WAGES AND SALARIES (NEGOTIATING MACHINERY)

HC Deb 23 October 1961 vol 646 cc601-704

5.0. p.m.

Mr. Harold Wilson (Huyton)

I beg to move, That this House deplores the action of Her Majesty's Government in breaking agreements governing the pay of Government employees, in interfering with established negotiating machinery in respect of teachers' salaries and in its announced decision of its intention to disregard the findings of arbitration machinery and wages councils. Our charge against the Government, quite simply, is that, driven by the utter bankruptcy of their economic policy, they have embarked on measures directed against the standards of public employees, and that, in the pursuance of these measures, they have wilfully interferred with long-established negotiating and arbitration machinery, and have wantonly broken solemn agreements to which, as a Government, they were committed.

These are serious charges, reflecting not only on the judgment but on the good faith of Her Majesty's Ministers. Thus, before I come to the main issues of policy involved—of policy in relation to the accepted basis of comparability in settling pay and conditions of public servants, policy in relation to the future of the education system, and policy on profits, wages, productivity and dividends and the rest—I accept responsibility for providing clear and indisputable evidence to the House to back up my charge that Ministers have broken firm and binding agreements and have acted in bad faith.

Before proceeding with my detailed indictment, I should remind the House of the all too familiar background—the run on sterling, the Budget miscalculations, the panic measures of the 25th July, and the widespread recognition, even in the 1922 Committee, of the monumental irrelevance of what the Chancellor proposed on 25th July. These issues we have debated, but we have not, of course, had the chance to debate the loan of £700 million from the International Monetary Fund, nor have we been told of the conditions attached to that loan or of pressure from Continental central bankers for some clear and overt deflationary measures and for a more than symbolic series of measures designed to impress foreign opinion with the Government's determination to deal with wages once and for all.

We are not concerned today with the other measures—monetary, fiscal and others—in the July package. We debated them three months ago. But in the course of his July Budget statement, the Chancellor announced a wage freeze—I think that he called it a "pay pause" —save for agreements where commitments had been entered into. The Chancellor said: In those areas for which the Government have direct responsibility we shall act in accordance with this policy."—[OFFICIAL REPORT, 25th July, 1961; Vol. 532, c. 223.] The Chancellor went on to ask that the same line should be followed elsewhere, both in the private sector and in those parts of the public sector outside the immediate control of the Government. Then, as a spectacular underlining of this policy, he announced the Government's decision to veto the settlement of the Burnham Committee on teachers' salaries.

The House adjourned shortly after, and from that time onwards the Government's pronouncements and actions followed thick and fast, and this panicky and ill-considered threat was given specific content. The basic pronouncement was the statement made by the Chancellor to the meeting of the staff side of the Civil Service National Whitley Council on 10th August, followed by a Treasury letter setting out what he had said. This laid down that where the Government side had made an offer, it would be paid, but for the rest and in all future cases there would be no increase.

Furthermore, it went on to say that this matter would not now even be subject to arbitration before the established machinery. I quote from the letter to the trade union side of the Joint Coordinating Committee for Government industrial establishments, which regulates pay for some of the lowest paid workers in the country. This said: It follows that in the event of arbitration the Government must, on grounds of public policy, withdraw from the scope of the Industrial Court and retain in their own control the timing (and, if necessary, the stages) of the putting of an award into effect. Therefore, in all proceedings before the Court which take place during the period of the pause, whether or not Terms of Reference have already been agreed, the operative date of any award will not be arbitrable. I ask the House to note those last four words, because this is a completely unilateral interference with the freedom of the industrial courts. In other words, apart from commitments entered into already, the Government would not enter into further negotiations and would not accept any further award from the Industrial Court or the Civil Set vice Arbitration Tribunal. The Government put the long-established machinery of negotiation and arbitration unilaterally into cold storage. [Interruption.] There is nothing to laugh at in this. I ask Members opposite who laugh whether they support the Government in breaking their pledged word in this matter. It is a well-known fact that unwise men —men in a panic—can tear down in a few minutes something which has taken wiser men perhaps half a century to build. This is just such a case.

I now turn to specific cases. There was that of the 2,300 Admiralty Dockyard employees earning wages far less than the national average at between £9 11s. and £10 2s. a week. On 25th September the Industrial Court made an award of £1 per week, made retrospective to 14th February—it had taken all that time to agree. The next day the Government announced that they would not honour that award. They said that they would pay the 8s. the Admiralty had decided to offer earlier, but the rest must wait until the end of the freeze, and even then it would not be made retrospective. That money is lost for ail time.

This means two things. First, it means that the Government have violated the doctrine of comparability with outside standards agreed and announced for the Civil Service. Secondly, they have broken their pledged word on arbitration. I am sorry to weary the House with details, but I must refer to a development in the hearing before the Industrial Court.

An eminent Civil Servant, the Director of Labour of the Admiralty, was put by his political masters in the position of having to appear before the Industrial Court, and, after quite properly making his point about the merits of the case, he went on to refer to the Chancellor's statement, and quoted the Treasury letter of 10th August. He went on: The hearing before the Court will … be subject to the proviso in Mr. Morton's letter to you dated 10th August. 'In all proceedings before the Court which take place during the period of pause, whether or not Terms of Reference have already been agreed, the operative date of any award will not be arbitrable' I am quoting the exact words of the Admiralty civil servant, taken from the verbatim transcript of the hearing before the Industrial Court on Wednesday, 23rd August.

I am not, of course, criticising the officer concerned. Obviously, his job as Director of Labour—and he has to live with these workers—is made enormously more difficult. But I do censure his political masters who forced him, as a civil servant, to attempt to dictate to a statutory body—the Industrial Court—about what was or was not arbitrable by that Court. The Court is 42 years old, and I ask the Government to tell me when before it has been subject to similar interference. I do not need to remind the House that, just as the independence of judicial courts from executive interference lies at the heart of our British conception of democracy, so does the independence of the Industrial Court from Government interference—in this case, the Government are the employers, which makes it worse—lie at the heart of our evolving system of industrial democracy.

Throughout history the first action of a dictator has always been to interfere with the courts on the specious plea that public policy, good or bad, is above the law. This has been the pattern of autocracy since the early Stuarts down to Dr. Verwoerd. The Industrial Court rightly rejected this interference and made its award not only on the amount but on the date.

The House will, I think, be concerned to know that the union side, pressing for their rights under the arbitration agreement, has been told by the Government that if this goes on the Government will introduce legislation to amend the Industrial Courts Act, 1919. I think that this is a highly improper threat for the Government to make. These are the consequences of ill considered action by a bunch of reckless and wilful men.

In the last three days we have had the same thing in the matter of the claim presented to the Civil Service Arbitration Tribunal by the Post Office Engineering Union. In this case, governed by accepted policy about comparability—and there is always a time lag in the application of comparability—the Government, before the Chancellor's freeze had offered 5 per cent. The tribunal were threatened by the Government representatives and told what they had to do. Nevertheless, they awarded 7½ per cent. Within minutes the Postmaster-General was put up to say that the 5 per cent. would be paid, but that the other 2½ per cent. awarded by the tribunal would be withheld until some uncertain date in the future and without retrospection.

I now turn to the, if anything, more flagrant case of the Miscellaneous Government Industrial Employees, the so-called "M" class, whose wage rates are determined by a binding agreement signed at the Treasury on 24th September, 1959. I hope that the Chancellor has a copy of the agreement before him because I have one here and propose to read from it. The "M" class employees are probably the lowest paid group of Government industrial employees. The present basic rate in the provinces is £8 19s. a week, and, in the main, as the people concerned are on time rate, there being no provision for piece-rate earning, bonus or overtime, this figure, less deductions, is their pay.

The agreement which I have here—Government signatures and all; they are all here—laid down the basic rates at the time of the agreement. On a basis of what they considered to be comparability, the Government provided that those rates should be fixed at each six-monthly review by reference to the average rates of outside industries and for this purpose specified in detail some 32 industries in London and some 34 outside London. It was as specific as a cost of living agreement. The agreement says: The review which would have taken effect in October, 1959"— I would remind the House that this agreement was signed in September, 1959— shall be cancelled and the next review shall he in April, 1960, and at six-monthly intervals thereafter. Clause 5 provides that the agreement shall remain in force for at least five years from the date of the signing of the agreement and be subject to review at any time thereafter at the request of either of the parties.

I think the Chancellor will agree—he is a distinguished lawyer, or at least he used to be—that this agreement is binding on the Government and that they have no power to get out of it within the five years. Perhaps the Chancellor will tell us later if he accepts that the agreement is still in force. However, there it is. If the agreement is still in force, I would draw the right hon. and learned Gentleman's attention to the words which I have just quoted that the next review shall be in April, 1960, and at six-monthly intervals thereafter. Does the Chancellor contest that that is the heart of the agreement— shall be at six-monthly intervals"? The agreement does not say that it may be at six-monthly intervals. Perhaps the right hon. and learned Gentleman thinks that it should, but it does not. I have studied the agreement very carefully. It does not say, "subject to considerations of so-called public policy." Perhaps it should but it does not. It does not say, "subject to any bright thoughts that might have occurred to the Chancellor while shaving" or that "it can be overridden by a message from the man at the Monetary Fund." Nor is there even a proviso that it was not binding on a Chancellor who so miscalculated his Budget that he made a Surtax concession of £83 million in April and could not afford to raise the wages of men on £8 19s. a week in July. Perhaps the provisos should have been included, but they were not.

The agreement was signed on 24th September, 1959—a very significant date. It was the date on which the Prime Minister was reported as saying that the economy was sounder than it had ever been. Perhaps the Treasury officials who signed the agreement at that time believed what the right hon. Gentleman said and for that reason did not make the provisos. So the agreement stands, that the review shall he at six-monthly intervals. I suggest that this is binding on the Government and that they have broken their word as far as this agreement is concerned.

Through you, Mr. Speaker, I am asking hon. Members, not the Government: have they no regard for the pledged word of the British Government? I know, of course, that we have the same combination here, the Prime Minister and the Chancellor of the Exchequer. They took the view five years ago at Suez that the Government's solemn word was all right so long as it did not cut across national policy. But we thought that they would have learned. Whether it is £500 million or 2s., their good faith is at stake, and not only theirs but ours too. I believe that the honour of the House of Commons is involved. We do not take such a lighthearted view of it as do the Government, nor would the Government take such a lighthearted view about it if it were anyone but themselves who was involved. They and we last week rightly condemned the Soviet Government for breaking their word on the H-bomb tests. We are all quick to condemn a shop steward or a group of workers who embark on an unofficial strike in breach of an agreement made in their name, and the Government devalue themselves and the House when they adopt the same tarnished standards of honour which they are so quick to condemn in others.

Some of the "M" grade workers work at airports on this very low rate of pay. The Government have broken the contract with them, yet as the Chancellor and the House will be aware both the Public Accounts Committee and the Select Committee on Estimates this year severely criticised the Government for entering into a 35-year contract with the big oil companies at very favourable rates to the companies in respect of the supply of petroleum and other fuel to aircraft companies. When these Committees said that these rates should have been tied to a sliding scale the Government witnesses said, "This is a binding agreement for 35 years until the 1990's." If this has to be a binding agreement between the Government and the oil companies, I suggest that here also there is a binding agreement between the Government and their employees.

Last week the Prime Minister received a deputation of two distinguished trade union leaders on this issue. The assembled Ministers treated them to an economic lecture on how Conservative freedom does not work and then proceeded to reject the case put before them. I will ask the Chancellor a ques- tion. I would ask the Prime Minister if he were here. Why the First Lord of the Treasury is not here I really cannot imagine. We are discussing the treatment of public servants, of the Queen's servants, and I think that it is nothing short of a scandal that the first of those servants is not here this afternoon. But if the right hon. Gentleman were here I would ask him what he would advise the workers to do when their employer breaks an agreement and when they cannot go to arbitration. Of course, even if they went to arbitration the employer has already announced that he will dishonour any award that may be made.

What is there left for them? I ask hon. Members opposite whether they advise those workers to withhold their labour. Do they say, "Strike; that is all there is left for you"? What would the Prime Minister, or the Chancellor, or the Leader of the House say about a private employer who behaved in this way? I will tell them what would happen—he would be sued for breach of contract.

I do not know whether the Government have taken advice on their vulnerability to be sued in this matter. Are they sheltering behind Crown immunity? Is there any Crown immunity? I do not know; I am not a lawyer. Are they sheltering behind Crown immunity and using that to justify a course of action and morality lower than any of us would tolerate in private industry? That is really the question which we have to put to the Government.

I turn to the specific issue—interference with arbitration. I can see right away that of course arbitration is inconvenient to a Chancellor who wants to change an agreed policy. That, of course, is the reason why, if he wanted to change it, he should have entered into consultations for that purpose. As I have said, the Government have announced that they will not accept the arbitration of the Civil Service Arbitration Tribunal on the timing of any award. That is, in present circumstances they will not accept that arbitration. I remind the House that this tribunal has functioned for thirty-six years and for the first time the Government have set it aside and, once again, have done that in clear defiance of their pledged word.

I have here a book, published by Her Majesty's Treasury, called, "Staff Relations in the Civil Service". I ask the Chancellor whether he has seen this book and whether he knows of the commitments which are contained in it. I shall quote from it in a moment and, so that the Chancellor cannot feel that I am quoting out of context, I shall give him a copy of it so that he can follow what I quote, because I ask him now whether he stands by the pledges given in this document.

I ask him to turn to page 19 and to paragraph 81. This is what it says: Questions of pay and allowances, weekly hours of work and annual leave are clearly arbitrable; and this includes questions of the effective date of any alteration in these conditions of service. In 1958 the Treasury says that those issues are clearly arbitrable, and in 1961 it says that they are not arbitrable, and the Chancellor will have to reconcile those two statements a little later. Indeed, as I have said, in the cases I have mentioned he has sought to dictate to the tribunal or court and to change the finding when it was promulgated.

Does he accept paragraph 94, on page 22? He will find it in the book. It comes after page 21. This is what it says: Formerly, Treasury authority is required for giving effect to an arbitration award which involves additional expenditure by any Department. But the Treasury Circular of 1925 which announced the Arbitration Agreement contained the pledge— 'Subject to the overriding authority of Parliament the Government will give effect to the awards of the Court. The qualification is inserted to preserve the constitutional supremacy of Parliament and the possibility of a Government defeat there; the pledge means that the Government will not itself propose to Parliament the rejection of an award, once made.' Does the Chancellor accept that statement, which was written by the Treasury and which has been approved by the House in the past and which the Chancellor has never sought to have altered by the House?

I will now take paragraph 97 which says: It is compulsory (apart from the qualification)"— that is the qualification about Parliamentary control— for Government Departments to accept arbitration on claims put forward by recognised associations and staff sides. Does the Chancellor accept that as being correct? If he does, he will have to admit that he has broken his word this year.

Paragraph 104 on page 24 deals with industrial employees, of whom I have given two cases. It says: —there is no special agreement governing the matters which may be the subject of arbitration, but when once an arbitration claim has been allowed the Government regards itself as pledged to give effect to the award. If that is Government policy and a Government pledge, how does the Chancellor justify rejecting the award in the case of the Admiralty employees this year?

One could develop this argument further, but I will mention only one rather mean piece of action by the Treasury. In the past, the procedure in the Civil Service Arbitration Tribunal has been that agreed terms of reference should be put to the Tribunal by both sides, but that if they cannot agree on the terms of reference, both versions should be put in, it then being a matter for the Civil Service Arbitration Tribunal to decide what the terms of reference are. The Treasury is now having the nerve to tell the staff side that it has to agree on the terms of the disagreement. In other words, the two sides cannot put in their own versions of what the terms of reference should be, but one side, namely, the Treasury, will have a veto on what goes before the Tribunal. That, of course, means that if the staff side wants to put forward a particular claim and if the Government, the official side, disagrees about the formulation of that claim, it will have an absolute veto on that claim going before the Tribunal.

I have only two more questions to put before turning to another subject, but these are questions on which I want answers tonight. What is the position of the probation officers, whose settlement has lagged for a very long time? Secondly, we want to know whether the question of the pay of the troops, under the Grigg Report, which was based on the same Civil Service principle of comparability, is also affected by the pay pause and the wages freeze. We hope that we shall be told quite plainly by the Chancellor tonight what the position is on both of those items. I now turn to the question of the Burnham Committee and the teachers' pay claim. Here, again, for the moment I am dealing purely with procedure and not with the merits of the case, or its bearing on educational policy. The Government's rejection of Burnham was meant as a symbolic act in the image it sought to create in the money changing centres of the world. For the teachers it has proved far more than merely symbolic. For the first time in forty-two years the Government have rejected a Burnham decision, and we are now told that the machinery is all wrong.

No human agency is perfect, but why did the Government have to wait until they got an award which they did not like before deciding that the machinery was wrong? If this was their view, why did not the Minister propose before July that there should be proper consultation with the bodies concerned on the future of the machinery? I ask the Minister of Education specifically whether he came to his view before July, because, if he did, why did he not say so then?

The truth, of course, is that Burnham produced an answer inconvenient to the Government at a particularly inconvenient time, when sterling was under heavy pressure and when the Government were going cap in hand to borrow £700 million. There was nothing that they could do about industrial wages at that time, so they lashed out at the teachers who happened to be nearest and within their control and, suddenly and at the same moment, they decided that the machinery was all wrong—the referee has awarded a penalty against the home team so we shoot the referee, Spanish style. I will come later to the devastating effects of this behaviour on the educational system and on morale, but for the moment I am concerned purely with procedure.

Never before has there been interference in this way—I do not think that that will be contested. I remind the House of the words of the Home Secretary when he was Minister of Education. Addressing the teachers he said: I think it is most important that it should be made plain on my behalf, also on behalf of any of my successors in office, and on the part of the Government, that it is no normal part of the duties of a Minister to resolve the differences which have arisen between the Panels, and I should not be at all surprised if you would warmly agree with me that that was the right interpretation of the Burnham machinery and the right attitude that both sides should take up in the future in regard to the Government of the day… You would be making an even greater mistake than the Government if you were to regard it as any part of the general duties of a Government to regulate the conditions and rewards of those who serve in any non-State regulated branch of our national life. I, personally, should very much regret it, and it would go right against the grain of some of my most fundamental ideas… Now just as I, on my side, would regret any attempt made by the Government to dictate the salaries of teachers, or to decide them, similarly I should equally regret—as I presume you would—the giving up of this excellent machinery and a return to the system of individual bargaining which was no unsatisfactory in the past before this machinery came into being… Those are the words of the Home Secretary. Perhaps unique among the right hon. Gentleman's pronouncements, they are incapable of two or more interpretations. They are capable of only one. They are uncharacteristically clear and unambiguous. What is more, they were made on behalf of any of my successors in office including this one. Does the right hon. Gentleman, as a Member of the Cabinet, with the responsibility which we understand he now has, endorse the decision of the present Minister to re-write the award and then bulldoze it through?

The Minister's decision met strong opposition from both the teachers and the local authority representatives. In a fit of petulance, in the middle of the Recess, when Parliament was not sitting, he announced that he would introduce legislation to force it through. The House knows the rest of the story. Even the worm will turn, and at Brighton a most enthusiastic resolution endorsing Government educational policy was thrown out on its neck.

The Minister returned to London faced with a teaching profession more than half of which reluctantly felt that it had no alternative to industrial action, and the rest were no less dominated by bitter and smouldering resentment. Last week, after more blackmail by the right hon. Gentleman, both sides of the Burnham Committee agreed and bowed to the diktat. This was no voluntary agreement. Do not let us hear that from the Minister. It was the acceptance of an imposed settlement by men and women who had been bullied, browbeaten, blackmailed and bulldozed by a man who had the power to impose a settlement, but who, by this action revealed his unfitness ever to have been entrusted with that power.

Let them not claim that there was agreement. The action of the teachers and local authority representatives, highly controversial as it was among their constituents, was about as willing an acceptance as that by Dr. Benes of Hitler's diktat of Munich, so do not let us call it an agreed settlement.

I make two specific charges against the Minister. First, the final acceptance was achieved by a threat and deadline. The Minister told them that if they did not agree, legislation, unilaterally conceived, without consultation, to amend the whole Burnham machinery would be introduced on 31st October. I do not know what authority the Minister had for quoting that date. Legislation is the prerogative of this House and of another place, not of the Government. We are not yet a rubber stamp. No Minister has the right to involve this House in his seamy manoeuvrings, because, despite all the Government's attempts to devalue this House over the past year, we are still the House of Commons, and this House will not be used as an instrument in a blackmailing operation.

My second charge is that it was not only Parliamentary blackmail on which the Government replied. The Minister knew of the bitter resentment he had aroused in the teaching profession. His gamble was to count on the hope that teachers all over the country would put their dedication to their vocation and their duty to the children, as they conceived that duty, above their resentment and bitterness. I maintain that the Minister had no right to force on them this conflict of loyalties. There is something mean and essentially nauseating to every decent man and woman that he should seek to get out of the consequences of his action by appealing to a sense of loyalty, mission, and dedication which is far greater than his own.

I want to put a categorical question to the Minister, which must be answered. Putting on one side the blackmail, and the appeal to the loyalty of teachers, there was one other element in last week's negotiations. The teachers were promised by the other side that if this diktat were accepted new negotiations would begin next July with a view to an increase starting in April, 1963. An increase in teachers' salaries in election year is, of course, as predictable as an increase in National Assistance Board rates, a big Budget hand-out, or a crisis immediately the election is over. All this happened in 1959, too. In 1959 the teachers had two increases—one on 1st February, and the other, by a singular co-incidence, on 1st October, seven days before polling. The teachers may therefore feel that they have reason for confidence, but I want to know whether the Minister is involved in this offer by the local authorities.

Press briefing by the Government suggests that he is. A number of hon. Members have told deputations of teachers that if they accept the Minister's proposals now they will be doing better by 1963 than if Burnham had been implemented this year. I am sure that hon. Members did not say that on their own, without a little inspiration and a little briefing. Will the Minister say whether he authorised that offer by the local authorities' panel? Is he bound by it?

The Minister of Education (Sir David Eccles)

I made it clear that the Government were not bound by it. It was the local authorities' suggestion, and I told them that if economic circumstances had not cleared up it would not be possible to produce this new negotiation.

Mr. Wilson

In that case, the teachers were completely misled last week, and if they had known what the Minister has said I think that the Lobbies would have been a great deal more crowded this afternoon. The Minister still reserves the right, even at some electoral risk, once again to intervene, to reject the settlement, and to cook up one of his own. He has made a very important admission.

I turn now to another sphere, railway service. There was a meeting between the three railway unions and the British Transport Commission a week or two ago. On 10th March last year, the Prime Minister accepted the Guillebaud principle that railway wages and salaries should be determined on a basis of comparability with rewards in other industries. He said: The Government accept the objective underlying the Report of the Guillebaud Committee—that fair and reasonable wages should be paid to those engaged in the industry."—[OFFICIAL REPORT, 10th March, 1960; Vol. 619, c. 643.] Do the Government stand by the Prime Minister's declaration? I ask that because at that meeting earlier this month the British Transport Commission specifically repudiated the Guillebaud Committee.

I want to know what is happening. Has the British Transport Commission unilaterally thrown over the Prime Minister, or has the Minister of Transport, fresh from his triumphs on the North Atlantic, been quietly twisting Dr. Beeching's arm behind his back? The House is entitled to know. There are so many changes of basic Government policy about which even the House of Commons is not being told.

As my last illustration, I turn to wages councils. Here we are again in the sphere of the lowest paid workers in the country. In August, two of these councils, covering 125,000 workers in industrial canteens and wool reclamation, submitted proposals for increased pay and shorter hours. The Minister of Labour wrote to the councils asking them to reconsider their proposals and said that if they sent them back unaltered he would have to take note of the Chancellor's speech. He sent a similar letter to the council of road haulage workers who at that time had not made proposals, but I think was about to do so.

All three councils ignored the right hon. Gentleman's letter and resubmitted the claims, which the right hon. Gentleman accepted. There has been some mystery about the Minister's somersault in these cases. Were these special cases? Or was his bluff called? Perhaps the right hon. Gentleman wished to wound but feared a strike of lorry drivers, especially those engaged in petrol distribution.

What is the right hon. Gentleman going to do with the other wages councils? I think that there are six about to report. If he rejects them, let him realise that he will undermine confidence in the whole wages council machinery, with all that that means, and he will have used his heavy hand against some of the worst paid workers in the country.

Before I sit down, there are one or two general points that I need to make. It is obvious from the Amendment that the Chancellor is to move that he hopes to divert attention from the broken agreements upon which I have rightly concentrated to wider, if misconceived, aspects of policy. The first question relates to the principles which should govern the settlement of pay and conditions in the public sector. We once again assert that the State should be a model employer, that conditions in the public service should be not less eligible than those in private industry, and that salaries and wages should be maintained on a basis comparable with those in the rest of industry. Even in the past two years, when we thought comparability was accepted by the Government—with the acceptance of Guillebaud and Priestley—comparability has always involved a lag in practice. Negotiations take place on the basis of the rates in force in industry a year or so ago. Teachers, in fact, have had a double lag, because there is always a further delay between the settlement and the starting date. Now, to the "lag" is added the "pause", of indefinite and, so far, undefined duration.

The Government's attitude is that the public sector, being under their control, must be the whipping boy; restriction here, appeals elsewhere. It is a reflection of their broader policy—or prejudice—that essential investment in the public sector and social investment in schools, local authority housing and hospitals, are always made the whipping boy of the Government's doctrinaire refusal to restrain excrescences and excesses in the private sector. Which do the Government think are more important to our future—teachers or advertising agents? Government scientists or share pushers? These questions are being decided by the Government, by the action that they are taking.

Of course, the Government say that it is all to help exports. We have heard that before. We heard it in the Budget debate. But exports have languished because of the Government's policy and a lack of dynamism in industry. How do the Government think that exports will be helped by their vetoing a 2s. increase in the wage of a £9 a week Government employee on a sewage farm or in a military hospital? These actions will do nothing to help exports. In the all-important field of education they will harm our competitive position and our export trade.

How often have we said that if capital investment in British industry—in the physical tools of production—is essential, investment in education and the nation's children is, if anything, even more vital. What do the Government think is the effect of all this manoeuvring on the future of education? In the July Budget debate, within a few hours of the Chancellor's announcement: The Chancellor should realise that the smouldering, burning resentment which he has kindled by his action will inflame and embitter educational policies for as long as a Conservative Government cling to office."—[OFFICIAL REPORT, 26th July, 1961; Vol. 644, c. 448] Can anyone now deny that our warnings were justified? I go further. I do not know whether or not the Minister of Education had his heart in this operation. I do not know whether he was an enthusiastic or reluctant tool of a myopic Chancellor. That he was a tool there can be no doubt. His responsibilities to the nation and to the nation's children required him, once the Chancellor insisted on this exercise in sabotage, w resign. At least we could have said of him, as of King Charles, that nothing so became him in his life at the Ministry as his manner of leaving it. But now I tell him frankly that he has placed himself in a position where he can no longer lead the great educational drive that we all know to be essential if we are to meet the Soviet challenge and re-establish our place in the world.

He has passed the point of no return. There is no longer even a minimum of confidence in him to be found among those who have the jobs to do, whether in the schools or in educational administration. Always an irrelevance, he is now an encumbrance, and the best service —the only service—he can now render the educational system of this country is to go, quietly.

Lastly, I come to the issue on which the Chancellor will no doubt wish to concentrate. We know what he is to say. We know this speech of his. It is the only one that he has. If it were not for fear of wearying the House still further I would deliver it now, to save time, right down to the last slanted statistic and the last over-tired cliché—Scylla, Charybdis and all: "We must not pay ourselves in income more than the national increase in production"—

Sir Cyril Osborne (Louth) rose—

Mr. Wilson

It is painful enough for the House to forecast the Chancellor's speech, without forecasting that of the hon. Member.—"We have been increasing our standard of living too fast."—

Sir C. Osborne

What did you say in July?

Mr. Wilson

I said the same in July as I am saying now. He will say, "This is not an attack on wages; it is to defend wages". We shall get all that this afternoon.

The Government's Amendment deals with the relation of incomes and productivity. As I said in July, on behalf of the Opposition, the Labour Party and the Labour movement have never, whether in Government or Opposition, shirked the duty, when it was needed, of urging wage restraint. We have said time and time again that in the long run we cannot afford increases in any personal incomes, wages, salaries, dividends, and rents greater than the national increase in productivity. That is precisely why we say that the first priority is to increase production. There are two ways of doing it. The Government's approach is to hold production down, cripple productivity, and then try to tailor the wages system to fit it, using every instrument—deflation, high Bank Rate, broken agreements, short-time working, and even the threat of unemployment—to achieve their end.

I have been dealing with the public sector. The Chancellor is hoping to bring about a similar freeze in the private sector by persuading, or squeezing, employers into following his example. We cannot say that we were not warned. In 1947 the Conservative Party produced a document—now largely unobtainable—called "The Industrial Charter". I could divert the House for some time by quotations from it, but I shall give only one. It said: Conservatism is a faith and a way of life which seeks to establish the right of the individual to develop his or her personality. We intend to preach that doctrine both in Parliament and out of it. We desire to work by example and precept as much as, or more than, by penalty or sanction. We propose to establish a series of standards in the field of industrial relations to which we are convinced employers must conform. That is exactly what he is doing. He is establishing a lower standard, as an employer, than we will find in any sector of private industry, and expecting the rest of industry to conform to it.

Already, all over the country, employers are getting tougher, preparing for a bitter show-down. We warn the Government with all the emphasis at our command, while there is yet time, that if the Chancellor's policies and pressures lead to intensified strife, with all the damage it would entail to this country and its export orders, the responsibility will be his. Do not let him blame the trade unions. Do not let him look for Communist plots; he will not need them. The Chancellor's policy plays right into the hands of trouble makers and fomenters of unofficial strikes. This is the Lloyd-Gollan axis. They are not allies, but they are certainly co-belligerents in an assault on industrial peace and the established machinery for negotiation and arbitration in British industry.

We have made it clear. A Government are entitled to ask for restraint if, but only if, they pursue policies of expanding production, of purposively strengthening exports and our essential industries, and, above all, when precept and example, legislative and budgetary policies are inspired by a sense of social justice. He enforces wage restraint in the public sector, even to the point of dishonouring pledges and agreements. He appeals to property developers and those who finance them to alter their behaviour. Last week we read of a £2 million advance by a big insurance company for property development, and the week before of a big property deal between City Centre Properties and the biggest Bingo operators in the country.

As for his sense of social justice, we have seen in April £35 a week additional spending power given to the £10,000 a year man, and in September an assertion that the country will be ruined if we pay 2s. a week more to men getting less than £9 per week. When the time comes, we shall be able with confidence to make an appeal to the nation that this Chancellor and this Government have lost the moral right to make. We shall not appeal in vain, because our hands are clean.

5.51 p.m.

The Chancellor of the Exchequer (Mr. Selwyn Lloyd)

I beg to move, to leave out from "House" to the end of the Question and to add instead thereof: welcomes the lead given by Her Majesty's Government in the measures taken to safeguard the economic interests of the nation by seeking to secure a more realistic relationship between increases in wages and salaries and increases in national productivity". In these matters, the Government have two sets of responsibilities. First, they have their responsibilities as employers, and, secondly, those as trustees for the community as a whole and as the guardians of the national interest. Of these two sets of responsibilities, the second must prevail. Therefore, the essential background to this debate and to the criticisms of Government actions, following upon my statement of 25th July, is whether or not it is accepted that action was necessary then for the Government to fulfil their responsibilities for the national interest. On that, surely, there can be little doubt.

The balance of payments, although improving, was still unsatisfactory. From March onwards, there had been a heavy strain on the reserves, and increases in costs and in demand at home were frustrating exports. It cannot be too widely understood that we depend for our future growth on visible exports. The principal cause of the increase in costs was the increase in personal incomes. I gave the figures on 25th July showing that the increase of personal incomes for the financial year 1960–61 had been £1,450 million, compared with a figure of £650 million for the increase in production.

Revised figures now available show that the figures, in fact, were £1,620 million for the increase in personal incomes, compared with £630 million for the increase in production. Of the £1,450 million, £1,030 million was wages and salaries, and of the £1,620 million, which is the revised figure, £1,200 million was wages and salaries. In the second quarter of 1961, the wages and salaries bill went up by nearly 10 per cent. as compared with the second quarter of the previous year.

The causes of inflation in this country have been discussed at length, but one of the most impartial analyses of the whole subject was that published by O.E.E.C. in May, 1961. After studying the reasons for rising prices in 20 or so O.E.E.C. countries, it came to the conclusion that in six of them, among them the United Kingdom and the United States of America, excessive wage increases constituted both an important and independent inflationary force. My submission to the House is that in these circumstances it was necessary for the Government to act. If we had not acted, inflation would have continued, costs and prices would have risen and there would be less chance of selling exports. Increased demand at home would have tended to attract more imports, and the effect upon the balance of payments, and therefore on sterling, would have been most damaging.

The time for asking for restraint had passed. Nor could matters be solely dealt with by increasing the budgetary surplus. I maintain that action was necessary in the interests of the country as a whole and of those most affected by inflation; in other words, the people who live on their savings, on small fixed incomes, and those classes of wage and salary earners whose earnings in these inflationary conditions are the slowest to react. I believe that there is a wide recognition that action was necessary, both in the interests of the country as a whole and in the interests of people who appear at first sight to be adversely affected. The right hon. Member for Huyton (Mr. H. Wilson) talked to us today about our support for wage restraint. I am told that the only cheer on the first day of the Labour Party conference was when a certain person said he did not believe in wage restraint in any shape or form, and that was most vociferously applauded by the Labour people.

Mr. H. Wilson

I used there exactly the same words as I used this afternoon, and that was cheered because they realised that it was based on our sense of fair play, and not on a unilateral, one-sided policy.

Mr. Lloyd

In other words they had two policies; they cheered both policies. I do not believe that the right hon. Gentleman can dispute what I have said. The first applause which the audience gave on the first day was to the statement that in no shape or form would they stand for any kind of wage restraint.

Now for the criticisms of the action taken. It is suggested, indeed the right hon. Gentleman suggested, that we have broken agreements, that we have interfered with existing machinery in respect of teachers' salaries, and have shown an intention to disregard the findings of the arbitration machinery and wages councils. If all that was necessary in the public interest, I would not shrink from it for fear of being unpopular, however unpleasant, for the Government's responsibility as guardians of the public interest is predominant. But, in fact, the right hon. Gentleman's statement is a complete travesty of the facts.

I said on 25th July that where commitments had already been entered into they should be met, and I propose to give some examples of the way in which we have carried out existing commitments.

The arbitration award on the pay of tilt; professional engineers in the Post Office, which was mad: before 25th July, has been put into effect with restrospection to 1st August, 1958. The award to the Post Office sales staff, made after 25th July, but on a claim which was heard by the Tribunal before that date, has also been put into effect, with retrospection to 1st January, 1960. Other Civil Service grades are receiving their consequential increases following the arbitration award to the general service clerical officers. Negotiations are proceeding on surveys of the Pay Research Unit which is now reaching the end of its first programme, and only last Thursday the Treasury announced a settlement, to be put into effect immediately on the pay of the three scientific classes, a settlement which was part of the first round of Pay Research Unit surveys. That increased the pay of the scientific assistants to the tune of £220,000 a year, and gave them £400,000 in back pay.

We have also stood by certain offers, even though they have been rejected. For example, we are abiding by our offer of a 5½ per cent. increase from 1st January of this year, costing nearly £4 million a year, to the engineers represented by the Post Office Engineering Union, and in due course we shall put into effect the additional amounts, in some cases an additional 1 per cent., in others an additional 2 per cent, awarded last week by the Civil Service Arbitration Tribunal.

The Government have stood by their offer of an 8s. a week increase to the Admiralty storehousemen from 1st October, 1960. In due course, we will put into effect the additional 12s. a week awarded by the arbitrators, but we have honoured our commitments by giving the 8s. a week increase from the date which we had offered—1st October, 1960, as compared with February, 1961, the date fixed by the Industrial Court. In the Health Service arbitration awards made before the 25th July have been put into effect for nurses and hospital chaplains. Commitments entered into before the beginning of the wage pause for increases in pay for senior staff in executive councils, for building workers and for radiographers have also been put into effect. We have carefully tried to carry out our existing undertakings and commitments.

In the Civil Service and in the Health Service there has been no interruption of the normal negotiating machinery on current claims. They can be discussed on their merits and there is no obstacle to the parties agreeing settlements giving increases and no denial of access to arbitration. What the Government have done is to reserve to themselves the decision as to the date when any increases agreed or awarded should be put into effect. That is what we have done and that is what we are entitled to do on the grounds of public policy. I maintain that if we had not done that we should have been failing in our duty as guardians of the national interest. The Government therefore as an employer intends the normal machinery to work to the greatest possible extent consistent with the pause, and the pause is necessary if the interests of the nation as a whole are to be safeguarded.

The right hon. Gentleman talked about teachers' salaries. I wish to say something about teachers' salaries. There is a great deal of public comment on the action of the teachers' representatives on the Burnham Committee. I think it a great mistake to describe what has happened either as a victory or a defeat for either side. There were two distinct matters in issue. First, the amount of the increase, and, secondly, the arrange-ments in the future for negotiating teachers' salaries. The House will remember that the teachers claimed increases which would have cost £110 million a year. The Burnham Committee reached agreement on figures giving an increase amounting to £47,500,000 a year. The Government never agreed to this figure. But, in any case, it was rejected by the National Union of Teachers, which commands an absolute majority on the Teachers' Panel of the Burnham Committee.

The situation arising from this would have been considered on 27th July. On 25th July I made my statement about the stringent measures to be taken to support sterling and about the pause, and we thought it right to tell the Burnham Committee at that stage that the Government must place a limit on what increase could be given. That limit was £42 million, a 14.6 per cent. increase overall as compared with the 16.25 per cent. increase involved in the £47,500,000. After the Government had announced their intention to set a limit, the teachers quickly accepted the £47,500,000, but the Government have adhered to the figure of £42 million. This was not action directed against the teaching profession—[HoN. MEMBERS: Oh."] I still see publicly ventilated the idea that somehow the teachers are suffering from a cut in their salaries. In fact, they have got the largest increase which they have ever obtained, an increase of £42 million. The question of the amount is now settled with, as I believe, wisdom and common sense on the part of the teachers' representatives.

I myself have found more interest on the part of the teachers in what they describe as the attack on the Burnham Committee. The teachers seem to take the view that only procedures adopted by the Committee in different economic circumstances can ever be described as free negotiations. But circumstances have changed very much and the existing position under which the Government who pay 55 per cent. of the cost have no real say in the negotiations and can only accept or reject the final result, clearly requires revision. My right hon. Friend the Minister of Education intends to make proposals to the House to revise the present crude power of acceptance or rejection, but he has agreed not to introduce this legislation until after the Christmas Recess in order to give more time to discuss the future working of the Burnham Committee.

Mr. George Thomas (Cardiff, West) rose—

Mr. Lloyd

May I finish what I have to say about the teachers?

It is not the powers but the use to be made of them which I believe is really important. I think that fact is widely understood. It has been suggested that the Government desire to reduce the Burnham Committee to a cipher and dictate to it from the start the total sum within which it should operate and the way in which the money should be distributed. That suggestion is quite unjustified. We wish to retain the Burnham Committee with the fullest measure of responsibility to determine future increases in salary, with due regard to the Government's interest as a provider of funds, and also to the national interest. I say this because it is surely common sense that with the changes in economic events and financial circumstances of the country since the Burnham Committee was set up in its present form just after the war, the Government should be associated in a constructive way with discussions leading to the fixing of teachers' salaries. I think that it has been maintained by this House that a partnership between teachers, local authorities and the Government is the essence of the whole education service; and we believe that if a sensible procedure could be worked out to this end in relation to salaries, not only would the working of the machinery be greatly improved, but we should be able to avoid the stresses and strains which have occurred on this occasion. But I maintain again that the proposition that those who provide 55 per cent. of the moneys for this service should be excluded from a say in the negotiations does not make sense.

Mr. G. Thomas

Would the Chancellor tell the House whether the Government have now dropped the suggestion or the demand that they should tell the Burnham Committee the overall figure which is to be used for an increase in teachers' salaries? Have the Govern- ment now abandoned the position, which they once adopted, that they must tell the local authorities and the teachers how much their share is to be?

Mr. Lloyd

Regarding the present negotiations, the position is that the matter of the amount is settled at £42 million and has been accepted. So far as the future is concerned, that is a matter to be worked out when my right hon. Friend makes his proposals. That is the time to take up that matter. I have said that there is no intention to use this as a means of dictating to the teachers or to the Burnham Committee. But I say again that those who provide 55 per cent. of the money must have a say in these negotiations.

The right hon. Member for Huyton referred to the question of the M-rate increase which in the normal case would have been paid on 1st October. It is true that we have deferred the payment of that increase. We did it after the fullest consideration of the particular circumstances. We also had to consider what the position would be if we did not defer this payment. It would have been extremely difficult to refuse an increase becoming due to other Government industrial employees. The wages of Government industrial employees including the M-rate workers—about 300,000 in all—are settled in accordance with the fair wages concept which the Government have accepted in principle.

It has been stated that the M-rate agreement is different. It is a written agreement prescribing the basis for calculating the wages of a particular group of workers in accordance with the fair wages principle. It is in this form because the calculation of the wages is complicated and involves the consideration of thirty-four different rates in outside industry. But the essential fact is that the same principle applies to all Government industrial workers and I felt as a matter of fairness that I could hardly exempt this group of employees from the policy rendered necessary in the circumstances which I have described, simply because their wage rate was determined under a procedural agreement, while others identically situated were being asked to go without.

My right hon. Friend the Prime Minister with the Minister of Labour and myself did see Sir Thomas Williamson and Mr. Cousins on this matter last Thursday. Both sides of the matter were ventilated and we agreed to consider the point of view of the other side. This we are doing at present in the context of the national need.

Mr. H. Wilson

The right hon. Gentleman said that he felt he could not operate this procedure without being unfair to other people. Whatever he may or may not have felt, does he, or does he not, agree that there is a binding obligation on the Government to have this review every six months?

Mr. Lloyd

I do not admit that there is a binding obligation on the Government. I maintain that the over-riding consideration, to which I have referred, prevails in this case and it would have been unfair to select this particular group for preferential treatment. A certain point of view was put forward in regard to how the pause might apply to this agreement and we are considering at present what has been said.

My right hon. Friend the Minister of Labour will deal with the points raised, but it was suggested that the Government had disregarded the findings of wages councils. That is not so. In my belief the Minister of Labour has carried out his statutory responsibilities and fixed the dates with due regard to the element of pause and prior commitment.

The right hon. Member for Huyton suggested that we have been unfair in what we have done and that we have discriminated against wage and salary earners in favour of profits and dividends. The Profits Tax was increased in the Budgets of 1960 and 1961, and indeed, profits were already falling before I took the measures I announced on 25th July.

Company profits in the first half of this year were significantly lower than a year ago, and this was on capital employed which had risen in the interval. Gross trading profits of companies—that is, profits before providing for depreciation —were £1,695 million in the first half of 1961 compared with £1,833 million in the first half of 1960. That is a fall of over 7 per cent. With the falling away in profits, the steeply rising trend of dividends in 1960 flattened out in the first part of 1961 and the continuing fall in profits will undoubtedly exert a further moderating influence.

In addition to this, my appeal for a pause in increases in dividends has obviously had an effect. I have also undertaken that certain transactions such as short-term deals on the Stock Exchange and in property which are intended to bring in spending money and incomes will be taxed as such. I have promised to bring forward legislation to deal with this and I will bring that legislation forward as soon as it is ready. I have noted the promise of the right hon. Member to facilitate the passage of such legislation when it is brought forward.

Mr. Harold Davies (Leek)

In view of the Chancellor's statement, will he look at the exaggerated rates in land values when making these promises across the Floor of the House?

Mr. Lloyd

I have said quite clearly that I am to bring in legislation to deal with quick profits made in property. I said in my Budget speech that I have always believed that these transactions yielded proceeds in the nature of income rather than of capital and should be taxed as such. Against that background —the fall in profits, limitation of dividends and the promise I have given to deal with this kind of short-term transaction—it is ridiculous to suggest that the measures I put forward were a discriminatory attack on wages.

Then the accusation was made that I have discriminated against the public sector and done nothing about the private sector. That is not true. In fact, part of the indictment made by the right hon. Member was that I hoped what I had done in the public sector would spread to the private sector. He is absolutely right; that is exactly what I hope will happen. The statement on 25th July made it clear that the principles of a pause should apply also in the private sector and other parts of the public sector outside the immediate control of the Government and should apply not only to wages and salaries, but to all personal incomes.

I think that is the only fair approach. The Government could not have taken a different line from that which they were urging on the country as a whole. The action of the Government as an employer was based on a belief that those responsible for reaching decisions outside Government control would pay due regard to the needs of the national situation. What has happened since 25th July has, I believe, confirmed that view, and in wages and salaries there has been a widespread response to my statement that a pause is needed. It is true that there have been some wage increases, but the statement I made recognised that there would be particular cases where commitments had been entered into and had to be honoured. That, of course, will no doubt apply in the private sector as in the public sector.

I want now to deal with what I regard as the most important part of the case before the House this afternoon. That is, what is to be the future policy? In the past three months I have discussed the merits and demerits of the policy of the pause with a number of representatives of the Civil Service and others. Whatever happened on the first day at Blackpool, I have found side acceptance of the thesis—the right hon. Member today, I thought, rather sustained that view—that personal incomes should not increase ahead of production, provided that the public sector is not picked out for discriminatory treatment.

I believe, for example, that the principal fear of the teachers is lest they should be specially discriminated against within the public sector over procedures. Certainly neither of these is intended by the Government. But clearly, long-term intentions are very important for the acceptance of the pause and of restraint. The pause is certainly not a lasting solution to the problem of rising costs. It is necessary, I believe, to cover the immediate situation, from which I hope the Government, employers and employees can develop procedures for securing a more sensible relationship between the increase in wages and salaries and other incomes and increases in national productivity.

Any long-term policy will have to be addressed to securing restraint in income. Unless we do this we shall have a much slower rate of growth in the economy than would otherwise be possible. At the same time, the Government are not neglecting other methods of increasing national productivity. I am engaged in discussions with both sides of industry about new machinery designed to help in the acceleration of the growth of the national economy.

These are the most important domestic issues of the nineteen-sixties. I had thought that the answer to this problem was stable consumer prices. Once that had been obtained restraint over claims for increased personal incomes would be comparatively easy to achieve. But we did achieve from 1958 to mid-1960 —for two and a half years—stability in consumer prices, yet over this period increases in personal incomes continued well ahead of increases in production. There must be a proper relationship, and it would be unjust to those in Government employ if the same sort of moderation were not displayed in the private as well as the public sector.

I am asked, how can that be achieved? It cannot be a matter for Government decree; the Government cannot dictate a solution. This needs to be worked out in agreement with both sides of industry. Take the present procedures for negotiation. Are they, as the Economisthas suggested, built-in producers of inflation? Is it true that all trade union negotiators think of a figure, double it and put it forward, confident that they will get half of what they have asked? How in negotiation do we provide for the public interest to be considered?

If the doctrine of comparability is pushed to its logical conclusion in every set of circumstances, it could bring disaster upon those whom it is designed to help. Supposing in the process of collective bargaining a particular group has exploited its scarcity value to extract an excessive reward, is it right that comparability should at once apply and that in the interest of strict comparability all other wages should move accordingly? If we recognise facts, something like this has already been happening, and it can lead to disaster.

We shall certainly have to consider with both sides of industry whether there should be some sort of guiding light—in other words, an official assessment of what the economy can sustain in the way of increases in wages and salaries and other incomes.

There is no great difficulty, perhaps, in arriving at a view on the likely rate in the growth of national productivity, but there are many practical problems to be worked out in regard to personal incomes. How would it be possible under such an assessment to secure proper relativities among wage and salary earners, and how would it be possible to secure the most effective deployment of our manpower? How do we reconcile the interests of those whose productivity can be measured and those who work in industries where productivity and increases in it cannot be measured? How do we reconcile the interests of those who work in industries where there is great scope for increasing productivity, for example because of new investment, with those who work in industries where, in the nature of things, productivity increases extremely slowly? Most important of all, how does one secure that answers in principle are translated into action in the practical world?

One thing is absolutely clear—that thought must be given to the modification of traditional attitudes and practices, certainly the modification of some of them, so that the undoubted benefits of our existing system can be preserved while the damaging consequences in the way of inflation are eliminated.

The breathing space afforded by the pause is being used for a re-examination of all these questions with both sides of industry. I am determined that a new approach to these matters should be made. I say again that the Government alone cannot solve this problem It is not a matter for Government dictation. The co-operation of all concerned will be essential.

But in resisting the Motion and in moving the Amendment, I would say, finally, that I know quite well that what I have done has been unpopular. It has been unpleasant to do it. It has involved changing certain practices in the determination of wages and salaries. But I should not have done it unless I had been absolutely convinced that it was necessary to do it both in the national interest and also to the long-term advantage of those who apparently are the first to suffer, the wage and salary earners in the public service. I believe that the understanding of that is steadily increasing.

6.24 p.m.

Mr. Stan Awbery (Bristol, Central)

We have been listening in the last half-hour to a blueprint of what the Government intend to do with the industrial machine of the country. Those in the forefront of the attack at present are the members of the teaching profession. Since the Elementary Education Act, 1870, the teaching profession has never been so angry or so confused or in such a turbulent mood as it is at present. That is the consequence of the Minister of Education's action, and I want to prove that his action is behind the present situation.

This decision in the teaching profession will cost the teachers £5½ million, but I prophesy that it will cost the Government far more. The acceptance by the teaching profession of the Government's award is not a solution to the problem. There will be an aftermath. It has aggravated difficulty in the teaching profession, and 210,000 teachers are dissatisfied with what the Minister has done. He has used the political machine to interfere with the industrial machine —and I hope that he will learn the lesson. He must not whine when he finds that the workers are learning to use the political machine to save their position in industry.

A few weeks ago the Minister sent out a circular which, I think, is disgraceful. He said that it was issued after consultation with the teachers. I read it very carefully. I am satisfied that this circular, dated 5th October, is the death-knell of the Burnham Committee and that it was the Minister's intention to destroy that Committee. By his action he has undermined and put a bomb under the whole machine.

According to the circular the Minister does not want to have a veto. He said that he simply wants a sanction. But then he proceeded to operate a veto and to determine that the amount of the award should be £42 million, which is to be the ceiling because the Government cannot afford any more. I do not see the Secretary of State for War here to say that we must fix a ceiling to our expenditure on arms. Only for the teaching profession and the Health Service is there to be a ceiling. The Minister must do away with this ceiling and deal with the profession according to the work which they do.

In his circular the right hon. and learned Gentleman says that he is anxious to obtain the opinions of the teachers and the local authorities. As if he has rot had them! He has been dealing with the local authorities and the Burnham Committee for many years but now, when a decision has been taken, he says that he wants to know their views. He knows them. He knows what the teachers want, and he should grant it.

The Minister of Education also says—I agree with him—that it may be necessary to have a fresh look at the position of the Burnham Committee. If this is to be done, why not meet the profession and the representatives of the education committees, discuss the matter with them and revise the Committee, if necessary, after consultation with those in the profession who understand all about it? If it is necessary to revise the machinery, by all means let it be done.

The right hon. Minister has also said that this is to be an attack upon all wage machinery. I am rather concerned about the action of the Chancellor as regards the structure of our industrial negotiating machinery. There was a time when there was no machine to be destroyed. It had to be built up. It was built up by the arduous, strenuous work of the industrial workers. It was the manual workers first. Then the white collar workers formed their industrial machinery. It was a slow process. At first, employers refused. I have heard hon. Members opposite say, "We recognised the trade unions first. We established them".

Mr. William Yates (The Wrekin)

Certainly.

Mr. Awbery

The employers did not. I have had twenty-five years' experience in the trade union movement. Never in those twenty-five years did I hear an employer agree to meet the representatives of the union until the union became strong enough to force the employer to recognise it. However, after long years of arduous work, a negotiating machine was built up. Some of our men do not understand what was involved, because they did not go through it. Some understand it but have forgotten it, because it was so long ago.

It is a machine I helped to create in my early days in the industrial movement. It is a machine which tried to bring about amicable understanding and remove the necessity for strife. I well remember meetings being held up and down the country in 1917, when the Government sent out lecturers and paid them large fees to advise the workers to set up Whitley councils and joint industrial councils. The councils were set up. We have had many years' experience of them, but the Conservative Party is now endeavouring to break the machine which was set up after many years laborious work.

The spearhead of the attack is the teaching profession, but the general attack is upon the principle of collective bargaining and the standard method of negotiation. We have heard hon. Members opposite speak of men who are using wildcat methods. The Chancellor of the Exchequer is using mad dog methods to destroy the machine. I warn him now that the industrial movement, which spent so much of its time and effort in building up the machine, will not tolerate his action. It will not succumb to his attempt to destroy this machine.

I am not concerned so much today about the £110 million, the £47½, million, or the £42½ million which has been offered. I am deeply concerned about the destruction of the confidence of the working man in the negotiating machine. If the machine is destroyed by the Government, I warn them that they will have, not one strike, but a series of strikes continually up and down the Country. The teachers accepted the negotiating machine. The Burnham Committee has been in operation for forty-two years. In all that time there has not been one complaint about a decision of the Committee. The teachers have always accepted the Committee and its decisions in good faith.

Mr. G. Thomas

And every other Government have.

Mr. Awbery

Every Government have accepted the decisions of the Burnham Committee. The teachers gave evidence of their faith by agreeing to accept onehalf—£47½ million out of the £110 million they asked for. They displayed a great desire for peace in their profession.

I am not a thought reader, but I have a suspicion that the Minister had this in his mind, "Now is the time to attack. The teaching profession has never struck before. It has never taken any industrial action before and it will not do so on this occasion. Therefore, the teachers will accept my offer and say, 'Thank you'". He found that that was not so.

The Minister has stirred up in this profession, and is stirring up in other professions, a smouldering fire. It will burst out despite the agreement he has recently arrived at. The fire has not been extinguished. It will take a long time to restore the good will and repair the damage which has been done.

Why did the Government select the teaching profession as the spearhead for their attack? The profession exerts a profound influence on the character of the nation. It is moulding the next generation. It is not an inflammable mob easily moved to action. That may be why the Minister made his attack. The blow he has dealt has been a deadly one. I ask him to reconsider what he has done and meet the profession again.

I shall now speak not merely for the teaching profession, but for all industrial workers. We believe in the sanctity of agreements. When an agreement is made by a trade union, the union endeavours to carry out the agreement in its entirety. The Minister has now destroyed not only the Burnham Committee, but the whole of our negotiating machine. He has violated all justice and all fair play in the industrial world. He has also created a dangerous and difficult mood among the workers. As I move among the men, I find that the tide of their anger is flowing strongly, and can be seen in some places more than in others. It is to be seen not only among the teachers, but in the industrial areas. They are anxious to do something serious. The teachers in Bristol are serious about this, and are to discuss the matter further on Wednesday night.

The Minister does not seem to understand that he has created this turmoil in this profession—I wish that his right hon. Friend the Minister of Labour would tell them why this turmoil has arisen. The Minister has dragged the industrial machine into politics, and must not whine if, in the future, as I hope they will, the teachers show that they have learned their lesson, and use their political machine at the next General Election.

I have to tell the teachers that part of the responsibility for this situation rests with them. They could have prevented it two years ago, at the last General Election. The Minister has struck a mortal blow at the machinery. I understand that he is to bring a Bill before this House—

Mr. G. Thomas

After Christmas.

Mr. Awbery

—presently, which will ask the House to dig the grave of the Burnham Committee. From that Dispatch Box he will then say, "Dust to dust, ashes to ashes"—and away goes that Committee.

Has the Minister thought of what he will put in that Committee's place? As far as I can see, he seems to be very satisfied with the action he has taken. When he replied to a question a few moments ago I thought I saw a challenging gleam in his eye, as though to say, "I have done it, and I will put up with the consequences." He must not be too confident. Resentment and exasperation amongst both teachers and other workers are boiling up.

There is only one thing for him to do—he should accept the award of the Burnham Committee. He should show in that way that he has confidence in that machinery until he alters it. Let the Committee do the work for which it was set up, which is to determine the level of teachers' wages. Let the joint industrial councils determine the wages in their respective industries.

There are at present ten industrial council decisions going through the pipeline, but if we are to accept what the Minister has said today as the pattern on which the Government intend to work, the Minister will refuse to accept all those decisions. Those decisions involve 3,500,000 men, so the Minister can imagine what he will stir up if he refuses to grant what the councils have decided.

These councils and committees must enjoy a high degree of the confidence not only of the employers' side, but of the workers' side. The Minister has destroyed that confidence by his action and has put back the clock of industrial relationships by fifty years. If the Government want to do away with this machinery and compel the workers on every occasion to use the strike weapon to determine matters, let them tell the men, "You will have to fight every time you want an increase because we will not agree, whatever is recommended by the machinery." Let the Minister tell the industrial workers what he has in his mind.

The Tory Party does not treat its friends in the same way. Among its friends, I do not see any dividend restraint; I do not see any capital gains or rent control; I do not see any action being taken against the rising cost of land. The Tories do not send things like that to a Burnham Committee to decide. The Tory Party helps its friends with both hands, but when members of the professions and the industrial workers are involved it pulls back its hands. The figures that the right hon. and learned Gentleman gave a few moments ago are not satisfactory. I have seen them. Last year, profits increased by £205 million—that is how the Tory Party helps its friends. The party opposite has drawn politics into industry, and now we, in our turn, must learn to use the same method to put our own friends in the right place.

The trade union movement will not accept a wage freeze or a wage pause—call it what one will. That is contrary to the traditions of the movement, and its members will not accept what the Minister suggests. The Government must cease to interfere with the free negotiating machinery that has been set up.

The Burnham Committee is a statutory body. It was orgininally formed in 1917, and re-formed in 1944 in its present structure. There is no provisions in it for arbitration. Only when both sides of the Committee agree is agreement recorded. In this case, agreement has been recorded, and sent to the Minister. The responsibility now is not with the teachers or with the representatives of the education authorities. The responsibility is now the Minister's, and the Minister must carry it.

By the constitution of the Committee all he is called upon to do is to ratify the decision of the two sides. Even at this late hour—and it is not too late—I ask him to agree to meet the teachers again, to discuss the problem with them, and to accept the decision of the Burnham Committee. I ask him to show that he still has faith in that machinery and will, in future, let not only the Burnham Committee but the joint negotiating committees in all other industries work as they were intended to work.

6.47 p.m.

Mr. Julian Ridsdale (Harwich)

I hope that the hon. Member for Bristol, Central (Mr. Awbery) will forgive me if I do not reply to all his arguments, but I say at once that I am sure that it is not the Government's intention to break the machinery of collective bargaining. Certainly, in the circumstances of the moment, the Government may wish to modify some of the machinery and bring it up to date in terms of full employment. A lot of the machinery for negotiating agreements was brought about in times of mass unemployment, but our problem today is how to negotiate in conditions of full employment, and not in times of mass unemployment—

Mr. Awbery

In the document from which I quoted, the Minister said that what was required was a fresh look at increases in incomes of all kinds, not only in the teaching profession but in every industry.

Mr. Ridsdale

I will not follow the hon. Gentleman further. In this debate it is important, before going on to discuss the details which are the burden of the Opposition's Amendment, to he clear in our minds about the present economic situation which has forced the Government to take the measures they have.

In his general review, the Chancellor presented two facts which stood out most clearly in my mind. The first is that during the last ten years incomes have risen by £10,000 million and national output by £3,000 million. Last year—and this should be underlined—far from the had figure it was of incomes rising by £1,450 million, the Chancellor told us this afternoon that incomes were rising by £1,630 million and, on production, the figure we were given previously was £650 million and today we heard that the figure is £630 million.

With such a disparity between incomes and productivity it is not a surprise when one looks at our costs in the export markets between 1956 and 1960 to find that those costs have gone up by 10 per cent. while the costs of Germany during that period have risen by only 2 per cent. and in the Netherlands they have gone down by 1 per cent. and have also gone down in Switzerland by as much as 4 per cent.

All this, of course, has led to speculation about the £ and a bad deficit on our overseas trade. I do not want to repeat to the House the many details of the economic arguments which the Chancellor has already presented and how, in the past, we have used hire-purchase arrangements, at other times when it was thought worth while we have raised the Bank Rate, at other times, when it was thought necessary, banks have been given directives to restrain advances, or how, when it was thought necessary, the Government have budgeted for big surpluses.

What is evident is that these measures have had an effect, but that they have not been enough. They have been palliatives in our economic situation, but they have not been cures. Incomes have been rising faster than production and when that happens, unless one has an import programme on a very large scale, prices are bound to rise. But the difficulty is that in our precarious position today we cannot afford to have an import programme on a large scale unless it is matched by an adequate export programme.

One cannot blame the trade unions alone for the position in which we find ourselves today. After all, it is the task of the trade union leaders to negotiate for increased wages which the supply of goods and money make possible. The Government must take full share of responsibility for the way in which Government expenditure has increased ahead of production, for the way they have invested some of the scarce capital resources of the nation—and this was referred to in an excellent article in the Sunday Timesby my right hon. Friend the Member for Flint, West (Mr. Birch)—particularly in coal mining and atomic energy.

I welcome, at long last, the appointment of a Cabinet Minister to look after the serious aspect of our economic affairs.. The wage pause and a more realistic financial policy must come together. The one must be the handmaiden of the other. This, indeed, was the message of Sir Robert Hall, in his two excellent articles recently in the Economist.I hope that this lesson has at long last been learned by the Government, who, for far too long, have created conditions in which money incomes have been able to increase ahead of productivity.

By last July it was evident that the Government were poised between the dilemma of devaluing sterling or calling a halt to this kind of money incomes increase in all sections of the economy—something which has been on and off with us since the war. To their credit, the Government chose the latter course and I shall do all I can to support them in this difficult task and to help, at this late hour, all I can to prevent what I believe would be a disastrous course, the devaluation of sterling.

My only regret is that the Government did not embark on this policy sooner. During the last few years we have seen both employers and employees enjoying dividend and wage increases sometimes at the expense of the efficient industry because we have had such a soft home market, and certainly at the expense of pensioners, salary and fixed income earners.

In our constituencies we have seen the hardship of the retired railway super-annuitants, retired teachers and retired civil servants. The have all had a raw deal, particularly those who have been long-retired. This kind of policy of not looking after those who have worked hard undermines morale and eats at the foundation of moral stability in the country.

We are in danger of becoming too much like pre-war France. I have always felt it to be rather hypocritical to grant the pension increases which have been sanctioned from time to time knowing that sooner, rather than later, they would be eaten up and that the hardship would prevail all over again.

In dealing with these questions many of us have felt much more like trade union leaders—knowing the hardship and difficulties of the cases with which we have had to deal—than some of the modern trade union leaders today who, of course, have been dealing with problems of prosperity and not of adversity.

I hope that all reasonable people, when they see the facts in this light, will be able to go some way in cooperating with the Chancellor in this pay pause. I am sure that many agree that wage and dividend increases these last few years have borne in many cases little resemblance to productivity increases. To hon. Gentlemen opposite I ask: are they going to take into account the national interest?

Mr. Percy Collick (Birkenhead)

The hon. Gentleman hopes that reasonable people will respond to the Chancellor's plea. May I remind the hon. Gentleman that one action of the Chancellor in this matter has prevented a 2s. a week increase to manual workers earning about £9 a week? How can the hon. Gentleman expect reasonable people to agree with that when the self-same Chancellor has put through the House a provision in the Finance Act which gives more than £80 million to Surtax payers?

Mr. Ridsdale

We can, of course, bandy political points incessantly across the Floor, but I tried to ask hon. Gentlemen opposite their views: what do they conceive to be the national interest? If we do not take into account this important national interest, unless everybody in all walks of life responds and cooperates with the Chancellor in what he is trying to do, we shall face a devaluation of the £ and a setback which has been rightly described in other quarters as a serious military defeat.

This, surely, is the background to the Chancellor's pay pause. He is not abolishing arbitration. He is not abolishing negotiating machinery. He is saying to those in industry, in conditions of full employment, "You must consider the national interest when reaching the settlement of a dividend increase or a wage claim." The leapfrogging of both employers and employees must stop. He is doing what the recent O.E.E.C. Report on Wages and Productivity suggested should be done. He is giving a defined norm for arbitrators to take as a guide when making an award.

Without that, I can see no assurance that wage or dividend increases will be kept in line with the growth of the potential in the economy. We shall have reached that objective to which Stanley Baldwin referred in this House when he said that in future years we might be faced with the amalgamation of employers, on the one side, and employees, on the other, and that it would be a case of God help those who stay outside.

It is because I want to help those kind of people that I support the Chancellor in what he is doing. It will not be an easy task for the Chancellor, and the country may not support him at first, but in the end his resolution will succeed, for he is attempting to bring home to the country the reality of our economic position, that we must earn a surplus on our visible and trading account—something that we have not done for years.

7.3 p.m.

Mr. Ness Edwards (Caerphilly)

The hon. Member for Harwich (Mr. Ridsdale) found an echo in my heart when he indicted his own Government for the mess into which the country has got. Ten years of Tory rule, and here we are discussing, as he says, the threat of devaluation in this country. We really never had it so good! What I could not appreciate in his remarks was the suggestion that we must make the workers pay for the mess that we have got into—for that, in effect, was the consequence of his argument.

Today, we have had a very brilliant speech from my right hon. Friend the Member for Huyton (Mr. H. Wilson). It was an indictment of the Government's conduct which was most feebly answered by the Chancellor of the Exchequer, if it was answered at all. We listened to a long apologia for a dishonourable piece of conduct. The right hon. and learned Gentleman offered national economic difficulties as his reason for cancelling the time-honoured arbitration methods in this country. In a false way he has used political interest to justify the breaking of agreements covering about 6 million workers. I was rather amused when he recited the cases in which he had honoured agreements, as if that was an excuse for dishonouring agreements in the future.

I have been in this House for nearly twenty-two years. I have heard right hon. Gentlemen saying, "If it means sacrificing all the wealth of Britain, we must carry out our undertakings to other people." I remember the late Neville Chamberlain talking about the scrap of paper and our obligations to Poland. This country could never go too far, no matter what the difficulties, in honouring the undertakings into which it has entered.

We have had the miserable spectacle of a Chancellor of the Exchequer saying that because he has difficulties they excuse him from carrying out bargains into which the Government have entered. This has been a very disturbing day, particularly when one has seen the Minister of Labour being a party to a policy of this nature. All the work that his predecessors did in building up that arbitration machinery will be frustrated and probably destroyed because of the stupid policy of his right hon. and learned Friend the Chancellor of the Exchequer.

There is, however, something much more serious involved in this issue today. We are discussing a policy that may lead us into industrial chaos and cost this country far more than the Chancellor intends or hopes to save. The teachers' dispute, grave as it is in its consequences, is only the beginning of a trail of events set in motion by this policy. I say to the Chancellor and to the Government: this is net the way to save the economy. It is far more certain to wreck it. Even the purposes mentioned in the Government's Amendment cannot be served by this policy. If we want to relate wages, salaries and incomes to productivity, this is the last way to go about it. If we want a new arbitration system this is not the way to create the climate in which we can get it.

No one would credit the Chancellor with a great deal of political acumen. It is possible that in wrestling with the problems arising from his misrule he is not aware of the great constitutional issue that he has raised. It has always been an axiom in trade union activities that industrial action should not be used for political purposes. Time after time we have set our faces against the use of the strike, against the use of direct action for political objectives. In a democracy we have taken the view that political questions must be settled by constitutional means. Unless we accept these principles progress can only be made by insurrection. That is the consequence.

But the Chancellor has ignored all precedents and principles. He intends using political power to settle industrial questions. He is transforming the struggle against the employers into a struggle against the State. Every such struggle must eventually raise the issue as to where power is to rest in a democracy, whether in Parliament or on the industrial field. That is the position as we see it. Time after time, through the very difficult years in which we have lived between the two wars, we have always taken that view—that one must not strike against the political decisions of the Government. Now we are face to face with this situation, that the Government take a political decision to settle industrial questions. I hope that the House will take note that this is a big constitutional principle that we ignore at our peril.

If the workers are told that the Government of the day can dictate what is to happen in the industrial field, they have only one remedy—to use their industrial power to determine what will happen. I am wondering what the Ministry of Labour advisers are telling the Minister in order to get him to understand the extremely serious position into which he has been put by this rather stupid and dishonest policy.

Let us consider the position. A trade union may argue its case before the Civil Service Tribunal, to which the Chancellor is a party. It may win its case, as happened with the Post Office engineers. Then the Chancellor applies his veto and denies the workers the victory which they have achieved. If they fight, they have to fight not his wages board, but his political decision. They fight, not the direct employers, but the State. That is something which must be taken into account when we consider the policy which has been adopted by the Government.

The Chancellor of the Exchequer should recognise the social anarchy into which his policy is taking the country. He should beware, because I noticed from the Daily Heraldtoday, in "The Facts Behind the News", that vast numbers of workers—over 6 million—are affected by his policy. As I say, he had better beware. He may be leading this country back to another 1926. While trade union leaders act individually, their fate will be the fate of Sir Ronald Gould, on television. Every one of them realises that that will be his plight at the end of every set of wage negotiations. The villain was not Sir Ronald Gould; it was the Minister of Education. Trade union leaders will be left without authority.

What would be the use of trade union leaders accepting the advice of the Minister to go to arbitration, the advice which the Minister of Labour invariably gives? He calls the parties to the dispute before him and says, "Let the matter go to our tribunal. Let it go before the Industrial Court." He knows that if he gave them that advice, he would merely be leading them up the garden path, and their fate would be the same as that of the teachers and of Sir Ronald Gould.

What is the social morality of all this? What becomes of the sanctity of agreements, a cliché which is often in the mouth of the Minister of Labour? What becomes of the provisions of the wages boards legislation? Is the Minister going to carry out the law, or is he going to carry out the diktatof the Chancellor of the Exchequer without authority from this House and in defiance of legislation procedures?

For five years I was in the Ministry of Labour with one of the most beloved Members of this House, George Isaacs, a man who earned the respect of right hon. and hon. Members on both sides. He was a great character. Immediately after the war, there were great difficulties in rebuilding our economy and in transforming our war-time economy into a peace-time economy. There was a period when there was a voluntary wage restraint. I say to the Minister of Labour that George Isaacs and I would have resigned rather than fail to countersign the decision of our wages boards. The Minister of Labour faces the same test. We took the stand that, above all else, a Labour Government could not be the first to fail to keep their word to the workers who came before our machinery.

What does the Minister of Labour propose to do about the long series of wages councils and wages boards which come under the supervision of his Department? Is he going to accept the diktatof the Chancellor of the Exchequer? Is he to become a tool for the carrying out of a dishonest piece of work? Our whole system of industrial arbitration will be placed in jeopardy unless decisions are honourably accepted by both sides and countersigned by the Minister, which is his legal responsibility.

When the Minister fails to countersign decisions of wages boards, does not he place himself in the position of looking like a bit of a cheat? That is how the workers will look at the matter. They will think that they have been cheated. They are advised to carry out the law of the land—go through the procedures and get an agreement, and then the Minister fails to append his signature to it. It is a poor excuse for the Government to say that they will not carry out a bargain because they cannot afford it.

Last week, there was a great deal of condemnation of those who act unilaterally in the international field. We had all the talk about the bomb and about Berlin. It was said that there should be no unilateral action. It ill becomes those who unilaterally deprive the people of their rights under legislation to decry unilateral action abroad. This is double morality, double talk and double action and the two standards about which the Foreign Secretary spoke.

My right hon. Friends have placed a Motion on the Order which upholds all that is decent in our system of industrial arbitration and which represents the only basis on which the interests of our people can be served. The Motion stands for the settlement of disputes in a manner which does least harm to the participants and causes least interference with the working of the economy. The Amendment appears to me to be a piece of camouflage which covers a piece of political arrogance never achieved even by the coal owners of South Wales.

The Postmaster-General has been compelled to go back on his statement. Right hon. and hon. Members will remember his predecessor coming before a cheering House and putting up the telephone charges so that Post Office workers, for the first time, he said, should have wages comparable with those paid in private industry. Now the Postmaster-General reduces their award by 2½ per cent., not because they are not entitled to it—it has been found that they are—but because the Chancellor of the Exchequer has dictated that that should be done Will the Minister of Transport carry out this tactic with the railwaymen?

What is much more serious for the Minister of Labour is this. When the miners go before the arbitration tribunal, which is part of their agreement, and argue their case and get an award, will the Minister of Power tell Lord Robens that he intends to dishonour the agreement? I warn the Minister of Labour of the shadows of 1926; and that the result may not be the same. Much has happened since 1926. Men who have an award, even if it be only 2s. a week, will look askance at those who say, "You may not have your 2s.", but who, to the rich Surtax payers, say, "But you may have your £80 million".

Unless we are careful, we shall have industrial bedlam in this country and the country will be torn by industrial conflict. That will be the price we shall have to pay for the stupid and dishonest policy of the Government. I say to the right hon. Gentleman and his colleagues that it will be better for this country when those who try to justify dishonourable conduct leave those benches and the House.

7.20 p.m.

Sir Cyril Osborne (Louth)

I want to bring the House back to the greater issues which caused the Government to take this step last July. The fact we must face is that, for some considerable time, the nation as a whole, not just one section of it, has been living beyond its income. The Government's problem is to make the nation live within its income. That is the beginning and end of the matter. We may differ on each side of the House about how it should be done, but that is what must be done, or the whole nation will face ruin.

It is for that reason that I gladly support the Government's Amendment. I wish to rebut the attack which has been made on the Chancellor's policy. I feel that my right hon. and learned Friend has been unfairly attacked, particularly in certain sections of the Press. My only wish has been that his measures should have been more drastic. If the House will allow me, I will explain, drawing upon my own experience, why I think that the Chancellor's policy was inevitable.

I spent last weekend in Lancashire, whore I discussed the problem facing the Lancashire textile cotton trade. This morning, I was in one of my own factories in Leicester. I warn the House, out of my own observations, that I am compelled to the belief that the nation faces the possibility of a slump worse than anything it has seen since 1930. My own experience in trade and commerce leads me to believe that that is the prospect facing our country and it is that with which the Chancellor must deal. In all seriousness, I say to hon. Members opposite, who may differ from me on many issues, that such a slump will be a certainty unless the Chancellor's wage pause is successful.

The House will remember that our country must export about 30 per cent. of its total industrial production in order to pay for its imports, its raw materials and its foodstuffs if real hunger and mass unemployment is to be avoided. During the past few years, I have had the privilege of visiting trade exhibitions in places as far apart as China, Russia, East Germany and Poland. I am convinced that this country faces competition fiercer than many of us realise. The growing power not only of America and free Europe, but of the Communist world, too, will make it harder for us to sell abroad than most people envisage.

The greatest problem facing us as a nation, as exporters and as individual businessmen, is the problem of our prices. There are many other factors making it difficult for us to sell—

Mr. Charles Loughlin (Gloucestershire, West)

What about profits?

Sir C. Osborne

I am coming to that. The hon. Gentleman would not be smiling in such a stupid way if he only had to deal with the export problem and knew something about it.

The greatest problem in exporting is that our prices on the whole are a bit too high—not enormously too high, but a bit too high. Therefore, since it is the fact, as stated in the Economic Survey, that 62 per cent. of our average industrial costs are due to labour, either direct or indirect, it is the labour cost content of our export prices which is the key to the solution of our problem and the key to our survival.

Unless wages are controlled and unofficial strikes are stopped, we shall face conditions worse than anything we have seen during the past twenty years. I say to our industrial workers, with a full sense of responsibility as one who employs a great many, that, if we are not careful, we shall price ourselves out of a job and into a bread queue.

Hon. Members opposite often say, with great sincerity, that we should plan our economy. To an extent, of course, that is true. Every good businessman plans his business. Every farmer plans his crops for three, four or seven years ahead. Planning is the very essence of successful business. What hon. and right hon. Members opposite do not recognise is that we cannot plan our exports—and exports are the key to everything. We cannot compel the foreigner to buy British if the German, the French, the Italian or the Russian product is cheaper or better. We cannot plan that sector of our economy which is vital to our survival.

During the last seven years, United Kingdom export prices, have, on average, risen by 10 per cent. In the same seven years, German prices rose by only 2 per cent. and Swiss prices fell by 4 per cent. As a result of such price differentials, United Kingdom exports in those seven years rose by only 28 per cent. while Germany's rose by 156 per cent. and Italy's rose by 180 per cent. If we, a people who must import half our foodstuffs and all our raw materials, cannot sell our exports abroad at a profitable rate, there is nothing but bankruptcy facing both sides of industry and both sides of this House.

As a businessman who, in his own small way, does his share of export trading, I am utterly convinced that, somehow, we must get our prices down, or starve. Unhappily, no one in this country really believes it, and that is the tragedy which faces us. I wish to goodness that somebody had the power to compel the nation to face these obvious truisms.

Having said that about the general situation, I want now to say a word—I wish that my right hon. and learned Friend were here so that I could say it to him—about the Chancellor's present policy. I disagree with imposing, or trying to impose, wage restraint on labour but only appealing for dividend restraint. Wages are the key to our economic des- tiny, but responsible trade union leaders have no hope of persuading their people to accept freely a wage pause unless equal sacrifices are imposed upon capital.

This, in my view, is the very essence of the problem, and I say to my right hon. and learned Friend again now, as I said at Blackpool, that I regard what he is doing as unfair and not right. [HON. MEMBERS: "Brighton."] I mean Brighton, of course. If hon. Members will invite me to their next conference, I will tell them how things should he done, and perhaps my good advice will sound a little strange in their ears in a place like that.

As I said at Brighton, I think that it is unfair, unjust, and unworkable to expect labour to accept greater sacrifices than capital will accept, because—I speak as one who has suffered from it—those who have the greater privileges are in the better position to bear sacrifices. In facing these problems, there ought to be fair shares all round, and it ought to start with those who have most to share. [HON. MEMBERS: "Hear, hear."] Hon. Members may cheer now. I hope that they will do the same when I come to things which touch them.

I want to make some suggestions to my right hon. Friend which, I hope, he will pass on to the Chancellor of the Exchequer. I think that the only way out of our economic dilemma, and to avoid what happened in 1926, to which the right hon. Gentleman referred, and which, I hope, will never come again—I do not want to see those days again—is to offer something that is obviously just and fair to the English point of view. Our country will always respond if the deal appears to be fair.

I suggest to the Chancellor that he should start in this way. He should offer, in my opinion, a package deal. He should, first, from capital, insist on a two years' statutory dividend limitation. Secondly, there should be a real capital gains tax. [HON. MEMBERS: "Hear, hear."] Thirdly, there should be much more strict control of expense accounts. [HON. MEMBERS: "Hear, hear."] Fourthly, I should like to see him have greater control of luxury flats and office buildings, because I believe that it is in the building industry that the greatest pressure is being felt at the moment.

Lastly—hon. Members opposite can also cheer this, because I have said it and written it before—I would postpone the Surtax concession. But in exchange for these things—hon. Members can cheer here—I did say that the only way in which we can get our economy in a position in which we can sell our exports abroad is to demand a two-year wages pause, except for increased productivity. There are no "Hear, hears" now from hon. Members opposite. In my package deal, I would demand that the 2 million wages now tied to the cost of living index, which itself is inflationary, should be tied in future to a productivity plus export index.

Hon. Members will not cheer these things. In political life we can get cheers from people when it suits their book, but when it touches their pockets they go stonily silent. [Laughter.] If hon. Gentlemen who laugh want that second proposal set out in greater detail, I recommend them to look at this week's Economist,where the matter is set out very clearly and very fairly.

I would say to unofficial strikers—unofficial strikers are those striking against the advice of their leaders and are, therefore, carrying civil war into industrial relations—"You shall have no repayments of P.A.Y.E. and no social services either". Those who fight against the State should be punished by the State. I would deal with great severity with unofficial strikers. I am sorry that I get no "Hear, hears" from hon. Gentlemen on this point.

The Chancellor must demand—I think that this is of immense importance especially in certain sections of the engineering industries—that all restrictive practices should be ended. [HON. MEMBERS: "On both sides."] Of course. Unless we get both sides pulling together in industry each will hang the other and the rest of the community will suffer. It is only by realistic approaches like these and by a national appeal to this problem, that we shall pull ourselves out of the difficulties in which we find ourselves.

I would like to say to the Chancellor, if he were in the Chamber, that I think that he has allowed Treasury officials to mislead him over the Bank Rate. I should like to see the Bank Rate down to 4 per cent. On the "hot" money that we borrow, about £700 million worth, we are paying very high rates of interest, and that money would fly from this country immediately there was any danger. That does not help us a bit. It is a policy which causes a great deal of social injustice at home. I should like to see the Bank Rate brought down to 4 per cent. and a lot of that "hot" money go away. Zurich bankers are not fooled by our stupidly faked gold reserves. They look at our export achievements. I beg him to look at the Bank Rate again and to get it down.

If the tragedy of 1926 is to be avoided—no one who took part in that would want to see it happen again; nobody with any sense—capital, I believe, must set an example to labour. That is what I am appealing for. It is impossible to get the economy right unless we all learn to work a good deal harder for one thing, and unless we get a deal from labour, but we shall not get that from industrial labour until the City of London does better itself.

That is the core of the problem. We have to say, however unpopular it is, that the British working man who enjoys a standard of living much higher than nine-tenths of the rest of the human race is not entitled automatically to an increase in wages every year. The rest of the world will not give it to him. He has to earn it just as others have to earn it. We are in the position that if we do not set about earning it we shall lose what we have now.

I make this final appeal to the Chancellor. I would like him to devote a good deal of his spare time, if he has any, to going around the countryside educating the nation, both sections, in basic economic factors. I think that he had better start in the boardrooms of the City of London before going to Transport House. From my own limited knowledge of industry and the knowledge that I have gained both abroad and at home I am sometimes frightened about our industrial future. I am really frightened of the situation. I believe, however, that if the facts were put in front of the workers that they would respond.

I have a great regard for the people whom I am lucky enough to employ. They do a fine job of work, especially the women, and when the facts are put in front of them they never fail to respond. I should like to see the Chancellor go up and down the country stating the facts. I believe that he would get a wonderful response. In the meantime, I want to say that I am delighted to support the Government's Amendment.

Mr. Collick

I am most interested in what the hon. Gentleman says. I have a fair amount of sympathy with him for his courage in putting the point of view that he has from the benches opposite. I think, however, that before he advises the Chancellor to go up and down the country it would be better if he first convinced the Chancellor of the wisdom of what the hon. Member has been saying this evening. If he does that, the Caneellor might get some response.

Sir C. Osborne

I am doing my best. All I am saying is that the policy that the Chancellor is pursuing, that is, to limit personal income to the amount of actual wealth that we are producing, is the right policy. It is the policy that Sir Stafford Cripps imposed on us in 1949, and which I supported at that time. It is the inevitable policy; we have to follow it. But if we are to make party politics out of it, we shall ruin it no matter which Government brings it forward. Therefore, I have great pleasure in supporting the Chancellor of the Exchequer in the unpopular duty which he is now carrying out.

7.40 p.m.

Mr. Ede (South Shields)

The conclusion which I have reached after listening to my right hon. Friend the Member for Huyton (Mr. H. Wilson) in moving the Motion and the Chancellor of the Exchequer in moving the Amendment is exactly the opposite to the one just announced by the hon. Member for Louth (Sir C. Osborne), whose speech I have now heard a good many times. He makes no converts on this side of the House, and, as far as I can see, he starts off with no supporters on the other. I noticed that some of his friends at Brighton thought that it would have been more appropriate for him to have been at Blackpool, and, in fact, offered him the considerable insult of saying that he was a Socialist. We on this side of the House are quite prepared to find him not guilty on that charge.

I never thought that I should hear a Chancellor claim at the Dispatch Box the right to dishonour contracts when it suited his convenience. That is the real issue which is before the country. My right hon. Friend the Member for Huyton went through a long list of the contracts which the Chancellor has deliberately broken, and gloried in breaking. All I had heard from Conservative speakers in this House had led me to believe that to break a contract was rather worse than blaspheming against the Holy Ghost in that there is no forgiveness for it, and yet we were told this afternoon that when it suits the Chancellor's convenience, and he thinks it is in the national interest, contracts entered into with wage and salary earners employed by the Government can be broken without any apology being offered. I cannot understand how anyone who seeks to defend the policies generally advocated from the Government benches can vote for the Government Amendment after hearing about the way in which their policy is to be implemented.

I want to say a few words about the treatment of the Burnham Committee. My right hon. Friend the Member for Huyton quoted a speech made by the Home Secretary at, I think, the first meeting of the Burnham Committee after the 1944 Act had been passed. The teachers were pressing for equal pay and the authorities were pressing for what the present Home Secretary then described as a hierarchical salary scale for the teaching profession. He and I had at that time just emerged from a number of conferences with various hierarchies, and that name was not a pleasant one to either of us. I have a suspicion that we have got perilously near to a hierarchical salary scale in these last few years.

The right hon. Gentleman attended that meeting. Those concerned had expressed a wish that he should attend, and he took me with him. He said to those present "I will not say anything to you unless both panels ask me to do so." Both panels retired into another room, and then came back and said, "Please will you address us on the current situation?", and the right hon. Gentleman did, and he made the remarks which my right hon. Friend quoted this afternoon—"You have a job imposed on you by statute. Do it. It is yours to do." The right hon. Gentleman also said, speaking for himself and his successors, that the Minister of Education had no right to intervene in view of the Statute. But, after all, what do statutes matter to this Government? The right hon. Gentleman could never have foreseen that the present Minister of Education would be among his successors.

We are faced with the position now that because this statutory requirement is inconvenient to the present Ministry, it is to be amended in some way or other. It is ignored for the moment, and, when a new Burnham Committee is appointed, it is to be under conditions which will enable the Minister, first, to decide what the global sum is to be and then to decide how that global sum shall be split up among the various grades and departments of the teaching profession.

We may, of course, be told that that is what the Minister will do. Let us be quite certain of this: this is arranged so that the real mastership shall lie not in the Ministry, but in the Treasury. It is the same with all the other rearrangements which were foreshadowed by the Chancellor when he explained, considerable lawyer as he is, that he has no respect for the sanctity of contracts. When bodies are set up in that atmosphere, it will be impossible to secure any faith in their decisions on the part of the people who ought to look to them for protection and assistance.

My right hon. Friend read out a long list of those whose contracts are being broken; in some cases, where a date is fixed, that is not to be honoured, and the Chancellor will himself fix the date. They were almost without exception councils which were appointed to secure that the wages of those least able to look after themselves should be settled by a semi-judicial tribunal in which, in my experience, the real voice has always rested with the independent members who sit there and listen to the argument as it goes on.

I had the experience only on Saturday of meeting a large number of people in my constituency who had considered these matters by themselves. They were recruited mainly from those groups and from Post Office workers and others in Government employment. They view with very considerable alarm the altered situation which they will have to meet in future when they have to consider wages and conditions of service. Whatever misgivings they may have had on Saturday, I am certain that when they read what the Chancellor of the Exchequer has said today every one of their misgivings will be considerably increased.

However, there were flashes of reality even in the Chancellor's speech. What is his excuse for doing all these things to the Burnham Committee? Because, he says, the condition of this country is now worse than it was when the Burnham Committee was set up—which was in 1919. That is after ten years of uninterrupted Tory Government. The best excuse he can find for taking this action is that the economic condition of the country is now so bad.

I would be a great fool if I were deceived by such a statement by the Chancellor. Bad as it is, I do not believe that this country's condition is now worse than it was in the early months of 1919, or even in the early months of 1944. But that it is not so is because, in spite of the sermons we hear about once a fortnight from the hon. Member for Louth, the wage and salary earners have shown their sense of responsibility in the way in which they have restrained themselves in moments when they have been in positions of great economic power.

My right hon. Friend the Member for Caerphilly (Mr. Ness Edwards) recalled the days of 1926, and I add that, if the other side of industry now thinks that economic power is passing to it, it must realise that it is only by co-operation between both sides of industry that this country can hope, in the present condition of the world, to be able to maintain an economic status worthy of our traditions. If some people who greatly benefited from the April Budget, go on a spending spree when they reap their reward next January—

The Minister of Labour (Mr. John Hare)

It is not next January when the Surtax concessions come in.

Mr. Ede

I did not catch what the right hon. Gentleman said, but we were told three months ago, when we had the July "Budget", that it was no use attacking the Surtax payers because they would not get anything until January. But, of course, one is always let down in some way by the Government Front Bench.

Mr. Hare

If the right hon. Gentleman had said "January, 1963" he would have made his point quite clear.

Mr. Ede

Then there is a good time coming. We are often told, "You have never had it so good." What the Government are now telling the Surtax payers, according to the latest version, is that, "You will never have had it so good as you are to have it." How that will increase their enthusiasm I would not like to say.

I very much regret the speech that we heard from the Chancellor because if he is entitled to repudiate contracts unilaterally when he has the power to do so, how can he complain if other people do the same? I had hoped that, after having had three Budgets in one year—first, the health charges, secondly, the ordinary one in April, and the third one in July—we would by now have faced the issue that it is only by joint discussion, conducted between people of good will on both sides, that we can hope to get economic peace and a return to anything like prosperity.

My right hon. Friend the Member for Huyton offered some advice to the Minister of Education—who, I know, will not accept it. People generally decline to accept good advice, sometimes even when they pay for it. But I say this to the right hon. Gentleman: he has produced in the teaching profession a lack of faith in the intentions of his Ministry that will not easily be removed.

It is important that we should, at the moment, have in the schools a profession that may devote its attention to discovering the hidden talents that have escaped us so often in the past, and a Ministry of Education under the dictates of the Treasury, and whose every action will have to be approved by the Chancellor or by the new Chief Secretary to the Treasury, will not be able to get the spirit into the schools that will enable that to be done.

The hon. Member for Louth announced enthusiastically his enthusiastic support of the Chancellor of the Exchequer. For many of the reasons that induced him to take that line, on a cool analysis of our economic situation, I am quite certain that no one will believe in the good faith of the Amendment, and, therefore, I shall vote for the Motion, which I know to be true, and which errs only on the side of mildness.

7.58 p.m.

Mr. John Page (Harrow, West)

For the first time, I have not agreed with nearly everything said by the right hon. Member for South Shields (Mr. Ede), but since he is an expert on education and made such very conservative references to the unchangeability of the Burnham statutes, I feel I had better not try to take issue with him. So I will merely say that I was fully in agreement with him when he said that it is only by co-operation of all those engaged in industry that we shall be able to get out of our present troubles.

For a few minutes I want to deal with one part of the Chancellor's speech which has not been elaborated enough by the Government. I refer to the composition and activities of the National Economic Development Council which he is hoping to set up. This Council was advocated in a document called The Industrial Charter,mentioned by the right hon. Member for Huyton (Mr. H. Wilson) this afternoon. It seems that various people have been invited to send representatives to discuss this Council. Management is very well represented; it includes the Federation of British Industries, the British Employers' Confederation, the Association of British Chambers of Commerce, and the National Union of Manufacturers. Only the T.U.C., however, is being invited to the discussions for the employees.

There seems to be something rather strange about this, in that the T.U.C. represents only 8 million of the working population of this country, although there are altogether 23 million work-people. The T.U.C., therefore, represents only about one-third. I may be wrong in my belief but, as far as I know, the associations to which the other 15 million workpeople belong have not come together in some kind of federation to represent the interests of all those workers not represented by the T.U.C. That is rather surprising. They would form a kind of alignment of the unaligned, rather like the Conference of Neutralist Countries. There is N.A.L.G.O., the National Union of Teachers, various nursing associations, besides people who work in banks and insurance companies.

Mr. S. O. Davies (Merthyr Tydvil)

And the E.T.U.

Mr. Page

They could always apply for membership. I do not know what would be the attitude of the other members to such an application. When they have cleaned themselves up they may be very valuable.

There are other important organizations, such as the Union of Club Stewards, and the pianoforte tuners. Why should not these members of the working population be represented both on the N.E.D.C. and in other discussions? It is time they got some kind of federation going.

Mr. Loughlin

I do not want to question the whole list of organisations to which the hon. Member has referred, but is he aware that the Union of Club Stewards takes no part in any negotiation in respect of wages and conditions of club stewards? Such negotiations are conducted by the union of which club stewards are members, namely, the Union of Shop, Distributive and Allied Workers. I do not want to question the rest of the hon. Member's list, but it is obvious that he has no knowledge whatever of what he is talking about.

Mr. Page

That is a very strong come-back. I apologise for my mistake. I made it my business to go through a long and complicated list of various employees' associations trying to see which had asterisks against them and which had not, and I must have gone wrong when I come to the club stewards. I shall not slip into the same mistake on a future occasion. I am grateful to the hon. Member for pointing out my mistake.

What will be the job of this N.E.D.C., if it comes to life, as I hope it will? In his letter of invitation to people to send representatives the Chancellor said that its job was the co-ordination of plans and forecasts for the main sectors of our economy I suppose that this will cover investment and production forecasts, but I wonder if it will include a forecast of the total amount of additional money which, in any year, the Chancellor will consider it safe for the country to pay itself above what it was getting in the preceding year. It may be a fairly easy figure to produce on paper, but I wonder how we can ensure that effect will be given to the recommendations of the Council. It seems likely to be the same sort of committee as the Cohen Committee and other such committees which make reports which are read by various people and are referred to in the Press, but whose recommendations are not acted upon.

The real problem involved in the question of wages and productivity is lo find a way in which those engaged in actual productive industry can see that the fruits of what they produce are shared with the workers in the service and non-productive parts of industry, who cannot themselves increase the country's wealth or the number of articles for sale. At the end of this pause, when production has caught up with the wages paid last year, the moment will arrive when those in productive industry, who may have got new equipment, new ideas, and greater efficiency, and may have produced much more, can say, "We have produced a lot more. Let us get the extra pay for this new stuff." What will then happen to the policemen, bus drivers, nurses, teachers and the rest?

Mr. Ede

And even Members of Parliament.

Mr. Page

And even Members of Parliament. I am not sure whether or not we have got a new claim in at the moment.

I regret to say that I have not found a simple solution to this problem. Nevertheless, I believe that I have discovered a method which, in the long term, could produce the kind of result we want, and which would create in this country a really responsible and interdependent industrial society. It requires a completely new look, by all those engaged in industry, at their relations with each other.

Many speakers this afternoon, including Members of both Front Benches, have talked about "both sides of industry". This expression has been used over and over again throughout the year. It is grossly inaccurate and wholly misleading to give the impression that there are two sides of industry. There are six or seven sides, or six or seven parts, and industry is not complete unless all those parts are there.

I will say what they are. We have the shareholders, the directors, the employees, the trade unions, the customers or consumers and the Government themselves. I think that all these different parts have to look again at their own rights and responsibilities to industry as a whole. Regarding the shareholders, at the moment, they are—and there is a distinguished lawyer on the Front Bench opposite who will correct me if I am wrong—the sole owners of a company. In the articles of association of the company, there is an objects clause stating that the company shall make so-and-so and that the only responsibility of that company is to the shareholders. At the present day, I think that should be changed, and I think it is quite time that shareholders in all limited companies accepted a responsibility to the people who work in the organisation for them, and that that responsibility should be more fairly stated when in the future the Companies Acts are rewritten by including something in those Acts.

Until that can happen, it is up to the boards of directors of these companies to state what they believe to be the objects of their companies, both in the manufacturing field and in their duty to their employees, their shareholders and to the community in which they live. The absurd thing is that, while all enlightened boards of directors—and there are a great many of them—already undertake these responsibilities and are already absolutely conscious of their duties, it seems to me that they so seldom put them across to the people working in their companies. I think that one of the things which the Government should do is to make it an obligation for a company to publish its objects in simple terms and to show them in the factories, works and shops which it runs.

Then, we have the employees, and many people say that, in this talk about industrial relations—and I believe that it is only by better industrial relations that we can get ourselves out of the mess—we are only asking for concessions to be made by managements and that we do not ask enough from the employees themselves. But what is it that an employee can give to the company for which he works? Very little. I should have thought that the first thing would be loyalty to the company, and the second flexibility in the way he works. Thirdly, a good day's work for a good day's pay.

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

They are all doing that now.

Mr. Page

Well, I say a good year's work for a good year's pay. Fourthly, keeping any agreement made with the company.

Mrs. Harriet Slater (Stoke-on-Trent, North)

Tell that to the teachers. They are waiting for it.

Mr. Page

Quite frankly, the teachers in my constituency are very happy and glad that this new arrangement has been made between the Government and the teachers. I only wish that it had been possible for it to have been made a couple of months ago.

Mr. Richard Marsh (Greenwich)

Since the hon. Gentleman feels so strongly about the sanctity of contracts for workpeople, may I ask him if he will still support the Government this evening, when, quite clearly, they have broken a whole series of contracts with work people?

Mr. Page

I think that it is very unpleasant, both for my right hon. and learned Friend the Chancellor and for many of us on this side of the House, that this action has to be taken; but I for one utterly accept the necessity of this pay pause and the measures which the Chancellor has taken. What I hope is that he will make the maximum use of this opportunity and this pause in order to get a long-term result.

Mr. Sydney Silverman (Nelson and Colne)

The hon. Gentleman is making so forceful a speech that I am sure that he would not like to be betrayed into inconsistency. Surely, the position is this. We can believe in the sanctity of contracts, and that is one thing. We can believe that contracts are not sacred, but are subject to over-riding justification for breaking them if we think that it is in the public interest. The Government are saying that a contract is not sacred. and that the public interest is greater than the sanctity of a contract. They may be right or wrong about that; I think they are wrong. What the hon. Gentleman is trying to do is to have it both ways, because he is trying to say that contracts are sacred, except for Governments, who are entitled to break them.

Mr. Page

I think that the point which the hon. Member has raised will be dealt with far more clearly and far more learnedly by my right hon. Friend when he replies. I think that I would be on very much safer ground if I avoided going on with it. I am speaking for far too long, and so I will come to the final point, which is the responsibility of the Government. [An HON. MEMBER: "Shareholders?"] I have dealt with them, and have given them a whole lot more responsibilities, which I think they should accept.

Mr. H. Hynd (Accrington)

The hon. Gentleman did not talk of any sacrifices by shareholders. Is he aware that dividends have been going up?

Mr. Page

I think that is getting a bit academic.

I think the time has come for the Government and my right hon. Friend the Minister of Labour and his colleagues—

Mr. Marsh

To resign.

Mr. Page

—to give a new lead and direction in this question of industrial relations in general. I think that it should be set out in a new code of behaviour, which all sides of industry should follow, and which will make it quite unnecessary in future for them to have to take again the absolutely necessary but extremely uncomfortable and unpalatable steps which they have already had to take.

8.17 p.m.

Mr. Jeremy Thorpe (Devon, North)

I hope the hon. Member for Harrow, West (Mr. J. Page) will not mind if I defer commenting upon his stirring call to action until a little later, because I should like straight away to refer to the speech made by the Chancellor of the Exchequer.

The Chancellor was asked quite specifically by the right hon. Member for Huyton (Mr. H. Wilson) whether or not it was his intention to honour an agreement relating to the miscellaneous workers in the Civil Service. What the right hon. and learned Gentleman replied—and I hope I do him justice in paraphrasing it for brevity—was that in these cases we must have due regard to the element of pause, and that it may therefore be necessary for that interest to prevail. I have not had a very long career at the Bar, but I have heard that argument used by defaulting debtors in county courts and have even heard it used in criminal courts by people answering a charge of fraud, but I never thought that I should hear in this House and from that Dispatch Box one who is a Queen's Counsel, one who is allowed to prefix his name with the words "right honourable" and who is Chancellor of the Exchequer, putting forward such a doctrine in support of Government policy.

It is not as if his argument ends there. He then said that it must be made plain that there was no impediment put in the way of negotiations. The parties are free to negotiate, free to meet, free to discuss and to agree upon figures. The only slight detail is that the Chancellor may decide when these agreed figures shall be put into operation.

In other words, the parties to the arbitration may climb into the automobile; may turn on the engine; may pull out the choke; may press the starter and rev up the engine. They may even put the car into first gear and, provided the vehicle is on level ground, they may even take off the brake. The only thing they must not do is to let out the clutch, engage the gear and drive away. That is the only interference of the Chancellor with the arbitration procedure in this country.

To prove that the Government have done nothing to interfere with negotiated agreements the right hon. and learned Gentleman carefully selected those agreements which had been negotiated in July and in June, before his wage pause, and he said that this proved that the Government were interfering in no respect with regard to negotiated agreements. What a crashing indictment of ten years of Conservative government. It was no coincidence that when the Chancellor of the Exchequer got up to speak there were six Ministeries represented on the Government Front Bench. To each of them he was an axe-man. But he was not chopping at a tree. He was chopping at the wages of the men and women whom they were responsible for employing.

It is an appalling indictment of ten years of Conservative economic rule. Civil servants, teachers, National Health Service employees who are entitled to increases—and in many cases have been awarded increases—have had them halted and frozen by this Government. It is a Government which have disrupted long-established negotiating machinery; a Government which have taken a panic measure in order to try to offset the economic affects of their own economic failures; a Government which have created prejudice against the Government at a time when they should be leading a co-operative planning movement in this country to stimulate economic growth; a Government which have behaved like a fire brigade. They have gone into the house, wielding their axes and drenching and ruining the furniture with their hose pipes in order to put out a fire which they themselves have created and stoked up. The only stimulation which the Government have given to the economy was the attempt made by the Prime Minister at the last election to debauch the electorate and appeal to the materialism of the electorate. Thee trouble is not that we have had excessive wage demands but that our economic growth has been the lowest in Europe. That is why we are having this trouble.

The Government must realise that their wage freeze is no substitute for a wages policy. What should they do? The Chancellor asked a series of questions about what the Government should do. He told the House that the wage pause would provide a useful breathing space to think things out. I must say that it is an extremely expensive price for the country to pay in order to allow the Chancellor to stimulate his mental processes. He has had ten years to think things out. This Government have won three elections running, and after each of them we were told that conditions were better and better. But all the Chancellor can do today is to ask rhetorical questions about what should be done. Even the hon. Member for Harrow, West went further than the Chancellor. He made a suggestion.

What is the Chancellor to do? I suggest that he should determine a salary and wages policy which is part of a general economic plan in which he will, in consultation with both sides of industry, determine a ceiling above which growth of salaries cannot rise. In fact, he must plan along the lines of the system which has been working very effectively in France. I noticed that many hon. Members opposite jeered when the Leader of the Opposition suggested it during one of the many Budget debates which have been kindly provided for us by the activities of the Chancellor of the Exchequer.

In this country we ought to have regular advances of 3 per cent. to 4 per cent. per annum. Not even in Soviet Russia have the Government attempted to freeze or to restrict wages in the way that is intended by this Government. It may well be that it is possible, indeed, it is desirable, to criticise much of the negotiating machinery. But what many hon. Members on this side of the House, and certainly those on the Liberal bench, think is that it may be possible to amend, it may be necessary to amend Whitley and Burnham and all the other negotiating machinery, but if that be needed, is that an excuse for sabotaging and undermining their authority unilaterally?

Let us consider the position of Burnham. What has the Minister of Education said? He has said that provided the teachers will accept his pay award of £42 million, after Christmas he will discuss possible reforms in Burnham. This will give time to hear both sides of the question and to allow suggestions to be put forward. But if they are not prepared to do that he will introduce legislation in a matter of weeks. That was the measure of the right hon. Gentleman's irresponsibility.

I believe that the Government are hitting the weakest people in the economy. I was delighted to hear from the Chancellor of the Exchequer that we shall have a capital gains tax. When asked about this during the Budget' debates he said that it was not possible because the best brains in the country would be spending their time devising ways to get round it. The best brains were apparently those given a Surtax concession a few months before.

When the former Minister of Housing and Local Government was asked why nothing could be done to tax land values we were told again that there was no practical way of doing it. When we suggested that there should be dividend restriction this again presented insuperable problems. At last the Government are realising that unless they are to have an industrial war on their hands they have to start running the economy fairly. That was the only point in the speech of the hon. Member for Louth (Sir C. Osborne) with which I found myself in agreement.

When did the Government decide on the pay pause? Was it the day before the Chancellor made the statement? Was it at the time of his second Budget, or at the time of the first Budget? When did it suddenly appear to the Chancellor that it was economically vital that there should be an immediate freeze of the wages of those employed in the public sector? When did this great "shaft" hit the Chancellor's consciousness?

How long does he think it is going to last? What effect does he think it is going to have on the economy, and how does he think he is going to enforce something which is regarded as manifestly unjust? I believe the only way to restrict wages is to have a policy linked with prices, economic margins, economic growth, with wages and salaries. It may be that the Government will have to be represented on some of this negotiating machinery, but the fact that it has a defect is no reason for saying that it should be sabotaged as it has been in the last few weeks.

I believe the most dishonest thing of all, quite apart from the argument of the Chancellor, is the Amendment itself. The Amendment seeks to have a relationship between increase in wages and salaries and an increase in national productivity. How does one relate the wages of teachers to national productivity? By the number of children who are crowded into one schoolroom? How does one relate the wages of dockyard and Admiralty workers to productivity? Haw does one relate the wages of nurses in the National Health Service— I understand that 200,000 of them have a claim pending—to national productivity? The answer is that one cannot do so. It is for that reason that the Government have a moral responsibility to see that those who are engaged in that sector of the economy have a fair wage. This is their moral responsibility.

This Amendment is not only irrelevant but is so much humbug. Therefore I say that this debate is the crashing indictment of the failure of this Government and its docile supporters. We have heard some docile speeches in this House today. It was not only a National-Liberal who gave servile support to the Government, it has come from practically every Tory speaker. It is this crashing indictment which I hope will bring home to the Government at last that in their handling of the economic affairs of the country they must have due regard to the element of honour, the element of principle and the element of justice.

8.31 p.m.

Mr. Forbes Hendry (Aberdeenshire, West)

The hon. Member for Devon, North (Mr. Thorpe) apologised for not referring at the outset of his speech to the speech of the hon. Member who immediately preceded him. I shall not fall into that fault. I shall refer to the speech of the hon. Member for Devon, North and congratulate him on his histrionic ability. Apart from that, I can congratulate him on nothing in it.

The right hon. Member for South Shields (Mr. Ede) said that the Chancellor had had some flashes of reality. I suggest that the hon. Member for Devon, North had none. Like all the other speeches from the other side of the House this afternoon, his speech has been pettifogging and completely divorced from reality. The Motion is completely divorced from reality. If we want reality we have to turn to the statesmanlike speech of my right hon. and learned Friend the Chancellor of the Exchequer and the wording of the Amendment.

What we have had from hon. Members opposite was obvious electioneering and pandering to a sectional interest, and even making threats against the welfare of the country. I am not putting it too strongly when I say that. My right hon. and learned Friend said in his speech that he had done something which was necessary but unpopular. Only there do I disagree with him, because I do not believe that what he is doing is unpopular. It may be unpopular with lion. Members opposite, but that is not the case in the country.

The right hon. Member for South Shields spoke about meetings he attended in his constituency on Saturday. I was at a meeting in my constituency on Friday. There, I found that the policy of the Chancellor and the Government were extremely welcome. I was asked especially to congratulate the Chancellor on the bold step he had taken to put the economy of the country on a sound basis. Mine is an agricultural constituency, where the people understand agricultural considerations well. They know very well that if they want to grow corn and to get a really good crop they have to eradicate nettles.

Since 1919, a vast nettle has been growing up in this country. It seems to consist of the idea that every worker must have an increase in his income, if not every year, at least every two years. I suggest that there never was such nonsense. We have heard a great deal this afternoon from hon. Members opposite about the poor chaps who have only £9 a week. They may not be well off on £9 a week now, but before the war a labourer's wage was £2 10s., and £9 was wealth beyond the dreams of avarice.

It was then, but it is not now, because some people seemed to think that an automatic rise in pay leads to an automatic increase in wealth. Thinking people know full well that that is not the case I tell my right hon. and learned Friend that thinking people appreciate full well what he is doing and welcome it. The great majority of them have a sense of values, and they support him and, I believe, the Amendment.

What is required is that the country should get away from the old thinking about automatic increases. We never hear about automatic decreases when things go badly. We require new thinking, together, about wages, dividends and profits. We have heard this afternoon that wages and salaries increased to a great extent last year, but that, in relation to the capital employed, profits went down. There is something wrong there, and I suggest to right hon. and hon. Gentlemen opposite that we ought to have a great deal of new thinking—thinking together.

Mr. E. G. Willis (Edinburgh, East)

Especially in West Aberdeenshire.

Mr. Hendry

We need this thinking to make sure that the economy of the country is not based on an ephemeral sense of values, but is brought on to a real and solid basis. I have every confidence in my right hon. and learned Friend, and I know that I am reflecting the wishes of my constituents when I say that I shall vote wholeheartedly for the Amendment.

8.37 p.m.

Mr. Charles Loughlin (Gloucestershire, West)

I wonder whether the hon. Member for Aberdeenshire, West (Mr. Hendry), who, I understand, was a town clerk before he entered the House, would have adopted the same attitude as that he has taken tonight if he had been pursuing that profession, in view of the fact that the Government are responsible to some degree for determining the salary negotiations of that profession.

Frequently in the debate right hon. and hon. Gentlemen opposite have talked about the economic crisis with which we are faced. The Chancellor devoted the whole of his speech to the argument that we ought to address ourselves not to the question whether there has been any Government action as a result of which they can be charged with damaging the whole of the negotiating machinery of the country but to the economic situation. The hon. Member for Aberdeenshire, West stated that the speech of the hon. Member for Devon, North (Mr. Thorpe) and other speeches from this side of the House were unrealistic.

If we take the arguments of right hon. and hon. Gentlemen opposite, wonder how we can resolve the problem of our economic difficulties and the problem of trying to sell our goods in the markets of the world if at the same time we undermine the confidence of the industrial workers in the arbitration and negotiating machinery which has been operating for many years. How can we increase our productivity in industries essential to the export trade if at the same time the Government are pursuing a policy which says to the workers in those industries, "Even if you have a claim, whether it be justified morally or economically or not, and even if that claim is accepted by your employers, indeed, even if there is complete agreement, the Government will veto the proposed increase in wages." How can the Government say to the workers that, in the interests of the nation, it is essential for there to be greater effort and productivity but at the same time pursue a policy of that kind?

I ask hon. Members to examine the problem solely on the basis of the economic difficulties the Government have got us into after ten years of Tory rule, after boasting at election after election that they have produced prosperity par excellence.The Tories said at the last election. "Do not let Labour ruin it". Who ruined it? The Chancellor of the Exchequer does not stand any chance at all of resolving our economic difficulties without the full support of the workers in industry.

I turn now to a question which is fundamental to the British people, because the pursuance of this policy by the Government challenges the whole basis of free trade unionism in Britain. There cannot be free trade unionism when, after an agreement has been arrived at by both sides of industry, the Government impose a veto.

Mr. Godfrey Lagden (Hornchurch)

Does the hon. Gentleman agree that it is logical, following his argument, that there cannot be good and free trade unionism if, after an agreement has been reached between employers and elected representatives of unions, the agreement is broken and destroyed by people who call themselves representatives of unions?

Mr. Loughlin

The hon. Gentleman has not only listened to me in the past but has intervened in some of my speeches. Of course we accept the sanctity of agreements. Of course we accept that once an agreement has been made between employers and trade unions it is binding. Sometimes some of those who have negotiated agreements have not liked what they have got out of them but they have had the courage to go to the workpeople and say, "This is the best we could do. We want you to endorse it and honour it". The whole trade union movement has been built up on that basis. Now the Government say that, even if we do that—

Mr. Lagden indicated dissent.

Mr. Loughlin

I hope that the Minister of Labour, if he winds up for the Government, will reply to the statement made by my right hon. Friend the Member for Huyton (Mr. H. Wilson), who quoted chapter and verse of the agreement which the Government have now broken.

Apparently the Government take the line that they are free to break agreements—whether they are parties to them or not, as in the case of Burnham. It is nonsense to argue that the Government find 55 per cent. of the cost and should, therefore, have a say in the matter. Burnham has not been going for only twelve months. It has been going for forty years. It is a little late in the day for the Government to start advancing that argument. If they are to veto agreements arrived at in the various negotiating bodies, what alternative has the trade union movement? If they refuse to accept the sanctity of agreements, how many hon. Members opposite can ever again condemn unofficial strikers if they do not accept agreements? What validity will there be in the intervention of the hon. Member once the Government give to the workpeople the example that agreements do not matter?

One of the tragedies of this Government is that they have destroyed the moral fibre of the nation in many ways. We have become a gambling State, a "bingo" State, and now the Government do not even accept the normal, reasonable, honest practices. There is a great deal of truth in what one of my hon. Friends has said today. There is a danger to the nation inherent in this transference of political industry to the industrial field. We are in serious danger of a situation developing in which the trade unions and their members will be striking, not against the employers—because we have had the situation already, and shall continue to have it, in which there is agreement between employers and trade unions—but against the Government.

As I said in the debate on the Consolidated Fund Bill, if we get a situation in which there is a multiplicity of vetoes by the Government in industry after industry, we get a general strike that can only develop into revolution, because the full implication of an industrial general strike is a revolution. The Chancellor of the Exchequer is pursuing a policy that will precipitate it.

A word, now, about some of our lower-paid work people. The Minister has already interfered in wages councils. This is, perhaps, the worst feature of the Government's policy, because the wages councils and wages boards operate in industries where the degree of organisation is low and where, by some sheer coincidence, the wage rates applicable under the Statutory Instruments, whether they be wages council or wages board orders, are also very low.

My union caters for a large section of the employees who come under the terms of wages council orders, and I say to the Minister that for him to interfere either directly—that is, after a wages board or wages council has determined an increase in wages—or indirectly through his independent members, would be a real tragedy for many sections of our workpeople. I have long passed the time when I have made appeals to this Government or to the Chancellor of the Exchequer. I do not expect the right hon. and learned Gentleman to respond to any appeal I make to him to try to reduce the problems faced by these lower-paid workers, but if he has any decency at all he will try, as far as it is possible, not to apply this policy to those people.

We in the trade union movement have over the years built up our industrial relations and we have based our attitude towards employers on the assumption that, in the end, we could find some form of arbitration to resolve our problems.

I say to hon. Gentlemen opposite—some of whom have evinced little trust and confidence in the trade union movement—that that movement has made a considerable contribution to the success of British industry. As I say, we have always dealt with employers on the assumption that if we failed to arrive at an agreement—either on wages or on conditions of employment—in the end reference could be made to some form of arbitration.

In most of our agreements there is a procedural clause to cover this issue of arbitration. Meanwhile, the Minister has refused to accept an award of the Industrial Court. Here again, in the event of there being no agreement through the arbitration machinery within the industry, we envisage reference to a kind of joint industrial court. Thus, by his actions, the Minister is posing an important question to the trade unions. If we find that we cannot get an agreement with an employer, can we any longer rely on our assumption that the matter can be resolved by arbitration?

If we cannot rely on that assumption, what is the only alternative? It is, of course, to bring our people out on strike. Is that what the Government want? Are the Government saying to the unions, "We are going to pursue a policy of destroying the arbitration machinery in industry, and the unions can either take the consequences or indulge in industrial action?" What alternative is open to the unions? Once the basis of arbitration is destroyed, the only thing we can do to resolve our problems is to withdraw labour. If the Government accept that this is the policy they propose to pursue in order to resolve the economic difficulties which they themselves have created, then the sooner the Chancellor and the whole Government resign the better it will be for all concerned.

8.53 p.m.

Mr. A. P. Costain (Folkestone and Hythe)

Only a short time remains for me to make a few comments. I had hoped that this debate would have concentrated more on production than on politics. Unlike the right hon. Gentleman the Member for Caerphilly (Mr. Ness Edwards) I cannot claim to have been in this House for twenty-two years. I can however, claim that for thirty years I have been trying to get exports for this country.

I wish that the debate had created a much better impression of what the nation needs; and how important increased exports are to us. I wish that those who take part in unofficial strikes—or who feel that if they do not they are being blacklegs—would appreciate, also, that they could be exports saboteurs. I wish that those who take part in unofficial strikes would go out with some of the salesmen of Britain and see their difficulties in getting orders and how heartbreaking it is, having got an order, for it to be lost because of unofficial strikes.

In the few minutes available to me I shall summarise my remarks. I accept that arbitration is the safety valve of industry. As an engineer, I also accept the fact that when one has a steep hill to climb one sometimes holds on to the safety valve for a short time until the top of the hill is reached. I support the Chancellor of the Exchequer today because I believe that that is what he has in mind.

I agree more than I generally do with my hon. Friend the Member for Louth (Sir C. Osborne). If it is necessary to get national unity I think that all sections should be approached. He has remarked that we should have dividend limitation, but I ask the House to pause for a moment at that question. We cannot expect industry to go out and get exports if we say, "Take the risks, but never take the profits". If we want to limit dividends we can do this in a simple way. We were prepared, during the war, to introduce E.P.T. I do not believe that people realise the effect that the cold war is having on our industrial front. I suggest to the Chancellor that a similar measure might be introduced if he wishes to bring in compulsion and if it will unite the nation.

Compulsion could be introduced in this simple way. Various firms have paid dividends at various rates. They have paid dividends on a dividend cover. That is to say, each different industry has paid out X per cent. of its dividends—sometimes one, sometimes two and sometimes three times cover. If my right hon. and learned Friend feels that he must bring in some sort of restriction, will he consider the effect of freezing dividend cover? That would encourage companies to go abroad and get more orders in the belief that, having got more orders and made more profit, they would be able to pay more dividends.

I wish time allowed me to develop my thoughts: however, I am grateful for the opportunity to say these few words.

8.57 p.m.

Mr. Frederick Lee (Newton)

It has been a pity that the debate today has had to be curtailed by the previous business. I am certain that no matter what our point of view may be on the solutions to this problem, we are all aware that there can be very few debates in this House of greater consequence than this, and I have the feeling that this is the first of perhaps a number of debates on this subject which we shall have in the not too distant future.

When we on this side of the House register our complete and utter opposition to the action which the Chancellor has taken, it must not be supposed that we are saying that the machinery of negotiation which we now have throughout British industry is the best possible machinery, that it has always served us well and that it will always serve us well. We do not say that at all. We recognise that in a changing situation, in which industry and industrial methods are now changing more rapidly than at any other period since the first Industrial Revolution, it is necessary that we should constantly amend the negotiating machinery in order to take into consideration the changes in productive methods.

Therefore, our opposition is not based on any unimaginative, solid refusal to see the need for change. Many of us on this side of the House—indeed, the trade union movement in very many of its sections, engineering, in particular—have been demanding a change in the negotiating machinery and the employers have refused point-blank to agree. Therefore, I say that we do not take a negative attitude.

I was apprehensive from the moment that I heard the Chancellor's statement three months ago. I felt then that it was an ill-considered statement, that there had been no working out of where we went from there. Therefore, I was most apprehensive from the moment that he made it, and I ventured to say so in various ways.

After today, I am shocked to the core. Three months after the statement about a pause on wages, a statement which did not attempt to substitute in any way, shape or form any other kind of negotiating machinery, the Chancellor comes to the Box and gives a string of difficulties which he feels are arising from the negotiating machinery. There was not one word about how long the pause will continue or what is to succeed the pause when it finishes. I believe that that is tragic.

My right hon. Friend the Member for Huyton (Mr. H. Wilson) today made a case which is unanswerable and unanswered. He quoted chapter and verse of agreements which have been wantonly, deliberately and knowingly broken by the Government. There has not been one constructive proposition placed before the Civil Service for altering that to which the Chancellor of the Exchequer objects. For three months the nation has been waiting for the Chancellor of the Exchequer to say what he meant. I think that at the Conservative Party Conference, and since, he used the expression "national wages policy". What does he mean by that? How long must we wait before we know the answer?

Today the Chancellor of the Exchequer told us that he is conducting discussions with both sides of industry. Which industry? Will he tell us now? Has there been any approach to any of the big private industries? In his statement of 24th July he made it abundantly clear, and repeated it today, that he desires, almost demands, that everything that we see emerging in the public sector should emerge in the private sector, apparently to the wanton breaking of every agreement which the Government can find. I am fairly certain that today the nation was waiting to hear what are the constructive alternatives to the negotiating machinery which the Chancellor of the Exchequer says is now dated. I think that it is utterly disgusting, utterly disgraceful, to this House and to the nation that at the end of this debate we are no wiser about what the right hon. and learned Gentleman thinks on this subject than we were before it began.

My right hon. Friend the Member for Huyton made a series of what I should have thought were the most serious charges which could be levelled at any Chancellor of the Exchequer. I hope that the House noticed that in his reply he did not deny the validity of a single one of them. All that he did was to say, as a lame excuse, "I am trying to do that which is best for the community as a whole". In other words, he accepts the validity of charges of bad faith and of the deliberate breaking of written agreements and his only excuse is that he feels that what he is doing is in the best interests of the nation.

I have heard, we have all heard, from that Box in the last few years that glib expression "the sanctity of agreements". We hear it every time that there is an unofficial strike, which I do not condone. We on this side, including myself, have also used it. How can the Chancellor of the Exchequer, the Minister of Labour or any other member of the Government come to the Box and preach about the sanctity of agreements when the Chancellor of the Exchequer does not deny that he has broken every industrial agreement? It is thoroughly and completely immoral. How can there be any chance of industry listening to the words which come from any representative of this Government? It tells me more clearly than I ever understood before precisely how we got into trouble at Suez, for if this is the way we treat the sanctity of agreements internally, how can we expect any more moral approach to agreements when the same right hon. and learned Gentleman happens to be at the Foreign Office?

I protest that, after waiting for these months in the belief that we were to hear at least about the bones of a constructive policy, the Horse will finish its debate tonight without knowing anything at all of what the future holds in this respect. I did not expect that we could have by now a cut and dried agreement with all the trade unions and employers of Britain. I did expect that at least the Chancellor would tell us about discussions he is having and about the types of industry with which he is discussing all these things. If the Minister of Labour can enlighten us about that, I should be very grateful.

We have been told today that the Government's decision was brought about because of the need to bring wages more into line with production. It has been presented to us as though the Government have thought of these things for the very first time. I have a memory. I remember 1956, for instance, when the present Prime Minister was Chancellor of the Exchequer and the engineering unions were asking for a substantial increase in wages. The present Prime Minister then caused Sir Anthony Eden, as he then was, the Prime Minister of the day, to bring together the chairmen of the nationalised boards and instruct them that they were not in any circumstances to increase the prices of their products. It was merely a maladroit attempt at ensuring that the nationalised boards could not meet wage demands anyway so that that would be a set-off against the demands of the engineers for increased wages.

In this "rake's progress" we move next to 1957, when the present Minister of Aviation made his name by an attempt at "nobbling the umpire", as we then called it—the threats to the chairmen of the arbitration boards. After that, in 1958, the present Leader of the House abolished the Industrial Disputes Order on the demand of the employers, with no replacement at all for the disputes procedure under that Order.

Now, in 1961, we see rendered abortive negotiating and arbitration procedures in the Civil Service, the teaching profession and those industries which have wages councils, embracing two or three million people, plus a request that both the nationalised boards and private employers should do the same.

I sometimes wonder what the outcome of all this will be. The taking away of any authority from the trade unions in Britain seems to be the logical conclusion of it. I sometimes wonder whether the Chancellor is trying to force the T.U.C. out of the I.C.F.T.U., for membership of that body is confined to trade unions which are not creatures of their Governments. We have heard of the House of Lords being described as Mr. Balfour's poodle. I should hate to see the T.U.C. become known as "Mr. Lloyd's Duck Club". That would he too much.

One test of the Government's present action is to ask oneself whether, if economic conditions today were such that the employers were able to negotiate wage reductions, we should then have the Government insisting on a wage freeze. It is quite obvious from their record that they will not impair the ability of employers, either in the sense of a dividend squeeze or in any way at all, to exploit the economic situation to the full.

The Minister of Labour has been informing the wages councils that he will not agree, until the end of the freeze, to sign agreements that are sent to him. I contest the right of the right hon. Gentleman to do anything of the sort. His job is either to sign an agreement when it comes to him or to send it back on the merits of each case. I would question his right under the statutes to do that which he is now doing.

The same applies with regard to the 1919 Act. The Minister is charged by statute to administer the terms of that Act. I believe that he is now contracting out of his responsibility as the custodian of that Act. He is statutorily bound, as I see it, to this House to administer the 1919 Act, and irrespective of whether other members of the Government want to threaten the teachers with alterations in legislation, I ask him tonight to address himself to the position that so long as he as Minister of Labour is in charge of that Act he has no right to withdraw from industry the right to go to arbitration under it.

Even more important is that we in this country have in the Ministry of Labour a Department which, I think, stands higher in the affection of both sides of industry than any other Department in any other country in the world. It is not that we have much in the way of legislation on the Statute Book which compels people to do anything through the Ministry. With the exception of the 1906 Act and the 1919 Act, there is nothing that really compels industry to do anything that the Ministry asks. Over the years it has grown in the esteem of industry which went automatically to No. 8 because it believed that it could rely on the scales of justice being kept balanced for both sides.

My fear now is that the Minister of Labour himself is being caught up in what is a political wangle for industrial ends, and that the day has gone when a trade union could feel that in going to No. 8 to ask the services of the Ministry of Labour it could expect to get justice. If we have reached that position, it is not a question of a momentary wages pause, it is not a question whether after a difficult period we can turn back to that which was there before. We do not build up confidence and trust in a year or in fifty years. Once a Government have used their power in the way this Government are using it now, I am apprehensive as to the possibility of the trade union movement ever again believing that the Ministry of Labour is trying to hold the balance fairly as between both sides of industry.

If it is the case that the Government are concerned—as the Chancellor said in his statement that they are—that we shall relate wages to productivity, perhaps I may be told why it is that they have started off with two great services neither of whose productivity is measurable. Perhaps my hon. Friends could assist in increasing productivity in the Civil Service by tabling more Questions so that they can tell the Chancellor what the answers are. One of the greatest problems in trying to obtain a wages policy is that we have great sections of industry in which thousands of people are engaged upon work which cannot be measured. Will the Minister of Labour tell us how or when the Chancellor expects to be able to report to the House that the productivity of the civil servants, the teachers and the wage councils industries has increased to the point where they can apply for wage advances?

I find it difficult to believe that the levels of inflation in Britain will be determined by the ability of the Chancellor to control the activities of wages councils for, for instance, the keg and drum industry or the pin, hook and eye and snap fasteners industries. Are we really asked to believe that this kind of messing about with almost defence-less people who have wages councils because they are unable to organise themselves properly is the object of the whole exercise?

I have said that the background to the debate, especially to those of us who for years have taken some interest in these matters, represents a major tragedy. We heard all the details of gross unfairness and dictatorial decisions which have now caused deep and justified anger among civil servants and teachers.

But let us consider the background to the present industrial position. Surely we are, by common consent, now witnessing in industry a major breakthrough in technical achievements which makes increase in industrial productivity comparatively simple. I have just returned from the United States where I discussed these matters in the Labour Department and the Commerce Department and with trade union leaders and with large-scale employers. They are all extremely worried about the technologi- cal unemployment which the introduction of new methods has brought, and they tell me that that will spread to 85 per cent. of their industry where modern methods still have to be applied.

That kind of problem—technological unemployment in a great scientific revolution—is a logical one, and we ought to be discussing that sort of thing tonight. We shall never get away from the stagnation of which there is complaint unless we have modernisation, and yet it is in that kind of situation that we in the House are in the absurd position where spectacular increases in productivity are now possible but we are faced with the alleged necessity of suspending the negotiating and arbitrating machinery until increases in production can catch up with wage advances, which, in all conscience, have been very modest. I believe that it is nothing short of an admission of the complete and abject failure of the Government's economic policy and their attempt now to limit wages and salaries to the levels of stagnation which they have succeeded in producing.

Among the panic measures is the announcement of the Government's conversion to planning. The Government have won three General Elections by pouring scorn on the whole conception of planning, and I just cannot wait for the moment when the Prime Minister emerges as the pioneer of long-term contracts and bulk purchase arrangements. It is small wonder that the Colonial Secretary, who used to argue that controls meant rationing, has now been removed from the scene of economic activity. One wonders whether they still have in the Tory Central Office any of those delightful dummy ration books which they used to distribute in the days before they were planners.

I suggest to my right hon. and hon. Friends that before acclaiming this mass conversion as an event which makes a certain incident which took place on the road to Damascus look like the quintessence of consistency, we should examine just how far the Government's zeal for planning has now progressed. As yet, we have heard nothing more than that planning is synonymous with an enforced wage and salary freeze achieved by the dishonouring of agreements and the mutilation of arbitration procedure.

What is the function of industrial arbitration? I have always understood it to be a process which enables unprejudiced minds to examine and resolve a dispute which the negotiators have failed to solve. It is the alternative to strike and lock-out. When we were considering, on 19th November, 1958, the action of the present Leader of the House in eliminating the Industrial Disputes Order, I said that if arbitration was the alternative to strike and lockout, to dispense with that alternative was to invite recourse to strike and lock-out.

The abolition of compulsory arbitration which, under that Order, could be requested by one party to a dispute, fits in nicely with the Government's present policy. It would be interesting to have seen what would have happened if the Industrial Disputes Tribunal had come to a decision in favour, for instance, of N.A.L.G.O. at the present moment.

During that debate in 1958 I argued that since the war there had been very little use made of sheer industrial strength for the settlement of disputes, and that this could be traced in part to the availability of such arbitration as we had in the Industrial Disputes Order. I said: In consequence of this we have advanced towards a far more civilised way of dealing with our industrial affairs instead of resorting to the jungle law of the survival of the fittest. Our great fear in the abolition of this Order is that this process could now be disrupted and that, in place of justice as the basis upon which wage claims are settled, we may well see the ability to use economic and industrial power coming back into our considerations. I have an idea that we are much nearer that stage now than in 1958. I went on: If I am right in this, it presupposes trouble in those industries in which the sides have power to fight, just as it presupposes the enforcement of the will of the employers in industries in which the unions possess very little economic power."—[OFFICIAL REPORT, 19th November, 1958; Vol. 595, c. 1251.] The Government, as employers, have proved me right. In other words, where the workers have little or no economic power the wage freeze can be imposed at once. I believe that what has happened is but the preliminary to what may come in great private industry. It would be a great optimist who would believe now that we are very far away from the position in which a trial of strength may take place.

My right hon. Friend the Member for Huyton (Mr. H. Wilson) showed, detail by detail, that the Government, apparently backed by Members opposite, have forfeited the right to consider that their own employees can ever again trust them with an agreement, either verbal or written. I shall not go through the whole series of cases which he quoted, but it is, to us, disturbing that the Chancellor, in his explanation of where the rights and wrongs of this matter lie, seemed to forget that freedom of association and freedom to elect and dismiss a Government, although they are essential ingredients of democracy, are not the sole proofs of a mature democracy such as ours. Industrial and economic democracy is just as vital a part of a great industrial nation as the power to elect or dismiss a Government.

I have said that I do not believe we are at the end of this process that the Government have launched. I am looking for the objectives of the exercise. I have mentioned what happened in 1956, when the connivance of the present Prime Minister with the engineering employers was shown clearly. In 1957 the Engineering and Allied Employers' Federation issued an interesting booklet in which it said: Twice in four years the Federation had been prepared to `fight it out' with the unions. Clearly, the unions' capacity to pay strike benefit was limited. Such a course, involving, as it would have done, the virtual closing down of the industry, might have been a worthwhile calculated risk. It was no occasion for the kind of compromise which would inevitably emerge from a Court of Inquiry. A little later on it said: No one can complacently look back on this dispute and say that it has taught the two sides and the Government valuable lessons from which they will benefit in the future. The employers took their original stand twelve months before the wage claim was settled on 23rd May, 1957. They stood firmly by their declaration that any general wage claim by the Confederation would be rejected, until pressure of events, partly dictated by the Government's apparent approval of a 6½ per cent. railway settlement in March, 1957, confronted them with the choice of meeting the trade unions' challenge alone, or with creating a situation that would lead to the strike being called off while a Court of Inquiry examined the causes and circumstances of the dispute. Evidently the Government was not as convinced in the spring of 1957 as it had been in the previous year that industrial conflict might be preferable to capitulation to the unions in an inflationary economy. The Government and the employers' organizations—notably the British Employers Confederation, in a document Britain's Industrial Future',…—were in complete agreement in 1956 that further pay rises were not in the best interest of workers in a period of rising prices, when bigger pay packets would buy less and further aggravate the inflationary spiral. When all appeared set for a struggle to which the Federation and the Confederation were irretrievably committed, the Government, shaken by the economic and political repercussions of intervention in Suez, decided that the country was not strong enough to withstand the probable effects of transport, engineering and shipbuilding strikes. I have often wondered what Lord Mills does in the present Government. I first knew him as Sir Percy Mills, the president of the engineers' National Federation. I am wondering if the thinking of Lord Mills in any way represents the thinking of Sir Percy Mills at a time when the engineering employers were twice in four years desirous of bringing the trade unions to a strike. This is the pith of the matter. At the moment the Civil Service and the teachers, together with the wages council industries, are in the front line, but none of us should believe that this is where the matter ends. The Government are after far bigger fish than that. They are trying to bring about a position in which, whether a man be an engineer, a miner or a railwayman, he will be confronted with an example set by people who have not the power to fight.

Many of us from the trade union world came into this House years ago in order to try to improve facilities for negotiation and to bring about better living standards and a better approach from both sides of industry. It affords us no consolation now to witness a Government whose economic policies lie in tatters and who are now desirous of bringing clown the wage standards to the levels of their own failures. It is for those reasons that hon. Members on this side will oppose in every way they can the imposition of an injustice, in the form of the action that the Government are now taking.

I have said that this will probably be only the first of many debates. I hope that these debates can be confined to this House. My feeling is that we are entering a period of enormous struggle in industry. If this is so the Government must not go to the people and tell them, "You must give us a mandate because the trade unions are striking." Let us have the thing put squarely, and let us say that the failure of Toryism really to work in the second half of the twentieth century has driven every one of us to sheer desperation.

9.30 p.m.

The Minister of Labour (Mr. John Hare)

We have just listened to a speech which began with a rather different approach from that of the right hon. Member for Huyton (Mr. H. Wilson), who opened this debate, and then perhaps rather tended to take a similar line towards the end. I think that it failed to examine what it was that the Government were trying to do. This has been the trouble with the debate. [An HON. MEMBER: "Tell us."] I will.

We have been attacked on a number of counts. We have been attacked for interfering with arbitration in the Civil Service. We have been attacked for breaking contracts with Government employees. We have been attacked for departing from the fair wages resolution, and we have been attacked for interfering with the Burnham machinery. Obviously, these are matters with which hon. Members would like me to try to deal during this debate. Throughout the debate the Opposition have failed to give any clear lead on whether the policy which has caused us to take this tough, painful—but, in our opinion, necessary—action is right or wrong. They blame the medicine, without relating the medicine to the disease which it is designed to cure, and this is what has made the debate rather unreal.

I think that the Economist posedthe issue very clearly last week when it said: The first and simplest immediate point to make during these coming debates is that a Government can fight a wage-price spiral either by taking a tough line on wages directly—or else by holding down production through fiscal and other restrictions, in the hope that wage inflation may then he checked indirectly, by the general deflation of demand. There is not the slightest doubt that the direct method is the more progressive and sensible; because the level of real earnings depends overwhelmingly on the level of production, the method of the wages pause is the one that should be overwhelmingly supported by all who want to see an advance in Britain's real standard of living. I have one quarrel with that statement, and it is that it refers to wages only when it should have referred to all incomes from whatever sources.

Not many hon. Members opposite have, in fact, listened throughout this debate, but those who have been here should realise that what my right hon. and learned Friend the Chancellor told us this afternoon must be true—that the pressure on sterling would not have lifted if he had not taken the drastic action which he did. I believe, and I think that many right hon. and hon. Members opposite would also agree, that the idea behind the Chancellor's policy—that incomes should rise in relation to productivity—is sound common sense, and would end the "Stop and Go" formula which has undoubtedly held back—and I know that the right hon. Gentleman will agree with me here—the rise in Britain's productivity since the war.

Mr. H. Wilson

The right hon. Gentleman must not misrepresent what I said. I said provided that production continued to increase.

Mr. Hare

That is what our policy is designed to do.

Mr. Wilson

The "Stop and Go" policy is the Government's.

Mr. Hare

May I now deal with some of the charges made against us? I can give the hon. Member for Newton (Mr. Lee) a categorical assurance about the action I shall take under the Industrial Courts Act of 1919. I will in no circumstances refuse reference to arbitration if both parties consent to it. On the subject of arbitration, there are a number of points which I want to answer. The right hon. Member for Huyton alleged that the representatives of the Civil Service "industrials" were threatened with amendment of the Industrial Courts Act. I can assure him that that is entirely untrue. I think that he got it from a report in the Guardian,but I thought that he was too wily a bird to believe everything he reads in newspapers.

Mr. H. Wilson

I am sorry to interrupt the right hon. Gentleman again, but I did not get it from any newspaper report. I got it from the trade union official to whom the threat was made. If the right hon. Gentleman will tell me that the threat was made without his authority and that he repudiates it and that no legislation to alter the Act is envisaged, then of course we shall be happy to accept that assurance.

Mr. Hare

First, I should like to ask the right hon. Gentleman who it was who told him. [HON. MEMBERS: "Answer."] Secondly, what I said was perfectly clear. This allegation is entirely untrue. A lot of points have been raised, and I wish to answer them. We are not rejecting the awards of the arbitration tribunals. To the extent that awards confirm offers already made we are giving effect to them immediately, and we are back-dating increases to the date offered in negotiations. This the Chancellor explained and gave examples relating to Admiralty storemen and Post Office engineers. If the award is for increases greater than the offer already made, the balance will be paid at a later date to be determined. It will not be paid retrospectively. I think that the hon. Gentleman for Newton will realise that retrospection would be completely contrary to any policy of pause.

I ask the House to remember that my right hon. and learned Friend the Chancellor of the Exchequer has promised to see the Civil Service unions, and review the situation, early next year. As the Chancellor explained—for some unknown reason this is considered humorous by hon. Members opposite—the public interest has been the basis for our action. It must always be the right and duty of a Government to withhold matters from arbitration if public policy requires that it should be done. The right hon. Gentleman was good enough to give me a copy of the document, "Staff Relations in the Civil Service." I have my own copy. If the right hon. Gentleman in making his perusal of the document had bothered to read as far as paragraph 95 he would have seen that in the last sentence it states: But the Government must also reserve to itself the right to refuse arbitration 'on grounds of policy:' because the Government is responsible to Parliament for the administration of the public service and cannot relieve itself of that responsibility or share it with any other persons or organisation.

Mr. H. Wilson

Read paragraph 97.

Mr. Hare

I have a lot—

Hon. Members

Read on.

Mr. Hare

The hon. Member for Newton, the right hon. Member for Caerphilly (Mr. Ness Edwards) and the hon. Member for Gloucestershire, West (Mr. Loughlin) all asked about my position in regard to the wages councils. My responsibilities under the Act are quite clear. With respect to the hon. Member for Newton—and nobody is more versed in these matters—even he seems to have got the position slightly wrong. When a wages council submits proposals to me I must make an order giving effect to them unless I choose to refer them back to the council for reconsideration. But when I make an order I must specify an operative date in the order. The Minister, under the legislation, has to determine the date. This is not a matter for the wages council. The hon. Gentleman was talking about not signing orders and that is why I am trying to give this information.

Since 25th July I have made orders giving effect to proposals for wage increases from six councils. Three of these councils had gone through the whole of the necessary statutory procedure and had submitted their proposals before 25th July. Accordingly, I made orders in the normal course. The next group presented difficulties. I have dealt with three of them. Before the Chancellor's statement the representatives of both employers and workers on those councils had agreed on a basis for their proposals which they then published, or were about to publish. The employers and unions represented on those wages councils had not, however, completed the full procedure of consideration which is necessary under the Statute. The final stages of this procedure took place after the Chancellor had made the statement, and proposals were not submitted to me until September.

I thought it right in these circumstances to impose an element of delay when making the orders to give effect to the proposals. I was in some difficulty, and I want to explain to the House why I acted as I did. If I had made the orders so that the increases came into effect in the ordinary way this would have been in conflict with the pause. I also thought it right to give effect to the views expressed by the employers' and workers' representatives that they regarded their agreements as committing them. For this reason, the delay I imposed was less than I would otherwise have thought to be right.

The orders, which have been discussed by a number of hon. and right hon. Members on both sides of the House, I have put into effect from 1st January, 1962. This is at least six weeks later than they would normally have been granted. As I hope to explain to the House, I have endeavoured to reconcile the two conflicting elements—the degree of prior commitment and the pause policy. I leave it to the right hon. Member for Caerphilly who talked about a very good friend of all of us in the House at the time, the late Mr. George Isaacs—[HON. MEMBERS: "He is not dead."]—well, he was a very good chap. The right hon. Member for Caerphilly, when talking about his relations and experience at the Ministry of Labour, seemed to have forgotten one thing. That was that Mr. George Isaacs referred back certain proposals to wages councils. I think the only difference between him and myself, or our respective Governments, was that we had the courage to carry out our convictions.

The next matter I want to touch on is the number of points raised about teachers' salaries. I wish particularly to refer to the speeches of the right hon. Member for South Shields (Mr. Ede) and the hon. Member for Gloucester, West. The Chancellor in his speech dealt very fully with this matter. I should like to emphasise two points. In all the speeches of hon. Members opposite one got the impression that the teachers had had their salaries cut and that this was a perfectly disgraceful action. The truth, as everybody who really knows the position realises, despite all the political barrage which has been put up, is that the teachers' salaries will go up by £42 million, an increase of more than 141 per cent.—the biggest increase the teachers have ever had. I could not understand the rather abstruse remarks of the right hon. Member for South Shields in saying that they were worse off now than in 1919.

Mr. Walter Monslow (Barrow-in-Furness)

Will the right hon. Gentleman forgive me—

Mr. Hare

No, I am talking about the right hon. Member for South Shields. He appeared to think that the action of the Minister of Education in relation to the Burnham Committee was contrary to the 1944 Act. That is not so, and I am rather surprised that he should say so because I know that he assisted the Home Secretary in the preparation of that Act. Surely the right hon. Gentleman recognises that my right hon. Friend the Minister of Education has no power under Section 89 to prescribe new scales in the event of a deadlock. He has merely the right to say yes or no.

That is why we welcome the agreement of the Burnham Committee to accept the £42 million. This has two effects. First, it enables the 14½ per cent. increase in salary to be paid straight away. Secondly, it means that in calmer circumstances the future of the Burnham Committee can be considered in the next few months by all concerned. [HON. MEMBERS: "Blackmail"] It is nonsense to suggest that it is blackmail.

A number of hon. Members opposite said that the Government's policy is an attack on wages alone, and my hon. Friend the Member for Louth (Sir C. Osborne) tended to agree. Wise as I consider my hon. Friend on many counts, I cannot agree entirely with his speech. We are not discriminating in this way. The Chancellor has made it abundantly clear to any fair-minded man that this applies to all incomes—salaries, wages, profits and dividends. [Interruption.]

This criticism, again, is good political stuff, but if hon. Members pick up the newspapers they will realise that profits are being squeezed. [HON. MEMBERS: "By whom?"] None of the hon. Members who intervene were here to listen to the Chancellor today. He said—and nobody denied—that company profits in the first part of this year had been 7 per cent. lower than a year ago. As hon. Members know, Profits Tax has been increased in the last two Budgets. This downward trend of profits is being reflected in dividends. This, too, is a statement of fact.

My hon. Friend the Member for Louth suggested a capital gains tax. The Chancellor has spoken about capital gains and has made it clear that he intends to bring in measures to deal with short-term speculative deals, both in property and on the Stock Exchange, which are intended to bring in spending money.

Mr. William Ross (Kilmarnock)

When?

Mr. Hare

I should like to say what I believe is needed. The question of a proper balance between increases in income and increases in productivity is, as we must recognise, the concern of us all—Government, employers, trade unions and all others who are responsible for determining the rate of increase in incomes. Fair-minded people will admit that this is not a new problem. It has been with us ever since the war. Sir Stafford Cripps frequently referred to it in his speeches, and the Leader of the Opposition, in one of his last speeches as Chancellor of the Exchequer, when he addressed the T.U.C. in 1951, said—

Mr. William Ainsley (Durham, North-West)

That was ten years ago.

Mr. Hare

It remains true.

Mr. H. Wilson

Sir Stafford Cripps resigned as Chancellor of the Exchequer on 20th October, 1951.

Mr. Hare

The right hon. Gentleman is evidently having a little difficulty in hearing me. I know that there is a lot of noise. I said that I was referring to the Leader of the Opposition when he was Chancellor of the Exchequer. It is a little quieter now and perhaps the right hon. Gentleman can hear me. What the Leader of the Opposition said was this: The plain fact is that the cost of living here will go on rising in 1952 even with stable world prices if we go on pushing up our own costs through further substantial rises in wages and salaries. That is what we surely must avoid. If incomes go up more than production goes up, then prices will rise. The right hon. Gentleman ended with these words: The truth is as simple as that. This is the truth that we are saying now. This is the truth which I know that the right hon. Member for Huyton fully recognises. He has done his best to disguise it, but it is something which I do not think political labels should inhibit us from recognising.

We all recognise the really great value of the arrangements for collective bargaining which have been built up by employers and trade unions over many years. It has been the policy of all Governments for many years to encourage employers and unions to set up machinery for negotiation and if their problems cannot be settled by negotiation to go to independent arbitration. This system has produced many great advantages, but we must face the fact that there has been one great weakness. As a result of collective bargaining, negotiation and other arrangements, wages and salaries have increased greatly in excess of production. Arbitration, in its turn, like a mirror, has reflected the trend of negotiated settlements or what has happened in the collective bargaining preceding arbitration. However, when considering arbitration we should remember that it covers only a small proportion of the increases granted each year.

These are hard realities which we simply must face up to. The short speech of my hon. Friend the Member for Folkestone and Hythe (Mr. Costain) produced some very good points. He said that we have had rising prices, that we have failed to increase exports, that we have too high a rate of imports, that we have lessened our ability to compete and that we have failed to get our balance of payments right. I think that most hon. Members will agree that we must preserve and cherish all that is best in our system of collective bargaining, but all of us—Government, employers and trade unionists—must be prepared to give hard and serious thought to the question of relating incomes to productivity.

To sum up, what we have done is to protect the interests of the whole community. My right hon. and learned Friend the Chancellor of the Exchequer has set out the economic and financial considerations. I do not think that it is necessary for me to repeat the details, but I want to underline one vital fact. For the first time this century our credit balance on invisible account has virtually disappeared. [Laughter.] This is not a laughing matter. For the future we must earn our living by visible exports. It is a sobering thought that during the last fifty years only in one year, namely,1958, have we shown a balance of visible exports over imports.

Perhaps since the war our economy has been too sheltered. It has been too easy to have higher wages, higher salaries, higher profits and dividends, and then pass them on in the shape of higher prices, thus cancelling out any benefits which might have been obtained. But it is not only a question of balance of payments. The threat is to full employment and our whole standard of life. Inflation affects us all, but it strikes particularly at the classes we know about—those least able to afford it.

These were the dangers that the Government had to meet. We did not run away from them. We took wide and comprehensive action, painful and unpopular as we knew it would be. The pause is giving us time to work out more long-term remedies.

We cannot go back to the regular inflationary round of increases in profits, dividends, and so on. We must cease to overdraw on productivity. If we do not, we shall kill that famous goose we heard about last week that lays those golden eggs on which our living standards and commitments depend. But, as we earn more, so we can pay ourselves more. This is no negative policy, directed against one section of the community, on which we are embarked.[HON. MEMBERS: "0h"] I am certain that, given the proper chance, productivity will increase at a greater rate than in the past.

Hon. Gentlemen opposite are making a lot of noise, but these are the facts of life and they are not difficult to understand. To cope successfully with them, we shall require common sense, self-restraint and the confidence that British industry is well capable of meeting the challenge of increased competition. In all this, the duty of the Government is to give the lead. This is what we are doing, and it is for this, apparently, that the Opposition seek to censure us.

Question put, That the words proposed to be left out stand part of the Question:—

The House divided: Ayes 226, Noes 309.

Division No. 268.]	AYES	[9.57 p.m.
Abee, Leo	Hewitson, Capt. M.	Pavitt, Laurence
Ainsley, William	Hill, J. (Midlothian)	Pearson, Arthur (Pontypridd)
Albu, Austen	Hilton, A. V.	Peart, Frederick
Allaun, Frank (Salford, E.)	Holman, Percy	Pentland, Norman
Allen, Scholefield (Crewe)	Houghton, Douglas	Plummer, Sir Leslie
Awbery, Stan	Howell, Charles A. (Perry Barr)	Popplewell, Ernest
Baxter, William (Stirlingshire, W.)	Howell, Denis (Small Heath)	Prentice, R. E.
Beaney, Alan	Hoy, James H.	Price, J. T. (Westhoughton)
Bellenger, Rt. Hon. F. J.	Hughes, Cledwyn (Anglesey)	Probert, Arthur
Bence, Cyrll	Hughes, Emrys (S. Ayrshire)	Pursey, Cmdr. Harry
Benson, Sir George	Hughes, Hector (Aberdeen, N.)	Randall, Harry
Blackburn, F.	Hunter, A. E.	Rankin, John
Blyton, William	Hynd, H. (Accrington)	Redhead, E. C.
Boardman, H.	Irvine, A. J. (Edge Hill)	Reid, William
Bowden, Herbert W. (Leics, S. w.)	Irving, Sydney (Dartford)	Reynolds, G. W.
Bowen, Roderic (Cardigan)	Janner, Sir Barnett	Rhodes, H.
Bowler Frank	Jay, Rt. Hon. Douglas	Roberts, Albert (Normanton)
	Jenkins, Roy (Stechford)	Robertson, John (Paisley)
Boyden, James.	Johnson, Carol (Lewisham, S.)	Robinson, Kenneth (St. Pancras, N.)
Braddock, Mrs. E. M	Jones, Rt. Hn. A. Creech(Wakefield)	Ross, William
Brockway, A. Fenner.	Jones, Dan (Burnley)	Royle, Charles (Salford, West)
Broughton, Dr. A. D. D	Jones, Elwyn (West Ham, S.)	Shinwell, Rt. Hon. E.
Brown, Rt. Hon George (Belper)	Jones, Jack (Rotherham)	Short, Edward
Butler, Mrs. Joyce (Wood Green)	Jones, J. Idwal (Wrexham)	Silverman, Julius (Aston)
Castle, Mrs. Barbara	Jones, T. W. (Merioneth)	Silverman, Sydney (Nelson)
Chapman, Donald	Kelley, Richard	Skeffington, Arthur
Chetwynd, George	Kenyon, Clifford	Slater, Mrs. Harriet (Stoke, N.)
Cliffe, Michael	Key, Rt. Hon. C. W.	Slater, Joseph (Sedgefield)
Collick, Percy	King, Dr. Horace	Small, William
Corbet, Mrs. Freda	Lawson, George	Smith, Ellis (Stoke, S.)
Craddock, George (Bradford, S.)	Ledger, Ron	Snow, Julian
Cronin, John	Lee, Frederick (Newton)	Sorensen, R, W.
Crostand, Anthony	Lee, Miss Jennie (Cannock)	Soskice, Rt. Hon. Sir Frank
Darting, George	Lever, L. M. (Ardwick)	Spriggs, Leslie
Davies, G. Elfed (Rhondda, E.)	Lewis, Arthur (West Ham, N.)	Stewart, Michael (Fulham)
Davies, Harold (Leek)	Lipton, Marcus	Stonehouse, John
Davies, Ifor (Gower)	Loughlln, Charles	Stones, William
Davies, S. O. (Merthyr)	Mabon, Dr. J. Dickson	Strachey, Rt. Hon. John
Deer, George	McCann, John	Strauss, Rt. Hn. G. R. (Vauxhall)
Detargy, Hugh	MacColl, James	Swain, Thomas
Dempsey, James	Mclnnes, James	Swingler, Stephen
Diamond, John	McKay, John (Wallsend)	Sylvester, George
Dodds, Norman	Mackie, John (Enfield, East)	Symonds, J. B.
Donnelly, Desmond	McLeavy, Frank	Taylor, Bernard (Mansfield)
Driberg, Tom	MacMillan, Malcolm (Western Isles)	Thomas, George (Cardiff, W.)
Dugdale, Rt. Hon. John	MacPherson, Malcolm (Stirling)	Thomas, lorwerth (Rhondda, W.)
Ede, Rt. Hon. C.	Mahon, Simon	Thompson, Dr. Alan (Dunfermlins)
Edelman, Maurice	Mallalieu, J.P.W. (Huddersfield, E.)	Thornton, Ernest
Edwards, Rt. Hon. Ness (Caerphilly)	Manuel, A. C.	Thorpe, Jeremy
Edwards, Robert (Bilston)	Mapp, Charles	Timmons, John
Edwards, Walter (Stepney)	Marquand, Rt. Hon. H. A.	Tomney, Frank
Evans, Albert	Marsh, Richard	Ungoed-Thomas, Sir Lynn
Finch, Harold	Mason, Roy	Wainwright, Edwin
Fitch, Alan	Mayhew, Christopher	Weitzman, David
Fletcher, Eric	Mellish, R. J.	Wells, Percy (Faversham)
Foot, Michael (Ebbw Vale)	Mendelson, J. J.	Wells, William (Walsall, N.)
Fraser, Thomas (Hamilton)	Millan, Bruce	Whitlock, William
Galpern, Sir Myer	Milne, Edward J.	Wigg, George
George, Lady Megan Lloyd (Crmrthn)	Mitchison, G. R.	Wilcock, Group Capt. C. A. B
Ginsburg, David	Monslow, Walter	Wilkins, W. A.
Gordon Walker, Rt. Hon, P. C.	Moody, A. S.	Willey, Frederick
Gourlay, Harry	Morris, John	Williams, D. J. (Neath)
Greenwood, Anthony	Mort, D. L.	Williams, Ll. (Abertillery)
Grey, Charles	Moyle, Arthur	Williams, W. R. (Openshaw)
Griffiths, David (Rother Valley)	Mulley, Frederick	Williams, W. T. (Warrington)
Griffiths, Rt. Hon. James (Llanelly)	Neal, Harold	Willis, E. G. (Edinburgh, E.)
Griffiths, W. (Exchange)	Oliver, G. H.	Wilson, Rt. Hon. Harold (Huyton)
Grimond, J.	Oram, A. E.	Winterbottom, R. E.
Gunter, Ray	Oswald, Thomas	Woodburn, Rt. Hon. A.
Hale, Leslie (Oldham, W.)	Owen, Will	Woof, Robert
Hall, Rt. Hn. Glenvil (Colne Valley)	Padley, W. E.	Wyatt, Woodrow
Hamilton, William (West Fife)	Paget, R. T.	Yates, Victor (Ladywood)
Hannan, William	Pannell, Charles (Leeds, W.)	Zilliacus, K.
Hart, Mrs. Judith	Pargiter, G. A.
Hayman, F. H.	Parker, John	TELLERS FOR THE AYES:
Henderson, Rt. Hn. Arthur (Rwly Regis)	Parkin, B. T.	Mr. John Taylor and Mr. Rogers.
Herbison, Miss Margaret	Paton, John
NOES
Allason, James	Balniel, Lord	Batsford, Brian
Amery, Rt. Hon. Julian	Barber, Anthony	Baxter, Sir Beverley (Southgate)
Ashton, Sir Hubert	Barlow, Sir John	Beamish, Col. Sir Tufton
Atkins, Humphrey	Barter, John	Bell, Ronald

Bennett, F. M. (Torquay)	Gibson-Watt, David	Macmillan, Maurice (Halifax)
Bennett, Dr. Reginald (Gos & Fhm)	Glover, Sir Douglas	Macpherson, Niall (Dumfries)
Berkeley, Humphry	Glyn, Dr. Alan (Clapham)	Maddan, Martin
Bevins, Rt. Hon. Reginald	Glyn, Sir Richard (Dorset, N.)	Maginnis, John E.
Biggs-Davison, John	Godber, J. B.	Maitland, Sir John
Bingham, R. M.	Goodhew, Victor	Manningham-Buller, Rt. Hn. Sir R.
Birch, Rt. Hon. Nigel	Cough, Frederick	Markham, Major Sir Frank
Bishop, F. P.	Gower, Raymond	Marples, Rt. Hon. Ernest
Black, Sir Cyril	Grant, Rt. Hon. William	Marshall, Douglas
Bossom, Clive	Grant-Ferris, Wg. Cdr. R.	Marten, Neil
Bourne-Arton, A.	Green, Alan	Mathew, Robert (Honiton)
Box, Donald	Gresham Cooke, R.	Matthews, Gordon (Meriden)
Boyd-Carpenter, Rt. Hon. John	Grimston, Sir Robert	Maudling, Rt. Hon. Reginald
Boyle, Sir Edward	Gurden, Harold	Mawby, Ray
Braine, Bernard	Hall, John (Wycombe)	Maxwell-Hyslop, R. J.
Brewis, John	Hamilton, Michael (Wellingborough)	Maydon, Lt.-Cmdr. S. L. c.
Bromley-Davenport, Lt.-Col. Sir Walter	Hare, Rt. Hon. John	Mills, Stratton
Brooke, Rt. Hon. Henry	Harris, Frederic (Croydon, N.W.)	More, jasper (Ludlow)
Brooman-White, R.	Harris, Reader (Heston)	Morgan, William
Brown, Alan (Tottenham)	Harrison, Brian (Maldon)	Morrison, John
Browne, Percy (Torrington)	Harvey, Sir Arthur Vere (Macclesf'd)	Mott-Radclyffe, Sir Charles
Bryan, Paul	Harvey, John (Walthamstow, E.)	Nabarro, Gerald
Buck, Antony	Harvie Anderson, Miss	Neave, Airey
Bullard, Denys	Hay, John	Nicholls, Sir Harmar
Bullus, Wing Commander Eric	Heald, Rt. Hon. Sir Llonel	Nicholson, Sir Godfrey
Burden, F. A.	Henderson, John (Cathcart)	Noble, Michael
Butcher, Sir Herbert	Hendry, Forbes	Nugent, Sir Richard
Butler, Rt. Hn. R. A. (Saffron Walden)	Hicks Beach, Maj. W.	Oakshott, Sir Hendrie
Campbell, Sir David (Belfast, S.)	Hlley, Joseph	Orr, Capt. L. P. S.
Campbell, Gordon (Moray & Naim)	Hill, Dr. Rt. Hon. Charles (Luton)	Orr-Ewing, C. Ian
	Hill, Mrs. Eveline (Wythenshawe)	Osborn, John (Hallam)
Carr, Compton (Barons Court)	Hill, J. E. B. (S. Norfolk)	Osborne, Sir Cyril (Louth)
Cary, Sir Robert	Hobson, John	Page, John (Harrow, West)
Channon, H. P. G.	Hocking, Philip N.	Page, Graham (Crosby)
Chataway, Christopher	Holland, Philip	Pannell, Norman (Kirkdale)
Chlchester-Clark, R.	Hollingworth, John	Partridge, E.
Clark, Henry (Antrim, N.)	Hornby, R. P.	Pearson, Frank (Clitheroe)
Clark, William (Nottingham, S.)	Hornsby-Smith, Rt. Hon. Patricia	Percival, Ian
Clarke, Brig. Terence (Portemth, W.)	Howard, Hon. G. R. (St. Ives)	Peyton, John
Cleaver, Leonard	Howard, John (Southampton, Test)	Pickthorn, Sir Kenneth
Cole, Norman	Hughes Hallett, Vice-Admiral John	Pike, Miss Mervyn
Collard, Richard	Hughes-Young, Michael	Pilkington, Sir Richard
Cooke, Robert	Hulbert, Sir Norman	Pitman, Sir James
Cooper, A. E.	Hutchison, Michael Clark	Pitt, Miss Edith
Cooper-Key, Sir Neill	Iremonger, T. L.	Pott, Percivall
Cordeaux, Lt.-Col. J. K.	Irvine, Bryant Godman (Rye)	Powell, Rt. Hon. J. Enoch
Corfield, F. V.	James, David	Price, David (Eastleigh)
Costain, A. P.	Jenkins, Robert (Dulwich)	Price, H. A. (Lewisham, W.)
Courtney, Cdr. Anthony	Jennings, J. C.	Prior, J. M. L.
Craddock, Sir Beresford	Johnson, Dr. Donald (Carlisle)	Profumo, Rt. Hon. John
Critchley, Julian	Johnson, Eric (Blackley)	Proudfoot, Wilfred
Crosthwalte-Eyre, Col. Sir Oliver	Johnson Smith, Geoffrey	Pym, Francis
Crowder, F. P.	Joseph, Sir Keith	Quennell, Miss J. M,
Cunningham, Knox	Kaberry, Sir Donald	Ramsden, James
Curran, Charles	Kerans, Cdr. J. S.	Rawlinson, Peter
Currie, G. B. H.	Kerby, Capt. Henry	Redmayne, Rt. Hon. Martin
Dalkeith, Earl of	Kershaw, Anthony	Rees, Hugh
Dance, James	Kimball, Marcus	Rees-Davies, W. R.
Deedee, W. F.	Kitson, Timothy	Renton, David
de Ferrantl, Basil	Lagden, Godfrey	Ridley, Hon. Nicholas
Digby, Slmon Wingfield	Lambton, Viscount	Ridsdale, Julian
Doughty, Charles	Lancaster, Col. C. G.	Rippon, Geoffrey
Drayson, G. B.	Leather, E. H. C,	Robinson, Sir Roland (Blackpool, S.)
du Cann, Edward	Leavey, J. A.	Robson Brown, Sir William
Duncan, Sir James	Leburn, Gilmour	Rodgers, John (Sevenoaks)
Eccles, Rt. Hon. Sir David	Legge-Bourke, Sir Harry	Roots, William
Eden, John	Lindsay, Martin	Royle, Anthony (Richmond, Surrey)
Elliot, Capt. Walter (Carsharton)	Linstead, Sir Hugh	Russell, Ronald
Elliott, R. W. (Nwcstle-upon-Tyne, N.)	Litchfield, Capt. John	St. Clair, M.
Emery, peter	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)	Scott-Hopkins, James
Emmet, Hon. Mrs. Evelyn	Lloyd, Rt. Hon. Selwyn (Wirral)	Seymour, Leslie
Errington, Sir Eric	Longbottom, Charles	Sharpies, Richard
	Longden, Gilbert	Shaw, M.
Erroll, Rt. Hon. F. J.	Loveys, Walter H.	Shepherd, William
Farr, John	Low, Rt. Hon. Sir Toby	Simon, Rt. Hon. Sir Jocelyn
Finlay, Graeme	Lucas, Sir Jocelyn	Skeet, T. H. H.
Fisher, Nigel	Lucas-Tooth, Sir Hugh	Smith, Dudley (Br'ntf'd & Chlswick)
Fletcher-Cooke, Charles	MacArthur, Ian	Smyth, Brig. Sir John (Norwood)
Forrest, George	McLaren, Martin	Soames, Rt. Hon. Christopher
Foster, John	McLaughlin, Mrs. Patricia	Spearman, Sir Alexander
Fraser, Hn. Hugh (Stafford A Stone)	Maclay, Rt. Hon. John	Stanley, Hon. Richard
Fraser, Ian (Plymouth, Sutton)	Maclean, Sir Fitzroy (Bute&N. Ayrs.)	Stevens, Geoffrey
Freeth, Denz[...]l	Macleod, Rt. Hn. Iain (Enfield, W.)	Steward, Harold (Stockport, S.)
Gammans, Lady	MacLeod, John (Ross & Cromarty)	Stodart, J. A.
Gardner, Edward	McMaster, Stanley R.	Stoddart-Scott, Col. Sir Malcolm
George, J. C. (Pollok)	Macmillan, Rt. Hn. Harold (Bromley)	Studholme, Sir Henry

Talbot, John E.	Turton, Rt. Hon. R. H.	Williams, Paul (Sunderland, S.)
Tapsell, Peter	van Straubenzee, W. R.	Wills, Sir Gerald (Bridgwater)
Taylor, Sir Charles (Eastbourne)	Vane, w. M. F.	Wilson, Geoffrey (Truro)
Taylor, Edwin (Bolton, E.)	Vaughan-Morgan, Rt. Hon. Sir John	Wise, A. R.
Taylor, W. J. (Bradford, N.)	Vickers, Miss Joan	Wolrige-Gordon, Patrick
Teeling, William	Vosper, Rt. Hon. Dennis	Wood, Rt. Hon. Richard
Temple, John M.	Walder, David	Woodhouse, C. M.
Thatcher, Mrs. Margaret	Walker, Peter	Woodnutt, Mark
Thomas, Peter (Conway)	Walker-Smith, Rt. Hon. Sir Derek	Woollam, John
Thompson, Kenneth (Walton)	Wall, Patrick	Worsley, Marcus
Thompson, Richard (Croydon, S.)	Watkinson, Rt. Hon. Harold	Yates, William (The Wrekin)
Thorneycroft, Ht. Hon. Peter	Webster, David
Thornton-Kemsley, Sir Colin	Wells, John (Maidstone)	TELLERS FOR THE NOES:
Tiley, Arthur (Bradford, W.)	Whitelaw, William	Mr. Edward Wakefield and
Turner, Colin	Williams, Dudley (Exeter)	Sir Harwood Harrison.

Question put, That the proposed words be there added:—

The House divided: Ayes 309, Noes 222.

Division No. 269.]	AYES	[10.9 p.m.
Allan, Robert (Paddington, S.)	Crowder, F. P.	Hobson, John
Allason, James	Cunningham, Knox	Hocking, Philip N.
Amery, Rt. Hon. Julian	Curran, Charles	Holland, Philip
Ashton, Sir Hubert	Currie, G. B. H.	Hollingworth, John
Atkins, Humphrey	Dalkeith, Earl of	Hornby, R. P.
Balniel, Lord	Dance, James	Hornsby-Smith, Rt. Hon. Patricia
Barber, Anthony	Deedes, W. F.	Howard, Hon. G. R. (St. Ives)
Barlow, Sir John	de Ferranti, Basil	Howard, John (Southampton, Test)
Barter, John	Digby, Simon Wingfield	Hughes Hallett, Vice-Admiral John
Batsford, Brian	Doughty, Charles	Hughes-Young, Michael
Baxter, Sir Beverley (Southgate)	Drayson, G. B.	Hulbert, Sir Norman
Beamish, Col. Sir Tufton	du Cann, Edward	Hutchison, Michael Clark
Bell, Ronald	Duncan, Sir James	Iremonger, T. L.
Bennett, F. M. (Torquay)	Eccies, Rt. Hon. Sir David	Irvine, Bryant Godman (Rye)
Bennett, Dr. Reginald (Gos & Fhm)	Eden, John	James, David
Berkeley, Humphry	Elliot, Capt. Walter (Carshalton)	Jenkins, Robert (Dulwich)
Bevins, Rt. Hon. Reginald	Elliott, R. W. (Nwoastle-upan Tyne, N.)	Jennings, J. C.
Biggs-Davison, John	Emery, Peter	Johnson, Dr. Donald (Carlisle)
Bingham, R. M.	Emmet, Hon. Mrs. Evelyn	Johnson, Eric (Blackley)
Birch, Rt. Hon. Nigel	Errington, Sir Eric	Johnson Smith, Geoffrey
Bishop, F. P.	Erroll, Rt. Hon. F. J.	Joseph, Sir Keith
Black, Sir Cyril	Farr, John	Kaberry, Sir Donald
Bossom, Olive	Finlay, Graeme	Kerans, Cdr, J. S.
Bourne-Arton, A.	Fisher, Nigel	Kerby, Capt. Henry
Box, Donald	Fletcher-Cooke, Charles	Kershaw, Anthony
Boyd-Carpenter, Rt. Hon. John	Forrest, George	Kimball, Marcus
Boyle, Sir Edward	Foster, John	Kitson, Timothy
Braine, Bernard	Fraser, Hn. Hugh (Stafford & Stone)	Lagden, Godfrey
Brewis, John	Fraser, Ian (Plymouth, Sutton)	Lambton, Viscount
Bromley-Davenport, Lt.-Col-Sir Walter	Freeth, Denzil	Lancaster, Col. C. G.
Brooke, Rt. Hon. Henry	Gammans, Lady	Leather, E. H. C.
Brooman-White, R.	Gardner, Edward	Leavey, J. A.
Brown, Alan (Tottenham)	George, J. C. (Pollok)	Leburn, Gilmour
Browne, Percy (Torrington)	Gibson-Watt, David	Legge-Bourke, Sir Harry
Bryan, Paul	Glover, Sir Douglas	Lindsay, Martin
Buck, Antony	Glyn, Dr. Alan (Clapham)	Linstead, Sir Hugh
Bullard, Denys	Glyn, Sir Richard (Dorset, N.)	Litchfield, Capt. John
Bullus, Wing Commander Erie	Godber, J. B.	Lloyd, Rt. Hn. Geoffrey (Sut'nC'dfield)
Burden, F. A.	Goodhew, Victor	Lloyd, Rt. Hon. Selwyn (Wirral)
Butcher, Sir Herbert	Gough, Frederick	Longbottom, Charles
Butler, Rt. Hn. R. A. (Saffron Walden)	Gower, Raymond	Longden, Gilbert
Campbell, Sir David (Belfast, S.)	Grant, Rt. Hon. William	Loveys, Walter H.
Campbell, Cordon (Moray & Naim)	Grant-Ferris, Wg Cdr. R.	Low, Rt. Hon. Sir Toby
Carr, Compton (Barons Court)	Green, Alan	Lucas, Sir Jocelyn
Cary, Sir Robert	Gresham Cooke, R.	Lucas-Tooth, Sir Hugh
Channon, H. P. G.	Grimston, Sir Robert	MacArthur, Ian
Chataway, Christopher	Gurden, Harold	McLaren, Martin
Chichester-Clark, R.	Hall, John (Wycombe)	McLaughlin, Mrs. Patricia
Clark, Henry (Antrim, N.)	Hamilton, Michael (Wellingborough)	Maclay, Rt. Hon. John
Clark, William (Nottingham, S.)	Hare, Rt. Hon. John	Maclean, Sir Fitzroy (Bute&N. Ayrs.)
Clarke, Brig. Terence (Portsmth, W.)	Harris, Frederic (Croydon, N.W.)	Macleod, Rt. Hn. Iain (Enfield, W.)
Cleaver, Leonard	Harris, Reader (Heston)	MacLeod, John (Ross & Cromarty)
Cole, Norman	Harrison, Brian (Maldon)	McMaster, Stanley R.
Collard, Richard	Harvey, Sir Arthur Vere (Macclesf'd)	Macmillan, Rt. Hn. Harold (Bromley)
Cooke, Robert	Harvey, John (Walthamstow, E.)	Macmillan, Maurice (Hallfax.)
Cooper, A. E.	Harvie Anderson, Miss	Macpherson, Niall (Dumfries)
Cooper-Key, Sir Neill	Hay, John	Maddan, Martin
Cordeaux, Lt.-Col. J. K.	Heald, Rt. Hon. Sir Lionel	Maginnis, John E.
Corfield, F. V.	Hendry, Forbes	Maitland, Sir John
Costain, A. P.	Hicks Beach, Maj, W,	Manningham-Buller, Rt. Hn. Sir R.
Courtney, Cdr. Anthony	Hiley, Joseph	Markham, Major Sir Frank
Craddock, Sir Beresford	Hill, Dr. Rt. Hon. Charles (Luton)	Marples, Rt. Hon. Ernest
Critchley, Julian	Hill, Mrs. Eveline (Wythenshawe)	Marshall, Douglas
Crosthwaite-Eyre, Col. Sir Oliver	Hill, J. E. B. (S. Norfolk)	Marten, Neil
Mathew, Robert (Honiton)	Proudfoot, Wilfred	Taylor, W. J. (Bradford, N.)
Matthews., Gordon (Meriden)	Pym, Francis	Teeling, William
Maudling, Rt. Hon. Reginald	Quennell, Miss J. M.	Temple, John M.
Mawby, Ray	Ramsden, James	Thatcher, Mrs. Margaret
Maxwell-Hyslop, R. J.	Rawlinson, Peter	Thomas, Peter (Conway)
Maydon, Lt.-Cmdr. S. L. C.	Redmayne, Rt. Hon. Martin	Thompson, Kenneth (Walton)
Mills, Stratton	Rees, Hugh	Thompson, Richard (Croydon, S.)
More, Jasper (Ludlow)	Rees-Davies, W. R.	Thorneycroft, Rt. Hon. Peter
Morgan, William	Renton, David	Thornton-Kemsley, Sir Colin
Morrison, John	Ridley, Hon. Nicholas	Tiley, Arthur (Bradford, W.)
Mott-Radclyffe, Sir Charles	Ridsdale, Julian	Turner, Colin
Nabarro, Gerald	Rippon, Geoffrey	Turton, Rt. Hon. R. H.
Neave, Airey	Robinson, Sir Roland (Blackpool, S.)	van Straubenzee, W. R.
Nicholls, Sir Harmar	Robson Brown, Sir William	Vane, W. M. F.
Nicholson, Sir Godfrey	Rodgers, John (Sevenoaks)	Vaughan-Morgan, Rt. Hon. Sir John
Noble, Michael	Roots, William	Vickers, Miss Joan
Nugent, Sir Richard	Royle, Anthony (Richmond, Surrey)	Vosper, Rt. Hon. Dennis
Oakshott, Sir Hendrie	Russell, Ronald	Walter, David
Orr, Capt. L. P S.	St. Clair, M.	Walker, Peter
Orr-Ewing, C. Ian	Scott-Hopkins, James	Walker-Smith, Rt. Hon. Sir Derek
Osborn, John (Hallam)	Seymour, Leslie	Wall, Patrick
Osborne, Sir Cyril (Louth)	Sharpies, Richard	Watkinson, Rt. Hon. Harold
Page, John (Harrow, West)	Shaw, M.	Webster, David
Page, Graham (Crosby)	Shepherd, William	Wells, John (Maidstone)
Pannell, Norman (Kirkdale)	Simon, Rt. Hon. Sir Jocelyn	Whitelaw, William
Partridge, E.	Skeet, T. H. H.	Williams, Dudley (Exeter)
Pearson, Frank (Clltheroe)	Smith, Dudley (Br'ntf'rd & Chlswick)	Williams, Paul (Sunderland, S.)
Percival, Ian	Smyth, Brig. Sir John (Norwood)	Wills, Sir Gerald (Bridgwater)
Peyton, John	Soames, Rt. Hon. Christopher	Wilson, Geoffrey (Truro)
Pickthorn, Sir Kenneth	Spearman, Sir Alexander	Wise, A. R.
Pike, Miss Mervyn	Stanley, Hon. Richard	Wolrige-Gordon, Patrick
Pilkington, Sir Richard	Stevens, Geoffrey	Wood, Rt. Hon. Richard
Pitman, Sir James	Steward, Harold (Stockport, S.)	Woodhouse, C. M.
Pitt, Miss Edith	Stodart, J. A.	Woodnutt, Mark
Pott, Percivall	Stoddart-Scott, Col. Sir Malcolm	Woollam, John
Powell, Rt. Hon. J. Enoch	Studholme, Sir Henry	Worsley, Marcus
Price, David (Eastleigh)	Talbot, John E.	Yates, William (The Wrekin)
Prloe, H. A. (Lewisham, W.)	Tapsell, Peter
Prior Palmer, Brig Sir Otho	Taylor, Sir Charles (Eastbourne)	TELLERS FOR THE AYES:
Profumo, Rt. Hon. John	Taylor, Edwin (Bolton, E.)	Mr. Edward Wakefield and
		Sir Harwood Harrison.
NOES
Abse, Leo	Donnelly, Desmond	Hughes, Hector (Aberdeen, N.)
Ainsley, William	Driberg, Tom	Hunter, A. E.
Albu, Austen	Dugdale, Rt. Hon. John	Hynd, H. (Accrington)
Allaun, Frank (Salford, E.)	Ede, Rt. Hon. C.	Irvine, A. J. (Edge Hill)
Allen, Scholefleld (Crewe)	Edelman, Maurice	Irving, Sydney (Dartford)
Awbery, Stan	Edwards, Rt. Hon. Ness (Caerphilly)	Janner, Sir Barnett
Baxter, William (Stirlingshire, W.)	Edwards, Robert (Bllston)	Jay, Rt. Hon. Douglas
Beaney, Alan	Edwards, Walter (Stepney)	Jenkins, Roy (Stechford)
Bellenger, Rt. Hon. F. J.	Evans, Albert	Johnson, Carol (Lewisham, S.)
Bence, Cyril	Finch, Harold	Jones, Rt. Hn. A. Creech (wakefield)
Benson, Sir George	Fitch, Alan	Jones, Dan (Burnley)
Blackburn, F.	Fletcher, Eric	Jones, Elwyn (West Ham, s.)
Blyton, William	Foot, Michael (Ebbw Vale)	Jones, Jack (Rotherham)
Boardman, H.	Fraser, Thomas (Hamilton)	Jones, J. Idwal (Wrexham)
Bowden, Herbert W. (Leics, S.W.)	Galpern, Sir Myer	Jones, T. W. (Merioneth)
Bowen, Roderic (Cardigan)	George, Lady Megan Lloyd (Crmrthn)	Kelley, Richard
Bowles, Frank	Ginsburg, David	Kenyon, Clifford
Boyden, James	Gordon Walker, Rt. Hon. P. C.	Key, Rt. Hon. C. W.
Braddock, Mrs. E. M.	Gourlay, Harry	King, Dr. Horace
Brockway, A. Fenner	Greenwood, Anthony	Lawson, George
Broughton, Dr. A. D. D.	Grey, Charles	Ledger, Ron
Brown, Rt. Hon. George (Belper)	Griffiths, David (Rother Valley)	Lee, Frederick (Newton)
Butler, Mrs. Joyce (Wood Green)	Griffiths, Rt. Hon. James (Llanelly)	Lee, Miss Jennie (Cannock)
Castle, Mrs. Barbara	Griffiths, W. (Exchange)	Lever, L. M. (Ardwick)
Chapman, Donald	Gunter, Ray	Lewis, Arthur (West Ham, N.)
Chetwynd, George	Hale, Leslie (Oldham, W.)	Lipton, Marcus
cliffe, Michael	Hall, Rt. Hn. Glenvil (Colne Valley)	Loughlin, Charles
Collick, Percy	Hamilton, William (West Fife)	Mabon, Dr. J. Dickson
Corbet, Mrs. Freda	Hannan, William	McCann, John
Craddock, George (Bradford, S.)	Hart, Mrs. Judith	Mclnnes, James
Cronin, John	Hayman, F. H.	McKay, John (Wallsend)
Crosland, Anthony	Henderson, Rt. Hn. Arthur (Rwly Regis)	Mackie, John (Enfield, East)
Darling, George	Herbison, Miss Margaret	McLeavy, Frank
Davies, G. Elfed (Rhondda, E.)	Hewitson, Capt. M.	Macmillan, Malcolm (Western Isles)
Davies, Harold (Leek)	Hill, J. (Midlothian)	MacPherson, Malcolm (Stirling)
Davies, Ifor (Gower)	Hilton, A. V.	Mahon, Simon
Davies, S. O. (Merthyr)	Holman, Percy	Mallalieu, J. P. W. (Huddersfield, E.)
Deer, George	Houghton, Douglas	Manuel, A. c.
Delargy, Hugh	Howell, Denis (Small Heath)	Mapp, Charles
Dempsey, James	Hoy, James H.	Marquand, Rt. Hon. H. A.
Diamond, John	Hughes, Cledwyn (Anglesey)	Marsh, Richard
Dodds, Norman	Hughes, Emrys (S. Ayrshire)	Mason, Ray

Mayhew, Christopher	Randall, Harry	Taylor, Bernard (Mansfield)
Mellish, R. J.	Rankin, John	Taylor, John (West Lothian)
Mendelson, J. J.	Redhead, E. C.	Thomas, George (Cardiff, W.)
Millan, Bruce	Reid, William	Thomas, lorwerth (Rhondda, W.)
Milne, Edward J.	Reynolds, G. W.	Thompson, Dr. Alan (Dunfermline)
Mitchison, G. R.	Rhodes, H.	Thornton, Ernest
Monslow, Walter	Roberts, Albert (Normanton)	Thorpe, Jeremy
Moody, A. S.	Robertson, John (Paisley)	Timmons, John
Morris, John	Robinson, Kenneth (St. Pancras, N.)	Tomney, Frank
Mort, D. L.	Rogers, G. H. R. (Kensington, N.)	Ungoed-Thomas, Sir Lynn
Moyle, Arthur	Ross, William	Wainwright, Edwin
Mulley, Frederick	Royle, Charles (Salford, West)	Weitzman, David
Neal, Harold	Short, Edward	Wells, Percy (Faversham)
Oliver, G. H.	Silverman, Julius (Aston)	Wells, William (Walsall. N.)
Oram, A. E.	Silverman, Sydney (Nelson)	Whitlock, William
Oswald, Thomas	Skeffington, Arthur	Wigg, George
Owen, Will	Slater, Mrs. Harriet (Stoke, N.)	Wilcock, Group Capt. C. A. B.
Padley, w. E.	Slater, Joseph (Sedgefield)	Wilkins, W. A.
Paget, R. T.	Small, William	Willey, Frederick
Panned, Charles (Leeds, W.)	Smith, Ellis (Stoke, S.)	Williams, D. J. (Neath)
Parglter, G. A.	Snow, Julian	Williams, Ll. (Abertillery)
Parker, John	Sorensen, R. w.	Williams, W. R. (Openshaw)
Parkin, B. T.	Soskice, Rt. Hon, Sir Frank	Williams, W. T. (Warrington)
Pavitt, Laurence	Spriggs, Leslie	Willis, E. G. (Edinburgh, E.)
Pearson, Arthur (Pontypridd)	Stewart, Michael (Fulham)	Wilson, Rt. Hon. Harold (Huyton)
Peart, Frederick	Storehouse, John	Winterbottom, R. E.
Pentland, Norman	Stones, William	Woodburn, Rt. Hon. A.
Plummer, Sir Leslie	Strachey, Rt. Hon. John	Woof, Robert
Popplewell, Ernest	Strauss, Rt. Hn. G. R. (Vauxhall)	Wyatt, Woodrow
Prentice, R. E.	Swain, Thomas	Yates, Victor (Ladywood)
Price, J. T. (Westhoughton)	Swingler, Stephen	TELLERS FOR THE NOES:
Probert, Arthur	Sylvester, George	Mr. Charles A. Howell and
Pursey, Cmdr. Harry	Symonds, J. B.	Mr. McCann.

Resolved, That this House welcomes the lead given by Her Majesty's Government in the measures taken to safeguard the economic interests of the nation by seeking to secure a more realistic relationship between increases in wages and salaries and increases in national productivity.