always at the end of the queue. The Health Service employees were not only behind industry in their claim, they were not only behind the Civil Service, but they were also behind the local authorities. The Health Service, heaven knows, was right at the tail end of the queue. If anybody had established a claim on equal comparisons with what had happened elsewhere, it was this particular group of people; yet it is this very claim, in which, I should have thought, the case was overwhelming, that the Government have chosen to make a test case.

I wonder why the Government have chosen the Health Service employees, unless it is that they belong to a union that is too respectable to affiliate with the T.U.C., unless they are a group of people who, it is known, will not strike, or unless it is the fact that they are a middle-class group of people. We all know the Government's affection for the middle classes and their desire to help them. I must say that if I were a Government supporter, I would have wondered what had come over my Front Bench. Instead of taking on a group of workers who cannot in any way be construed to be of the middle class, the Government select the very union in which there is, I suppose, greater political division than almost anywhere else, and the very union from which they drew a great many of their supporters, and they say, "Here is the group we shall select. The group which has the best case of all for an increase in pay, we shall do them down." If the middle classes continue to stand for this, I tremble for their future.

I do not know what Government supporters will say to Members of their own Front Bench when they get them in the privacy of the committee room, but I wish that they would say something to them here in the House. The Government could not have selected a worse case from their point of view than the one they have selected for this action.

Let us examine the matter a little further. If claims are not to be considered on their merits—and this claim certainly has not been—what the Government are doing is to shuffle off their responsibility on to the arbitration tribunals. This is a most dangerous and unwelcome development. It means the end of collective bargaining in the public services. When I hear the Lord Hailshams and the Lord Mancrofts and the others speak, I sometimes wonder whether they have any conception at all of what happens in trade union committee rooms. Lord Hailsham did say that he was more at home in a university, and sometimes I wish that he would go back there. He said that he was fundamentally an egghead. Some people might move to delete "egg" and to substitute "block."

It is quite clear, as the Prime Minister said, that there is no national wage policy in this country. What does exist, and what the Government are now tearing asunder, is a very delicate and intricate relationship between wages in various occupations and especially in the public services. It has been a network that I have watched for over twenty years. All these claims are related to each other, they all depend upon each other and a very close relationship has been established between them.

What are the Government doing? In the case of town hall employees, for example, in which they have no direct interest—nor do those employees have representatives on the negotiating machinery, nor do they come to the Minister to make regulations—what the Government are saying to them is, "If you can establish a case to the satisfaction of your employees, although we would like them to refuse it, we cannot do anything about it."

When, on the other hand, the firemen establish their case and go to the Home Secretary and ask for a regulation he will say, as the Minister of Health has said, and what has been said quite clearly, "No, we are not willing to concede the agreement that has been made." So they disturb immediately the relationship between the firemen on the one hand and the town hall employees on the other.

What is to happen with the Civil Service? There has been a criterion established, laid down by the Royal Commission in 1955, that the levels of remuneration should be dependent upon fair comparisons with what is happening outside. My hon. Friend the Member for Sowerby (Mr. Houghton) asked about this last week. I read a very ominous note in The Times this morning. It puts in a negative way that what is happening in the Post Office does not necessarily mean that the Government are going to adhere to this principle of fair comparisons in the future.

Do the Government really know, I wonder, where they are getting to in this matter of wage claims? I wonder where they are getting to. They say they do not want a war. Nations have blundered into war before. If the Government want to avoid a war they must reverse some of the decisions and pronouncements which have been made over the last few days.

Mr. R. Gresham Cooke (Twickenham)

Have we got to give way to every wage claim?

Mr. Callaghan

The hon. Gentleman asks if we have to give way to every wage claim? [HON. MEMBERS: "Who are 'we'?"] I take it the hon. Gentleman means the Government.

Mr. James Griffiths (Llanelly)

The hon. Gentleman used the word "we".

Mr. Callaghan

Do the Government demand unconditional surrender from the trade unions, if there is to be no war? The hon. Gentleman will have many constituents who will know what is at stake here. Many of his constituents are people in the middle classes, and are members of the Civil Service or of other governmental authorities, and they are the very people who are always last in the wages queue. They have a right to ask the Government today by what test their remuneration is to be measured.

It cannot be on the basis of profit. It has been in the past on the basis of comparison with what is happening elsewhere. It has been on the basis of the movement in the cost of living. We have no indication yet from the Government of the positive tests they will apply. The only indication we have had is from the former Chairman of the 1922 Committee, a most appropriate Minister to do this, and that is to rule out and disallow a claim which has been undoubtedly established on its merits.

He says, or it is said on his behalf—I believe he said it himself—that the official side has no responsibility for finding the money.

The Minister of Health (Mr. Derek Walker-Smith)

The management side.

Mr. Callaghan

The official side is the management side.

Mr. Walker-Smith

No.

Mr. Callaghan

The Minister is displaying that he has no knowledge of the term which is commonly used in these matters.

Mr. Walker-Smith

Surely the hon. Gentleman understands that the management side consists, in this Whitley Council which he is discussing, of some official representatives, that is to say, representatives of the Department concerned, and some unofficial representatives not representative of the Department but, nevertheless, on the management side.

Mr. Callaghan

I am much obliged to the right hon. Gentleman. I am not going to have a verbal quibble with him. He can call it the management side or the official side, whichever he likes. The point remains the same. It has been called the official side in all these negotiations for the last twenty-five years, to my certain knowledge. However, let us leave it.

The management side, if I may use the Minister's term, has no responsibility for finding the money; so that it is in effect in a more independent position than if it had to find the money. In the face of the protestations to the Minister, in the face of these authorities who have gone on record as saying that this claim should be conceded, and who, indeed, voted down the Minister's representatives in order that the claim might be conceded, does he say that they have no responsibility? If I were a member of an official side or management side which was treated in that way I should wonder if it was really worth my while carrying on. And what is the Minister to do if he does not have the support and help of people in that position, who have been giving up a great deal of their time to that work?

The plain truth is that the Government are going to make more anomalies than they can possibly solve. To the railwaymen's claim they will say, "No." They say, "We are not going to finance any wage increases. If they go to arbitration they can get them, but it is for the British Transport Commission to decide whether they will implement the awards. We are not going to give any money for them." On the other hand, they say that with the employees in the electricity industry and the employees in the gas industry, it is, of course, plain sailing, and if they can make out a case, it can be conceded.

The Government must realise that they will get themselves into an impossible position if they go on in this way. I beg of them to think again about what they are doing, and to face up to the fact that in the public services, where they have started this policy, they are running very grave risks of dislocating much of the machinery which has been patiently built up, on which the people concerned place a great deal of importance and in which they place a great deal of trust, and who therefore do not strike. It is this machinery the Government are putting a spoke in.

I refer to one particularly wild speech made by Lord Mancroft at Lewisham last week. He said: Socialists would like to see a little industrial strife if that would help to discredit the Government. We do not need anything else to discredit the Government. They have been rejected by the electorate from Tonbridge to Gloucester. That last half-dozen by-elections have shown that there is no support for the administration. Indeed, if they were to do their duty they would resign and go to the country, because they are governing now against the majority of the people. How long they will carry on doing that I do not know, but what they will find is that a Government who continue to govern against the will of the country have their authority slowly but certainly drained away. I do not know how long they can carry on in circumstances like those.

I know there is a contest in the Cabinet. I place the Prime Minister and the Minister of Labour on the side of those who are more sensible and who do not want to revert to the condition of having two nations such as we had in the 'thirties. The Lord Mancrofts and Lord Hailshams and a lot of other wild men are willing and ready to force the position in order to have an industrial showdown. Let them beware of the consequences of this. They might win a General Election that way, if they were able to precipitate sufficient trouble as to be able to go to the country and ask, "Who is to govern? The Government or the trade unions?", but the harvest they would reap afterwards would be bitter indeed.

Mr. J. Griffiths

They know it.

Mr. Callaghan

Now I turn for a brief while to the question of the Colonies. We welcome very much the statement in the Gracious Speech about the proposal to enhance the status of Singapore. All of us are watching with very great interest the struggle to establish the democratic system in that State.

We were glad to hear the Prime Minister say that satisfactory progress was being made with the constitutional arrangements with Malta. I understand that the constitutional differences are being ironed out. I hope that is so, and I trust that the financial arrangements which are to be made will be generous in view of the very special dependence of Malta upon the Dockyard.

I would say how much we regret the Government's decision to go ahead with the Constitutional Amendment Bill in Central Africa. We believe that they are making a mistake there. The African Affairs Board has declared that that Bill is a discriminatory Bill. It is the first time it has taken this decision, and because it is the first time it has taken this decision the Africans are watching very closely to see what action the Government will take. The Africans at least believed that the African Affairs Board, under its most distinguished Chairman, Sir John Moffat, who has been resident in Northern Rhodesia many years, would try to hold the balance for them.

Now that the Government have decided to rule against the African Affairs Board, the consequence to the political stability of the Federation, in my view and in the view of many of us who have recently had the good fortune to go there, will be extremely serious. We shall ask for a full day's debate on this matter in due course, but as the Under-Secretary of State for Commonwealth Relations gave a Written Answer to us last week on this matter, I think it right to say straight away that we really cannot accept the Government's assessment of the situation. We believe that they are making a very unfortunate mistake.

The Prime Minister referred to the abortive international discussions that have taken place on Cyprus during the summer, but he made no reference to the other side of the coin, which we have always emphasised as just as important, if not more important. That is the need to get internal talks going with the people of Cyprus. I very much regret that he had no comment to make at all about it, because I am bound to repeat the charge that I made last July that the Government are frittering away the months accorded to them since the truce arrangement of last February or March and since the release of Archbishop Makarios, and that nothing is happening. No discussions at all are going on.

Surely it must be clear to the Government sooner or later, and heaven send that it be sooner, that they must start talking with the Greek and Turkish Cypriot people. The Greek Cypriots are in a substantial majority, but the Turkish Cypriots have a right to have their minority interests protected. The Government should call representatives of these people to London and start discussions on how a representative Government can be set up. Archbishop Makarios is now in New York, where we are told he is having a remarkable reception. Why we do not engage him in sensible discussions in London, instead of allowing him to parade the world, I do not know.

This is what Archbishop Makarios has said about discussions: Minority problems"— He was referring to the Turks— have existed in many parts of the world and have been given their proper solution by proportional representation and guaranteed minority rights. We are ready and willing to have those rights guaranteed by international instrument to the Turks of Cyprus with whom we wish to live in perfect harmony as we have done in the past. But we certainly cannot accept that the wishes of the minority should be allowed to override the will of the large majority… Is it not worth the Government's while, for the sake of peace in Cyprus, to bring the representatives of the Greek and Turkish Cypriots here to discuss this and to see how far, by means of proportional representation, international guarantees, or any other proposals that we or Archbishop Makarios can make, we can be enabled to get a representative Government going?

I am interested to see that the Tory rebels have on the Order Paper an Amendment to the Address in reply to the Gracious Speech. The major Amendment in the whole welter of economic and political troubles that concern us urges that sovereignty over Cyprus should continue to be guaranteed. It is proposed, as an Amendment to the Address, at the end, to add: and whilst welcoming your Majesty's Government's intention to seek a just and enduring solution of the problems of Cyprus, trust that your Ministers will safeguard your Majesty's sovereignty. The Prime Minister must be glad to have these rebels out of the way so that he can go ahead with the more commonsense members of his party to try to solve this problem. Nothing that the Government have done over the last few months has led us to alter our conclusion that their policy so far has been disastrous. We only hope that the appointment of a new Governor will mark a turning point in the sad history of that island.

I should like to make certain points about the consequence to this country of the artificial satellite which, I have calculated before this debate started, will have revolved round the world five times before we finish the debate at ten o'clock tonight. I am almost beginning to lose the capacity to wonder, and I shall not be at all surprised if I hear that the Russians have landed something on the moon, however distant and remote that would have seemed to us five years ago. But these remarkable achievements of the Russians might have been met with a slightly different response from the Prime Minister yesterday. I believe that the reaction of the British people is one of frank and ungrudging admiration for these tremendous scientific achievements. The Prime Minister might have spoken for us if he had said that when he referred to this matter indirectly yesterday.

Though it comes as a surprise, what the Russians have done should not have been a surprise if we had looked back upon our own history and upon past debates on this subject. The Labour Party, in opposition over the last six years, has consistently pressed on the Government the need for a larger scientific effort. We had a debate on the subject following the issue of a White Paper on technical education in February, 1957. These achievements by the Russians should not have been a surprise to us, for this reason—the very simple fact is that the Russians are producing far more scientists than we are and they have a planned economy. Those two things put together make it inevitable that they should go ahead in scientific research and technological development.

I quoted figures in the House eighteen months ago to point out to the Government the need for an enlarged scientific effort. I said that in terms of graduate engineers Britain was producing 57 per million of the population and the U.S.S.R. was producing 280 per million of the population. On an exactly proportionate basis, that is 57 against 280. Is it surprising that the Russian scientific effort should be capable of these remarkable achievements?

On the day when the satellite was launched, the Government's own Scientific Advisory Council published its Tenth Annual Report. Almost every year the Council has referred to this problem. This year its words were: The main limiting factor in our scientific effort today is the shortage of trained manpower…. We on this side of the House have pointed that out before. We point out again now that this country has not enough scientists or technologists to keep pace with developments in the modern world.

I shall bore the House—but I am afraid that it must be bored with them—by repeating figures which I quoted two years ago on the disparity of effort between the Russians and ourselves in this matter. Before I do so, I should like to emphasise the startling fact that there has actually been a decline in the number of graduate scientists and technologists produced in our universities since 1952–53. In 1952–53, when the last of the students who went in under the Labour Government were emerging, there were 7,957 graduates. The following year the number dropped to 7,496. The next year it declined to 7,313 and last year it went down to 7,263.

We are told that the number of students is again increasing, but what about the years that we have wasted? I was astonished at the complacency of the Chancellor of the Exchequer's comment last week when, throwing out his chest, he said he was glad to be able to say that the technological education proposals were not being cut in any changes and rephasing which was taking place in education generally.

Dr. Barnett Stross (Stoke-on-Trent, Central)

Has my hon. Friend noticed from the figures that the situation looks even worse if one takes into account the number of people with doctorates in philosophy, and particularly in physics, who are emigrating as soon as they graduate?

Mr. Callaghan

One of the greatest achievements of this Government, after six years of Conservatism, has been to replace the dole queues of the 'thirties with the emigration queues of the 'fifties.

By comparison with the United States, our effort is too small. The Scientific Advisory Council points out that British industry's expenditure on research was only one-half of that of the United States on a comparable basis. In terms of money, their effort is seven times as great as ours. The Report states: The resources devoted to civil research and development have been, and still are, far too small for a country whose competitive position in world trade is dependent upon the economic development of new products and new processes… How pathetic, in the face of this situation, is the proposal of the Government to double the number of scientists by 1970. This is out of all proportion to what is needed.

Let me point out one other thing which we have said before in this respect. We are still not making nearly enough use of the number of young men who are apprentices in industry, and the employers, either through lack of knowledge, interest or desire, are failing to use the day release scheme. There is a vast, untapped pool of reserves and skill there which is not being used.

According to The Times this morning, I notice that the American President is going ahead with what was called a personal crusade to increase the flow of scientists. What we are going to do is to change over to a block grant system, which will mean that the educational services will become the prey of all those who have other interests to serve. The Government are really failing to face this situation in the way they should. When I look at the Front Bench opposite, I am not surprised. It is about time that this bunch of old Etonians was replaced by a few people from board schools, grammar schools and technical schools, who would tell them what the scientific age is really about. [An HON. MEMBER: "And Wykehamists?"] There is an old Wykehamist there, too, and I see plenty of old Etonians as I look around.

The plain truth is that the Government are not willing to make the necessary choices that are essential if we are to keep up to date in the world that exists in this generation. The element of choice, the selection of priorities, is essentially a part of the Labour Party policy and programme, an element which the Government reject. It is for this reason that the Government are being rejected at this moment by the people of these islands.

4.12 p.m.

The President of the Board of Trade (Sir David Eccles)

The hon. Gentleman the Member for Cardiff, South-East (Mr. Callaghan) began by asking some questions about the attitude of the Government towards wage claims and collective bargaining in Government services. He will get answers to those questions and on the general principles about which he inquired in the course of this debate. My right hon. Friend the Minister of Health, if he is able to catch your eye, Mr. Speaker, will intervene later this afternoon on the particular problems of the Health Services, This is a general day, and, therefore, I hope that the House will understand if I do not follow precisely what the hon. Gentleman has just said. He talked about the Colonies, and I agree with what he said about the necessity to press on with solving our general colonial problem of raising the standard of life and the political maturity of the Colonies. I will say something about their economic problems in the course of my remarks.

If I do not discuss domestic politics, I hope the hon. Gentleman will agree that in the long run what we do at home determines our influence abroad, and that it is important to remember that there is no country which has more reason to care about what others think of us than we have. For my part, being largely concerned with the overseas picture, it is that which I wish to discuss this afternoon.

We are always asking ourselves what contribution the Government can make to holding world trade on a steady course of expansion. Since I spoke on this subject in the Budget debate, the world's economic barometer is not as set fair as it was. Central bank reserves have shown big movements, exchange rates have been under pressure, commodity prices have fluctuated, not all downwards. At the same time, international trade in manufactures has continued to expand strongly and many countries have taken fresh measures against inflation.

Looking at all this from the point of view of the United Kingdom, far the most important event this summer has been the threat to sterling. When, in September, the Chancellor of the Exchequer spoke to his fellow-governors of the International Monetary Fund in Washington, where sixty countries were represented by their Finance Ministers and central bankers—the greatest annual gathering of borrowers, lenders, spenders and printers of money the world knows—those listening to my right hon. Friend, of whom I was fortunate enough to be one, had a concentrated, unbelievably sharp impression of the importance of sterling to the whole of the rest of the world.

Almost every country represented at that meeting was suffering in some degree from the same disease, inflation. Almost everyone let us know, inside or outside the conference, that they regarded the United Kingdom as far and away the most important test case of whether a free country could cure itself of this chronic affliction.

The measures announced there by my right hon. Friend were greeted with satisfaction by large and small, by creditor and debtor countries. The good effect on the sterling exchanges and reserves is there for all of us to see. If it was not as swift and dramatic as some people hoped, it is as well to face the fact that there was in some quarters a reservation to the welcome our policy received. Doubts were expressed whether the United Kingdom would stand the rigours of the treatment till the cure was complete.

Would we stop half way and find some excuse for allowing the pressure against sterling to begin again? After a few months of recovery in the gold reserve, would we relax our policy? It was made clear to us that the world is still waiting to see whether, this winter, we can hold our costs of production. We shall not disappoint them, if only because it is so clearly in our interest to check the rise in prices and to rebuild the reserves.

The good effect of the Chancellor's measures was most clearly seen, as we would expect, in the Commonwealth itself, when we moved from Washington to the conference at Mont Tremblant. There, ten Finance Ministers of the Commonwealth—New Zealand was represented by her Minister for Foreign Affairs—met as a family and discussed their cash and their overdrafts as only a family can. I should like to record our admiration for the Ministers from Ghana and the Federation of Malaya, the two new members who were at this Commonwealth gathering for the first time. Everyone present was impressed by the standard of the contributions made by Mr. Gbedemah and Sir Henry Lee.

Canada, our host, which is not in the sterling area, was in the chair at the conference. Perhaps that was a good thing, because it gave Mr. Donald Fleming the chance, which he took with great skill and sincerity, to show the rest of us that Canada shares to the full the problems and the hopes of all the other members of the Commonwealth. The old hands at these meetings, like Sir Arthur Fadden, told us that it was one of the most successful and useful they could remember; successful because of the strength and determination to solve the problems of Commonwealth finance and trade by realistic measures taken in common; and useful because we reached full agreement with the Commonwealth on our European policy, and went on to recommend to our Governments the holding of a full-scale Commonwealth Trade and Economic Conference some time next year.

I should like to try to explain to the House what gave to the Mont Tremblant conference this new sense of reality and unity. It came from two related and unanimously accepted propositions: first, that the £ sterling is not just Britain's currency, but is of vital concern to the Colonies and to all other members of the Commonwealth, including Canada; and, secondly, that we all are going through a common experience of being unable to find enough capital to carry out our development plans.

These two facts of present-day life were recognised by all of us and the relationship between them was far better understood than ever before. As each country told the meeting, one after the other, about the difficulty it was running into in financing the development plans on which it had set its hopes, it became clear that the resources for these plans depended on what we all and each of us did in our domestic policies and that it was unquestionably our common interest to act more closely together than hitherto.

We saw that there are only two sources from which the needed capital can come, greater savings inside the Commonwealth and greater borrowings from outside. We accepted the fact that our ability to save and to borrow is in direct relation to the soundness of our money. And here, of course, we were back again face to face with the problem of sterling.

The Chancellor of the Exchequer and I posed our own dilemma, namely, that the United Kingdom has commitments and capital programmes that strain our resources and, at the same time, we very much want to be able to lend more abroad. We said that the amount we could lend depended, in the long run, on the surpluses we could earn in our trade with the whole of the rest of the world. It was plain to the whole meeting that the demand and supply of capital for the Commonwealth was something we should have to put very high on the agenda of next year's conference.

I have no doubt that the rest of the Commonwealth understood and accepted the fact that sterling must first be strong before the United Kingdom can lend more abroad. After all, nations can export capital only when they have first made themselves rich. It cannot be done the other way round. We have been lending as much as or more than was safe for sterling; and it is as much in the interests of the countries who use sterling as it is in our own that we should not overlend.

The degree to which that was appreciated and understood was remarkable. Perhaps, as an illustration, I might digress for a moment and take the case of India. Here, we all know, is the largest member of the Commonwealth faced with great temporary difficulty because her second Five-Year Plan is far too big to be financed with the resources available. The United Kingdom is doing more to help India than is generally realised. India takes one-twentieth of all our exports, but of the total of outstanding insurances on credit underwritten by the Export Credits Guarantee Department India's share is one-fifth, and that fifth represents well over £100 million more than it did eighteen months ago.

None the less, India needs far more money than we can provide, and we should like to see her and other developing countries in the Commonwealth borrow from creditor countries who can lend without endangering their currencies.

Indeed, a great lesson in international finance is being learned, and we needed to learn it, too. In a world which wants to do so much more development than there is money to finance that development without inflation, no justification exists for jealousy as between one lending country and another.

There is ample room, indeed, there is a great human demand, for the genuine savings of all countries to be mobilised and invested in raising living standards throughout the world. The formulated plans for development which so far outstrip available resources are the guarantee that a world slump of pre-war proportions cannot recur.

I turn now to the action which the Government are taking, and contemplate taking, to secure the orderly expansion of Commonwealth trade and investment. My first point is simply that we are independent nations and the United Kingdom, therefore, cannot force her partners to adopt any particular development programmes, or decide the pace of the development or lay down for them their internal financial policies.

All that we can do we must do by example and consultation, and since we are the financial centre of the sterling area what we do about our own costs and prices, savings and investment, Government expenditure and monetary policies, must have a preponderating influence upon the others. Hence the overwhelming importance of winning the present campaign against inflation.

If, for any reasons, however politically attractive, the attack on inflation was called off too soon, what chance would we have to persuade other members of the sterling area to keep their own finances in order? It is a matter that the whole British people, who are all taking part in the campaign against inflation, should understand, as of course hon. Members do, that this campaign has so great an effect outside our own country that if we fail it will be hard to dissuade other members of the sterling area from drawing upon their balances here, for example, at a rate which would cause the most severe difficulties.

The right hon. Member for Huyton (Mr. H. Wilson) gave us last week his programme for dealing with this situation. I have studied his five points with care and I must tell the House that I think that his policy is self-defeating, for it rests on a contradiction. He thought that the United States should give us further massive help, either in the form of additional monetary reserves—because he said international liquidity was inadequate—or, I suppose, in the form of increased American inflation, while at the same time his fourth point was that we must make ourselves more independent of the United States by further discrimination against her exports.

This does not make sense. Even if I thought that this extraordinary feat could be achieved—that is, to borrow more from and to discriminate more against the United States—it would be the wrong policy in a world which is so interdependent that we need, all of us, to expand together in concert with the United States, whose resources are the greatest in the world.

Mr. Harold Wilson (Huyton)

The right hon. Gentleman is knocking down an Aunt Sally of his own creation. I said nothing then or at any other time about borrowing from the United States. The Government are doing quite enough borrowing in the United States on their own account.

What I referred to was the proposal that there should be more international liquidity made available through the International Monetary Fund or other international monetary institutions, because of the effect of the dollar and Deutschmark shortage in drawing off liquidity from world trade. There is not the same contradiction between the first and the fourth points to which the right hon. Gentleman refers.

Sir D. Eccles

I should like to quote the right hon. Gentleman. In column 76 of the OFFICIAL REPORT of our last week's debate, he said: We must first deal with the problem of ensuring adequate liquidity in international payments. This means more funds available to the International Monetary Fund and to other international monetary institutions."—[OFFICIAL REPORT, 29th October, 1957; Vol. 575, c. 76.] The right hon. Gentleman knows as well as I do that the great source of these funds can only be dollars. He may say that the International Fund is there, and, certainly, it would do the lending to the countries the liquidity of which requires to be increased. Even so, the right hon. Gentleman goes on, later, to say that we must discriminate against the country from which he desires to see large new quantities of dollars put into the Fund's reserves. It simply does not make sense.

I should like to take another point which the right hon. Gentleman raised, and that was his plea for support-price agreements for primary commodities. Whether we think this policy desirable or not, there are very few commodities in which it could succeed without the active participation of the United States. They are the largest importers. They hold big stocks already of most of these commodities, and only with their finance could effective arrangements be made to handle such new surpluses as might appear. Yet, in spite of that obvious fact, the right hon. Gentleman wants us to begin new discrimination against United States trade.

Do we need these commodity arrangements? Of course, stability in earnings is a great boon to any primary producer. None of us with the experience of the 1930s could remain indifferent to the consequences of a collapse in world prices. At the moment, according to the best information we have, and I believe that it agrees with the United Nations' index, commodity prices are not below the pre-Korean War level and the volume of international trade is keeping up well. It is the volume of international trade which really matters. None the less. I fully agree that the situation has to be carefully watched.

Here in London we have a responsibility for the Colonies, and through our membership of G.A.T.T. we are participating in discussions on commodities. In the G.A.T.T. discussions last week this question was raised by many of the members who produce the same kinds of commodities as our Colonies, and I supported them as much as I could. One has to admit that wars and rumours of wars have always brought great prosperity to primary producers, but their long-term interests in times of peace can best be secured by a steady expansion in the industrial countries. We hope to achieve just that kind of expansion by the increase in trade that will come about both through the Free Trade Area in Europe and the Commonwealth Conference which we are to hold next year.

Yesterday, the Leader of the Opposition commented on the omission from the Gracious Speech of any reference to pro- duction in this country. Production is running at about 3 per cent. above last year, and shows no signs of contracting. It is very difficult to make a forecast, but perhaps one of the best indications is the level of imports, and imports are running at such a rate that I think that businessmen generally must be confident that a continued expansion will be with us.

There is no sign at the moment of any slackening in total demand at home, while in many lines we could sell more abroad if we could deliver more quickly and our prices remain competitive. I am constantly being given examples where British industry could do more business overseas if it were not for the pressure of demand at home. The fact is that at the present level of the supply of money, and given the increased efficiency of industry due to past investments, we can, if we keep our costs right, anticipate a reasonable expansion in Britain.

One other promising market, as the House knows, is Canada. I am sure that we will all give a very warm welcome to the Canadian Trade Mission which is due to arrive here on 22nd November. This mission, through its composition and the length of time—about three weeks—which it intends to stay in this country—is proof that the Canadian Government's desire to take immediate steps to buy more from Britain is to be translated into action. I am confident from the talks which we have had that it will be possible to find many ways in which our goods can be bought by Canadian institutions, such as the Canadian Government and Crown Agencies, in quantities greater than we have seen hitherto.

Another cause for thinking that production must go up is the fact that we shall continue to invest £1,500 million a year in the public sector alone. There is not much chance of a slump, provided that that is the figure of investment. If, six years ago, total investment had been anything like as high as it is now, the Labour Government would have claimed it as a triumph of a planned economy.

On the subject of production, I am sorry to see that the Opposition still believe that production today could be raised by a return to controls. Of course, they call them selective controls nowadays, because the idea of controls pure and simple is so obnoxious. The right hon. Gentleman the Member for Smethwick (Mr. Gordon Walker) said a most extraordinary thing last week. He said: Selective controls…do not choke off activity."—[OFFICIAL REPORT, 29th October, 1957; Vol. 575, c. 164.] What nonsense that is. The whole point of a control is to stop somebody doing something that he wanted to do, and experience shows that, although physical controls may direct activity into particular channels, they always restrict it in total.

I agree with my right hon. Friend the Chancellor that it is right to consider carefully individual controls on their merits, and without political prejudice. We have done this, and we cannot believe that detailed controls by Whitehall would help us today, either in our own economy or as an example to others, any more than they did in the past. We see no change in present circumstances which would justify one in thinking that what failed ten years ago will succeed now.

We are exercising detailed control in the public sector through the decisions over the expenditure of public money, and that is quite right, but in the private sector we believe that the generalised control of making money dearer and profits harder to earn gives the greatest measure of flexibility and the greatest chance of growth where growth is most beneficial to the nation.

There was one point on which I did agree with the right hon. Member for Huyton. It was when he said that we ought to do more East-West trade, and he spoke particularly of trade in goods which are now embargoed. If the strategic lists are to be reduced, it will be our policy to try to do that in agreement with the Americans and with our other partners. We should all agree that the stronger the free world can make its own defences, the less there is to fear the build-up of the Soviet economy.

However, there is plenty of trade which we can do here and now. If the Soviet authorities would only listen to the wishes of their own people we could do a great deal more trade in goods without any military significance. The House will remember the Russian athlete who was seized with the desire to possess some hats. I am certain that that lady is typical of millions behind the Iron Curtain. Would there be anything wrong with buying for all those households behind the Iron Curtain the things which they want and, in return, selling to us more of the products of the Soviet economy?

As the hon. Member for Cardiff, South-East said, the Soviet Government have recently given us great proofs of their scientific and technical efficiency, but they still apply to the daily lives of their peoples the austerities of an underdeveloped country. One of the differences between the Soviet economy and ours is that they concentrate their scientists on armaments.

Mr. Callaghan

So do we.

Sir D. Eccles

Not to the same extent. If the Soviet people could get washing machines instead of satellites, who knows how many washing machines they would buy?

The hon. Gentleman referred to education in this country. We do not have a bad record in that respect. The rate at which we have increased the expenditure on education, both on what one might call the plant and the teachers, is so much greater than anything ever contemplated under the Labour Government that that record is not one which hon. Gentlemen opposite should bring out.

Yesterday, my hon. Friend the Member for Aberdeen, South (Lady Tweedsmuir), who moved the Motion for the Address with such dignity, said something which has very much wanted saying, because it is so true. She said: I often feel that there are two tremendous tasks which the Government are trying to do and which, by their very nature, are little understood by the public. The first is to establish a new system of trade and the second to establish a new structure of defence."—[OFFICIAL REPORT, 5th November, 1957; Vol. 577, c. 10.] We have to fashion a new system of trade and it is hard to make and explain so many breaks with the past. The world in which all the industrialised nations are fully employed and where every country is short of capital is a very different place from the world of the 1930s. Then we were wholly preoccupied with unemployment at home and now our chief concern is how to pay our way abroad. We were then a creditor country and now we are the largest debtor in the world. The problem then was how to find investments to absorb idle savings. The problem now is to find savings to match the investments which we all want to make.

What a change has taken place in the use of the tariff! In 1932, we went protectionist in order to increase employment and to secure Imperial Preference. Today, we use the tariff not to protect full employment, but primarily as a bargaining weapon to expand the markets for our goods overseas. As stated in the Gracious Speech, a Bill will be introduced to revise the tariff structure of the United Kingdom. This will be a very large Measure and will tidy no fewer than eight previous Acts and 70 amendments to Finance Acts. It is designed to put into our hands a modern instrument for the making of a tariff and to rewrite our tariff in a way which will enable us to carry out such great projects as the Free Trade Area.

We shall ask the Commonwealth, at next year's conference, to look at all means of expanding trade between us, including tariffs and quotas and agricultural arrangements, but we all know that development plans now take a higher place in the thoughts of members of the Commonwealth than do tariffs and, since they are convinced that the pace of development is directly related to the soundness of sterling, we shall have a fruitful theme for next year's conference.

Among all the adjustments to the new world of technology, full employment and shortages of capital there is nothing harder to accept fully than the consequences of putting international co-operation in the place of independent action in matters of economics. Yet if we have full employment at home we can get richer only by more efficient work and by international division of labour. The right hon. Gentleman the Member for Huyton put too much emphasis on action by others to help Great Britain and all too little on what it is in our power to do for ourselves and, as we get stronger, to do for others.

The Prime Minister told us yesterday that in defence …the nations of the free world must make an even more significant contribution of their national sovereignty to the common cause than hitherto."—[OFFICIAL REPORT, 5th November, 1957; Vol. 577, c. 39.] Defence and economics are inextricably bound up. We cannot pursue different policies for each. We as a single country cannot, Western Europe as a group cannot, the Commonwealth as a group cannot, safely pursue a policy of economic independence against a background of interdependence in defence. That is not to say that economic arrangements by groups of countries inside the free world cannot add to the strength of the free world as a whole, provided that they are outward-looking and do not become protectionist blocs.

There open out before us great possibilities of wider markets in Europe and expanding trade over the Commonwealth. What we are trying to do today is new in both directions and our people have a fine part to play in the mobilisation of the free world's resources. It is a task which suits our genius and is fully worthy of our tradition as the greatest mercantile nation. I hope that we shall never forget our invisible exports which add so much to our balance of payments.

We shall, of course, derive great material benefits from the growth in international economic co-operation, but also great spiritual satisfaction in helping to raise the standard of life of peoples who have not worked so hard or so ingeniously as we have in the past. Certainly, my hon. Friend the Member for Aberdeen, South was right to tell us that the Government are trying to make a new system of trade. Only if we enter that system wholeheartedly and refuse to cling to old ideas shall we remain the centre of the Commonwealth. In short, and to sum up what I have been trying to say, this is a good time to be alive and to be engaged in industry, commerce or agriculture.

4.50 p.m.

Mr. Dingle Foot (Ipswich)

For the benefit of those hon. Members who arrived here since the year 1945, I should like to explain that this is not a maiden speech. The last occasion when I had the privilege of speaking in this House was a little over twelve years ago, but I appreciate that the lapse of time does not give me any claim to immunity or indulgence. The most that I can expect is that faint curiosity which is aroused by the spectacle of a Parliamentary ghost which has unexpectedly been re-embodied and has come back to earth.

When one returns after a lapse of a good many years, everyone asks the same question. Everyone says, "What changes do you see in this House as compared with the House of Commons several years ago?" Without wishing to seem presumptuous. I would say that I have observed one very considerable change. I observed it during the debate on the Franks Report on Thursday of last week. I believe that that debate was extremely significant, not because of the detailed proposals which were discussed and are contained in the Report, but because of the general approach of hon. Members. We had speech after speech from hon. Members on both sides emphasising that considerations of administrative convenience must give way to the rights of the individual.

That was a remarkable thing to anyone who remembers what took place in the days before the war. In those days we had available to Parliament an equally authoritative document, known as the Donoughmore Report, which made almost precisely the same proposals as those contained in the Franks Report. In those days, in the course of six years between 1933 and 1939, we could not even obtain from the Government a single day upon which to debate what the Report contained, and its conclusions were almost consistently ignored. It is a rather remarkable development that we should have a similar Report produced to this House and that it should meet with such universal acceptance from hon. Members on both sides.

But the Franks Report, and the debate last Thursday, were confined to this country. It seems to me that the principles which were so clearly laid down in the Report and so generally accepted in this House are not very evident when we look at the scene in the Colonial Territories, and especially at the territories in East and Central Africa. My hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) welcomed that passage in the Gracious Speech which said: In accordance with their belief in responsible self-government by free peoples My Ministers will continue to promote the economic and constitutional development of the territories overseas which are in their care. We all welcomed that passage, but I do not believe it is possible to promote the economic and constitutional development of territories for which we are responsible except upon the basis of respect for human rights. I want to draw the attention of the House to certain respects in which I do not believe that that is evident. I want, first, to call attention to the question of passports. In November of last year, a Socialist conference was held, I believe, in Bombay. The organisers of that perfectly legitimate conference invited certain African delegates, from Nyasaland, Northern Rhodesia and Uganda. In each case application was made for a passport, and in each case the passport was refused without any reason being given.

We cannot imagine that happening in this country, and I suggest that it is a very dangerous development. A passport was originally a facility; now it almost becomes an instrument of tyranny. I want to ask the Under-Secretary of State for the Colonies what possible justification there can be for refusing facilities to three British protected persons who wanted to go overseas in order to engage in a perfectly proper and legitimate political activity.

I now want to turn to something which is a good deal more serious. Hon. Members all know that in Kenya many thousands of Her Majesty's subjects are still detained, in some cases having been detained for as long as four or five years, without charge and without trial. I remember the debates which took place in this House on Regulation 18B and the attacks made on my right hon. Friend the Member for Lewisham, South (Mr. H. Morrison) when he was Home Secretary. In those days we had to have some form of detention because we were engaged in a life and death struggle, but I do not think that there was any Member on either side of the House in those days who did not loathe the whole thing. There was not one of us who did not rejoice when the necessity for it came to an end.

But we have detention without trial on a far larger scale in Kenya. Looking back through the Parliamentary records of the past four or five years, it is rather remarkable to find that all the protests against that state of affairs have come from hon. Members on this side of the House. Last year and the year before I visited the detention camps, where I was given every possible facility and shown every possible courtesy by the Kenya authorities. I want to say something about the people in those camps. I know that their numbers are falling, but I hope that we shall not be told by any Minister in this debate that the situation is covered by rehabilitation.

It is true that a number of devoted people are engaged as rehabilitation officers inside the camps, and I do not deny that they may be doing extremely valuable work, but we must realise that no one is a candidate for rehabilitation until he has confessed to Mau Mau activities. That system is not without its dangers, because it means that there is always a temptation to make a confession even though it may be false, because that is the only way in which one can obtain one's freedom, perhaps after having been shut up for years.

But I am concerned not with those who are candidates for rehabilitation; I am concerned with some of those sometimes referred to as the "hard core," who will say that they have never taken part in Mau Mau activities. Last year I went to Manda Island, and there I saw a number of detainees, who showed me statements of the grounds for their detention supplied to them when they appeared before the advisory committee.

I want to give three examples illustrating the grounds upon which people are locked up. The first example concerns a man who had been a journalist. He had been locked up almost since the beginning of the emergency. In his case, as in almost all other cases, there was the general accusation that he had been an active supporter of Mau Mau. That means nothing unless it is supported by particulars, and those particulars in this case were, first, "That you had been a close associate of Paul Ngegi." Here is an example of guilt by association. Secondly, and more startling, "You had been editor of a 'near-seditious newspaper'"—here follows the name of the newspaper—"which has now been proscribed." What is "a near-seditious newspaper"?

I want the House to observe the way in which the process works. First, one takes emergency powers; then one uses those powers to suppress a newspaper, and then one uses the suppression of the newspaper as a ground for keeping a man in prison for four or five years. I do not believe that prolonged detention can possibly be justified on such grounds.

My second example concerns a man whose case was raised in the House not long ago by the hon. Member for Wednesbury (Mr. Stonehouse). In this case, the man had taken part in politics, and the allegation was as follows: You made inflammatory speeches against the Government of Kenya and Europeans calculated to stir up sedition and inter-racial enmity. That was all; no particulars of any speech whatsoever—simply that general allegation. That man has been detained on Manda Island or elsewhere ever since the beginning of the emergency.

I now come to the third case, the case of a member of the Koinange family, the son of the ex senior chief Koinange, who was aquitted by a court of law, but, none the less, who has been interned ever since. The following was the allegation made against the son: You acted as your father's clerk and to that extent had knowledge of Mau Mau plans, and to the extent that you did not reveal them became a participant. That is remarkable enough in itself, but it is still more remarkable when one considers the charges made against the father, because it is not even charged against the father that he was ever a member of the Mau Mau organisation.

I suggest that these are matters which deserve the attention of the House. It is no less important when Her Majesty's subjects of Kenya are locked up without trial and kept without trial than it was in this country during the war when people were so locked up. The point I want to make about this class of case is that we are not here dealing with terrorists, not with men who have been in the forest and not with people who have taken part in any violent action, but simply with a class of political prisoners. They have been kept locked up for four or five years because of the general political views they have expressed either in speech or in writing, and I respectfully suggest that these cases ought to be reviewed, and reviewed in the very near future.

I make the further suggestion that these cases ought to be reviewed by someone with high judicial experience sent out from this country. I say nothing either against the judges or the law officers in Kenya. I think that they have played a very considerable part during these years in maintaining English notions of justice and the rule of law, and have done so in extremely difficult circumstances. But I think it is very difficult for anyone who has been there throughout these years—and I do not underestimate what many have had to go through in Kenya during the emergency years—anyone with that background, to bring a fresh mind to bear on cases of this sort.

I pass now to one other matter which arose in Northern Rhodesia. It is just a little over a year ago since we had a declaration of emergency in Northern Rhodesia. Hon. Members will recall what happened. There had been a series of strikes on the Copperbelt. There had not been any public tumult, but there had been strikes which may have appeared unreasonable to a large number of people. The Deputy-Governor invoked his powers under the Order in Council, 1939, to declare a state of emergency. The leaders of the African Mineworkers' Union were arrested. They were taken away without trial and were, as it afterwards appeared, detained unlawfully. Most of them, if not all, have been detained or rusticated ever since. They are not allowed to return to their homes on the Copperbelt and very often have to live in a very confined space in their own villages. As I understand it, many of them are undergoing very great hardship at the present time.

The point I wish to make is that, to my mind, it was a most questionable procedure to invoke the 1939 Order in Council in order to deal with industrial disputes. The Order in Council was framed to meet circumstances where there was something in the nature of bloodshed or riot. Here it is being used for a wholly different purpose. These are just three examples which I desire to give the House.

I would add that there is, of course, a complete lack of uniformity between the various Colonial Territories about another matter, that is, the matter of deportation. I am not going to enlarge on that a: this stage. We can all think of examples of deportations in recent years and in every case the deportations have proved to be wrong. But in all these territories we have different laws. It is an anomalous thing that whereas in Northern Rhodesia if a man is threatened with deportation he is entitled to a judicial inquiry, generally conducted by the chief justice himself, whereas in the neighbouring territory of Nyasaland the Governor merely issues his fiat and the man is deported there and then without any opportunity to know the grounds on which he is being deported or to state his case.

I have ventured to emphasise the importance of these matters, and I hope that we are not going to be met at some stage with the argument that we must at all costs trust the man on the spot. I always dislike the argument about the man on the spot. For one reason, there is nearly always more than one man on the spot. If a detention order is made in Kenya by the Governor or district officer against an internee, then there are two men on the spot—the man who makes the order and the man against whom the order is made. It is very unlikely that their views will coincide. Therefore, it seems to me that we have to realise where the responsibility lies.

We in this House should, of course, always attach very great value to the views of those who are entrusted with the actual task of administration, but when passports are refused or when Her Majesty's subjects are interned for years without trial, or when emergency powers are misused, we cannot get out of our responsibility simply by saying that the decision has been taken elsewhere. The responsibility always rests with us in this House.

I conclude by saying that we all realise, or at any rate all of us who are at all familiar with the problems of the African territories, how very great are the difficulties ahead. It is not easy to combine political and economic development. It is not easy to see how the problems of plural societies are going to be solved, but quite certainly we are never going to solve them unless we in this country are prepared to concede to all the colonial peoples under our rule the same standards of freedom and justice that we here claim for ourselves.

5.7 p.m.

Colonel Richard H. Glyn (Dorset, North)

I ask for the indulgence of the House on the occasion of my maiden speech. I should like to start by saying how conscious I am that my election was made possible by the loss to the House of a Member who was widely respected on both sides.

I shall not attempt to follow previous speakers in the debate, because today I must not be contentious. However, I should like to refer to a matter which was discussed briefly yesterday. I refer to the possibility of, as it was said, women taking their seats among the Lords. When I heard this matter discussed I was reminded of the story of the last time that a group of women took their seat among the Lords. Although this happened a long time ago, I would like shortly to relate the story, because one of the women concerned was a resident of North Dorset.

It is officially recorded that about the year 1306 King Edward I convened a Parliament to which he summoned his Lords, his Commons and also his Prelates, as the custom then was. He summoned them to Westminster, to appear concilio nostro apud Westminster, that is to say, to take their seats in the Old Westminster Hall. Tradition has it that in those days Prelates and Lords sat in one part of the Hall and the Commons in another. It is a matter of history that on that unique occasion a summons to appear was sent to the Abbess of Shaftesbury and to three other Abbesses, and it is a matter of tradition that, having been summoned to appear "apud" Westminster, "apud" Westminster they went and took their seats, among the other Prelates, with the Lords. History makes it perfectly clear that they were never asked to come again, but history does not record why, which, of course, remains a matter of speculation. The Abbey over which the lady ruled is now a ruin, but the broad acres with which it was endowed are still the centre of a busy agricultural community which I have the honour to represent.

Agriculture is of the greatest importance to North Dorset, and agriculture and its auxiliary industries and horticulture are really the most important industries in my constituency. Therefore, I wish to welcome the statement in the Gracious Speech that the Government intend to continue supporting agriculture. I know that many people ask why agriculture, of all our industries, needs to have what we call support prices and what are sometimes called subsidies. I know many people think that because foreign food is sold very cheaply here in Britain it follows that it must have been produced very cheaply by the foreign producers. Statistics to which I shall refer show that this is not always the case.

The United Nations has published figures of great interest which are available to hon. Members in the Library in the monthly bulletins of agricultural and economic statistics. It would be very wrong for me on this occasion to detain the House with a great list of figures, however important. But perhaps it is worth noticing that if we take an average for the last three years for which complete figures are given the British wheat grower is shown to be one of the lowest paid in the world.

This was so interesting to me that I referred the matter to the Department of my right hon. Friend the Minister of Agriculture, Fisheries and Food and asked if it were right to say, as the United Nations did, that these figures included all British support prices and subsidies. I got back a most helpful answer assuring me that this was the case. This being so, I can say with confidence that the only country which during those three years which was paid less for its wheat than Birtain was Canada, which received less to the tune of 17 American cents per metric ton of wheat.

Butter and cheese were formerly articles of great importance to the small farmers in my constituency. They used to augment their incomes by turning milk into butter and cheese and making a little profit that way. But this can no longer be done, and the United Nations figures show that British farm prices for butter are the lowest in the world. They further show that the French farmer gets actually 92 per cent. more for his butter on the three-year average than is paid to the British farmer.

Regarding cheese, it was announced only last week that the farm cheese price is now less than before the war. The British farm cheese price for Cheddar cheese was said to be 80 per cent. of what it was in 1938, and I can think of no other commodity of which that would be true. It is interesting to note that, on the United Nations figures, the Italian farmer is shown as being paid on a three-year average 106 per cent. more than the British farmer for cheese.

I do not want to weary the House with more figures, but it is right to say that there is another side to this question. On two commodities only have British farmers benefited according to these United Nations figures. They show that for eggs the French farmer gets 4.7 per cent. less than the British farmer and that for milk the Italian farmer gets 5 per cent. less. For every other commodity supplied for human consumption, the balance of advantage is with the Continental farmer. That being the case, it may be asked, how is that that foreign food is sold so very cheaply in this country? We are the lowest paid butter producers in the world, but we import 5,000 tons of butter every year. The answer is, I think, that foreign food is sold in this country at an artificial and false price, below the price that the farmer who produces it is paid for producing it. The reason for this, I think, is that some countries have a surplus of agricultural products which they have to sell somewhere and they compete with each other as to how to sell them; and because we are the biggest market for food in the world, they compete with each other to sell their surplus food to us.

To give one example of this, the price of French wheat two years ago off Avonmouth was £23 a ton. The French farmer producing it was paid over £37 a ton on the United Nations figures. I think that gives the true picture. The real position is that a great quantity of imported food is sold here, not only at less than the farmer who produces it was paid for producing it, but in some cases less than it could be produced by any farmer in any part of the world. If that be accepted, it is clear that, so long as this position continues, British farmers will have to have the help of some kind of subsidy or support price.

The British community benefits enormously by buying this cheap food, and it is right and proper that it should. But what benefits the rest of the community would be a great cause of loss to the farmer if he were not supported or aided in some way. So I suggest that these support prices are neither a badge of sloth nor a cloak for inefficiency. They are part of a system under which we buy our food so cheaply that it is necessary to help our farmers with these support prices. For all these reasons, and because of the importance of agriculture and horticulture to North Dorset, I welcome the phrases in the Gracious Speech which indicate continued Government support for these industries.

5.17 p.m.

Mr. Marcus Lipton (Brixton)

It is a privilege to follow the hon. and gallant Member for Dorset, North (Colonel R. H. Glyn), because it enables me to congratulate him on one more distinction in addition to those which he already holds. I shall have the support of all hon. Members when I warmly congratulate the hon. and gallant Gentleman on an excellent maiden speech. In fact, I think that one may say that he is a very worthy successor to the Abbess of Shaftesbury who preceded him in the representation of the constituency.

It was very refreshing to hear what the hon. and gallant Member had to say, because as a small agricultural producer I have for long felt that I am not getting what I ought to get for my produce. I hope that the changes which are to be introduced will not worsen the situation. One of the puzzles for pig producers, for example, is that while they are getting much less for their pigs than they received 12 months ago, the housewife is not reaping the advantage of the difference in price. But I shall have to reserve my comments on the agricultural problems with which we are faced until some other occasion. I wish now to say a few words on some of the contents of the Gracious Speech.

Reference was made in the Gracious Speech to the possibility of creating life peers. I do not regard that as a matter of very great importance. In my view, it would have been better had we first put our own House in order. We should do far more than has been done already to improve the working conditions for hon. Members and their secretaries. In the last Session, or the previous Session, there was a Sessional Committee set up to consider these problems of accommodation and the facilities available to hon. Members. I hope that steps will be taken to set up that Committee again, because the problems with which it attempted to deal have by no means been solved. While I am on this topic, may I beg the authority concerned—it is always difficult to know which authority is directly concerned—to take whatever steps are possible to reduce or minimise the odour of fried fish which so very frequently permeates the Central Lobby and other parts of the Palace of Westminster. It is certainly not a dignified aroma for the Mother of Parliaments to conduct its business in, and I make a firm plea to whoever is responsible to do what is possible to minimise this rather annoying inconvenience.

In discussing the economic situation, it it difficult to know exactly what the Government regard as inflationary. The Prime Minister made a long speech yesterday which did not do very much to enlighten either the House or the country. The Prime Minister is a political Sputnik, because no one knows, including himself, how, when or where he is going to come to earth. He certainly did not come to earth on more than one topic to which he referred yesterday. Despite his attempt to explain the duty of Her Majesty's Government on the subject of increased wage demands—the increased wage demands put forward by people in the hospital services—responsible trade union leaders are still dissatisfied and suspicious.

The Government are putting up a tremendous smoke-screen to create the impression that the trade union movement is the principal cause of the current inflation. The point that I should like to make very briefly is that we can only ask for a wages standstill if the cost of living is held steady, and until Her Majesty's Government can give that assurance it is idle to expect the trade union movement to refrain from making wage demands where such demands are considered essential.

No reference has been made by any of the Government spokesmen to the inflationary effect of giving £100 million to landlords under the recent Rent Act. No reference has been made to the inflationary effect of the Government giving £100 million by way of extra interest on the National Debt. No reference has been made to the inflationary effect of giving £35 million by way of a present to Surtax-payers in this year's Budget, and certainly no reference has been made to the question of post-war credits, the repayment of which ought really to be speeded up. At the current rate of repayment, £17 million a year, 1984 will indeed be a memorable year, because it will not be before 1984 that post-war credits will be finally paid off.

Another point that I want to make is that, by October next year, the full effect of the Rent Act will be felt, and it will be felt at the very time when, since the Rent Act has been put on the Statute Book, the Government have decided to impose a 20 per cent. cut in housing during the next two years. I think it is true to say that of all the cuts that are being imposed by the Government housing bears the most savage cut of all. So far as the property-owning democracy is concerned, it is sufficient to take note of the fact that the 7 per cent. Bank Rate has virtually put out of business for the time being almost every building society in the country. Just try to obtain an advance at the present moment for the purpose of buying a house.

In October of next year many decontrolled tenants will be thrown to the wolves. The Government, it is true, have increased or are going to increase in the very near future old-age pensions and the National Assistance grants. I should like the Government to tell the House how much increased expenditure to be incurred by the National Assistance Board in the next year or two will be devoted to paying the increased rents of recipients of National Assistance. In effect, the Government will be paying to some extent the increased rents required by landlords from old-age pensioners and others in receipt of National Assistance.

The magnitude of the problem can be gauged from one very simple fact, which I can quote, from the Borough of Lambeth. Since a rent advice bureau was established at the town hall a few months ago, 8,600 inquiries have been received at that one rent bureau. Many cases have come to my notice in which a landlord has given notice to quit in October, 1958, and he does not want to consider any offer, however vastly increased the offer may be, by the tenant to pay increased rent; what he wants is vacant possession.

The Minister of Housing and Local Government made an appeal to landlords to be reasonable. That appeal has, I am sorry to say, fallen on deaf ears in all too many cases. What is even more galling is this. The Government are still pretending that the Rent Act will increase the number of unfurnished houses and flats to let. I very much hope that the Government are right and that I am wrong in prophesying that in October, 1958, there will be vast distress and dislocation in London and other large centres—people being made homeless with nowhere to go.

What I fear is that the county court procedure, which will have to be employed for the purpose of evicting people, will break down simply because there will not be sufficient bailiffs to ensure the ejection of all those unfortunate people. In Lambeth, for example, the problem is aggravated for another reason to which I have previously drawn the attention of the House. Three years ago, I asked the Colonial Secretary whether he could announce the result of an examination which the Government were then making of the problems arising from the emigration of British subjects from the West Indies to the United Kingdom. The then Minister of State for Colonial Affairs said that the Colonial Secretary was still in urgent consultation with other Ministers concerned but was riot yet able to make a statement.

I pointed out that the longer this matter was allowed to drift the more difficult it would be to find a solution satisfactory to the increasing number of immigrants in this country and to the local authorities which are very much concerned and whose resources were considerably strained. The Minister of State replied: I can assure the hon. and gallant Member and the House that the Government are very conscious of the urgency of this matter and are doing their best to deal with it as rapidly as possible."—[OFFICIAL REPORT, 15th December, 1954; Vol. 535, c. 1768.] That was three years ago. The Lambeth Borough Council sent a deputation to the Colonial Office almost immediately after I put that Question in the House, and we are still waiting to know what the Government are going to do about it. It is proving impossible to enforce the Public Health Acts. The terrible results of overcrowding are constantly brought to our notice and very bad cases of exploitation by landlords, white and coloured, are also coming to our notice.

Mr. Cyril Osborne (Louth)

Is the immigration still as great today as it was three years ago?

Mr. Lipton

I have not up-to-date figures on that. All I would say is that during the past three years there has been further immigration into this country which, of course, has made this situation in London and other large cities even more difficult. The point I am trying to make is that the situation is now more difficult than it was three years ago, but the Government, although stating that they were giving the matter active consideration three years ago, have not done one thing since to show any willingness or give any evidence of their intention to deal with the very difficult problems which are involved. As a matter of fact, for that, if for no other reason, I welcome the Labour Party's proposal to municipalise rented property. That, combined with the economic aid to under-developed areas overseas, including the West Indies, may help to deal with this very difficult problem.

We have at present a Government which is drifting in a rudderless fashion, not only regarding this problem, but regarding problems in other spheres. The whole effect of the Government's policy is to create hardship and anxiety for vast numbers of people, among them old-age pensioners who are living in dread and do not know what is to happen to them in October. 1958. Surely, it is ironical to produce a Gracious Speech in which appears the following sentence: My Ministers will continue to promote the social welfare of my people. That particular sentence will come as very hollow mockery to many tenants whose future is indeed black, unless there is a very radical change in the Government, or the policy followed by the Government.

5.31 p.m.

Mr. Michael Clark Hutchison (Edinburgh, South)

Like my hon. and gallant Friend the Member for Dorset, North (Colonel R. H. Glyn), I ask for the indulgence of this House as this is the first time that I have had the privilege of addressing it. I should also like to mention my predecessor, Sir William Darling, who. I know, was a very popular Member in this House, and whose retirement through ill-health is much regretted.

I was very pleased to see in the Gracious Speech reference to the development of our Colonial Territories. Here I should like to pay tribute to members of the Colonial Service. Very often policy decisions are issued in this country, and directive go out, but we overlook the difficulties of the men who have to implement them. Frequently, they are handicapped by lack of adequate staff, lack of funds, and lack of understanding of their position. Very often, their deeds are misrepresented by foreign nations. All these things they have to fight against, but nevertheless, our Colonial Service is staffed by men and women of great integrity, men and women who spend their lives—often at great cost to themselves—in furthering the welfare of colonial peoples, and I should like to pay respect to them.

It seems to me that there is one small way in which we could recognise their services; that is, to grant them the vote in this country. As I understand, under the Representation of the People Act, a Crown servant employed overseas and paid from United Kingdom funds has the franchise here. That means that a certain number of colonial servants do have a vote in this country because they are paid from United Kingdom funds, but the vast majority do not because they are paid from colonial funds. It seems that it would be a reasonable and generous step to place those men who are recruited here and who are domiciled in Britain in the same position as members of the Armed Forces and to grant them the vote. I hope that my right hon. Friend the Secretary of State for the Colonies will look into that matter.

There is one particular point to which I should like to refer, the question of how our information and publicity services in Arabia and East Africa may be improved. Great advances have been made in those territories, but very often, because of the deplorable lack of publicity services, our achievements are belittled and we are thrown on the defensive. It must be remembered, and I am sure the House knows, that Cairo Radio can daily reach thousands in Arabic and millions in the Swahili language and that much of this propaganda is, indeed, hostile. When I left Aden three years ago, there was no anti-British feeling, but I am sorry to say that today the position has changed. It is because the people of Aden have been influenced by this hostile propaganda.

Against that, we have the B.B.C. Its Arabic programmes are often excellent, but it has to cover a very wide and diverse area, including advanced countries like Syria and mediæval lands like the Yemen, and sometimes its programmes are very unsuitable. I was told, but have not been able to verify it, that not long ago it had a programme on the life and habits of the grasshopper. That programme cannot have had a great following in Arabia. There is obvious need for a much closer liaison between our local officials on the spot and programme planners in this country.

In addition to the B.B.C., there are local stations but, frequently, these are handicapped by lack of finance and lack of staff. The one in Aden, for example, is a most ramshackle affair and the total vote for publicity services in that Colony is under £30,000 a year, plus a grant of £8,000 from Colonial Development and Welfare Funds. Not much can be done with that. I do not blame the local staff: I know many of them; they work hard, but they just have not the tools.

I know that expansion will cost money. One means would be by setting up an efficient organisation for Aden and the East African territories, an efficient broadcasting organisation, so that the resources of those countries could be pooled. Within that framework programmes can be directed to each local territory according to its needs, the state of its educational services and general standards obtaining.

There is one other point. Throughout Aden, the Protectorate and the East African Territories down to Zanzibar, there is a vast quantity of local military, police and security forces. In the Aden Protectorate there are six such forces. All have different standards of recruiting, different uniforms and different equipment. Here, surely, is a field where some sort of uniformity can be undertaken. We can streamline those forces and get much greater efficiency while saving much money which could go towards our propaganda services and broadcasts. I wonder, once again, whether my right hon. Friend the Secretary of State for the Colonies will look into this matter.

Finally, I should like to say that territories like Malaya have reached maturity and have taken their places in the Commonwealth, but that we must not overlook the needs and aspirations of the small territories. It is my belief that very few, if any, of them will be able to stand on their own feet and be fully self-supporting. Nevertheless, they must develop and we must help them to do so. One way out may be to ask the great Dominions to interest themselves more in such Colonies which lie within their orbits.

The British Commonwealth is changing. It will need all our imagination to ensure that as Colonies come to be more self-supporting they stay within the family circle. I have great faith in our nation and in the Commonwealth. I hope that careful consideration will he paid to these matters which are supremely important and take precedence over any question of European free trade or anything of that sort.

5.44 p.m.

Mr. Thomas Hubbard (Kirkcaldy Burghs)

It is my good fortune to catch your eye, Mr. Speaker, just after we have heard a most interesting maiden speech on a very interesting subject. The hon. Member for Edinburgh, South (Mr. M. Clark Hutchison) obviously spoke with a great deal of knowledge and sincerity. I am sure that on behalf of the whole House I can offer him our most sincere congratulations.

I am particularly interested in the subject matter with which the hon. Member dealt. We know that he has had a long experience in colonial work. I am aware that he was in Australia when the war broke out and there joined the forces and rose from private to major. That is evidence of his ability. After that, he went into the Colonial Service in Palestine and elsewhere. He knows his subject, and his knowledge will be of the greatest service to this House in the future.

It is not surprising that the hon. Member should deliver a good maiden speech when we remember that his father served in this House for six years after 1920 as Member for North Midlothian. Not far removed from where the hon. Gentleman is now sitting is another member of his family, the hon. Member for Edinburgh, West (Sir I. Clark Hutchison), who has served this House for a long period. The hon. Member's family has thus made quite a contribution to Parliament. I am sure that he will look forward to future debates, when he can join in the battles which are enjoyed so much by hon. Members on both sides of the House.

I wish I could be as sincere in congratulating the Government on their proposals. One of the strange things about our proceedings is that one may congratulate a maiden speaker in the kindliest terms one can think of and immediately afterwards have to address oneself to the Government, when one cannot find terms harsh enough with which to criticise. I do not think any Government deserve criticism more than the present Government. I have read carefully through the Gracious Speech, and I have imagined all the things that might have been in it. One of the most effective parts is that in which the Government make the resolve to take all steps necessary to maintain the value of our money, to preserve the economic basis of full employment by restraining inflation, to strengthen our balance of payments and to fortify our reserves. Up to now, the Government have taken all possible steps to destroy the value of our money. Even at this late stage, if we could accept what they say in the Gracious Speech as likely to be true, we might be able to help them.

I do not wish to go further in my criticism. After hearing the speeches that have been made in this debate, I very much doubt whether the Government are capable of maintaining the value of our money and preventing unemployment. If one were to be guided by speeches made here by the Government and their supporters, as well as by speeches made outside this House by Ministers, Government supporters and other Conservatives who are not members of this House, one might be misled into believing that the Government had had a long run of success and had brought the country into prosperity by creating conditions in which, as the Prime Minister has said, we have "never had it better". In point of fact, everyone, excluding the Prime Minister, knows that there has been a steady deterioration since the Government were elected.

Many things have happened during the last year, not excluding the Suez crisis. The by-elections have shown in clear terms that the Government ought to go to the country, rather than continue in office when they know that the country no longer has confidence in them. It is not a question of the so-called war against the Government by wicked trade union leaders, or of Opposition Front Benchers or back benchers trying to destroy the success of the Government. The Government have had no success.

It is a rather pitiful story. We have gone from bad to worse, year after year. Now we find ourselves in the sorry position in which the Government's own deliberate policy has increased the cost of living and, therefore, has reduced the standard of living. Having done that, they tell us and the country that it would be wrong for trade unionists to ask for increased wages and for the Government to approve them, whether before or after arbitration, because they would be inflationary increases. It is the question of whether the hen or the egg came first. Everybody knows that the Government, by giving large sums of money to one section of the community, have created conditions which have caused us nearly to reach bankruptcy.

No one on this side of the House wants to see inflation. One of the things which annoys me is to have to listen to right hon. and hon. Members opposite making speeches, both inside and outside the House, on the basis that the patriots are on their side of the House. We believe that they are on this side of the House and in the trade unions and the workers whom they represent, some of whom have been derided by hon. Members opposite.

Throughout my short lifetime the low-paid wage earners in this country have always responded when the country was in difficulties, whether in war or in peace. My memory takes me back to conditions to which none of us likes to refer. When the First World War broke out nobody said, "We are the people who have been so badly treated that we have little to gain by fighting." They went to war and fought. The very same people who fought in the First World War had been receiving wages of about 17s. a week in the linoleum industry. These are the old-age pensioners of today. We are told that they ought to have saved for their old age. The ordinary people were the great patriots.

We all know that this country cannot survive without production and manufacture. The Government recognise this. Our problems cannot be solved simply by a few kind words; more must be done. Someone from the Government Front Bench ought to pay a full tribute in respect of the co-operation which the Government have had from the trade unions since they were elected. When we remember the conditions in which the miners have worked in the past and realise that after long years of struggle they have achieved a five-day week, we also recollect that they have continued to work a six-day week. People in other industries who have worked for very small wages in the past are today working long hours of overtime.

In spite of this, all we can hear from the Government and their supporters are references to the average earnings of the people, forgetting that these are the results of the miners working a six-day week instead of a five-day week and of many others working longer and harder. This criticism of the earnings which the workers make is far from a credit to people who make such remarks.

By the production of all industries in this country, engineering no less than any other, by working overtime, by making greater effort and by increasing our production, they are assisting the Government, but the most they can get from the Government and their Tory supporters as well as a large section of the Press is a continued report about the average earnings of the people in this country, without any explanation that these earnings have arisen because the people have worked harder and longer.

That is not the way to treat a single section of the community. I agree that everybody's efforts are needed if we are to make our money worth something. It used to be worth something. It requires everybody's efforts, but the Government select a single section of the community, whether for a tax reduction or, for the landlords, an increase in rent. In many cases there will be no limit on the increased earning capacity of the landlords, and there is no suggestion of disloyalty because they have raised their rents as high as they wished. Apparently there is no crime in that; it seems to be all right. It does not appear to be disloyal for a group of people, at the very moment that the full impact of the financial crisis struck this country, to make fortunes overnight on the Stock Exchange. There seems to be nothing unpatriotic in that, according to the Government.

On the other hand, when people find that their standard of living is affected by these things, apparently it is unpatriotic when they try to maintain it. If the rent rises and if the price of everything else goes up because of increased interest charges, the only way in which people can maintain their standard of living is to ask for an increase in wages. I cannot see that there is anything wrong in an ordinary wage earner wanting to maintain his standard of living if at the same time there is nothing wrong when another section of the community makes the sky the limit.

I have had a long experience in the mines, but my constituency must be about the largest linoleum manufacturing centre in the country. The industry has been of great assistance to the town. Many people are employed in it. I know little about what goes on in the head office of the linoleum industries in Kirkcaldy, but from time to time we hear what has happened in the Linoleum Manufacturers' Association, of which all the linoleum manufacturers, including those in Kirkcaldy, are members. I know that there was an examination of that industry by the Monopolies Commission, and I was delighted to hear that the Commission thought That no action was necessary.

Although they are more or less in steady employment at the moment, the workers in the linoleum industry cannot be described as high wage earners. They are lucky if their wages fall between £7 and £8 a week. Despite this, I notice that it has been decided to increase the cost of linoleum by 5 per cent. I have not heard that there was any suggestion of arbitration about this or that anyone suggested that it was likely to prevent us from placing our economy on a sound footing. Nobody was consulted about this. I am quite certain from statements made by the Chancellor, the Minister of Labour and all others who have spoken from the Conservative benches that if the workers in that industry were to ask for an increase in their income by 5 per cent. they would be told that they were jeopardising the country's economy and that it would be an inflationary increase unless attached to greater production.

It is because of this that I think the Government's policy is unfair. The country cannot overcome the crisis lidless we do it together, and if we are to do it together, then the policy must be as fair for one section as for another. We cannot say to one section of the professions, trade or industry, "You can have a 5 per cent. increase", if to another we say. "You cannot have a 3 per cent. increase". If we do that we cannot go forward together, and I am convinced that if we cannot go forward together, then we shall move backwards together. We shall do that unless, pretty quickly, the Government have more to tell us than the sort of things to which we have been listening for the past fortnight—something more concrete and something which will be found agreeable by the people as a whole and not merely by a section of the community.

We know that everybody cannot be engaged in productive industry, but we must be convinced and be able to convince others that those who add most to the pool are entitled to take most out of the pool. Those who add nothing to the pool are not entitled to take anything out of it. I am afraid that at present those who make little contribution take far too much out of the pool.

I listened with some interest to the debate last week when it was stated that if, after arbitration, the British Transport Commission might seek to give an increase in wages to its employees the Government would have to do what the Minister of Health has already done—decide whether or not such an increase was inflationary, and, if it was decided that it would be inflationary, refuse to give it. Not that the British Transport Commission could ever be accused of being too generous. The Commission looks after a nationalised industry, it is true, but an industry that was bankrupt before it was nationalised, that had been receiving subsidies for donkey's years before then, and that had never stood on its own feet. The Minister now says that it must stand on its own feet.

Among my acquaintances there are some who have given long and loyal service to the railways. I have spoken before of a friend of mine in my constituency who, on the very day that he was 65—though he was enjoying good health and manpower was required—was told to pack up and go home. That was after forty years' service. While it is true that he had not given long service to the British Transport Commission itself, he had given a continuity of service to the railway company, and one would have assumed that the Commission, when it took over the railways, would take over the human liabilities as well as the assets.

This man was informed that, by virtue of his service, he was to be awarded a pension of 6d. a week. It is a year since I spoke of that, and I have not since received evidence that the Commission is now any more generous or more likely to throw about public funds. A letter dated 27th September, sent to the same man reads: I have to inform you that as a result of the amendment to the rules of the B.T.C. (Male Wages Grades) Pension Scheme, which came into operation on the 19th August, 1957, it is now possible to offer you a lump sum in lieu of pension of 6d. per week you are receiving. On the advice of the Actuary, it has been determined that the sum of £11 14s. is the estimated capital value of your pension of 6d. per week. From that, it would not seem that we need be suspicious that the B.T.C. will spend public funds without regard. Here is a man with 6d. a week pension. It is true that they do not ask him to go to the office every week to collect it. They allow him to collect the magnificent sum of 2s. each month, and now he has been offered that meagre sum in complete satisfaction of his claims on the Commission. Nevertheless, the Minister says that we might not be able to trust the B.T.C., that it might even advocate an inflationary increase.

I do not want to say much today about old-age pensions, because I hope that we will have an opportunity to discuss them in the near future. Nevertheless, it would not be out of place, perhaps, for an honorary official of the British Council of Old Age Pensioners' Associations to say the old-age pensioners see no reason to thank the Government. They do not believe that the Government have done great things since the 1951 Election. Increases have always come too late and have always been too small.

It is not for me now to go into the questions raised by the Bill now available in the Vote Office, but it is right and proper to say that I believe that we have got into the habit of looking on old-age pensioners as a separate population. We look upon them as people who ought to be content to live a sub-standard life. That is very wrong. Who are the old-age pensioners for whom I speak? They are our fathers and mothers—just ordinary people, but ordinary people who have given great service to the country.

They worked for not very big wages, and they raised big families. Many of them served in the First World War, and many gave their families to serve in the second. When they were working, they often worked twelve hours a day for seven days a week. They were industrious. Now we talk of them almost as though they were people to whom we must give a hand-out. The old-age pension does not allow them to have the standard of life that I would like for my own people.

The hon. Lady the Member for Aberdeen, South (Lady Tweedsmuir) interpreted—she did not quote—Robert Burns. Burns wrote: O wad some pow'r the giftie gie us To see oursels as others see us! I do not think that needs translation.

Mr. R. J. Mellish (Bermondsey)

Yes it does.

Mr. Hubbard

My Cockney hon. Friend often speaks, and I cannot understand a word that he says.

We should not be thinking in terms of the translation, but in terms of the philosophy. We should be searching for some power to enable us to seek for others something that is good enough for ourselves. When I think of the degree of comfort there should be for old-age pensioners, I think in terms of the comfort I want for myself. I do not think that my job is yet completed. Young people today, who have made little effort, are always ready to condemn the old people, many of whom worked hard until they were nearly seventy years of age.

The old-age pensioners have for long been looking forward to an increase in pension. Last February we had a long debate on the subject, when we on this side pleaded with the Government to give an increase. The Government did not give it. That was before the Prime Minister said that we had "never had it so good." Some time later he gave a great gift to the Surtax payers, but he could not give anything to the old-age pensioners. Now the Minister tells them that, if they behave themselves, they will get it by the end of January. But we know perfectly well that because of the Government's monetary policy and of the rent increases, even a 10s. increase in pensions will not then meet the increased cost of living.

During the passage of the new Bill I hope that I shall have an opportunity to tell right hon. and hon. Members on both sides to think of the old-age pensioners, not as people who are a burden, but as people who made this country as great as it is, and who, in their time, made a contribution equally great as that we are now calling on their successors to make. They should think of them in those terms, and should say that, however the money is to be provided, the old-age pensioners have earned it far more than those associated with the Stock Exchange. These old people are entitled to a decent standard of living. Every time the weather is very cold and we have to put on an additional fire we should remember that, whatever the cost-of-living index says, the old-age pensioners cannot afford that extra bag of coal. That fact alone contains greater criticism of the present attitude than any words that I could use.

The House should remember some of the things done by the late Sir Stafford Cripps—, things that were so much criticised by hon. Members opposite. It should remember that throughout their lifetime the Labour Government, with all their difficulties, made some attempt to get the country moving, even with wage restraints. They did not succeed 100 per cent., but at least they made 100 per cent. effort. If I could feel that there was even 20 per cent. sincerity behind the Government's policy I would be happy. Be that as it may, if we are to win we shall have to win together. The victory will not be the result of what happens on the Government's side, but of the response we get from people who can feel that they are in the fight together.

6.10 p.m.

The Minister of Health (Mr. Derek Walker-Smith)

I welcome this opportunity of catching your eye, Mr. Deputy-Speaker, in order to give to the House a short explanation of the decision relating to the agreement reached by the National Health Service Administrative and Clerical Whitley Council, which has been referred to both by the hon. Member for Cardiff, South-East (Mr. Callaghan) in his speech earlier this afternoon and by the right hon. Gentleman the Leader of the Opposition in his speech yesterday.

Before coming on to that subject, I should like to welcome the maiden speech of my hon. Friend the Member for Edinburgh, South (Mr. M. Clark Hutchison). As the House has seen, he spoke with confidence and, although he had copious notes, he did not have to refer to them. The subjects on which he spoke are very far removed from what I have to say, but I noted that he made constructive suggestions which will, I am sure, be considered, We all look forward to hearing him again, and I associate myself with the fitting and eloquent tribute paid to my hon. Friend by the hon. Member for Kirkcaldy Burghs (Mr. Hubbard).

Perhaps I might, without impertinence, also welcome the first speech for many years in this House of the hon. and learned Gentleman the Member for Ipswich (Mr. Foot), with whom I have been fortunate enough to enjoy a personal friendship for over a quarter of a century.

I welcome the opportunity to say a word about this Whitley Council matter not least because a good deal of misconception and misunderstanding has been revealed by the comments which have been made upon it. Perhaps I might start by indicating briefly what is the statutory position in which we had to act in this matter.

The regulations which govern our action are the National Health Service (Remuneration and Conditions of Service) Regulations, 1951, which are made under Section 66 of the National Health Service Act, 1946. The operative words of the Regulations for this purpose are these: The remuneration of any officer who belongs to a class of officers whose remuneration has been the subject of negotiations by a negotiating body and has been approved by the Minister after considering the result of these negotiations, shall…be neither more nor less than the remuneration so approved…. As the House will see, there are two clear steps contemplated and provided for. First, there is negotiation by a negotiating body, and then there is Ministerial consideration with a view to approval or otherwise.

So far as the first stage is concerned, the negotiating machinery is the Administrative and Clerical Whitley Council, which is, in fact, one of nine functional councils for negotiating rates and conditions of employees in the National Health Service. It is right that I should make clear what is the composition of the management side, because in this context it is a very important matter. The hon. Member for Cardiff, South-East sought this afternoon to take me to task for asking him to call it the management side and not the official side. He pointed out, with some asperity, I thought, that it had been called the official side for twenty-five years.

The hon. Member for Cardiff, South-East is wrong. Indeed, in many cases his dogmatism is in inverse ratio to his accuracy. It is quite true that, in the Civil Service, that nomenclature is used, but in the National Health Service the terminology is that which I used, "the management side". Of course, no question of twenty-five years comes in, because the thing has been in operation for only nine years.

Mr. Cyril Bence (Dunbartonshire, East)

So what?

Mr. Walker-Smith

I will tell the hon. Gentleman "so what". I say this not because I am quibbling about nomenclature, but because there is a very important point underlying this distinction, and if he will be good enough to await the explanation, he will have it with, I hope, reasonable clarity.

The management side comprises 18 members; 10 are representatives of hospital authorities, three are representatives of executive councils, and five are official or Departmental representatives, that is to say, representatives of myself as Minister of Health and of my right hon. Friend the Secretary of State for Scotland. There is here, I should have thought, some paradox, in this sense, that only those five representatives, the minority, are concerned with finding the money for any wage increases, because although the hospital authorities and executive councils are technically the employers, the wages in these cases come directly from the Exchequer, that is, directly out of the taxpayers' pockets.

The hon. Member for Cardiff, South-East, had his own idiosyncratic way of referring to this state of affairs. He said that the fact that certain members of the management side had no responsibility in the economic sense, no connection with the finding of the money, made them more independent. That is, of course, one way of putting it. One might equally well say that the customer entering a shop takes a more independent—some would say a more lavish—point of view in ordering his goods if he does not have to foot the bill. It might be a more reasonable and sensible way of putting it to say that this is a clear exception to the general rule that he who pays the piper calls the tune.

In this case, the statutory Regulations ensure that the payer of the piper has his say at a later stage, but not within the management side of the Whitley Council itself where he is in a minority.

Mr. Arthur Moyle (Oldbury and Halesowen)

Not even with five of the Minister's own representatives on the Whitley Council?

Mr. Walker-Smith

As the hon. Member will appreciate, five out of 18 is a minority so small as not even to be capable of forming a quorum.

I have indicated the first stage. The second stage is Ministerial consideration. On that, the House will appreciate that there is a clear, express statutory duty laid on Ministers. In this case the soft option of doing nothing is not available. Ministers must grant approval, or withhold approval; or they may take the course which we took in this case, which was to withhold approval in present circumstances, coupled with an undertaking to review at an appropriate time.

It is not, as has sometimes been represented, an outright rejection for all time, but it is a withholding of approval now in the context of the present economic situation, with an undertaking to review. [HON. MEMBERS: "Oh."] Definitely. If this is new to any hon. Member, it merely shows that hon. Members have failed to familiarise themselves with the basic facts of a matter on which they have not been slow to express uninformed opinions. The point was quite clearly taken in the letter which I wrote to the chairmen of both sides of the Council last week.

Mr. Stan Awbery (Bristol, Central)

Would the right hon. and learned Gentleman say how many times the approval of the Minister has been withheld since the establishment of the Whitley Council in 1917?

Mr. Walker-Smith

I can deal only with the position in the Health Service, with which I am concerned. The Minister has not previously had to withhold his approval, even in the context in which I am speaking now.

Mr. Awbery

Is the right hon. and learned Gentleman aware that he is establishing a precedent for the future for all Ministries?

Mr. Walker-Smith

I am seeking to point out that Ministers are under an express statutory duty to consider these questions when they arise. I think that it would meet the convenience of the House if I now came to the question of the relevant considerations which should be taken into account; that was one of the questions put to me by the hon. Gentleman this afternoon.

Mr. Callaghan

Concerning the statutory responsibility of the Minister, if I may put it in a semi-interrogatory manner, the right hon. and learned Gentleman is obviously aware that before 1951 he had no responsibility in this matter. It was only in 1951 that he assumed it because of the regulations that were made. Is he aware—have his researches carried him to this point—that precisely because the staff side of the Whitley Council could see the danger of putting the Minister in this position, it wrote to the Ministry in 1951 and had a reply on 4th August, to this effect: The regulations do not supersede in any way the work of the Whitley Councils in regard to remuneration and conditions of service in the National Health Service and the Minister would not wish the Whitley Councils to be in any doubt on that score. Is the Minister aware that what he is doing is to use the statutory powers, which he took in order to ensure that all hospital boards kept in line on the payment of remuneration, to refuse a general increase that has been conceded by the very body whose powers he said he did not wish to supersede?

Mr. Walker-Smith

I am certainly not superseding the negotiating machinery of the Whitley Councils. [Interruption.] As I have already explained to the House, as matters now stand there are two stages. My right hon. Friend and myself have a statutory duty in this matter, which I have already defined.

The hon. Member asked whether consideration would be given to claims on the merits of the case or in the light of the general economic situation. This is the answer. Those aspects are not a direct antithesis, nor are they mutually exclusive. A claim has to be looked at on its merits, yes, but its merits not in an isolated context but in the general context of the economic situation, including the necessity to counter inflation. I do not believe that anybody would think that the general economic situation and the inflationary position are not immediately and immensely relevant to a decision such as this.

Mr. Roy Mason (Barnsley)

Is this not a case of penalising the workers for the failure of the Government's economic policy?

Mr. Walker-Smith

I am not prepared to debate the whole economic situation with the hon. Member at this time, because I have a duty to expound to the House the particular matter with which I am concerned. I will, therefore, say quite shortly, although I do not think it will surprise the hon. Member, that I do not accept the premises on which his intervention was based.

The Government's policy was stated quite clearly by my right hon. Friend the Chancellor of the Exchequer on 29th October, when he said: …they"— that is, the Government— should, where they are themselves the employer, seek to follow policies similar to those which they urge upon others. My right hon. Friend went on to say: If wage increases on the scale which they have been given in the past, and are still being today demanded, were, in fact, granted, I have no doubt as to the result. It would be a disaster to this country…"—[OFFICIAL REPORT, 29th October, 1957; Col. 575, c. 56.] It is, of course, open to right hon. and hon. Members opposite to argue whether my right hon. Friend was right or wrong in his analysis of the situation. What it is not possible reasonably to say is that these matters are irrelevant to the decision which my right hon. Friend the Secretary of State for Scotland and I had to make in this context. It cannot be Tight to say that this decision should be taken in a vacuum isolated from these general considerations. If it were so, it would be said that the Government were saying one thing but doing another, that they were proclaiming a general principle but ignoring its application in practice.

Mr. Moyle

Was it not the view of the Minister of Health, when the setting up of the Whitley Council was approved by him, that such a council was a far better and more competent judge to determine issues of this kind than the Minister himself? Secondly, does the Minister's veto mean not only the withholding of the award, but excludes the reference of the question to arbitration?

Mr. Walker-Smith

I will come to those points in a moment. I wish to pursue the pattern of my argument and to put the basic facts of this matter before the House.

In the case of the staff in question, their last pay increase was one of 3 per cent. with effect from 1st January last, or in some cases from the preceding month. Since then, the cost-of-living index has risen somewhat. There is no dispute about those facts. The question really for us was whether such a short-term adjustment as that was compatible with the policy of halting inflation. On that, it seems that common sense and experience combine in saying, "No". It is not compatible with the halting of inflation to make such short-term adjustments for such relatively small rises in the cost-of-living index.

The trouble is that that sort of adjustment is part of an inflationary race in which there is no finality. The trouble with the inflationary race is that there is no winning post. What one person regards as his winning post, somebody else regards as his starting point, so it is a sort of relay race, in which the baton is passed from hand to hand, an endless succession of inflationary laps with the Joneses always in the lead. Against that general background, we were faced with the clear, narrow decision of "Yes" or "No". We had to make our choice and our decision, however unwelcome and unenviable it might be.

May I deal next with the remarks made by the hon. Member in the course of which he kept on referring to the selection of this as a test case? It is quite wrong—

Mr. Eric Fletcher (Islington, East)

Before he leaves the point, will the Minister explain on what ground of economic policy, and what ground connected with the battle against inflation, he discriminates between those earning less than £1,200 a year, whose claims he rejects, and those earning over £1,200 a year, whose increases he approves?

Mr. Walker-Smith

Because they were more out of line with the general level of remuneration and had been out of line for a longer time. That is the reason for that. Obviously, a Minister aware of the presentational difficulties would not have made that decision unless there were very proper grounds for such a differentiation. They had not had an increase nearly so recently as the people with whom we are concerned today.

If I may be allowed to pursue the thread of my argument, I would say that the hon. Gentleman is not right—I ask him to accept this in describing this as a selected test case. It is nothing of the sort. I am bound to say that I rather resent the reasons which he suggested for why they had been picked on—that they were weak, not affiliated to the T.U.C., and so on. If the House has followed my argument so far it will be quite clear that there was no question of selecting this case at all.

The time factor was imposed upon us. The claim had been made; it had come before the Whitley Council; we were fixed with the statutory duty under the regulations; and the time factor was determined by those circumstances. It is quite wrong and inaccurate and unhelpful to talk about the selection of a test case.

Mr. William Hannan (Glasgow, Maryhill)

rose—

Mr. Walker-Smith

I have given way many times already and I should be trespassing unnecessarily on the time of the House if I gave way any more.

I should just deal with the collective bargaining matter. I think everybody is now quite clear this is not an arbitration proceeding, and, therefore, there is no question of interference with arbitration or of a blow at collective bargaining, as I sought to make clear in a speech I made about this last Friday in the country. I see that it has been said that we could have prevented the error made by the Leader of the Opposition at the weekend if we had made clear from the start that it was not an arbitration proceeding; but it is novel doctrine that Ministers should have to explain, for the benefit of the Leader of the Opposition, that Whitley Council procedure is what it has always been and is not what it never has been. [Laughter.] The matter is now quite clear. I am sorry that hon. Members should laugh when I refer to the speech of the right hon. Gentleman the Leader of the Opposition as making it clear.

Mr. Callaghan

I think the right hon. and learned Gentleman will agree that these are very important matters. One can go to arbitration only when there is disagreement between the management side or the official side and the staff side. Here, as I understand, the management side itself proposed by a substantial majority the increase of 3 per cent. and of 5 per cent. If there is no disagreement between the two sides, under the Ministry of Labour proceedings there is no provision for arbitration. What advice does the Minister give to the staff side in these circumstances?

Mr. Walker-Smith

The staff side has not, in fact, asked for advice on this. What the Whitley Council as a whole has done is to ask to see me. Representatives of both sides of the Council are coming to see me on Monday, and this and any other matter can certainly be discussed between us then. At the moment, the position is quite clear, that no arbitration proceeding is involved; and this was admitted, very fairly and clearly, by the right hon. Gentleman the Leader of the Opposition yesterday.

May I just deal with the point referred to by the right hon. Gentleman yesterday and by the hon. Gentleman the Member for Oldbury and Halesowen (Mr. Moyle)? I am sorry that I did not hear the hon. Gentleman's speech yesterday. I did not know he was going to speak on this matter. Of course. I have read it with much interest this morning. They both referred to this as being a unanimous decision of the management side of the Whitley Council. The right hon. Gentleman used the word "unanimously," as may be seen at column 22 of the OFFICIAL REPORT of yesterday's debate, and the hon. Gentleman used the word "unanimously," as may be seen at column 97.

I think it is important that I should indicate to the House—and there has also been some misunderstanding about this outside the House—what the position is. That is why it was necessary for me at the beginning of this speech to explain in some detail the composition of the management side. If we regard the management side as, as it were, a monolithic structure, it is, of course, true that at the full meeting of the Whitley Council 3 per cent. was the management side offer, just as it is true to say that when a Bill passes this House it becomes an Act of Parliament, although that does not mean that the House was unanimous in the sense that all Members agreed to it or voted for it.

So far as the management side is concerned, I must make it clear that the five Departmental representatives, the five official representatives on the management side, never approved this increase. They opposed the offer on precisely the same grounds, that is, the general economic context, as those on which my right hon. Friend and I found it necessary to withhold our approval to this agreement for the time being, and, as the hon. Gentleman quite fairly said today, my representatives voted against it, as he put it, on the management side. Further, the unofficial majority on the management side, if I may so describe it, were left in no doubt that approval might well have to be withheld from this agreement by myself and my right hon. Friend if, in fact, it was entered into.

I say, therefore, that the Ministerial course in this matter has been clear and consistent throughout and at all times related to the general context of the economic situation and Government policy on inflation.

Mr. Mellish

Is it not a fact that the main basis on which this claim was conceded and the main reason why it was put forward was the terrible problem of the shortage of staff, of which the Minister knows very well? Unless we get more staff there will be a breakdown. Everybody knows it. That is why the claim was advanced, and when it was advanced the management side unanimously recognised that something had to be done to improve the position. I would ask the Minister, how are we to overcome the shortage of staff if this claim, which has been conceded, is not met?

Mr. Walker-Smith

What the hon. Gentleman puts forward is an important consideration. It is one of the considerations which have to be taken into account, together with the general economic considerations of which I have been speaking. This is a very difficult question, and nothing that I say would ever represent it as anything else. Indeed, if the hon. Gentleman talks about selecting a test case I would ask him to believe that this matter has caused me and my right hon. Friend very great personal anxiety and difficulty in coming to a conclusion as to what was the right course.

Dr. Edith Summerskill (Warrington)

I hope that the Minister will forgive me for interrupting again, but this is a very important matter, in which hon. Members on both sides of the House are taking an interest. He said tonight that he wanted to explain the position. I must say that he was a little legalistic. Has he forgotten that he is in charge of a most important human Ministry and that personal relations in his Ministry are of the utmost importance?

The right hon. and learned Gentleman really cannot divorce this action which has been taken by the Treasury—I recognise the Minister's problems—from the conduct of this big Department. I listened very carefully to the Prime Minister's speech yesterday, and he said that when the claims of the workers are considered the further question must be considered whether the workers are producers or whether their claims can be related to some savings. If the worker does not come into either of these categories the claim must be considered very much more seriously.

The Health Service workers are not producers. Neither can their claims be related to saving. Nurses are some of the lowest-paid workers in the whole country. When a Whitley Council recom- mends an increase for nurses who are non-producers, or for any of these categories in the right hon. and learned Gentleman's Ministry, who, by the way, feel that they have a vocation and will not take any industrial action, can the right hon. and learned Gentleman assure us that the action taken with respect to this Whitley Council recommendation will not be repeated in relation to those other Whitley Council recommendations?

Mr. Walker-Smith

I am obliged to the right hon. Lady for what she has said about the human nature of the problems with which we are dealing. It is true that I am a lawyer, but I assure her that the human aspect to which she refers has not escaped me. It is very present in my mind and that of the Secretary of State for Scotland. The question of people who are not directly productive is very important. It was raised earlier by the hon. Member for Cardiff, South-East and it has been raised in newspaper comment. It was referred to in a leading article in the Daily Telegraph yesterday, for example.

The general test of productivity with which I am concerned for this purpose is the overall test that money incomes should not increase faster than productivity. [HON. MEMBERS: "Lawyers"] Yes, there are people, like lawyers, who depend upon the general wealth produced by the productive section of the population. But in an expanding economy there should, of course, be scope for improving prospects for those who do socially useful but not directly productive work. The only thing is, however, that it would not be compatible with countering inflation to apply the test of precise comparability in such a way as to match every inflationary rise in the cost of living immediately it takes place.

The right hon. Lady the Member for Warrington (Dr. Summerskill) referred just now to the human aspect. The matter is a difficult one, but this is a decision which I am satisfied had to be taken in relation to the general economic context and could not reasonably or sensibly have been taken in isolation from it. Surely, this is clear. These are the sort of workers who would suffer in an unrestrained inflation, not perhaps most of all—because those who would suffer most are the pensioners, the retired people and the fixed-income people—but they form a sort of middle category, and obviously, would suffer more in an inflationary race than the mass of industrial workers, with their massive position in the economy and their greater bargaining power.

I return, therefore, to my earlier point and say that there is no direct antithesis here between the interest of these people and the general interest, because it is in their interest as well as in that of the community as a whole that inflation should be held. It was with this consideration in mind that we had to take the decision to withhold aproval from this agreement, with an undertaking to review it at an appropriate time.

Hon. Members

Shame.

6.45 p.m.

Mr. Clement Davies (Montgomery)

It is right and proper that the Minister should have intervened as early as possible in the debate, for there is no matter recently that has caused so much anxiety and apprehension as his decision to withdraw approval of this award made by the Whitley Council. I am not sure that the right hon. and learned Gentleman has done anything today to allay that apprehension. On the contrary, I think that he has increased it.

Let us look at the position. The Whitley Council has long been regarded as the best machinery for settling, as between the Government and employees, what should be the fair remuneration that should be paid. The Minister, in answer to an interruption, admitted that this is the first occasion on which withdrawal of approval has taken place and the Government have refused to accept an award; and that at a time like this. Not only are we entitled to look at the merits of the decision, but also at the way in which the decision has been taken. That, I think, has deeply offended the whole country. It certainly caused great apprehension, because it looked as if we were heading for a direct clash in which the Government were saying, "We are taking an absolute stand here against any increase."

A distinction, apparently, is being drawn between a Whitley Council award and an arbitration. It is a very narrow one, for a Whitley Council is the machinery which has been adopted as the means of deciding what should be a fair remuneration. Arbitration has arisen when employers and employees cannot agree. The matter is then referred to arbitration. Now the Prime Minister has said that in the case of arbitration the Government would not dream of interfering. They would allow that to go on.

In this case, merely because a Regulation was made in 1951, the Minister says. "I am entitled to refuse my approval and I do so, really, because of the financial situation." Is that the only consideration that should be in his mind? Here is a service which is absolutely essential to the whole country. We know the difficulties in which the service is placed at present in the matter of increasing its staff. Yet consideration is given to one side only—the present financial position—without giving at least equal consideration to what I should have thought was the much more important side, that is, the service that the country expects from these very people.

Mr. A. Blenkinsop (Newcastle-upon-Tyne, East)

Does the right hon. and learned Gentleman feel that in this case the staff side should have been advised to persuade the management side to reject the claim or not support it, so that it could have gone to arbitration and obtained Ministerial acceptance in that way?

Mr. Davies

I do not want to take up more time on this subject. I have expressed what I believe is the general view, which is one of great dissatisfaction not only with the decision, but with the way in which it was arrived at.

I turn to the more general matter of the Gracious Speech. Like The Times, I cannot feel myself very exhilarated by its words. The Times has very rightly described it as a little thin and airy, but that newspaper might have gone on to consider and call attention to a certain part of the Speech. I have never seen such a conglomeration of sentiment and excellent clichés as appears in one paragraph. May I remind the House of them? They read: My Ministers are resolved to take all steps necessary to maintain the value of our money, to preserve the economic basis of full employment by restraining inflation, to strengthen our balance of payments and to fortify our reserves, upon which depends the strength of sterling and hence the strength of the sterling area as a whole. I am sure that the right hon. Gentleman the Prime Minister must have had in mind those wonderful clichés which we often get from the Foreign Office. If those are right, as I think they are, they should have been in the mind of the Government throughout. Since the Government have now been in office since 1951, why have they allowed the country to fall into the state in which it is in at present? We would all like to know whether the Government are aware of the mistakes which have led to this inflation and what steps ought they to have taken to stop that inflation. Still more, we want to know what steps they are now proposing to take in order to carry out what they say is their general aim.

On that, with the exception again of some general statements and the raising of the Bank Rate to 7 per cent., I have not heard of one step except the general one that there should be increased production. We all know that. But what do the Government propose to do to help to increase production, to encourage it in any way, to encourage investment that will be profitable to the country generally? We would like to know, for example, what is in the mind of the Chancellor of the Exchequer to spur the use of more up-to-date machinery and plant and to discourage the use of out-of-date equipment, so that we can be in a position to compete on the world market. We would like to know, step by step, what the Government are proposing in order to effect a halt to this inflation.

I now turn to another matter. I was very glad that yesterday the Prime Minister departed from precedent. One remembers the days when the Speech from the Throne was considered in this House, some perfunctory statements were made by the leaders on both sides, and then the House adjourned. Yesterday, very rightly, the Prime Minister made a full and general statement, and I was glad that he did so. I do not take the disparaging view of that statement which has been expressed. It was a first-class statement, and one which we needed so that we might know what is in the mind of the Government.

The most important part was the Prime Minister's reference to what had taken place in Washington and what he hoped might come of it. I am sure the whole world will agree that what was achieved at Washington was made much easier by the two greatest ambassadors this country has ever seen, Her Majesty the Owen and His Royal Highness Prince Philip, who have done more than anyone else to bring about good relations between the United States of America and this country.

Now I turn to what the Prime Minister said on what took place in Washington, where he set out what had apparently been agreed between the President and himself. He said: Nevertheless, whatever may be the outcome of these discussions at N.A.T.O., I feel that in the near future—perhaps the comparatively near future—the nations of the free world must make an even more significant contribution of their national sovereignty to the common cause than hitherto. The journey may be a very long one, but the goal must be the same. Any advance towards the effective union of the free world, by which alone it can be defended from the pressures and dangers which now confront it, must be on the basis of this principle of interdependence which we tried to declare at Washington. At Washington, we made a first beginning. A little later the right hon. Gentleman very rightly said: …this is a turning point in history."—[OFFICIAL REPORT, 5th November, 1957; Vol. 577, c. 39.] I agree. What I have been puzzled about since 1948 has been that further attention has not been paid to that and that further efforts had not been made to bring about what is obviously now in the mind of the Prime Minister. Article 2 of the N.A.T.O. Treaty, which was signed at Brussels in 1949, provides for this very matter, and I have never been able to understand why it was that the thirteen nations which first signed the agreement, and the two that joined them afterwards so that there are now fifteen in all, have been content hitherto merely to agree to pool their military resources to a certain extent and to put them all under one generalissimo at Paris, and have paid no further attention until recently to Article 2, which had been much more clearly set out in the Brussels Treaty.

Articles 2 and 3 of the Brussels Treaty stated that the desire of the four parties signing it was not merely that they should assist one another in case of war—that came later—but that they should endeavour to bring about a closer co-operation socially, economically and politically. Yet, so far as I am aware, no step has been taken by this country to try to implement those two Articles; in fact, rather the reverse. For when Mr. Schuman put forward his great plan, which was one for closer co-operation and interdependence, it was the Labour Government in those days which refused to collaborate, although they were the signatories to, and had actually made, the Brussels Treaty and the N.A.T.O. Treaty.

We have continued thus ever since, and it seems extraordinary that we should say that we would pool our military resources but in the meantime do nothing to help one another economically. Then one finds that one or other of us is in either economic or financial difficulties. France is going through them now in exactly the same way, and has again had to devalue the franc. Yet that economic co-operation is a necessary element in defence of our general freedom. In the same way, except for the Council of Europe and the European Payments Union, there has been no effort whatever to bring this about.

At last, however, the Prime Minister has turned his attention to it. Very rightly he referred not so much to the military danger—I have felt all along that we must be prepared to meet any such aggression that may come to us—but to the real danger facing any country today arising from an economic war. The Prime Minister said that in Russia there is central control of all that vast territory from the German Oder to the China Seas, all under one control, and all, therefore, can be turned to whatever is decided by Moscow as the thing they most need.

In the meantime, the three countries which are pledged to defend our freedom—and even the fifteen that have realised they are not strong enough to stand alone—pursue each their own separate ways. They pursue their own foreign policies separately and they pursue their own economic and financial policies. But at last, apparently, that has come to the attention not only of the Prime Minister but of the President of the United States.

The most important matter that has happened since the end of the war has been this decision that the heads of the Governments of the fifteen nations shall now meet to see how we can co-operate in order to build up our strength, not only our strength but that of all the other nations and peoples who are so dependent on us at the present moment. Without doubt, as the Prime Minister pointed out, Russia is in a position to undermine any influence that we have had in the past upon those peoples. While we are separated in this way, Russia, because of her strength, is in a position to direct or finance goods or whatever else it may be to help those peoples and then turn In them and say, "We are your friends."

I sincerely hope that out of this meeting in Paris there will come a realisation of our interdependence upon one another, and that at long last we shall cease to worship sovereignty as if that was the only thing that mattered. In this small world we are now nearer and nearer to one another than ever before and are dependent upon one another. I sincerely hope that out of that there will come some form of agreement which will enable us to work much more closely together than we have been able to do hitherto.

I now turn to one or two other matters referred to in the Gracious Speech. First, I would mention Cyprus. I wish that the Cyprus problem had been settled long ago. It could have been, and should have been. I do not believe for one moment that Turkey would ever have intervened in the slightest degree if in those days, before any trouble had started, agreement had been reached to give the people of Cyprus what we are apparently prepared to give now—self-government—and to give them also self-determination within a reasonable time. It is merely because of the reply which was given in this House, that if they had ever hoped for their freedom the answer was that they would never have it, that there was trouble. Since the trouble started, we have gone from one disaster to another. I sincerely hope that we are now about to reach an agreement.

I am also very glad that the negotiations with the Prime Minister of Malta have proceeded so well, and I hope that in a very short while we shall have news of complete agreement there.

I turn now to the proposal to deal with local government. We had a debate on this subject last Session. I strongly disapprove of what is being proposed by the Government in their new Measure. All that is really being proposed is to enact what has been agreed by the various local authorities represented by their institutions—the County Councils Association, the Urban District Councils Association, the Rural District Councils Association, and the associations representing boroughs. All that the Government have been able to get from those associations is an agreement upon the lowest common denominator.

What I have felt all along is that too much attention is being given to the councils and too little to the people who are subject to their administration. I should like a much more thorough inquiry into the whole working of the system and the introduction of a really radical Bill which would deal with the situation as it is today and not be concerned merely with patching up the situation as it existed seventy or eighty years ago.

There is a reference in the Gracious Speech to the rating system, but apparently all that is to happen is that industry is now to return to 50 per cent. rating. Why it should not be 100 per cent. I do not know. Has not the time come for us to ascertain whether there is not a much better system of financing local authorities than this absurd system which was invented as long ago as 1601?

Surely the time has come, when we are inquiring into local government, for us to consider whether we do not want a far better, wider system which will provide a far better administration locally and at the same time relieve this House. Without a doubt, this House is overwhelmed now with a mass of detail which ought to be dealt with by regional authorities. I am dealing very briefly with this subject because I hope to have another opportunity when the Measure is introduced. I would remind the House how little it is troubled with the details of what must necessarily be done in Northern Ireland. I do not see why that system should not be copied for London, for central England, for Scotland, for Wales, and so on.

One thing that I am certain will do an infinity of damage is the proposal to put all the local authorities on a block grant system. I do not know how, when that is finally settled, Lord Hailsham can remain a member of the Government. It means that there will be a cutting down of the amount devoted to education at a time when we need such expenditure more than ever, and Lord Hailsham, prior to the change of office when he was Minister of Education, continually referred to the fact that we were not spending enough on education. He said that if anybody suggested that we were spending too much, he would be thirsting for a fight with him. I hope he has that fight with the Cabinet here and now. Moreover, any increased expenditure which has to be incurred by local authorities will now fall on the rates, and the poorer authorities are quite incapable of carrying out the duties they would like to carry out.

With regard to pensions, I do not think that the amount of increase will bring much comfort and much warmth to the old people, and they very much need that during this winter. Also, it does not help those people to know that this is an increase upon what has been given previously and that it is more than some other Government gave at some other time. What we all want to know, and what the old people especially want to know, is whether it is sufficient to keep them adequately and in comfort and in warmth.

The last subject to which I wish to refer is the reform of the House of Lords. So far as it goes, it is right that life peers should be put in the House of Lords, but that is merely tinkering with the problem. I still think that the best solution of all was the one upon which we all agreed as long ago as 1947. The first recommendation in Command Paper 7380 relating to the Parliament Bill, 1947, was: The Second Chamber should be complementary to and not a rival to the Lower House… That means that no extra power should ever be given to that second Chamber. …and, with this end in view, the reform of the House of Lords should be based on a modification of its existing constitution as opposed to the establishment of a Second Chamber of a completely new type based on some system of election. I was adamant against any question of the election of a second Chamber, because it would not be right that the second Chamber should ever be in a position to say that it could challenge this House because its members had been elected just as Members of this House are elected.

The second recommendation was: The revised constitution of the House of Lords should be such as to secure as far as practicable that a permanent majority is not assured for any one political party. The third recommendation was: The present right to attend and vote based solely on heredity should not by itself constitute a qualification for admission to a reformed Second Chamber. I absolutely agree with that.

It is proposed to add a few life peers in order that they may attend day by day, but if any great question arises they can be hopelessly out-voted by the 800 hereditary peers who will turn up in order to out-vote the others. If this is only an initial step just to secure attendance in the other place, then by all means let it be done, but surely the right thing to do is to—

Mr. Ellis Smith (Stoke-on-Trent, South)

Abolish it.

Mr. Davies

No, I would not abolish it. If we want a proper second Chamber, surely the right thing to do is once again to revive what was agreed by the leaders of the parties in 1947. Why what was agreed was not carried out at that time, I do not know, but I am convinced that those who were responsible for breaking that agreement have deeply regretted it ever since.

7.10 p.m.

Mr. R. Gresham Cooke (Twickenham)

The right hon. and learned Member for Montgomery (Mr. C. Davies) referred to the Whitley Council dispute as a direct clash, but, of course, it is not a direct clash between independent outside employers and employed. It is quite strictly a matter for the Government.

Mr. C. Davies

I did not say it was. I said it looked as if the Government were heading for a direct clash.

Mr. Gresham Cooke

I accept the phrase. What I was saying was that this is a matter for the Government. We are here as representatives of the taxpayers, and these employees of the National Health Service, while they may not be civil servants, are the servants of the Government. The Minister of Health is the accredited Minister in charge of the National Health Service, and surely we as the Parliament of this country have a right to say what these National Health Service employees are to be paid.

On this side of the House, we are very satisfied with the explanation which the Minister has made today of the nego- tiations in the Whitley Council, and of how he came to withdraw support for the discussions which that Council had about this rise. What is the alternative? The hon. Member for Cardiff, South-East (Mr. Callaghan)—I am sorry he is not in his place at the moment—advised the Government earlier to avoid all trouble. When I tried to analyse how the hon. Gentleman would avoid all trouble, it seemed to me that he was telling the Government to advise every employer to give way to every wage claim. That was how the hon. Gentleman was going to avoid all trouble. Of course, that is highly inflationary, and is paying for trouble with a will, if ever there was a way of doing it.

Mr. Blenkinsop

Does the hon. Gentleman think that the Whitley Council automatically grants every claim submitted by the staff side?

Mr. Gresham Cooke

I was not saying that. I was only referring to what the hon. Member for Cardiff, South-East said, or what he gave us to understand—that we should agree to every wage and salary claim put forward. However, I will not continue this sterile debate, but will return to the Motion before us for an Address.

I am certain that many millions of people will be happy that the Government are introducing so soon a Bill to increase old-age pensions. I am particularly gratified that a Bill is also to be introduced for the creation of life peerages for men and women, because this will surely increase the prestige of the House of Lords and strengthen the legislature by bringing in a number of national figures who would not otherwise find their way into Parliament at all. It will later on give us the opportunity of saying to younger hon. Members of this House whose fathers are peers that, on the death of their fathers, they need not go into the House of Lords.

I should like to see another place so reform itself that it was able to select 250 of its number to be peers of Parliament, with the right to sit in another place, and so disfranchise the other 550 from sitting there. That would seem to me to strengthen another place considerably. If one takes the trouble to go and hear a debate there, one cannot but be struck by the fact that the Opposition side of the House is particularly weak when it comes to a discussion during the Committee stage of a Bill. I think the creation of life peerages will enable the Opposition to be strengthened, so that more Members will take part in the debates on Committee stages.

I cannot agree, and I do not think many Members on this side of the House will agree, with the Leader of the Opposition in his second proposition in his speech yesterday; namely, that membership of a second Chamber should in no wise be based on the hereditary principle. It seeems to me that acceptance of that proposition would be attacking the whole basis of the monarchy in this country. If we give up the hereditary principle in some part of our constitution, we shall soon be saying that we do not believe in the hereditary principle in regard to the monarchy.

Turning from discussions of our constitution, I should like to deal for a moment with the problems of industry, on which the strength and prosperity of this country depend absolutely. I say "absolutely" because not many people realise how greatly we are dependent on the strength of our industry. We had a predominant position at the end of the last century and the beginning of this one, mainly because we had a two-Power standard for the Royal Navy, which was stronger than any other two combined. That was so because we had an iron and steel industry and a shipbuilding industry that could outbuild any other nation in the world.

Mr. Jack Jones (Rotherham)

Only just.

Mr. Gresham Cooke

The hon. Member for Rotherham (Mr. Jack Jones) will appreciate that more than anyone, but our position in the world has declined relatively, because America and Russia have supplanted us as the two great industrial powers. Therefore, we have to see the problems of industry in the light of the following phrases in the Gracious Speech referring to the need to strengthen our balance of payments and to fortify our reserves, the establishment of a European Free Trade Area and the advance of science into the unknown.

Taking the last point first, the flight of the Sputnik has not, from the point of view of defence, shown anything beyond what we know already; namely, that the Russians have an intercontinental missile. I do not think it shows anything more than that, but the expense of research into the project, and of making and launching a space satellite, must be tremendous. I have seen a figure of £500 million estimated as the cost, and, having regard to the low standard of living in Russia and the overcrowded conditions of the people, I should say that Russia should be the last country to have attempted such a thing. America might possibly be able to afford it. I do not think we could, but, from the point of view of social conditions, though Russia has launched this space satellite, she must have diverted workers and plant from the production of houses and consumer goods needed by her suffering people. Perhaps she thinks that its propaganda value all over the world is worth it.

The lesson facing British industry today, which stands out a mile, is that obviously we are up against an extremely hard-working and highly scientific country in Russia. In fact, most countries in Europe, and I am sorry to say particularly in the European Free Trade Area, work harder than we do.

Mr. Ellis Smith

That is not right.

Mr. Gresham Cooke

It is true on hours of work, and, from what I shall say in a moment, I think it will be seen that it is true.

According to the best estimates which I have been able to obtain, the total capital value of the buildings, plant and machinery of British industry is about £18,500 million. It is tragic to contemplate that this great capital gathered together over the years is standing idle for nearly 70 per cent. of its time. It is used to only just over 30 per cent. of its capacity. That is because in this country we work one shift and a five-day week.

A Ministry of Labour survey in 1954 revealed that only 12 per cent. of workers in industry were engaged in any form of shift working. When I worked in Sheffield, the steel plants worked a continuous three-shift system and the coal mines in the surrounding area of South Yorkshire worked a similar system. That was quite normal. People liked working on the morning shift from 6 a.m. to 2 p.m. because they had the afternoon free. Nor did they object to working on the afternoon shift. However, in other industries, such as non-ferrous metals, manufactured goods and even textiles, the amount of shift working is very small, almost non-existent.

The advantages of shift working are very great. There is better use of expensive modern machinery and a given value of production concentrated on a smaller number of machines and therefore in a smaller space, thus avoiding expensive extensions and the absorption by industry of agricultural land. Problems of shopping and of transport for workers are considerably easier because they are spread over a longer period and are therefore less acute. The load on electricity power stations is more evenly spread and therefore lower at any one time.

Because of the shortage of labour, it is obvious that shift working can be introduced only very gradually, but we should turn our attention in that direction, particularly where new plant is being built in a new industrial district. The two-shift system is fairly common practice in the U.S.A. and in Germany—I have seen it at the Volkswagen plant where three shifts are worked. Nearly every British productivity team from America has advised it. I take at random the report of the Letterpress Printing Team which said: In the U.S. widespread use is made of two and three shift working. In practically every plant visited the machine room works three shifts, and the remainder of the works either two or three shifts. Thus, in addition to productivity per man hour being much higher than in Britain, the output per unit of plant, machinery, and equipment is also very high indeed. The advantages, having regard to the high cost of new machinery, equipment and buildings are obvious.

Mr. Mellish

Surely it is managerial responsibility to say whether there should be shift working. There would be much more logic in the hon. Member's argument if he gave a list of enterprising managements which had suggested shift working and which had been turned down.

Mr. Awbery

From where will the labour come for the second and third shift?

Mr. Gresham Cooke

I have dealt with that. I said that we can introduce this system only very gradually. This is something for the Government. The Govern- ment have to lead the country and the Government should suggest that industry should look at this matter to see whether we ought not to copy some of our American and European competitors.

Mr. Bence

In general, British industry has not objected to working the three-shift system in the past. The great difficulty in engineering has not been getting workers to work three shifts, but getting executives, the people who have status and who take responsibility and make decisions, to work shifts. British industry cannot get a £2,000 a year man to work shifts.

Mr. Gresham Cooke

That is certainly not true of the steel industry, nor of the iron industry. They have been able to find superintendents for shifts and I see no reason why the engineering industry should not do the same. We want some education on this idea.

Mr. Jack Jones

All round.

Mr. Gresham Cooke

All round. I am coming to that. On this subject of the hours of work, I should not be honest or fair to industrial workers if I did not criticise the hours of work in the City of London. In many offices they are too short. Some offices are working only 32½ hours a week. That is a disgraceful example to the nation. For example, an insurance company in the City of London working only 32½ hours could, by working a full week, do with a smaller staff, thus saving valuable manpower in the office. Incidentally, not enough people are available on the telephone in the City of London before 10 o'clock.

Mr. Bence

They are in bed.

Mr. Gresham Cooke

Not only must we make the best use of our scientific trained manpower, but we have to realise the virtue of work. We should apply that notion to every grade, to management, office workers and men. This is no time for a shorter working week, for a 40-hour week. The claim of the A.E.U. was particularly dishonest after it had agreed last May not to make a further claim after that settlement. However unpopular it may be, we have to emphasise the need for hard work and for a full working week throughout every class of society, in short, a call for work. As has been truly said: Man's record upon this wild world is the record of work—and of work alone.

7.27 p.m.

Mr. Ede (South Shields)

The hon. Member for Twickenham (Mr. Gresham Cooke) has put before us a number of his ideas about the reorganisation of industry. Of course, to carry them out he would need to treble the population over a great part of the country. In our existing difficulties, our present population is as big as we can expect to carry; and, certainly, the importation of further raw materials and food to deal with a trebled industrial population would cause difficulties about balance of payments and the dollar gap which would make the Chancellor's present troubles seem almost a state of supreme happiness.

Mr. Gresham Cooke

The right hon. Gentleman should have listened. I was not advocating that we could do this in one step. I was advocating that in new areas with new factories we must set up a two-shift system of working.

Mr. Ede

Now we are beginning to reduce it to something more nearly approaching reality, but even then, as my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) pointed out, it would demand an increase in the number of people who could accept positions of responsibility at all ranks in the industrial process and at the moment there is no sign of getting those people. Our late friend Richard Stokes often used to discuss with me the problem of finding men prepared to take positions of responsibility, not the commissioned officers and the field marshals of industry, but the sergeant majors, the sergeants and the corporals.

It would be difficult even to get people who would be prepared just to show their merit as unpaid lance-corporals—a rank for which I know my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith) holds the highest respect. To get anywhere near what the hon. Member, in his modified scheme, wants would involve such an amount of Government planning that I am quite sure the first thing that would happen would be a revolt on the benches behind him against interference with the way of life of the leisured classes who make most out of modern British industry.

The Minister of Health was not very successful this evening. He confirmed my worst fears and aroused a few suspicions that I had not previously harboured. We understand that this is a matter to which the gravest consideration was given by the right hon. Gentleman, by his right hon. Friend the Secretary of State for Scotland and, surprisingly, the Chancellor of the Exchequer—because generally, in these negotiations, at about that stage friendship between the spending Ministers and the Treasury diminishes with an almost unbelievable rapidity. I should like to know at which stage in these proceedings these three right hon. Friends, in the friendly spirit prevailing between them, decided that they would refuse an increase to the lower-paid and grant an increase to the higher-paid group of people with whom they were negotiating.

My hon. Friend the Member for Bermondsey (Mr. Mellish), only a few months ago, raised, on an Adjournment Motion, this very question of the recruitment of these officers in the hospital district with which he is so honourably associated. What happened? The Parliamentary Secretary to the Ministry of Health, as she then was—now the Joint Under-Secretary of State for the Home Department—reproved him in the most unmeasured terms for venturing to say anything which interfered with the secret and private work of these Whitley Councils at which these matters are decided.

I took some part in the debate, in support of my hon. Friend, and I tried to analyse exactly what she meant. Let it be now understood that when the Government want to interfere it is all right, but if my hon. Friend, concerned as he is with the efficiency of the Service and the recruitment of the staff, intervenes, that is something approaching treason.

Mr. Mellish

My right hon. Friend will probably remember that the Parliamentary Secretary, as she then was, told me that it was most improper for anyone to interfere with Whitleyism, and that the last thing the Minister would want to do would be to interfere with this very sacred thing.

Mr. Ede

My hon. Friend has not yet been an Under-Secretary. I doubt whether he will be; I rather imagine that in about two years' time, at the latest, he will be a Cabinet Minister. But let me assure him, as one who has been a Parliamentary Secretary, that they sometimes get the most awkward briefs from their Parliamentary chiefs, and if they do not stick to them they get into very severe trouble.

What has happened in connection with this matter will cause the gravest unrest among all those connected with Government services. Does this rule apply to the Burnham Committee? Does it apply to the police? They hive asked for a 10 per cent. increase. Everybody knows that we cannot get policemen in sufficient numbers. I do riot know exactly how they could add to the country's production. I know that the Government were so perturbed about the situation last Session that they took steps to ensure that policemen should not attend magistrates' courts as frequently and in such numbers as they had hitherto—a view of their duties which I regarded with grave misgiving. Very elaborate machinery has been created by which their wages and salaries are to be computed in future.

Mr. Bence

My hon. Friend the Member for Bootle (Mr. Mahon) told me a story yesterday. I was hoping that he would have been able to tell it himself to the House today. He told me that dockers on Merseyside often work as hard as they can to get steel off the ships and on to the lorries, and then the lorries often get held up for three hours at Stanley Bridge, which crosses the River Mersey.

Mr. Ede

I am grateful to my hon. Friend for enlivening my speech with a story which he has borrowed from somebody else. I hope that it will not be reckoned against me, in the matter of delaying the House, that he has taken so much of my time in order to ensure that my hon. Friend the Member for Bootle (Mr. Mahon) should have immortality.

I do not understand any basis which the Government have so far announced to be their guide in this matter. Was there a time in the past when wages and merit were related so closely as to be beyond challenge? When I started as a trained, certificated teacher, in 1905, if I had had £1 a year more I should have had a salary of 35s. a week. My salary scale ran from £90 to £130. I left the teaching profession for its own good, as I was assured by the profession itself, and I have tried to make that true in a way which the profession did not mean. The present teacher's salary bears no comparison to that, and I rejoice in the part that I played in seeing that that became the case.

Let us consider the people in the Health Service with whom we are dealing. They cannot produce any more to put into the economics of the country. Was there a time when their circumstances were so just that they could say, "If the cost of living goes up, our wages go up with it, because that represents merit"? Distinctions are drawn in all occupations and professions between one grade and another—the differentials. These are among the things that have varied very considerably in recent years. The Government are always telling us what wages and prices are now compared with what they were a few years back, but I know of nothing that they have said which indicates what they regard as the accurate date or datum line in all these comparisons.

I hope that nobody thinks that any comparison between an agricultural worker's wage today and that which obtained between the two world wars could be regarded as other than an exercise in pure mathematics. The relative importance of a profession or occupation at one stage of the country's existence to its importance at another is a matter on which we do not get any guidance from the Government. If we are to get down to any basis at all we shall have to have something far better than the statement of the Minister of Health this evening that he and two right hon. Friends seriously considered this problem and the astounding result was that the lowest-paid workers get nothing and the higher-paid workers get what was awarded to them. Unless we can get some guidance on general grounds from the Government as to the basis they are adopting in this matter, it will be quite impossible to accept the decisions they reach apparently in so arbitrary a manner.

I pray the indulgence of the House while I deal for a few minutes—I promise the House that I will not take long—with some matters which arise out of the Gracious Speech. I notice that in the third paragraph of the Speech the Government put into the Queen's mouth these words: They"— that is, the Government— will pursue their endeavours to achieve an agreement on disarmament, mindful that, at this momentous time, the advance of science into the unknown should be inspired by the hopes, and not retarded by the fears, of mankind. It is an astounding thing, which would have been unbelievable before the First World War, that the growth of knowledge in these very intricate sciences should cause mankind to live in fear rather than to rejoice in hope. Knowledge brings power and the increase of knowledge in the post-war period has given a few men such power that none of our ancestors would have believed could be confided to mortal man. We are well aware that one frivolous or wicked man could now bring the whole of civilisation to an end. Such power arising from knowledge has never been contemplated before.

Why does it bring fear? It is because all these matters are now arranged in secret. When Newton started this great physical revolution in the seventeenth century he published his results to the world and all the world knew them. When Priestley, in the late eighteenth century, discovered that the air was not an element but a mixture, he did it with apparatus that a secondary modern school would not tolerate on its premises in these days. He immediately published his findings to the world, with the result that the great French chemist, Lavoisier, was able to build on what Priestley had discovered and carried the triumph of that chemical discovery to reaches that Priestley himself had not contemplated. What is the position today? Only great wealthy States and very wealthy financial industrial corporations can carry on research. We have said we cannot afford to make a satellite.

On the one o'clock news I heard what Mr. Khrushchev says about his satellites. He hopes that the Americans and other people will have satellites which will be running about in outer space to the enjoyment of people who have high-powered telescopes and will be able to watch what is going on. I rather imagine that if he has his way there will be an international commission appointed to define areas in which each nation may run its satellites and that pathways will be marked through outer space just as there are now pathways in the lower air in which it is agreed that the various air services of the world shall operate.

I listened with great interest to that part of the speech of the Prime Minister yesterday which many people found so dreary. I could not help thinking that it was dealing with this particular problem. It was not aimed at this House. That was quite obvious, as the House found it difficult to take any interest in it at all and, as my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) said, even some of the Prime Minister's supporters walked out while he was speaking. It was aimed at the American Congress to support the President of the United States when he asks for the modification of the McMahon Act.

Knowledge gained in secret by men who are under an oath not to disclose it will not add to the hope of mankind; it only adds to the fear. Until about three weeks ago everybody was hoping that we were one jump ahead of our competitors. Now we fear that we are several jumps behind them. I say this quite deliberately. I could wish that the first agreement that we could reach would he an agreement that all these atomic cards should be placed on the table, face upwards, by their possessors. I made that remark about a year ago, in one of the great American universities before the science faculty. They agreed and, when I added, "and if they were I do not think many secrets would be revealed," one of the leading scientists in that university said, "How right you are."

I am not quite sure that tonight some secrets might not be revealed if that process were undertaken. It may be that we have lost one chance of getting an international understanding which we shall not be able to get until more money has been spent and more experiments carried out by those who hoped, until three weeks ago, that they were ahead. I regret to see the hysteria which this has caused in some circles in America. I hope that we in this country will keep our heads and that we shall express the hope—and work for it—that secrecy of this kind shall not be maintained.

I had to deal with two men who had taken oaths of secrecy and who were convicted in the courts of having broken them. If a man takes an oath of secrecy he is bound by it and must obey it. The scientist of modern times whom I most honour is the late Professor Soddy who, when asked to engage in this work under an oath of secrecy, declined to accept the offer of the job because he said that the knowledge which he might discover should be available for all mankind. I have no respect for those people who, having taken the oath of secrecy, then for a miserable pittance hand over the secrets which they have discovered not to all mankind but to one other Power. There can be no defence of such an attitude as that.

I could understand and respect a man who said, "What I have discovered is so fraught with danger for mankind, if not properly controlled, that I must publish it to the world; I must read a paper to my scientific society." That I could understand, but I do not understand the man who, having taken an oath—and being a man of education he must know the implications of what he is doing—then hands over what he has taken an oath to keep secret to some Power he must regard as being likely to use it against those whom he has sworn to protect by maintaining his secret from outside sources.

This brings me to one other point with which I want to deal. It seems to me that when everybody in the world expects the future to be dominated by the source of strength which we can derive from science, we cannot run any risk about the education of the children in our schools. I speak for myself alone in saying this, but I think that the Government's decision to break up the partnership between local education authorities and the Government and put it on a new basis on which the Government is a sleeping partner, with its liability limited in the partnership, so that the other party has to bear any unexpected demands which are made on it, is fraught with disaster, particularly at this time.

Hon. Members on both sides must be aware of the dismay which is caused when children in the primary school do not get what their parents think they deserve as a result of the 11-plus examination. I have trained too many children not to know that there are a good many parents who think they have Derby winners in their stable when the most they have been able to produce is a couple of miserable selling platers. A woman came to me once to complain that I had not promoted her boy from standard six to standard seven. I showed her the work which he had done. After about 20 minutes she pointed to her wretched offspring and said, "I suppose you are right, Sir. You see, I was always afraid that he would take after him."

From 1962 onwards the tremendous birthrate of the immediate post-war years will he reaching the top of the secondary schools. The parents of those who have won the 2,000 Guineas by getting into the grammar schools will expect at least the same proportion of them to go on to the universities as during the thin years from which at the moment we are recruiting university students. I wish I could see some sign in the universities that they appreciate the might of the problem with which they will be faced. I am certain that in this age of nuclear power we shall want every trained scientist that we can get, not merely the people on top but those whom I have previously called the non-commissioned officers and warrant officers. We shall want in the scientific army those whom we have not been able to recruit for the industrial army.

It will not make finance committees of county councils and county borough councils happy if they are faced with the prospect that they will have to deal with that problem on a block grant system. To my mind, that is the final condemnation of the Government's proposals.

I rejoice at only one sentence in the Gracious Speech. It comes at the end of that wonderful paragraph which the right hon. and learned Member for Montgomery quoted, in which they asked Her Majesty to say, My Government believe that these are purposes which should command the support of all sections of the nation, That may be their hope. I cannot imagine that any other sensible person in the country shares it. They have said nothing in the course of this debate to indicate that they realise how seriously they have forfeited the confidence of the nation and how lacking are their proposals in any approach to the realities of the situation.

7.58 p.m.

Sir Henry d'Avigdor-Goldsmid (Walsall. South)

Necessity makes strange bedfellows, and the debate on the Address makes for odd sequences. It is, therefore, a particular honour which I feel in following so distinguished a figure as the right hon. Member for South Shields (Mr. Ede).

I had thought that in the House we were united as far as we could be about the war against inflation, but I detected, not only in the right hon. Gentleman's speech, but particularly in that of the right hon. and learned Member for Montgomery (Mr. C. Davies), the former Leader of the Liberal Party, a trace or an echo of an utterance from a well-known Confederate General in the American Civil War. Briefly, he addressed his troops on these lines: "Men, the honour, chivalry and beauty of the South is looking towards you. These are occasions when men act as heroes. I welcome this because I know that you will prove yourselves worthy of that immense responsibility. My advice to you is this: wait until you see the whites of their eyes, then fire. A volley should be devastating. If that does not stop them, use your bayonets. My horse is not very fit so I shall be waiting for you some 30 miles in the rear." The war against inflation has many generals issuing orders of that sort.

I should like to bring the debate back to where the President of the Board of Trade started it, which is a discussion on our economic situation. We face a situation which could very well be compared with the Battle of Alamein. We have to beat this enemy, and to beat him here. I particularly remember reading in one of the most interesting accounts I have read of the Battle of Alamein, which appeared not very long ago in the Sunday Times, which was written by General Horrocks, that he stated that he was entrusted by Field Marshall Montgomery with 60 Grant tanks. These were the most precious reserves of the entire British forces. If we had failed at E1 Alamein, the war would have been lost. It would not have been lost in one day or in one week, but lost it certainly would have been. That is the exact parallel of our economic position today.

In the short time I have been a Member of this House, every economic debate has turned on the shortage of reserves. It is terrifying to think how little we have with which to meet the enormous calls upon us, due to our past indebtedness. According to the last figures I have seen, the total sterling balances held in this country amount to about £3,400 million. Of that, about £1,600 million is held by the independent countries of the sterling area; £1,300 million by the Colonies, and about £500 million by non-sterling area countries.

Against that, the figure of our reserves is pitifully small. What we have to do is to hoard those 60 Grant tanks until they can become the nucleus of the force that will be required if we are to advance again. I say that because, let us make no mistake, although E1 Alamein was a battle that we had to win, it could not win us the war, but had we lost that battle we would have been defeated in the war. If we lose the battle against inflation now we are defeated, but we shall not regain our position without positive advances, and we must hoard our reserves.

I was struck by a sentence in the speech of the Chancellor of the Exchequer in last week's debate, when he said: In any event, we have not the slightest intention of being beaten by technical difficulties. There is no technical difficulty which does not have a technical solution."—[OFFICIAL REPORT, 30th October, 1957, Vol. 575, c. 346.] That is perfectly correct, but the important thing is to find a technical solution at the right time. About a year ago I indicated to the Treasury my view that it was taking an unduly optimistic view of the cost to our finances of investment in Canada. The Treasury replied that it was satisfied with the situation. It took some six months before the Kuwait gap, as it has come to be called, was stopped, during which time the loss of reserves was about £100 million. All these are published figures.

As there is an absolutely confident attitude in the Treasury on all these technical matters, I would put another technical point to it. It is one that I am quite sure could be equally easily brushed aside, but one about which, I am also quite sure, we shall eventually do something. The present position is that although the United States of America produces only the very smallest fraction of world gold production, it controls the price of gold. There is absolutely no reason that I can see—and my researches have gone back some time—why we should not pay a premium for gold newly mined within the sterling area.

I have figures here which show that the total world production of gold amounts to about £500 million a year. Of that, the British Commonwealth, without Canada, produces nearly half—about £232 million. South Africa produces £198 million. The present position is that we in this country do not get the benefit of any of the South African gold at all. That South African gold is used by South Africa for its own purposes. It uses some of it to meet its indebtedness to this country, but that is all. The gold reserves of the sterling area do not benefit by one penny from the enormous South African production.

I should have thought that this was a time for our Ministers to scratch their brains to see whether we can rake up some of these precious reserves. I should have thought that an approach to the South African Government by which we paid a premium for newly-mined South African gold would attract a great deal of that production here. Not only that, but it would increase production as, of course, a good deal of gold is no longer mined because the cost of production is now too great. There could, therefore, be an increase in production as well. I think I heard an indignant voice opposite say, "We do not want it." If hon. Members believe that, they can believe anything—

Mr. Bence

rose—

Sir H. d'Avigdor-Goldsmid

No, I want to develop my argument.

Mr. Bence

The hon. Member accused us of saying "We do not want it." The question I pose, and it is one that I have posed all my life, is: why should the arts and crafts of humanity and the satisfaction of human needs depend on the process of digging gold out of the earth in South Africa and putting it in holes under the Bank of England or in the vaults at Washington? Why should it depend on that?

Sir H. d'Avigdor-Goldsmid

The hon. Member has developed an argument that was very popular when I was at school and university, which is still popular at school and university. The fact remains that the great majority of the nations of the world do not accept it. Whether one looks East or West, they value that metal which the hon. Member treats with such contempt; the metal which I remember being described as being fit only to stop holes in teeth. He must overcome his natural resistance to anything that appeals to the majority of people and accept the fact that the majority of them like this stuff, and value it.

There is one nation, of course, that will object to such behaviour on our part, and that is the United States. In connection with gold, the United States has adopted a policy at once logical and parsimonious. It fixes a price, it is unwilling to encourage production, does all it can to discourage it, and does all it can to stop it coming in. America does not want any more, because if more is produced it appears to the Americans that some of it will find its way to them, and they have to pay for it. It is a very simple and reasonable attitude, but I would remind the United States that as recently as 1933 it paid a very much higher price than the world price at that time for newly-mined gold produced within its boundaries. The Americans did not then consider themselves to be behaving in any extraordinary fashion.

Here we have this commodity that is saleable in unlimited quantities and obtainable within the sterling area. Surely, after all these years, it is time that we did something to encourage gold production. Such action could have only one result—to fortify our reserves. It should be realised that the action of the Indian Government, announced last weekend, in taking power to draw on their sterling balances £246 million, leaving £64 million, is liable to cost us £182 million in the next six months. Where is that money to come from? Some will go out in foreign exchange, and some as goods which would otherwise earn foreign exchange. In either case, it will be a dead loss to this country.

In those circumstances, when we are as vulnerable as that, I beg the Government to look really seriously at this proposal and not to dismiss it as trifling with the problem. It is absolutely vital that we should hoard this ammunition that we still have. It is not too late to do it. I will not develop the argument further. I cannot imagine that any country except the United States can have any conceivable objection to a proposal that we should pay a higher price for newly-mined gold within the sterling area.

I leave with hon. Members the thought that, as far as I can see, only two nations in Europe have been able to maintain their overseas possessions since the war, namely, Belgium and Portugal. They have not done it by expensive weapons nor by large armies; they have done it principally by putting their financial affairs in order. I commend to the Government the suggestion that there is something to be said for that.

8.10 p.m.

Mr. Simon Mahon (Bootle)

The hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) will, I hope, forgive me if I do not pursue the arguments which he has presented to the House. I wish to concentrate on an aspect of affairs within our society which I view with grave anxiety.

Yesterday, the Prime Minister in his comments on the most Gracious Speech of Her Majesty to both Houses of Parliament, referred to the great desire for peace in industry. I remember that, in 1955, when I was quite new in this House, the Prime Minister's predecessor, on a similar occasion, spoke about peace in industry and profit-sharing in industry, expressing his desire to end what he termed at that time the class war.

Rather than improving, the position in industry seems to be deteriorating. I have spent some time in industry and in trade union circles, and I know the repercussions which a speech made by a trade unionist can have in factories, on the dockside, and elsewhere. This evening, therefore, I want the House to appreciate that what I am going to say, at least, is said with a measure of responsibility, and I hope that my speech will be helpful in bringing to industry the peace which I have so ardently worked for for so many years.

Over many years of industrial growth, we have evolved a system of industrial relations which, despite its weaknesses, has stood up to many severe strains and has served the country well in difficult times. Now, however, it is the honest opinion of many experienced people that the Chancellor of the Exchequer and the Minister of Health have dealt a severe blow at this system by their recent pronouncements, particularly regarding the Whitley Council negotiations and arbitration courts within the public sector of industry.

For the Chancellor to say that the Government will not honour the carefully considered decisions of these courts in public industry is to undermine the faith and good will that millions of workers inside and outside the trade union movement have built up over many years. As a result of their recent actions, the Government are undermining our whole system of collective bargaining in industry.

I say these things not with malice, but in the hope that the Government will take note of what is said by a back bench Member who spent some time in industry as a boy and also on the management side at the age of 26, having worked within the same industry all the time. I ask the House to believe that I am without bias in this matter. As I continue my speech, I hope that that may become evident.

I have pointed out that years were spent in forging these instruments of industrial collective bargaining, and I say, in all honesty, that the pronouncements we have heard in the last three or four days were, to ordinary trade unionists, nothing less than a declaration of industrial war. The Government must realise that there can now be no secure future for our country on the basis of conflict between Her Majesty's Government and organised labour.

No responsible person inside the Labour Party wishes for conflict in industry. I believe, also, that no responsible Conservative Member of the House would wish for conflict in industry. Surely, over the years we have all suffered too much as a result of conflict in industry. These things have been self-evident, and, as I said before, the trade union movement has served both Labour Governments and Conservative Governments well in some of their most difficult days.

I know that an effort has been made—we heard it again today from the Minister of Health—to avoid the charge which is made, but I must repeat to the House that the charge is made with honesty by some of the most responsible people in the country. Some of those who have spoken to me have made their objections with a very real measure of sincere regret. I should like to quote from some of the comments which have been made. The National and Local Government Officers' Association, which, as we all know, is not the most militant of associations, has said, referring to the recent action of the Government, that it will not be taken lying down". The National Union of Public Employees has said: It undermines the sanctity of agreements and will incite industrial strife in spheres where strikes are unknown. In the face of 'his"— continues the Union— angels would be incited to strike. The British Medical Association, a responsible body, said: It is bound to lessen the confidence of those dependent on the Government for their remuneration. The medical profession's own pay claim is getting on for two years old and dates back to 1951. This latest decision of the Ministry in overruling agreed negotiating machinery is bound to accentuate anxiety. Even though I am not a trade union Member of the House, my own membership of a trade union goes back to the time when I was 14 years of age, and I am exceedingly proud of it. Perhaps I may quote the words of Mr. Frank Cousins, the General Secretary of my own union, the Transport and General Workers' Union, who said: This is the road to industrial id[...]ocy He went on to say that the Government had told the unions that they should use arbitration procedures to the full. Now the Government have said that if the unions did, and if awards were given, they were not likely to be met.

Those are the opinions of responsible people who have earned their laurels in industry, people with whom many hon. Gentlemen opposite must have sat round the negotiating table on many occasions. The nation is right, I believe, in its judgment that the trade union movement is something of which we may be proud. One of our greatest statesmen described the trade union movement in past days as an Estate of the Realm, and I think it has earned that title over many years of industrial and economic growth.

Trying to be reasonable about this, I would say that, if any Government wished to have the full co-operation of the trade union movement it would be only reasonable to assume that they would ensure that their policies were not directed continually at the reduction of the standard of living of organised workers. It must be remembered by those who are so glib and who criticise the trade union movement, that it is, and always has been, the prime duty of that movement to safeguard the living standards of its members, and it should be no surprise to anybody that the trade union movement is always prepared to do that.

As a responsible trade unionist and one who wants peace in industry, I would, however, say that it would have been remarkable had the trade union movement looked with equanimity or complacency at the abolition of the food subsidies, the abolition of price control, the abolition of the housing subsidy—a subject in which I am extremely interested—or at the Rent Act, which is having such grave repercussions amongst our people. Surely, when they were pushing this legislation so avidly through Parliament, the Government knew that it would result in demands for increased wages. They knew it then, and now they have taken this action to offset what they knew would happen.

When we consider the general economic position of the country, we are all aware—the Government are quite right in saying this—that the trade union movement has a great responsibility resting upon it. No knowledgeable person would accuse the trade union movement over the years of not fulfilling this responsibility or of failing to consider the common good of the nation and its people.

The Government, on the other hand, have the full responsibility for the welfare of the nation and all its people. One would have thought that in these difficult days, because of this tremendous responsibility, the Government would have fostered and maintained the former excellent relationships the T.U.C. had with previous Governments, both Conservative and Labour.

Unfortunately, however, in one way or another, irrespective of what the Minister of Health has said today, this precious relationship between the Government and the trade unions is being assailed. One could be forgiven for thinking that the Government, beset with such great difficulty, are looking about for a scapegoat upon whom to blame their failures. If I may offer them a friendly warning, they would be ill-advised to choose the trade union movement for this kind of treatment, for they would be doing that movement an injustice and, in the long run, causing great harm to the nation.

I urge the Government to refrain from their pursuit of industrial war and, as they have been requested by my right hon. Friend the Leader of the Opposition, to try again, by policy and by good will, to re-establish the correct relationship that they should have with this important movement. We would all agree that nothing good could come out of industrial strife. Its dubious advantages would go to our foreign competitors and to those who have a vested interest in industrial unrest. It is no use hon. Members on my side of the House burking this issue, either.

In all these years, as I have said before—and I have a long family history in the trade union movement—we have always deplored any tendency to industrial strife and class war. We have worked for its cessation and for its replacement by a system of industrial relations based upon mutual respect and a desire for social justice. That is what we have worked for and that is what most of my colleagues on these benches have worked for, in spite of what irresponsible people say from time to time. If we had not worked for it, we would not have achieved what we have achieved over these long years.

Having said that, however, we all know that we have in our society people who do not think this way, people who see in class war and in industrial strife opportunities which are not afforded to them by normal democratic processes. These people see industrial disturbance and industrial strife as an end in itself. I have opposed these people always. I have been a virulent opponent of Communist infiltration on the Liverpool dockside. Communists are a menace to society, to Government—any Government—and to the trade union movement, and they have always been condemned by the trade union movement. By virtue of that opposition, their scope is very small indeed, but their influence is still with us and their exploitation of industrial circumstances has been detrimental to succeeding Governments and to the progress of the nation as an industrial power.

I hope that the Government will take these remarks in the spirit in which they are given. Remembering the opinions of many Government supporters, it would be sad and paradoxical if those undesirable elements within our society were assisted in their work by the inflammatory speeches that we have had from Government spokesmen in recent days and which appear to be directed at the trade union movement. I say that in no rhetorical sense. I know that advantage will be taken by these disruptive elements in our society to whom the Government are giving the chance to do the very thing of which we have been trying to deprive them for so long.

It is reasonable for any Government to expect the full co-operation of the trade union movement and the full co-operation of every able-bodied worker, so that our economy can grow and be healthy and strong to the mutual advantage of everybody. That is my belief and it would be wrong if I thought anything different. It is, however, equally necessary that the ordinary worker—not all workers are clever, intelligent people—should know and should feel that the Government are directing their policy towards furthering the common good and that it is not directed solely to the maintenance of sectional interests.

That does not mean that the Government should concede every point to the trade unions. We have been brought up on opposition and the trade union movement would not expect otherwise, because by its nature it has to contend with opposition. I want to say this in case some of my own people make a mistake. There is nothing intrinsically wrong or illegal or immoral if there should be a first-class row between the Government and the T.U.C., or between the T.U.C. and the Government. The Government, even some of our own people, at times think there is something wrong about it. With my background, I have always regarded that as naturally as tide beating upon a shore. It can be a healthy prelude to a reasonable settlement, and as long as both sides are seeking truth with honesty, the outcome of it can be an adequate, if not always a completely satisfactory, compromise.

It is when prejudice and acrimony cloud the industrial atmosphere that injustice and unhappiness can result. I must say that I fed that the Government have lent themselves and are lending themselves to unjustifiable prejudice against the trade union movement, and I say that because when they were passing their legislation to which I objected they must have known that it was impossible for the trade union leaders to assist them to further those policies which are against the essential interests of the workers.

I have been speaking for rather a long time, but I may as well finish what I have to say, for do not often get the opportunity of addressing this House, although I try hard to get as many opportunities as I can. I think that my hon. Friends will agree with that.

I was not in the House in the days of the Labour Government, but was in industry, and I remember that the Labour Government did not have an automatic absolution from industrial conflict and trouble. We had a lot of it to contend with, and the Conservative Party was not slow in pointing to the difficulties we had and, as was its duty, in blaming the Labour Government for much of the conflict then going on in industry.

Now, Government supporters, with some justification, will point, in mitigation of what the Government are trying to do, to the grave loss of working days in industry through strike action. I could make a good comparison between British time lost and American time lost. I think it is to the credit of the British trade union movement that we are holding the position as well as we are.

Nevertheless, to be fair, I would say that I have always regarded the unofficial strike as the bane of both employers and trade unions. Since the war it would appear that its use has been extended and intensified. It is no use, however, the Government making that a basis for a new attitude towards industrial arbitration, for this form of industrial strike action, the unofficial strike, grave as it is, does not warrant the undermining of the whole of the system of collective bargaining, simply because it is a weakness in the system.

The Prime Minister is reported as saying about these matters that errors are being committed on both Right and Left about what the Government can do in the industrial field. They have great difficulty. I want to pay them a compliment. I was always pleased at the attitude of the Minister of Labour and I was always pleased with the attitude of his predecessor, and I think the relationships were excellent. When the Prime Minister says that about the limitations of the Government, he can apply it also to the limitations the trade union movement itself has in the control of the industrial field at certain times. To blame the trade union movement for whatever happens in industry is to betray limited knowledge of industrial affairs generally. In a free society such as ours many forms of activity are deplored, but to take Governmental action against them would undermine the structure of the free society itself.

However, there is no doubt—and I have said this to people who have presented the question to me—that there have been times in recent years when ordinary citizens, anxious for the welfare of their country, were sickened by the stupidity of some unofficial strikes. I say it. I have been sickened by some of the unofficial strikes and the stupidity of them. There has been no sense in them.

Those unfamiliar with the intricacies of collective bargaining and the pitfalls which attend it have often asked me and other people, "Why do not the Government compel those people to come to an agreement? Why not insist on compulsory arbitration?" Those of us who have first-hand knowledge of the heartbreak that strikes of that sort always cause have wished that compulsory arbitration were not as full as it is of dynamic repercussions and dire consequences.

There are good reasons why the Government, the trade unions and management disallow the use of compulsory arbitration. I do not want to go into those technicalities, because they would take some time. The reasons why we would not wish to use compulsory arbitration are well known to everyone on both sides of the House. If the time ever came, even in the direst conditions, when we resorted to compulsory arbitration we should only be exchanging a greater evil for a lesser one.

The Government's attitude on this matter is dogmatic and final, but they are now indulging in their very practice in reverse. Their practice is dangerous, inasmuch as they are destroying the faith that our people have built in the system of voluntary collective bargaining. It may have the effect in industry of putting too much accent on the strike as a means of settling claims. That would be disastrous. I again honestly plead with the Government to review their action, because I feel that this action can result among working people, management, Government and trade unions only in discords and dissension and possibly a resuscitation of class hatred, against which I have always fought. This sort of action will never result in prosperity for our nation and its people.

8.37 p.m.

Mr. Philip Goodhart (Beckenham)

Like so many who have taken part in the debate today, I also wish to begin with that part of the Gracious Speech which refers to the necessity of preserving an economic basis of full employment by restraining inflation. There are many views in the House on how inflation should be restrained, and those views divide us. We have even heard an argument today whether or not gold should or should not be valuable. We certainly are united in the belief that strikes are undesirable.

I believe we are also united in thinking that waste is undesirable and that combating waste is a necessary part of the fight against inflation, particularly in the nationalised industries. Some months ago a constituent of mine, Mr. E. L. Gethin, who had been contract adviser to the British Transport Commission, made certain allegations about waste in the activities of the Commission. The Minister of Transport asked Sir Harold Howitt to carry out an independent investigation into those allegations.

I am sure that we are in Sir Harold's debt for having done that, and, in particular, for having put out the relevant facts in some detail so that they might speak for themselves. I am grateful to him for doing that, although I must admit that some people think, despite the fact that he is a distinguished accountant, that he appears in certain instances to have made two and two equal five.

I do not wish this evening to go into the technicalities of Sir Harold Howitt's Report, but merely to draw attention to two quotations from it. In paragraph 56 Sir Harold says: There is, I think, no doubt that this emphasis towards more financial control and safeguards, which Mr. Gethin rightly urged, was on occasion resisted by the users, sometimes for technical or other reasons which in the event did not prove to be correct. Finally, in paragraph 218 he says: It is of course of vital importance that the directive on the Supplies Organisation"— this means the new purchasing director for the British Transport Commission— shall be implemented in the spirit in which it is written. I believe that in industry generally there is almost bound to be a clash between those responsible for purchasing and those responsible for the engineering and technical side. Those who are interested in purchasing are naturally interested in buying at the lowest possible price, whereas those primarily interested in the technical side and engineering are chiefly interested in such things as delivery dates, and fancy specifications, and are not so interested in questions of price.

The engineers, the technical men, are usually higher in rank in the organisation than the purchasers, but in most private firms they can look for certain allies on the board or committee of the board because those companies are profit-making concerns and, therefore, are primarily interested in making money. I do not want to imply that those on the boards of the nationalised industries are not interested in making money or in saving money, but they are not as interested in making money and in saving money as the directors on the boards of private, profit-making firms.

Therefore, I think that in a nationalised industry it is particularly important to support those on the contracting side against those on the engineering and technical side. Look at the situation now. If a contracting man, one interested in buying, comes into contact with the engineer and wants to keep his job, he is likely to knuckle down to the engineer. Mr. Gethin stood up against the engineers, and what did he get? He got the sack. So it seems to me that anyone who wants to keep his job would be well advised to pipe down and not follow that example.

So I think it is essential to give particular help to the contracting men. I should like to see this done by the setting up of an independent commission, rather like Sir Frank Tribe's watch-dogs, who from time to time would study the contract procedure of the nationalised industries, and also the purchasing practice—

Mr. Awbery

For all industries, not one section.

Mr. Goodhart

Such an independent commission could do two specific things. Firstly, it could check on the actual theory of purchasing in these organisations. Sir Harold Howitt, as well as a number of other investigators has shown that the organisation of purchasing in the nationalised industries can often be improved. Drastic changes have had to be made on the British Transport Commission side. The recommendations were first made as long ago as 1949, but it has taken a long time to bring them into effect. An independent commission could check whether these practices have been put into effect.

Secondly, it would strengthen the hands of the contract men in their battle with the engineers and the technicians. The knowledge that an independent commission would be coming round in two or three years' time and might look into a certain contract would be of great help to them. I ask the Government to consider the setting up of such a commission.

Another part of the Gracious Speech which I particularly welcome is that which refers to penal reform and the treatment of offenders. Another constituent of mine, Mr. Taylor, recently had his daughter Edwina most brutally murdered. Since that time, Mr. Taylor has made certain proposals. He has proposed that a register should be kept of all those who have been convicted of some form of sexual assault, and that they should be required to report to their local police station from time to time and notify their movements and their changes of employment to the police. In other words, it would be the "ticket of leave" system.

Mr. Taylor has, of course, this deep, personal tragedy behind him. He is not an expert of punishment, the law or the detection of criminals. I also am a layman, and most of this House is composed of laymen in this sphere. I would ask the Home Secretary to obtain the views of chief constables and other members of police forces on whether a change in the treatment of offenders—some modification of Mr. Taylor's suggestion—might be desirable. I ask that the matter should be investigated. I think this would set at rest the minds of many parents who are deeply worried at the moment.

8.48 p.m.

Miss Elaine Burton (Coventry, South)

I wish to deal with three matters referred to in the Gracious Speech, not—as my hon. Friends will be glad to learn—at any length. [HON. MEMBERS: "Hear, hear."] I note that some of my hon. Friends cheer my statement. They certainly have not been sitting here any longer than I have, although they may have been sitting here as long. At all events, I shall be as brief as possible.

I turn first to the statement in the Gracious Speech concerning the European Free Trade Area. It says that the …Government also welcome the recent declaration by the Council of the Organisation for European Economic Co-operation… on this subject, and that the Government intend to do all they can to bring it about. One may as well start with approval, and, while I know that there are varying opinions in the country about the European Free Trade Area, I am in favour of it. The differences which exist cut right across party, right across industry, and, I think, right across nations. I believe that people very sincerely hold different views on this subject.

With many other hon. Members of this House, I have had the opportunity of going to the Council of Europe and of working in other European organisations, and I am very much in favour of the idea. I hope that the European Free Trade Area will become an actual fact. Apart from thinking that it would be a good thing, I am also quite convinced that it is inevitable. Therefore, I would like to see us go into it as soon as we can.

I appreciate, as the House does, that it is very necessary for the trade union leaders to see the Minister responsible, as I know they have done, on the matter of maintaining employment and wages in connection with the European Free Trade Area. I think it is quite true to say that, where the motor industry is concerned, the imports of motor vehicles into the prospective Free Trade Area have doubled since 1950. I have been looking at some estimates made by economists—and I do not pretend to be one—stating that these imports may increase to about four times their present value by 1970. Whether that figure is correct or not, I think there is little doubt that they obviously will greatly increase.

I know that there are many people—there are people I know in my own City of Coventry—who have their doubts about this Free Trade Area. But I would say to them that if the Free Trade Area does not materialise, and if what we call the six Messina countries continue with their Common Market, British motor manufacturers will be virtually excluded from the largest part of the European vehicle market. That would mean their exclusion from about 70 per cent. of the potential market of the European Free Trade Area. Obviously, that would be very damaging to sales, but it would also greatly damage the efficiency of the motor car industry, because the greater the sales the greater the production and the greater the efficiency.

I have only two figures which I should like to give on this subject. I have been told that the failure of the European Free Trade Area to materialise would probably mean that the total United Kingdom production of vehicles in 1970 would be only four-fifths or 82 per cent. of what it would be if Britain were to participate in the Free Trade Area, and if industry used its advantages to the full.

Two very simple facts about the matter are these. If the Free Trade Area does come into being, reliable experts in the trade visualise that the United Kingdom should be able to extend its share of the commercial vehicles market to 30 per cent. of that total and of passenger cars to 20 per cent. That obviously would be of very great benefit to the industry.

Leaving the European Free Trade Area, I now want to say a word or two about something else mentioned in the Gracious Speech, and that is the matter of retirement pensions and contributions. Obviously, I do not intend to dwell on it, because it is a matter for legislation. While I welcome, as everybody does, any increase in retirement pensions or any other pensions, I believe quite sincerely that the amount given is too little, that it is too late, and—and this is the real point I am making—that it is based on a wrong system of payment. I believe, and I would have thought that everybody in the House and in the country would agree, that it is quite impossible to give anybody a pension on which they can exist—I will not even say live, because they are not existing today let alone living—on a flat rate contribution, because I think it has to be much too high. We have heard today what it is to be for this modest increase.

While I am quite convinced that there is nobody in this country who would begrudge any increase to the old people, I think it is manifestly unfair that a person earning £5 a week should pay exactly the same as a person earning £20 a week. This, I submit, is quite indefensible. I should have thought that a sliding scale of contributions was essential. The second major joint I want to make, as a basis, is that I cannot see how any pension, whichever party or Government may give it, will have any validity unless it is linked to the cost of living. It is quite impossible. Whichever party has been in power, we have all seen that increases in pensions have been swallowed up long before the old people have got them. That is a wrong foundation. There should be a sliding scale of contributions and the pensions themselves should be linked to the cost of living.

To the relief of my colleagues. I am coming to the last point which I want to make. I wish to deal with the House of Lords reform and life peerages for men and women, something which I hope will never affect me. Perhaps differently from some people, I believe in the necessity for a second Chamber. It does very good revisionary work on what goes to it from this House. But, even more firmly than I believe in the necessity of having a second Chamber, I think that the hereditary principle should go absolutely and completely. Therefore, I hope—I do not know with what success or foundation—that the Opposition will oppose this suggestion when it comes before the House.

I want it opposed, firstly, because I do not take the view that to admit life peers or even women will be a breach in the hereditary system in the House of Lords. I believe that it will bolster it up. Secondly, presumably the life peers, anyway at the start, would have to be Labour peers, or the balance of Members in the Upper House would become even worse, and I understand that that is one of the things it is wished to rectify. Thirdly, if we are to have life peers who would give a great deal of time to the work of the House, which I gather is the reason for appointing them, they will have to be paid for a full-time job. Fourthly, in spite of the peers we may appoint, there is always the danger or possibility that suddenly the 800 backwoodsmen, as we call them, will appear, purely because of the hereditary principle which entitles them to be there, and will vote and swamp any Measure.

I do not believe that a few Labour life peers, or the admission of women, should be used to bolster up the other House as it is. In common with a good many other Members, I have had a look at the debates in another place. When this matter was discussed, the Government spokesman there said that he thought that there was a need for the second Chamber and that the country would accept that. I agree, but he went on to say something quite extraordinary. He said: I think there are two matters which, in the debate over these two days, we can probably agree to by-pass. The first is any alteration in the powers of this House, and the second is the abolition or reduction of the right of hereditary Peers to legislate. I cannot see why those two matters, which are most important, should be bypassed if we are discussing possible reforms of another place. Equally, I should have thought that consideration of possible amendments to the constitution of another place was not the prerogative of that place.

The Assistant Postmaster-General (Mr. Kenneth Thompson) indicated assent.

Miss Burton

I should have thought that we would have a say in the matter—and I see that the Parliamentary Secretary agrees with me.

The Government proposals with regard to another place are the admission of life peers, the admission of women, and the payment of expenses, which has already begun in a limited way. During the debate last week the statement was made that not many life peerages would be created at a time. If that is really to be so, it will take a very long time to redress the balance of Members there.

The statement then referred to the value of the people whom I have perhaps somewhat discouragingly referred to as the backswoodsmen. The Government spokesman said that the peer uses Parliament when he has first-hand knowledge to contribute to the debate and that the other place benefited from that exceedingly, and…from the contributions of backwoodsmen; people who come from the country, people who do not live in London, and who know intimately the conditions of the country people among whom they do live. I am sure that their contributions are very valuable—we know that they come very seldom—but I cannot see that that is any reason for allowing them to vote. Certainly they should be allowed to speak, but they should not be allowed to have a vote.

The spokesman continued: So, although we may come to a comprehensive reform which will limit the numbers of hereditary Peers in some way, I think there are two things which we have to prove to ourselves before we can do it. The first is that there is a great measure of agreement between the Parties."—[OFFICTAL REPOR. House of Lords, 30th October, 1957; Vol. 205, c. 588–92]. If there are enough people on my side of the House who think as I do. I am quite sure that there will not be any great measure of agreement among the parties as to what we ought to do with another place, and, if there is no measure of agreement between the parties, does it mean that another place is to stay as it is for ever? That would seem to be the logical conclusion.

The spokesman's second point was that any scheme suggested for the future should offer a better result than the present scheme. That I entirely accept. The number of peers twenty years ago was 772; the number today, with the admission of the latest one, is 872. It will not strain any of us, even at this late hour, to appreciate that that is an increase of 100 in twenty years. In twenty years' time, therefore, if we do not have any changes the number may have grown to 1,000. Is it suggested that we should add to that 1,000? Is it practical?

I should have thought that there were four points of agreement upon this matter among most people: firstly, that we should not have a Chamber open to many people who never enter it; secondly, that there is a necessity for a second Chamber of some sort; thirdly, that women should be admitted, and, fourthly, that people might be willing to serve if life peerages were introduced and the financial question could be solved.

Who will disagree with the Government's proposals? Obviously those whom we may call the diehards, and the extremists. The diehards say, "No change at all," and the extremists say. "Sweep away the lot; let us get rid of them." On the other hand, there is a large body of moderate opinion which says, "Let us have these changes that the Government suggest and see how they work out, and then we can see what will happen in the future."

I should like to see women there. I see no reason why women should be debarred from the other place when they are admitted to this House, but, if it is a question of admitting women while the hereditary principle is maintained, I take my courage in both hands and say that I should prefer not to see women there, because I think that the hereditary principle should disappear first.

If we are not going to pay 872 peers full-time money for doing a full-time job, how on earth is it proposed that we should select the few that we are to pay? If we did not pay them we should not be able to get them to do a full-time job. They have not got the money—certainly those on this side of the House have not got the money—to afford to do the job without payment.

And so, finally, on this matter of the House of Lords, I think that the hereditary principle should disappear. I think we should have peers of Parliament, men and women, but that the hereditary principle should go first, and I hope very much that my right hon. and hon. Friends on this side will agree with me.

9.5 p.m.

Mr. John Baldock (Harborough)

The hon. Lady the Member for Coventry, South (Miss Burton) did a good service by drawing the attention of the House to the benefits that would be likely to follow for the principal industry in her constituency if this country were to enter a European Free Trade Area.

I was not able to go along with the hon. Lady quite so well when she spoke about pensions, particularly in the rather depressing view she takes that a pension will never be permanent because it will always be left behind by the rising tide of inflation. I believe that Her Majesty's Government are determined to make a stand against that. It is perfectly true that we have had this serious evil with us ever since the early days of the war, but I detect a real determination to strengthen the £ and real resistance towards inflation.

I hope that the hon. Lady will find that she need not take quite such a gloomy view about any fixed pension being left behind by the falling value of money.

Mr. Hannan

Will the hon. Member not agree that what is happening today is part of the price the Government have to pay for their failure to deal with inflation since 1951—not since last week?

Mr. Baldock

For the hon. Member, apparently, history began in 1951. This inflationary process has been going on since the early days of the war.

Mr. Ede

Mr. Randolph Churchill said in the Evening Standard that inflation started after Agincourt and has been going on ever since.

Mr. Baldock

I am grateful to the right hon. Member for South Shields (Mr. Ede) for correcting my history, but I think he will agree that it is the pace of inflation that matters and that, while it may creep slowly forward always, it is when the pace becomes fast that it becomes more serious.

I believe that there are some in this House and elsewhere who take the view that all emigration to the Commonwealth is good whatever form it takes, but I believe that there can be very few indeed who do not regard with apprehension the considerable drift of young and early middle-age people of high quality living in this country to North America. I wish to examine some of the reasons for those people of high quality and ability drifting from this country to North America.

One thing is perfectly clear. It is not that they have any desire for Socialism, because if that were what they wanted they would not choose North America. What they want is a place where they can find greater opportunity, greater freedom and a chance to keep more of what they earn. I believe that they have something more than a suspicion that the best days of this country are behind rather than ahead. I think that there are a number of other causes, although perhaps they are relatively minor, which increase the feeling of irritation and discontent with things as they are here now.

For instance, if they are busy people, and want to save time by not waiting in doctors' surgeries, and, therefore, become private patients, they are annoyed and feel it unjust if they then have to pay for their medicines. They make an above-average contribution to the Exchequer and an above-average contribution to the National Health Service, and they feel that they should be at least on equal terms with others. If they pay for their children's education—and they make a larger contribution towards education and all other State expenditure than does the average person—they feel that it is unjust that they are not given any return in allowances for what the State has saved by not having to educate their children. These may well be only small matters, but they add to these irritations.

The most important of all the reasons that this drift is taking place is that these people have a feeling that there is a lack of opportunity in Britain at present and that an excessive part of their salaries is taken by taxation, giving little opportunity for saving or accumulating any substance. I am glad to say that the Government have moved in the right direction by reducing the proportion of the national income which is taken in taxation. They have made a substantial reduction while they have been in office. That is quite contrary to the policy adopted by hon. Members opposite, who seem to believe in taxation for taxation's sake and who wish to endeavour to obtain a state of artificial equality which both nature and good sense abhors as much as a vacuum.

Perhaps they might learn a lesson from the Sputniks, because the country which so successfully first launched these space vehicles, or whatever they are, gives very big rewards to its scientists and technicians compared with its unskilled manual workers. There is certainly no attempt at equality in that State which has produced such successful results.

Mr. Bence

Stockbrokers or bankers do not get anything in Russia.

Mr. Baldock

It seems a little ironical to me that those who are leaving the United Kingdom, feeling that perhaps the best days of this country are over, should do so when the possibilities are greater than they have ever been and when the chances of links with Europe and greater influence in Europe are opening out before us. The opportunities undoubtedly exist if we solve our economic problems and we can build up a strong, respected and honest £.

In my view, much strength would be injected into industrial life by changing the emphasis between direct and indirect taxation. This is the main point which I want to make. Heavy direct taxation not only dissatisfies those who subsequently emigate. It is an important reason why they leave. More than this, it is strongly disliked and even resented by a great many people who pay it. That applies not only at levels where three-quarters of a man's earnings are confiscated but at the very first rung in the taxation scale. Heavy direct taxation is bad not only because it inhibits savings and reduces incentive, but because it falls inequitably and provides temptations and distractions which distort the whole economic pattern of the country.

For a man earning a high salary it is more profitable to devote time to so arranging his affairs that they suffer less taxation than to earn more salary. Thousands of manual workers find it more remunerative to do odd jobs in the evenings and week-ends, such as driving week-end buses, helping in public houses, decorating, and doing odd building jobs, than to do any overtime with their employer, because their overtime earnings would be taxable. For those whose transactions are mainly in cash the temptations of heavy direct taxation are obvious.

For all these reasons, but particularly because of the reduction of incentive that is brought about by heavy direct taxation, it seems important to lighten the load of direct taxation as much as possible, both by raising the lower limit so as to exclude as many as possible from paying direct taxation at all, and by reducing the rate for those who do pay it. Both are equally important, because the weight of both forms of taxation at present is a disincentive—a disincentive to those on the verge of paying higher tax and to those already paying it.

The Government have done both by reducing the share of the national income taken in taxation. They have reduced the rate of direct taxation and have also raised the level at which Income Tax becomes payable. Both those steps are excellent, but if we are to be realistic we must admit that that process of reducing the proportion of the national income taken in taxation cannot go on indefinitely. The reverse is the case. There are several spheres, such as education, in which the Government have repeatedly said that more money will have to be spent, and I do not think that anyone in this House would quarrel with that forecast.

It is not realistic to continue beyond a certain point reducing the proportion of income required for revenue. The only solution is to change the way in which it is raised and to collect more by indirect taxation. Such taxation is not a disincentive either to increased production or to savings. It may be said that to increase indirect taxation is inflationary, but I would hardly think that anybody would claim that that was so in the case of beer or cigarettes. It is quite the reverse.

I should like the Government to explore the use of a wider tax on consumer goods. There are many things that might well be the subject of taxation—

Mr. Bence

Such as?

Mr. Baldock

—and which would lead to a reduction of direct taxation; such as, to reply to the hon. Member for Dunbartonshire, East (Mr. Bence), restaurant meals, which are taxed in other countries; sweets, at any rate the more expensive ones—

Mr. Bence

Tax the children's toffee apples?

Mr. Baldock

I said the more expensive ones. Per head, we are the largest consumers of sweets in the world. I do not think that anyone can say that expensive sweets or restaurant meals are necessities though, if the hon. Gentleman thinks so, he will perhaps take the opportunity to say so. There are several other commodities. The cost of quite a few licences has not been adjusted to the decline in the value of money—such as dog licences—and it would all result in bringing in a little more revenue.

To sum up, I believe that a change in emphasis from direct to indirect taxation should be most seriously considered by the Government. I think that it would be the most immediately effective action which could be taken to bring about that state of economic strength which everyone in this House desires, and to which reference was made in the Gracious Speech.

9.19 p.m.

Mr. Cyril Bence (Dunbartonshire, East)

The speech to which we have just listened is one of the most extraordinary I have heard in this House. The hon. Member for Harborough (Mr. Baldock) started off with the proposition that we are getting heavy emigration from this country because people feel that too much of their income is being taken in taxation. He ended by suggesting that more of the people's incomes should be taken in taxation, not at the point at which they earn it, but at the point at which they spend it. But, in either case, they will be losing income through taxation to the central Government. What the hon. Gentleman suggests is not that we should reduce taxation but that we should take it from the people in a different form in the hope that they will not notice it.

Mr. Baldock

I hope the hon. Gentleman will allow me to make a correction. I thought I made it clear that I was entirely in favour of reducing the whole weight of taxation, and I gave credit to the Government for having done something to that end, in taking a smaller portion of the national income. However, I believe that there is a difference in incentive to save and to produce between different methods of collecting those taxes.

Mr. Bence

I am certain that everyone always hopes to pay less in taxation. Most of us pay taxes, and we wish we did not. That is a quite natural feeling; no one likes to see part of his income being taken in taxation. I read in some statistics not long ago that, out of every £1 I pay in Income Tax, 16s. 4-id. can be accounted for by interest on and management of the National Debt. Now, with Bank Rate up to 7 per cent., I find that a greater proportion of what I pay in taxation will go towards interest on and management of the National Debt.

I went through some statistics of local authority finance. Taking my own local authority of Clyde Bank, I find that about 15s. 8d. out of every £1 collected in rates goes to satisfy, not the immediate, physical services of the administration of the burgh, but to satisfy interest on and service of moneys borrowed by the local authority. It seems, therefore, that the principal reason for taxing the community as we do is not to provide these physical services which are rendered, but it arises rather from the existence of a system of compound interest on the basis of which we try to work our industrial society. If the hon. Member for Harborough wants a reduction of taxation, he should press his hon. Friends to reduce the burden of the debt structure we have created by our monetary system.

Mr. Gresham Cooke

The hon. Gentleman ought not to leave the impression that interest on the National Debt is responsible for 16s. 4½d. out of every £1 of tax which he pays. I have not got the figures; it may be responsible, possibly, for 16s. 4½d. of Income Tax, but that cannot be true over the whole range of taxation, taking into account Purchase Tax, duty on cigarettes and alcohol, and so on. I do not think he ought to leave an unfair impression.

Mr. Bence

I quite agree; I did not include the others. I meant Income Tax, and I believe that I referred specifically to it.

I want to speak this evening about a subject which is very dear to me, a subject which has caused me a great deal of heartbreak in my relations with the party opposite, because although I oppose hon. Gentlemen opposite in ideas, I have looked upon many of them as friends. I have many friends among Conservative Members, and I have always felt that they really believed in home ownership. I believe also that the bulk of people in this country have a great respect for the concept of the family and the good home.

Between the wars, I was always pleased to see drives by local authorities, by public bodies in general, and by the building societies, to encourage home ownership. My own trade union, the Amalgamated Engineering Union, did all it could before the war to foster home ownership through the union; we financed it, and we still do. The Tory party campaigned between 1945 and 1951 to end building licences and to encourage, the ordinary people of our country to acquire their own homes.

Mr. Denis Howell (Birmingham, All Saints)

"A property-owning democracy".

Mr. Bence

Yes, we remember that phrase. I have always felt there to be a good and natural argument for home ownership. It is a good thing for a man to own the place where he can function as an individual. In modern industrial communities, a house and home is about the only thing left where we, as individuals, can function with our families and own what we have about us. The home is the last bastion of individual ownership and function open to us.

I admit that there has been an increase in housebuilding for private ownership during the last few months, but I see in the Press this morning that a national building society is proposing to increase to 8 per cent. the interest rate on mortgages for people wishing to buy through that society. This is a frightful situation. Do hon. Members realise what this means to thousands of young people—young men, for example, who have completed their National Service, who are married and have quite modest incomes, many of them in the professional groups? They have undertaken the obligations of acquiring a house of their own. They have taken on responsibilities for repairs. They have taken on a terrific responsibility for thirty years.

Many of these people are the backbone of a solid society. They feel personal responsibility, and they organise their lives in an orderly manner. I have had deputations from them in my own constituency. They have entered into obligations on 30-year and 35-year terms. They calculated that when they reached pensionable age at 65 they would draw a modest pension and would have paid for their house and be free of liability. In the last three years, however, every upward movement of the interest rates has added periods from ten to thirty years to the term of repayment of their mortgage. This is a tragedy for millions of young people.

The hon. Member for Harborough talked about emigration. Many people are leaving the country, not merely because they are discontented with their jobs or with the taxation system, but because of housing and the conditions of house purchase. I know of two cases in which this has happened to people who bought houses in Scotland. They say that this is the last straw.

It is said—I do not know with what justification—that immediately the Government introduced their legislation to free 700,000 or 1 million houses from rent control an increasing number of young folk who were contemplating marriage went to the building societies to negotiate house purchase as a consequence of the increased rents brought about by the new Rent Act. But immediately this flow begins—a flow in the right direction to people owning their own homes—the Government do something that makes house purchase more difficult for them than ever.

I know the old arguments that we hear from the Government. I have argued this before, and I am arguing it again tonight, because these are things that I must get off my chest. When we suggest any action that would relieve many of these people, who deserve relief, from the heavy burdens being placed upon them as a result of house purchase, and would relieve ratepayers and local authorities, who will suffer considerably as a result of the 7 per cent. Bank Rate, we are told that to discriminate between one borrower and another or between one enterprise and another is wrong and that there must be no discrimination. I can never understand that.

I was brought up to believe that my life was a process of discriminating between alternatives and between one action and another. My life was a battle every day. It was a struggle I had to make with myself in discriminating and choosing what action to take, how I did things and the motives that actuated me in doing things. I believe that society has to do the same thing. The idea that in a society we should not discriminate is wrong and immoral. We should discriminate.

What society has ever evolved or devolved in which people were not prepared to discriminate between what was good and what was bad? What bank manager has not had to exercise discrimination between one borrower and another? Of course bank managers have to do it. There is discrimination all the time. I had a balance-sheet sent to me a fortnight ago which showed that the overdraft of the company had gone up from £3,750,000 to £5,500,000, and yet the bank managers worry small families to death about their overdrafts. There is discrimination.

I am glad to see the Secretary of State for Scotland here. He told us some time ago that he is doing all in his power to expand industry in Scotland. What expansion of industry are we likely to get with a 7 per cent. Bank Rate? Consider the terrible effect it will have on one of our chief industries, the shipbuilding industry. It will have a terrible effect in every branch of capital development, and Scotland is still a country of heavy industry.

This policy which the Government pursue, the policy of the monetary mechanism, as an alternative to discrimination is bad, and not in the best interests of the economy. I believe it is the duty of the money interests, the money power, of the Treasury, to use discrimination in the creation of credit, the creation of the cash basis for the credit structure, and to discriminate in the use and investment of that money in such an economy as ours.

Mr. Gresham Cooke

The Government do not lay down what is to be the rate of interest charged by the building societies to borrowers. There is discrimination because the rate of interest on mortgages differs between one mortgage and another. The hon. Gentleman has mentioned one building society, but there are other building societies lending at below 8 per cent.

Mr. Bence

Yes, but the pressure is on. The society I mentioned is outside the Building Societies Association. Once it charges 8 per cent. the presure will be on other building societies to increase their charges. At the last meeting of the Building Societies' Association it was only by a very small majority that it was decided not for the present to increase the interest rates.

How young people can equip their homes and maintain them and raise their families and pay these charges I do not know. I feel very deeply for them. The party opposite says it believes in a property-owning democracy, but then it uses the monetary mechanism and an undiscriminating interest rate on all money loans and all credit throughout the country. It is dealing a deadly blow to a property-owning democracy, and harming an important part of our social life, and those of our people who desire to have homes of their own.

What I am now about to say I do not say from any lack of appreciation of the great scientific achievement of the scientists of the Soviet Union in sending those satellites round the earth. We should show very bad grace if we did not recognise that that is a tremendous achievement. I am as appreciative of it as anyone else. However, there is an aspect of the modern world and of Western civilisation which worries me. We continually hear the plea for more scientists. Of course, we need more scientists, but I remember a conversation I had with the general manager of a very important company in Scotland and of how he said to me, "I can get all the technicians and engineers I want, but I cannot get men with human understanding, men who can understand human relationships. Those are the men I am short of."

I believe that society will get very short of these men. Specialised education and vocational training are all very well. That kind of education makes a man a scientist or an economist or some other kind of specialist. I may be old-fashioned in still believing that human life will be brought to a pretty sorry end if the world is not peopled by human beings whose standard of measurement is not some great scientific or technical achievement or production output but the sum total of human attitudes, the forms of behaviour and general association of human beings.

This is one of the reasons why I believe that the British Commonwealth, a family of nations, should not worry about whether we can do this or that technological or scientific feat in projecting satellites into their orbits. Our contribution to the world and to the United Nations is surely our capacity to evolve out of an empire. India has had her freedom. We are a tolerant people. We have very few racial complications and we preserve in wide measure our freedom. Both parties in their long history have made their contributions to our concepts of society.

These are our contributions to the world, and the sum total of human happiness should be the yardstick by which we measure progress. Let the scientists and the technologists achieve their great technical masterpieces but, for goodness' sake, do not let us worship those achievements as the purpose and the ideal to which we as legislators and the people of our country should chain our ambitions.

We should not supplant the humanities in our educational system by vocational education. We should marry the two. That will mean tremendous sacrifices. We shall have to spend more on education. We shall have to provide longer periods of education for our children so that they may be educated in the humanities as well as the sciences and so be enabled to preserve a balance. We should not measure our lives and our society by achievements in production but by the sum total of human happiness, by the conduct and behaviour of our people, by the affection of our families, and all that emanates from those bases. Those are the things that to me mean progress.

9.38 p.m.

Mr. Archer Baldwin (Leominster)

I am glad to know that the hon. Member for Dunbartonshire, East (Mr. Bence) likes a property-owning democracy, but I wonder how he will square that idea with those of his leaders when they take over, as they have suggested, all the houses that they can possibly get hold of.

Mr. Bence

The hon. Member must not take advantage of a point which I made quite clearly. I said that I can always find a good argument in favour of the individual who desires to own that within which he functions, but there is ownership of hits of paper and of thousands of pounds of value in land by people who never function within that property. I could never justify that.

Mr. Baldwin

I agree that there is nothing like owning property. I am glad that the hon. Member agrees with that idea, though I thought that was contrary to the ideas held by his leaders.

I also agree that there are certain features which tend to be lacking in our educational system. We are spending too much time and energy on technical and other so-called education for our children instead of providing for them that human touch which was provided in the smaller schools of the past. Therefore, I agree with the hon. Gentleman's sentiment in that direction.

Tonight I want to deal with the Franks Report. I endeavoured to speak last Thursday, Mr. Speaker, but I am glad I did not catch your eye because many things have happened since then. I welcomed the statement of the Prime Minister today that the Government propose to repeal the judicial and disciplinary powers of the 1947 Agriculture Act. Most of us on this side of the House will welcome that. I was also glad to hear in the debate last Thursday that the Franks Report has been accepted to a large extent by the Opposition. That is probably the reason why my right hon. Friend felt prepared to deal with the Report quickly.

We have had a great many Reports since I have been in this House, but this is the first occasion on which a Report of this character has been dealt with so quickly. The members of the Franks Committee are to be congratulated, because it shows that the time and trouble they took in preparing their Report has been worth while. I can only hope that steps will now be taken to implement it as soon as possible.

The judicial and disciplinary powers conferred by the 1947 Act have acted prejudicially to the farming industry. When, ten years ago, the Bill went through Standing Committee, some of us pointed out to the then Minister of Agriculture the effect of sonic of the powers that were to be given to the county agricultural executive committees. What we said on that occasion has proved to be correct and I am glad that it has fallen to a Conservative Government to repeal part of that Act. At that time we pointed out that too much power was being given to Whitehall and not enough left in the countryside. If these powers are taken away from the county agricultural executive committees, I suggest that the committees themselves will no longer be necessary. They are clogging the machinery by which they pass land from tenant to tenant or from landlord to tenant.

I know it may be said that the county agricultural executive committees will still be needed to operate various schemes for which claims can be made for assistance under the various statutes. That duty can be exercised by the National Agricultural Advisory Service. There are, I know, some excellent agricultural officers in every county who are at present attached to the county agricultural executive committee against their wish. It has proved to be the case that instead of these advisers being called in to help farmers who are on the margin of productivity, those farmers have hesitated to call in the advisory officer for fear that he might report to the county agricultural executive committee that their standard of farming is not good. Therefore, I suggest that the advisory committees should now revert to the control of the county council, under the supervision of the county land agent, as used to be the case. If that is done, there will be no need for the county agricultural committees.

The statement in the Franks Report to the effect that these committees have not proved to be entirely satisfactory is correct. During the war and in the period immediately after the war they were necessary, but they have outlived their usefulness, and so I hope that the Government will abolish them.

Mr. H. A. Marquand (Middlesbrough, East)

Will the hon. Gentleman allow me to ask a question? I may not be sufficiently familiar with these provisions to understand exactly what he is saying, but as a representative of a municipal constituency, I understood that we had struck a bargain with the farming community that, in return for subsidies and aid from the Exchequer, we were to have the satisfaction of knowing that farmers would be required to farm their land properly. If the hon. Gentleman is now suggesting getting rid of all those committees which discharged that responsibility, is he not repudiating one side of a bargain?

Mr. Baldwin

That is the suggestion made by the Franks Committee. With Part I, which gave farmers guaranteed prices, went Part II, which laid down a standard of cultivation, but circumstances today are entirely different from what they were then. Now we have reached the stage of over-production with many of our products, and, therefore, the necessity for putting people under supervision, for snooping and so forth has been removed, and we need something fresh to take its place. I am not suggesting that we want to encourage a bad farmer, but, at the same time, if a farmer farms badly, he suffers the penalty which is suffered by anyone who does not conduct his business properly.

The Franks Committee did not anticipate that the Government would do away with all the judicial and disciplinary nowers, and it made the suggestion that minor tribunals should be set up as a preliminary to a final appeal to the Lands Tribunal. As those powers are now to be removed, I suggest that it is quite unnecessary to set up any further tribunals. We have too many tribunals, committees and so on. The more we can do away with that sort of machinery, the more we shall reduce the expense of governing the country.

I support my hon. Friend the Member for Warwick and Leamington (Mr. John Hobson). Like myself, he has had some experience of executive committees and appeals. He was emphatic that the minor tribunals should be dispensed with and that matters should be settled by the existing Lands Tribunal. Too much has been made about the question of law. The question of law as between tenant and tenant or landlord and tenant very seldom arises. The decision is mainly one of fact. Whether a farmer is farming his land well or not will be the most disputed fact.

I should like us to adopt the procedure which was common to agricultural disputes before the war. In those days valuers on each side met to try to settle the problem. If they could not settle it, they appointed an arbitrator. If they could not agree upon an arbitrator, an appeal was made to the Minister of Agriculture, and he appointed an arbitrator from a list of selected men. The list of arbitrators was agreed by various organisations dealing with land. Consequently, all the problems dealing with land were settled without any cost to the Treasury.

The decision of the arbitrator was final. There was no appeal against it except on grounds of misconduct. If a question of law arose, the arbitrator could sit with a legal assistant, and the valuers could also have their legal assistants, and any matter of law was argued out at the arbitration. Alternatively, if a question of law arose during the proceedings, the arbitrator was asked to state a case so that a county court decision could be obtained, and the decision of the county court was final.

We could dispense with all the paraphernalia from which we have been suffering for fifteen years by reverting to the old procedure, which was fair and inexpensive and settled problems without undue trouble. Under that system the expenses fell not on the Treasury but upon the parties. There should be provision for the Lands Tribunal to decide how the expenses of the hearing should be met. The great thing about the procedure is that there can be no delay. However, if we set up minor tribunals, before an appeal can be made to the Lands Tribunal from a decision of the minor tribunal the circumstances on the farm may have altered entirely, because over the course of a few months it would be possible to remedy many of the troubles and difficulties which existed when the case arose.

I am glad to know that my right hon. Friend is to reduce the over-security of tenure which exists at the present time. That was another matter which we argued in the debates in the Standing Committee before the Bill was passed. We pointed out that if over-security of tenure was given, there would be a tendency to do away entirely with the landlord and tenant system, and that, in fact, is what is now taking place because of the over-security which now exists. It means that a landlord who lets his farm to a young man virtually parts with the possession of the freehold of that farm for his lifetime. All he has to do is deal with the repair bills as they come in. The result of that is and I expect that hon. Members representing agricultural constituencies will bear me out—that there are very few farms today which are being relet when they become vacant. I think that is a very great mistake.

We have in the country a large number of energetic young farmers, who want farms, but with the over-security of tenure that exists they will never get them. I think that it is to the detriment of this country that it should be so. I have always felt that a reasonably good tenant had all the security he wanted under the 1925 Agriculture Act. Under that Act, if he were given notice to leave by the landlord, he had the right of claiming up to two years' rent as compensation for being turned out. Under that system, a landlord hesitated to give a tenant notice, knowing that he would be faced with a pretty considerable Bill if he got rid of his tenant.

Mr. Mellish

In view of the fact that it is now pretty hopeless to try to catch Mr. Speaker's eye, although I have been waiting since half-past two, would not the hon. Gentleman agree that all the points he has been discussing could have been made on the Bill which will have to be brought before Parliament by the Government in order to do the things they want to do and on which he has expressed himself so freely? Is it not a fact that all this could have been said on the Bill which the Government will have to bring in later on?

Mr. Baldwin

I am sorry, but I could not catch what the hon. Member said.

Both the National Farmers' Union and the Central Landowners' Association have agreed that the present system is not in the interests of the farming community, and both will agree to some relaxation of the over-security which exists at present.

I welcome the decision to end the emergency powers on the acquisition of land, which have been completely unfair to the owners of property, whether land or houses. If land is required by the public, it should be acquired at a fair price, and that price should not be based on 1939 values. I have known cases in which a local authority has been loth to acquire land, knowing that it was to be acquired on 1939 prices, which would be completely unfair to the owner. I am glad to know that that power is now to be done away with, and I hope that if land is to be acquired, whether for the Services or any other purposes, it will be acquired on the basis of what it is worth and not at pre-war prices.

We have done quite a bit in amending the Rent Act towards giving the owners of house property a little more justice than they have had for a long time, and if we repeal the power to acquire land at 1939 prices, it will be much more fair to owners of property. I hope that when my right hon. Friend is considering these propositions he will deal with that aspect of the matter as well.

Debate adjourned.—[Mr. E. Wakefield.]

Debate to be resumed Tomorrow.