INDUSTRIAL RELATIONS

HC Deb 29 January 1962 vol 652 cc720-836

4.15 p.m.

Mr. Ray Gunter (Southwark)

I beg to move, That this House deplores the damage done to industrial relations consequent upon the interference by Her Majesty's Government with the established forms of negotiation and the freedom of arbitration courts to arrive at unfettered decisions. I am sure that the House will have a sense of the importance of this debate, in view of the events that have taken place in London today and the shadow that is now over the railway industry. I thought that we had all accepted the seriousness of the situation facing us in the immediate future. I had the feeling that we were conscious that the nation was faced with very grave decisions—arising from the Common Market and, in particular, the grave issues of how we are to work and spend in the future.

Having talked to businessmen, industrialists and trade union leaders throughout the country, I thought that all hon. Members were concerned about the nation's future. There is a feeling that there is indifference in high places. People in very unexpected quarters are anxious about the handling of the present-day problems by the Government. Britain has faced many crises in its long and historic past, and has learned that melodrama is futile, but the nation has understood that in moments of crisis and gravity one thing is imperative, and that is truth—that the nation might be told the truth and understand the problems.

I believe that the Prime Minister is rendering a grave disservice to the nation by his attitude towards our problems. The right hon. Gentleman lolls and drools at his fireside chats and tells people, "We have not done badly. We have done jolly well—but we must do a little better." I submit that that is not the language the leader of the nation should be using today. It is an entirely wrong way to lead the British people, of all people, just now. It is almost like the classical phraseology that would be used when addressing a girls' junior hockey side. It is language different from that that we require.

There is not one hon. Member who does not appreciate that Britain has little margins. We have no fat on which to live. We are faced with the realities of a competitive world and it is essential that every aspect of our productive effort should be looked at most closely at present.

I submit to the House that the most important aspect of all our efforts now is that which relates to the relationship and the spirit in industry. Unless the present bitterness and frustration can be removed the Government's planning and advisory councils will avail them nothing in the end, for there is one essential to the future well-being and progress of the nation; and that is that men should understand the problems and then be called, in a spirit of unity within industry, to Solve them.

I would submit for consideration a very wise statement made not by a trade union leader or politician, but by one of our leading industrialists, who said, just before Christmas: In the final analysis, the prestige, the efficiency, the progress of any business depends not on the magnificence of its plant, not on the splendour of its offices, but on the spirit of the human beings who are working together in that business and whose lives are bound up with its success. The nation is made up of all those businesses, and those words are relevant to the present situation in a national context.

Efficiency, progress, the solution of our problems and the adaptation of industry to modern techniques—all these depend in the last resort upon the spirit of the human beings who work in industry. In their panic and their cowardice, the Government have mutilated the very thing upon which our future depends. They have affronted men on both sides of industry who have sought to teach that industrial relations are, in effect, human relations. Good human relations in industry are not pie in the sky. They are a matter of good business, the good working of industry. They are the very thing that matters. Without good human relations, how can anyone persuade men to join in all the efforts, work study and so forth, necessary for greater efficiency? Without them, a barrier is created between management and men.

Let us never forget that industrial relations are not something which can be legislated for. They are human relations, matters of the spirit. What is it that some of us have been struggling to achieve? First, that men in industry should have confidence, confidence not only in their trade union leaders but confidence in management, that they should understand that management is identified with them in the purposes of the industries in which they work. This means creating such an atmosphere that men have a sense of involvement, a sense of belonging to the industry in which they work. When a man's dignity is respected, when he feels himself belonging, all difficulties about new techniques, about redundancy, and so on, can be seen in their proper perspective.

It means, also, that companies stand on principle and they expect the men to stand on principle, too. The pledged word is given and those employed know that that word will be honoured. It means, also, that one strives—goodness knows, the task is difficult enough—to eliminate the tragic concept of two sides in industry.

In the present situation, which we all, except the Prime Minister, know presents us with grave economic problems in a world where we must become more competitive, the greatest prize of all would be a new surge of spirit and a new understanding arising within industry. How rich a prize it would be for our country if the unions, the employers and the Government were sitting down together not to argue too much about wages, but really to find out how to solve our common problems. It is here that the futility of the Government is clearly seen. They are incapable of grasping the true priorities.

The Chief Secretary to the Treasury—I heard him described as "'Arry the 'Ammer" the other day—boasts that the pay pause has worked, that the Government have achieved their object. Has it? There are some who have escaped the net. Some have suffered. Some will suffe2. Do the Government really think that they have achieved a victory because they can boast that in certain sectors they have been able to enforce restraint for six or seven months? If they have done it, so what? If the methods adopted for achieving that pause have blunted the essential instrument for recovery after the pause, to whom is the victory? Who has won, and who lost? In the end, it is the nation which has lost.

Do the Government ever stop to think how our industries are to be geared to the European market if we are to go in? How are we to keep pace with modern techniques if there is to be bitterness, sourness and frustration? if the men whose aid we wish to call upon have been soured, how can we expect to achieve results?

There have been introduced into industry many different forms of joint consultation. They have achieved varying measures of success. There are industries where men and managers have sat down to talk about their work. Are we now to have angry men withdrawing from that machinery for consultation? Are we to see vital committees set up to ease the introduction of new machines and deal with problems of redundancy unmanned by representatives of the trade unions? That is the danger which the Government have put us in today. To whom is the victory?

The Government may beat the postmen. They may beat the railwaymen. I am sure that the Minister of Transport would be delighted. Let us suppose that he may, in the end, thrash the railway- men. What does he or the rest of the Government think that they will have done? They will have put us back twenty years, so that we have to start again the weary journey to build a new edifice within industry.

Why do men feel angry today and—I am not ashamed to admit it—why do I feel angry? It is not so much the money. Let no one run away with the idea that the battle is about 8s. or 10s. a week, though, goodness knows, that is important enough to the lower paid workers. The blunt fact is that we have been lied to; we have been cheated. Our contracts and our agreements have meant nothing in the end. How can men have confidence? How can they believe in the principles we have been talking about? How can we expect them to behave in a constitutional manner?

I reject the right of men to use the industrial weapon for political ends. I have always fought against it because I regard 'it as a denial of the principle upon which our democratic institutions are built. Nevertheless, there is, at the same time, an imperative duty placed upon every Government of whatever colour never to create circumstances in which men become so angry, so humiliated and so frustrated that they attempt to use that weapon. I repeat that I reject the weapon, but I assert that the tragic responsibility lies upon the Government today for many of the actions now being taken, for men have been tempted into unconstitutional action. The Post Office workers and engineers, the railwaymen and the civil servants are now soured. They have seen their long-established machinery denied.

I say this to my friends in London Transport and to railwaymen everywhere—I think that I have a right to say it in the House—"You are wrong, very wrong. You are damaging your own case. You are now required to be obedient to standards of conduct higher than anything the Government deserve or understand. Nevertheless, you are wrong, and you are called to that standard of conduct in your own interests and in the interests of the country". I say to them, "You have no right to impose this hardship upon hundreds of thousands of innocent people until every hope of settlement has been extinguished, until the trade union leaders have exhausted every channel".

I go further and say to my friends in transport that they bring great joy to the Tory Central Office, which sees in their actions only an electoral advantage, and, finally, I say to them that, whatever the provocation, it is not by venting their justifiable anger upon the citizens of London that they will attain justice. What is required now is cool heads, calm leadership and a determination to bring the guilty men before the nation and let the nation understand what they have done to decent working men.

What is the end of the Government's desire? They desire restraint. We understand that. We are not fools. When we are told that we are spending more than we are earning, we understand it. We have had joy at times in holding inquests on who is responsible. The thing remains that we are in a mess and that for the sake of the nation we have to get out of it. We understand the end. What we object to is the ineptitude, stupidity and malice of the Government in the manner and the means that they have used to achieve that end.

The Government have not had the courage to come forward openly and say, "Well, never mind what your machinery is, the crisis is so great that we are going to interfere with it." I might have respected that more. I would have fought against it, but I would certainly have respected it, if they had had the courage to stand on their feet and say, "We are going to interrupt it."

What have the Government done? They have used half-truths. They have advised the chairmen of nationalised boards. They have asked them to take cognisance of their opinions, knowing full well that the men to whom the advice was given were, in fact, instructed. They were told, in the case of the railways, "You will not get the money." The Government have dodged the issue.

I hope that the Minister of Labour will not. I pray not, find himself a very busy man in the not too distant future, May I ask him, "What are you going to say? What are you going to do?" He cannot tell us to go back to the machinery, because he will not let us use it. He cannot offer conciliation, because there is no hope of agreement. Let me say to the Minister that he has almost destroyed, or allowed to be destroyed, the conciliation machinery that was created after years of effort.

I think that it is proper at this time to submit to the House, as I do submit, in view of all the circumstances, which are being discussed today in another place, what has happened in the case of the railways. Here, I think, is the outstanding case of duplicity. On 31st December, 1959, the famous Mr. Guillebaud and his companions set up a date for comparability. They compared the standards of railwaymen with twelve outside industries, and they said that at 31st December, 1959, the railwaymen were out of line by 8 to 10 per cent. The Prime Minister, very nobly, informed the House later that he was prepared to underwrite the objectives of the Guillebaud Committee and to ensure that the railwaymen should have a fair and reasonable standard of wages.

The railwaymen can never be accused of being irresponsible, because they have waited for a very long time and have seen each one of the industries and services with which they had been compared at 31st December, 1959, receive a rise, and, in some cases, two rises. They never asked to go in the van, they never asked to lead the way, or blaze a trail, but after eighteen months they simply said that the time had come to restore the balance and give fair and reasonable conditions. More time has passed. I will let the House know the facts, so that the country can judge.

On 23rd November, we had a long meeting with the British Transport Commission. Let there be no fear in the minds of anyone that those concerned were Communists or Trotskyists; it was a reasonable, fair and gentlemanly meeting. The railway unions spent a long time in submitting their case, nearly three hours. Every aspect of the Commission's financial problems was argued and discussed. At the end of the meeting the deputy chairman of the Commission thanked the unions most profusely and said that he would give immediate consideration to their claim. He admired their patience and statesmanship, and thanked them very much for the way in which the case had been submitted. Then we waited again.

Two months later, on 23rd January, it was arranged that we should meet to negotiate and discuss and then "that little man", twenty-four hours before the meeting was to take place, wrote a letter to the unions. It was so timed that it arrived at the union headquarters after it was closed. There was no time for discussion. There was no time for the executive to be called. We were told then that advice had been given to Dr. Beeching, "No negotiations; advise them to send it to arbitration."

We had submitted our case over a period of three years and when we did meet it took exactly four minutes for the reply to be given—one sheet of foolscap, in which we were told that the Commission accepted the fact that there had been a change of circumstance. That was very true—very self-evident—a change of circumstance since our last award. The Commission agreed that there was a case, but the Government had said, "No negotiations". They had advised the Commission to take it to arbitration.

Now I turn to consider an interesting aspect of the case. This is where the deceit comes in. The Minister of Labour will get up and say, "We only advise Dr. Beeching." What does that mean, in effect? That there had been a breach of the agreement. Our agreement had been very clearly laid down, "We do not go to arbitration until we are in dispute." We are not in dispute with the Commission because it has never answered our case. We do not know what it has got to say, so how can we be in dispute with it? We are being forced to go to arbitration.

An attempt has been made to force us to go to the next stage of the machinery when we have not even had a reply at the second stage. Therefore, I submit that we look upon arbitration, as directed by the Minister, with some suspicion. Let me put it this way. We pleaded with the Commission. If we went to arbitration, as the Minister had directed, what would it say? What would be its submission? It knew our case; we had submitted it. But we were not in dispute. If it was to submit something, why not put it on the table so that it could be discussed? We might then have had an agreement—I do not know. Even if we had not, we would only have ended up with arbitration. I therefore submit that the railwaymen have been very roughly handled.

I hope, as I have said before, that cool heads will prevail. I tell the Minister of Transport that I know of no railwayman, from the very top to the bottom, who can find it in his heart to say a good word about him. We are shocked and shaken. We have held our members to the machinery of negotiation. How can we answer the unofficial strikers? What can we say to them? They have said to us already in the last twenty-four hours, "What are you talking about? You cannot keep us on the path by negotiation. The machinery has been breached by the Minister. What right have you to talk to us about the machinery of negotiation?" That is the situation to which we have been reduced.

I want to make an appeal now, and I put it earnestly and carefully to the Government. I want them to believe that the railwaymen do not want trouble. We know what it means. Even now, is it too late again to invite or advise Dr. Beeching to reopen negotiations with the railwaymen? Cannot the Minister this afternoon tell us that Dr. Beeching will be advised immediately to go back to the stage of negotiations where we left off? Even if we cannot agree, let us maintain the machinery, let us talk and discuss, for I warn the Government that the present path is the path to ruin. If our machinery is to be upset like this, if the established forms and channels which have taken so long to create are to be mutilated in this way. I submit that there is no hope of escaping from our industrial troubles. What is now happening to the machinery in one industry is being most carefully watched in others. We are disturbed. Postmen, civil servants, railwaymen and engineers—all are worried.

I end as I began. We desperately want peace. We want the nation to be strong and prosperous. We want it to be geared to a new world, and it cannot be done by cheating. It cannot be done by breaching contracts unilaterally. It can be done by leadership that understands priorities, that has regard far human dignity and for men who have given their pledged word in documents. The people can be led in truth to their duty in industry, but they cannot be kicked by deceivers who know not the truth.

4.42 p.m.

The Minister of Labour (Mr. John Hare)

The hon. Member for Southwark (Mr. Gunter) has made a speech of great emotion, which I am sure he feels absolutely sincerely. In his speech he attacked the Government, which, of course, is part of his job. But he also made a personal attack upon my right hon. Friend the Minister of Transport. I am sorry he should have done so at this very delicate moment in discussions which could result in a most serious dispute on the railways.

I have said what I have just said because this is so unlike the hon. Gentleman. I feel that in the future he may regret some of the things that he has said today. I commend very much what he said about the responsibilities of both sides to try to stick to agreements. But I think that any irresponsible word uttered at this time—and I think that some of his words were perhaps irresponsible—will make the task of preserving peace on the railways more difficult. If it were not for the fact that, in my opinion, some of the hon. Gentleman's statements were so wide of the mark, I would at this stage have preferred not to talk about the railways at all.

Mr. F. H. Hayman (Falmouth and Camborne)

Does the right hon. Gentleman recall the speech made by the right hon. and learned Member for Chertsey (Sir L. Heald), in which he made a vile personal attack on the Deputy Leader of the Opposition last Thursday?

Mr. Hare

I think that that is a little irrelevant.

In view of what the hon. Member for Southwark has said, I should like to examine some of his strictures on my right hon. Friend and the Government. The chief burden of his speech was that the Government and my right hon. Friend the Minister of Transport have breached the negotiating machinery of the railway industry. I should like to say something about this, because we must keep things in perspective. I would remind the hon. Gentleman of something which he himself knows perfectly well, namely, that arbitration is an integral part of the negotiating machinery in the railway industry. I cannot for the life of me see why the hon. Gentleman can maintain that the machinery has been disrupted by a suggestion that an integral part of that machinery should be used.

Mr. Gunter

I am sorry that the Minister does not grasp the facts—

Mr. Hare

I should like to finish what I am saying.

The hon. Gentleman made the point that arbitration only arises when negotiations fail. He said that it was improper to suggest arbitration until negotiation had failed. That is really the burden of his case. What he overlooks is that if the Commission were to have regard to the Government's views it had to have them before it met the unions. The Commission did decide to have regard to these views, and when it met the unions it proposed arbitration instead of attempting to carry the matter further by negotiation. The hon. Gentleman would have done much better if he had asked me why the Government prefer the issue to be settled by arbitration.

Mr. Gunter

The Minister does not grasp the facts. He does not understand negotiations. Last Friday we were dismissed without even a reply to our case. If we had had a reply to our case, if there had been a detailed answer to our submissions and then, if the Transport Commission had said, "Are you prepared to take the advice of the Government?", that would have been another matter. But we never had an answer. We are not in dispute.

Mr. Hare

The Government prefer the issue to be settled by arbitration, for very sensible and fair reasons.

Mr. A. C. Manuel (Central Ayrshire)

The Government are destroying the machinery.

Mr. Hare

No, they are not. The Government have responsibilities in all this. The first consideration that the Government have to bear in mind is the alarming deficit on the railways, which exceeded more than £140 million in 1961. This has got to come out of the taxpayers' pockets. It represents no less than 7d. in the £ on Income Tax, or a huge drain on what other taxes bring in. This deficit may well be larger in the coming year. The Government have to come to the House to ask for these moneys.

The second consideration—with which hon. Members opposite do not agree—is that we have to take account of our own policy that increases in income must be brought into a realistic relationship with increases in the national output.

The third consideration—and here again, in fairness to my case, I should point out that the hon. Gentleman made nothing of this—is that the Government have recognised that in spite of the two things that I have said—the financial situation of the railways and the Government's own incomes policy—there are special factors which warrant some increase in railway wages. It might have been argued that as guardian of the national finances out of which any increase has got to come, the Government should have advised a limit to the amount of increase. If we had done so, I think that the hon. Gentleman would have made a speech attacking us. But we did no such thing. We felt that the fairest thing was that all these complicated issues should be argued in front of a completely independent and impartial arbitration body.

I do not think that every hon. Member realises how the Railway Staff National Tribunal is established. Of course, the hon. Member for Southwark knows this because he is a leading member of one of the three great railway unions. The chairman is appointed by the two sides of the industry, not by the Government. When it sits, the unions nominate a representative and the Transport Commission nominates a representative. These, together with the independent chairman, constitute the tribunal. It is, therefore, completely independent of the Government, and I think that members of the tribunal would be entitled to resent any imputation that they were not.

Mr. Manuel

Will the Minister try to answer the case of my hon. Friend the Member for Southwark (Mr. Gunter)? We are not in dispute about the composition of the tribunal. What we are in dispute about is the fact that the Government propose to go to arbitration before a case is submitted to them. That is the case that the right hon. Gentleman has to try to answer, and not "hare "away on the composition of a tribunal about which we all know.

Mr. Hare

I have not tried to "hare" away, on anything. In a newspaper which I read on Sunday the hon. Member for Southwark took exception to the view expressed in the Government statement about the need for any increase to take effect not earlier than 1st April. I know that hon. Members opposite do not agree with this, but it seems to me a perfectly natural proviso in view of the Government's insistence on the necessity for a pause in increases in incomes, the size of the Commission's deficit, and the fact that any increase in railway wages will involve a further subsidy from public funds. The Government cannot place a further burden on the taxpayer in the current financial year.

Mr. Gunter

This is a very important point. Do I understand that the Government will pledge themselves to accept any award of the arbitration tribunal?

Mr. Hare

I think—[HON. MEMBERS: "Answer."] Hon. Members make so much noise that it is almost impossible to answer, but I shall try to do so. The Government are not a party to the arbitration proceedings. The British Transport Commission and the unions have not yet agreed on arbitration. When the award is made the Commission and the unions will have to consider whether they accept it, as the results are not binding upon them. Therefore, this question is purely hypothetical.

Mr. George Brown (Belper)

The Minister said—and I quote his exact words—that the Government preferred that the matter should go to arbitration—not that the Commission preferred, not that the unions preferred, but that the Government preferred. He also said that the Government have decided that no award can be given before 1st April Will he tell us in what sense this is free arbitration that he is offering?

Mr. Hare

It is free arbitration. I think that I have made the position on arbitration perfectly clear.

This Motion covers a much wider range of subjects than the hon. Member for Southwark found time to cover. In view of the importance of the subject, and of the importance that he places on industrial relations, I must be allowed to deal with the general state of industrial relations, because the hon. Gentleman said a number of very damaging things about them.

Mr. Gunter

If the Government will not say that they will accept arbitration but send the matter to the British Transport Commission and to the unions, will the right hon. Gentleman authorise the Commission to accept anything that the tribunal offers?

Mr. Hare

If the hon. Gentleman will tell me whether the unions will accept arbitration, we may have a useful conversation. However, I do not want to be deflected from my main theme.

I think that there is a tendency in this country to exaggerate the badness of our industrial relations. The hon. Member for Southwark tried to do that in his speech. I do not think that that does any good to industrial relations or to the country, and I am sorry that the hon. Gentleman, of all people, should have succumbed to that temptation on this occasion. He accused the Government of having made a breach in the machinery which had been developed and improved over the years. From many of the things that he said, one would have imagined that the Government, the trade unions and employers were at daggers drawn. This just is not true, and the hon. Gentleman knows it.

What some people do not realise is that, although Members of Parliament make heated speeches in this Chamber on party political lines, trade union leaders, when conducting trade union business, do not play party politics. I should like to pay public tribute to the sympathetic understanding and genuine co-operation that the leaders of the trade union movement have given me during the eighteen months that I have been Minister of Labour.

Mr. Manuel

What has the Minister been doing?

Mr. Hare

I will tell the hon. Gentleman.

There is today an increasing readiness on the part of responsible men on both sides of industry to get together in order to concert measures for further improvements in industrial relations.

In response to the request of the hon. Member for Central Ayrshire (Mr. Manuel), I should like to mention some of the things which have been happening during these last months. There has been a growing realisation of the folly of unofficial strikes and the damage that they do. I am glad that the hon. Gentleman confirmed that in what he said. Employers and trade union leaders are combining more and more to uphold agreements freely entered into. The motor car industry is a good example of this. In the docks and in shipbuilding, employers and unions are showing a new preparedness to work out ways and means for providing greater security of employment on the one hand and improved efficiency on the other.

I am finding a similar preparedness to look at our existing apprenticeship arrangements to see whether the arrangements that we have inherited over the years needs adaptation to provide the skills which the 1960s and 1970s call for. Throughout industry people are recognising more and more the need for better communications and joint consultation. Employers and unions realise that, although agreement may be reached on major principles at the top, the same spirit must be got down to the floor of the factory. The need for better training and more careful selection of foremen by the employers, and more training of shop stewards by the unions, has been accepted by both sides.

The unions have recently agreed to discuss with employers any instance of restrictive practices that the latter bring to their attention.

I should also like to mention the solid support that I am being given by the employers and unions in the efforts that we are jointly making to reduce the increasing number of factory accidents.

Finally, last week we heard of the decision taken by the General Council of the Trades Union Congress, by a large majority, to join the National Economic Development Council. This could be an historic decision. For the first time, a working partnership between the Government, employers and trade unions, designed to make the fullest use of the nation's resources, becomes a practical possibility. It could bring about a fundamental improvement in the working of our economy.

Hon. Members would be unwise to underrate the degree of understanding in the trade union movement of the many and great difficulties which face the country. Nor should they underrate the sense of responsibility of the great mass of trade union members by suggesting—and this was implied in the hon. Member's speech—that they are now going to throw out of the window all their traditions of common sense and loyalty to their industries and to the community. I wanted to say this to give the opposite side of the picture—

Mr. Dan Jones (Burnley)

Is the Minister expecting the House to believe that this responsibility which he says is inherent within the trade union movement is a by-product of the pay pause?

Mr. Hare

I did not say anything of the sort. I am trying to make a balanced speech and have every right to show that the statement made by the hon. Member for Southwark was exaggerated. I say this because of the Opposition Motion. In view of all I have said, which I do not think anybody will dispute, how can it possibly be said that there is a grave deterioration in industrial relations?

It is, however, true that the unions have protested consistently at what has become known as the pay pause policy. Let us, however, be quite clear that, in doing so, they are not necessarily opposing an incomes policy. Indeed, in its letter of 24th January to the Chancellor of the Exchequer, the General Council of the T.U.C. used these interesting words: It is of course a condition of reasonable price stability that increases in incomes should keep in step with the growth of real output. I quote that deliberately. The unions have attacked our policy, as hon. Members opposite have done, on the ground that we have singled out wages and salaries to bear the burden of the country's difficulties. That is where we and they disagree. In my opinion, they have underrated the difficulties which faced us in July and which could have led to disaster for us all if the Government had not taken action.

The steps taken by my right hon. and learned Friend the Chancellor in July were essential to redress our balance of payments position and restore confidence in sterling. We also had to take urgent action to make our industry more competitive and to keep our costs from rising so that we could be in a position to increase our exports. It was not a situation in which we could rely merely on exhortation. I think that history will say that we were right. Indeed, I wonder whether millions of working men and women do not already in their hearts believe that we are right.

We did not single out wages and salaries. We asked for a pause in increases in incomes of all kinds, and this was achieved. Although the hon. Member for Southwark mocked what the Chief Secretary had to say last week, my right hon. Friend gave the following figures. The index of weekly wage rates stood at 120.1 in July, 1960; 122.2 in December, 1960; 125.1 in July, 1961; and 126.4 in December, 1961. During the pay pause, therefore, the index has risen at little more than half the rate of the corresponding period in 1960 and all but 0.4 points of this rise was due to pre-pause commitments.

Let me turn to companies to see the other side of the picture. Companies reporting in the second quarter of 1961 showed an average increase of 12 per cent. on their dividends and 6.9 per cent. on their profits, whereas those reporting in the fourth quarter of 1961 showed an average increase of 2 per cent. on their dividends and a fall of 3.3 per cent. on their profits. There can be no argument that the measures taken in July have strengthened our economic position. I do not think there can be any shadow of doubt that we are now much better placed for a successful export drive.

Throughout these months, the Chancellor has constantly pointed out that the pay pause policy was a temporary policy to meet an emergency situation. It was phase one of the Government's policy for incomes and production. As my right hon. and learned Friend has outlined, the second phase will be one of continued restraint. Again, I would emphasise that in this second phase it is essential that the restraint should not be limited to wages and salaries, but must apply to incomes of all kinds.

Phase three is our long-term policy to give enduring strength to the economy, to step up the rate of increase of production so that we can provide for greater increases in real incomes and steadily improve the standard of life of all our people.

Mr. G. Brown

Did I understand that what the Government have achieved against the aim stated by the Minister is that in the last quarter of 1961 profits had disappeared altogether—decreased by 3 per cent.—and dividends nevertheless had gone up by 2 per cent.? Is that what the Minister is saying?

Mr. Hare

If the right hon. Gentleman reads my speech, he will see that my meaning was clear.

Mr. G. Brown

Tell us what it was.

Mr. Hare

I hope that the right hon. Gentleman will forgive me if I continue. My right hon. and learned Friend the Chancellor recently expressed the hope that it would be possible to end phase one of the Government's incomes policy by the end of the present financial year. He has now authorised me to say that the Government intend that this phase shall be brought to an end on 31st March. This means that the undertakings given by my right hon. Friend the Chief Secretary to the Civil Service and industrial unions on 16th and 18th January will now operate right from the beginning of April. Perhaps I can repeat what these are.

The Government will give effect to any salary increases agreed and to any wage adustments negotiated since July, 1961, which have been kept for implementation from a date to be decided by the Government. At the next review of the "M" rate for workers in Government employment, the workers concerned will be offered what the review indicates at that time. The Government will also put into effect those parts of awards of the Civil Service Arbitration Tribunal and the Industrial Court which have been held in abeyance. The effective date of increases will again be within the scope of negotiations in the Civil Service, subject to the understanding that increases will not be dated earlier than the beginning of the second phase.

We shall thus return in the second phase—from the beginning of April—to the position on arbitration in the Civil Service which obtained before July, 1961, subject again to there being no operative date earlier than the beginning of this phase. In negotiation and at arbitration, as indicated by the Chief Secretary, the Government representatives will, as necessary, strongly argue the need in the national interest to keep increases in incomes in proper relationship to increases in national production. I sincerely hope that this will enable normal relations and working to be restored in the Civil Service.

With the end of this first phase, we must not throw away the advantages we have gained in keeping our costs down and improving our competitive position. I reiterate that if we return to a course of increasing personal incomes without regard to national production, we shall again put up our costs and prices, weaken our currency at home and abroad and defeat the drive for exports on which we depend.

In order to achieve the objective which I have just described, it is essential that the average increase of wages and salaries should be kept within the long-term rate of national productivity. It is the Government's aim to secure an increase in the rate of growth of national productivity and this will be a main concern of the National Economic Development Council. For the moment, however, we must deal with things as they are. Over the past three or four years, national productivity has risen by about 2 to 2½ per cent. a year and it seems likely to increase at about this rate in 1962.

In referring to wages and salaries, I have in mind the general level of effective rates—that is to say, those rates on which earnings for a given time or a given piece of work are actually calculated. Changes in pay made under particular agreements—for example, those related to the cost of living—and reductions in hours or other improvements in effective pay should be included in the reckoning. In considering the scale of increases in wages and salaries rates, it is also necessary to pay regard to the practical likelihood, judged from past experience and knowledge of particular forms of employment, that basic rates will be supplemented by local or special arrangements.

It is for employers and employees to work out in the light of the conditions and agreements existing in particular industries and areas the application to individual cases of the considerations which I have mentioned, But it follows from what I have said that in the Government's view there is no scope in 1962 for more than strictly limited general increases in wages and salaries. In many cases there may indeed be no justification at present for any increases at all. In others there may be particular circumstances which point the other way.

Although I have spoken up to now primarily of wages and salaries the same principles should apply, in the Government's view, to any form of incomes. Restraint in profits and dividends continues to be a necessary part of the incomes policy, and the Government reaffirm their request for co-operation in this respect made by my right hon. and learned Friend the Chancellor in his July statement. Meanwhile we shall certainly watch developments very closely.

I have made clear in earlier debates the value I attach to our negotiating machinery and to the agreed arrangements for arbitration as the way of settling wages and salaries in a free country. But we must recognise that, as a result of the working of this system, increases in wages and salaries have been outstripping increases in production. We all know that in fact—I am sorry to repeat this, but we must go on saying it—we have been paying ourselves more than we have earned. We have been causing inflation. We all recognise that this is damaging to the national interest, and that this in the long run is against our own individual interests.

I do not believe that high wages and salaries are wholly due to trade union demands. Members of trade unions are no more selfish than the rest of us. I believe that they and their leaders are as sensible and as conscious of our national problems as any of us. They have a job to do in the interests of their members and they do it with remarkable skill.

Nor would I blame employers for all these troubles. They rightly wish to settle these matters by free negotiation and agreement with the representatives of their workpeople on a fair and just basis. They are concerned with maintaining the efficiency of their work-people. It is true—and I am sure that the hon. Gentleman would agree with me here—that sometimes employers have put up wages to attract labour from others and this has caused bidding up of rates and damage to the normal processes of collective bargaining. But employers, too, are conscIous of their obligations to the wider national needs.

The Government cannot direct employers and trade unions as to how they should settle these difficult and complex problems, nor can they give directions to arbitrators. In my view, it would be a grave mistake if they did so. But it is essential that in future the national interest should be fully considered by all those, whoever they may be, who are responsible for the settlement of wages and salaries. The wider implications of particular decisions just cannot be ignored. These decisions affect not only the parties concerned, but the whole economy and our general prosperity. Selfish sectional interests which disregard the national interest will obviously seriously harm our future prospects. I do not believe that any sensible person would really argue about that.

I think that if the national interest has not been taken into account as fully as it should have been in the past this has been due to lack of knowledge rather than to lack of responsibility. I am sure that more must be done to make this knowledge readily and easily available to all concerned. The real need is to preserve our machinery of free negotiation and impartial arbitration and at the same time to ensure that the results do not run counter to the national interest.

I am sorry to have kept the House so long. There was a time when increased costs were passed on to the consumer, and profits, far from being reduced, increased at the same rate as wages. That time has passed.

In July the Chancellor acted with courage and determination. He has been subjected to a barrage of criticism ever since, but, as events have shown, how right he has been. [Interruption.] I will say why. Our costs were rising, our competitiveness was being undermined, our share of the world's exports continued to shrink. Of course, our whole economy and standard of living depends on exports. Unless we can control our costs we cannot be competitive. The overseas customer, as everybody here knows, will give us a living only if we give him value for money.

Thanks to the action we have taken, this year holds out great possibilities. The inflation is being ejected out of our system. The prospects for exports look better than for a long time. The Chancellor has set in motion policies which are aimed to secure far greater efficiency in the use of our resources. Some restraint all round is needed. Surely in these circumstances each one of us should ponder on this simple thought—so little to ask, so much to win.

It is because I believe it to be completely out of touch with the facts and needs of the times that I invite the House to reject the Opposition Motion.

5.16 p.m.

Mr. Richard Marsh (Greenwich)

I think that particularly at the present time the House will have listened with a great deal of disgust to the speech made by the Minister of Labour. None of us on this side of the House, I think, felt that the right hon. Gentleman really believed in most of the things which he said. He comes here with his usual method—a few words of agreement with the speech made from the Opposition Front Bench, and then he tries to drown any controversy in an absolute deluge of platitudes and patronage. He tries to tell us that we are all standing shoulder to shoulder, and that somehow or another the rather unpleasant events which have happened have taken him rather by surprise and that in any case they are not the responsibility of the Ministry of Labour.

Like the Prime Minister, he tells us that we have got to face the fact that we cannot as a nation spend more than we earn. It would have been a great deal more to the point if he had addressed some of his remarks to some of the hon. and right hon. Members behind him on the back benches who have a rather bigger share of the nation's earnings than some of the people against whom the Government find it necessary to take action at the present time.

The big problem in the railway dispute, as my hon. Friend the Member for Southwark (Mr. Gunter) said, is this. The Minister talked of arbitration, and yet he missed one simple question which was put to him and it is one to which we are entitled to have an answer now. I put this question again to the Minister now—because the debate is largely for his benefit—and I hope that he will answer it. In the railway dispute, will the Minister tell us now, yes or no, if the unions go to free arbitration, do the Government regard themselves bound by the result of that arbitration? It is a perfectly simple question.

The Minister turns down the right of the trade unions in the railway industry to negotiate on equal terms with the British Transport Commission. He refuses them the right to negotiate with their employers. If it is suggested that they should go to arbitration one is entitled to ask him, if those men go to arbitration is the result of that arbitration binding upon the Government? If the result of that arbitration is not binding upon the Government, can the Minister give one simple reason why the employees should go to arbitration?

Mr. Denis Howell (Birmingham, Small Heath)

Let us have an answer.

Mr. Hare

I have already made it perfectly clear. I have said that it is a hypothetical question. Neither side has yet agreed to arbitration. Neither side has said whether it finds the results binding or not. Therefore it is hypothetical.

Mr. Marsh

It is the Minister who has changed the established procedure of negotiation. The employees are quite prepared to negotiate in the normal fashion, but the Minister comes along and tells the new leader of the British Transport Commission that, despite his £24,000 a year, he must not have anything to do with negotiating salaries on behalf of his own employees. At that meeting the employees asked the Minister whether the result of going to arbitration would be binding upon the Minister and the question has not yet been answered. With the greatest respect to the right hon. Gentleman, it is sheer hypocrisy to say that he has answered the question. It is a simple issue and he knows that obviously no trade union can go to arbitration unless it knows that the Minister is prepared to accept the result.

Mr. Sydney Silverman (Nelson and Colne)

My hon. Friend is a trade union official and I am not. Would he explain to me what there would be to negotiate about? What would the issue be until negotiations had been pursued and one knew what matters divided the two sides? If they agree, there is nothing to arbitrate about.

Mr. Marsh

I am coming to that point. The Minister is asking them to go to arbitration. It is not their idea. If they agree to go to arbitration, the second question is whether the Government intend to present a case. If so, what is the case? At the moment they have turned down the men's claim and no one knows what the Government want in its place.

The simple fact is that this is not an issue concerning the railway industry. This is not a dispute in the railway industry at all. This is the result of Government policy in every part of our industrial life. In the National Health Service in August the nurses submitted a salary claim to the Minister of Health and since August they have met the management side every month. In January they received the Minister's reply that he was considering his answer to them. I am not talking about dock workers, steel workers or coal miners. The nurses' representatives have now written to the Minister of Health informing him that they can no longer be responsible for the actions of their members.

A claim was submitted by the staff side of the Professional and Technical "A" Council of the Health Service Whitley Council. A meeting was called by the management side to discuss the claim. The staff side were kept outside the room for an hour and then they were called in and told by the management side that they had received a message, it is alleged, from the Cabinet Room, that they were not allowed to discuss the claim with the staff side. The meeting was abortive. It was pretty gutless of the management side of that Whitley Council that they did not walk out, but they did not, though I understand that they have made their objections.

Then there are the telephonists in Service Departments. On 1st February, 1961, the Treasury agreed to a substantial increase in pay as the result of a claim submitted in September, 1960. In February, 1961, the Treasury agreed to consider that claim, but by September, 1961, no money had been paid and no agreement had been formalised. The staff started to work to rule and by January, 1962, the staff have still received nothing.

I should like to put a question to the Minister in simple terms, and here I disagree with my hon. Friend the Member for Southwark on some of these issues. If the Government refuse organised labour the right to free negotiation, what can they do except take strike action? Are they supposed to surrender the things for which they have fought for sixty years? Are they supposed now to accept a situation where they walk into a negotiating room and have to take whatever is given them, without the right to argue or to discuss, or to have independent arbitration?

All of us on both sides of the House accept that a major industrial dispute today is a tragedy for everybody in the country. It is a tragedy for the men directly involved in the dispute. Some of us from time to time have taken responsibility for bringing men out in an industrial dispute and we have never felt happy about it. Contrary to what some of the more dramatic sections of the Press say, people do not enjoy participating in industrial action, and the people who are involved in taking the decisions do not enjoy taking them. But if a trade union leader has a contractual obligation to work on behalf of his members, and if the proper channels are denied to him, what alternative has he but to take direct action or let the men down in every possible way?

The present situation is the result of a long process. This trouble has not just happened in the railway industry. It has not just happened in the telephone service, or in the National Health Service, or among civil servants or teachers but in every section of our industrial life. This is what is so intriguing at the present moment. It is not that we are faced with a dispute in the railway industry or a dispute in the Civil Service or among teachers or among other sections of the industrial community. What is intriguing is that at the same time in every facet of our national life, as a direct result of Government policies, we find ourselves in the same position in every section of industry, whether engineering, the nationalised industries, among white collar workers, or workers at the factory bench. They are all being challenged directly by the Government, and one is entitled to ask whether this is important and serious.

The Minister of Labour made some remarks about the way in which strikes are exaggerated and about the effect of that exaggeration. Hon. Members on both sides of the House will agree with that. The Minister knows that more damage is done to the economy of the country and to overseas trade by irresponsible talk of strike action by some of his hon. Friends—

Mr. Hare

Oh.

Mr. Marsh

The Minister says "Oh" like an insulted virgin. He knows per, featly well that strike action in this country in any one year has never had the effect of a whole host of other things with which industry has to cope as a matter of course. Strike figures here do not compete with the amount of time lost through industrial accidents or through influenza. Their effect is not even as big as the time lost through the vagaries of the calendar.

Mr. Michael Foot (Ebbw Vale)

The Government intend to put that right.

Mr. Marsh

They will have difficulty in putting that right.

The Government know that what has caused the problem in each of these cases is not strikes but the deliberate attempt of some hon. Members opposite to frighten old ladies in Bournemouth with the spectre of a massive industrial revolution. Only the Minister's hon. Friends could turn the General Council of the T.U.C. into raving revolutionaries, and this has been done deliberately to conjure up this spectre and bogy on which the Government can lay the blame for a situation for which they have been responsible.

Strike action is not the main problem. The overwhelming majority of industrial agreements are reached in a peculiar British way by free negotiations. We seldom have strikes, and the number of strikes has gone down in each of the last three years. The overwhelming majority of claims have been agreed round the conference table by negotiation between the two sides.

I have sat on both sides of the negotiating table. I have represented men and, as happens nowadays, I have also sat on the management side. From time to time management side has to say "No". This is not surprising. It does not cause an immediate downing of tools. It is accepted that when one goes into free negotiations one probably comes out with something different from the original claim. This is the reality of the situation. Acceptance of negotiation implies a willingness to hear the other person's point of view.

But the whole purpose of Government action, carefully and systematically over a long period, has been to destroy the negotiation method in every industry in which they have any say. How does this arise? Some of my right hon. and hon. Friends have suggested that it is through Government incompetence. We accept that they are pretty incompetent. I do not think that even in his wildest moments the Minister of Labour visualises a Britain studded with statues to his memory in a hundred years' time. He does his job as well as he can, but he is not revolutionising industrial relations. It does not really rest on the right hon. Gentleman himself. He has some very good advisers who have been at the Ministry for a very long time. They are not responsible for what happens, but they tell him in clear words what is likely to happen when he pursues a certain policy.

I submit that Government incompetence is not the reason for the situation in which the country now finds itself with industrial action in the railways, transport, post office, Civil Service and every possible field. Even Sir Ronald Gould, of the National Union of Teachers, is becoming militant. Everywhere one looks, there is industrial unrest. It is not the result of Government incompetence. Indeed, it is about the only thing which has happened in modern times which is not the result of Government incompetence.

The only explanation is that it is the result of deliberate Government policy. If we say that it did not just happen, like Topsy, that after all this time of comparative peace the Government find themselves in dispute with every section of organised labour, the only answer is that it is the direct result of Government policy, a policy designed to produce a head-on clash with organised labour. The Minister appears to be shaking his head. If that is not true, he ought to get someone else to do his job, because he is making a sorrowful hash—

Mr. Geoffrey Wilson (Truro)

Has it not occurred to the hon. Member that there might be another solution? If the sum total of all the claims made is in excess of the national income, is it not reasonable to try to make some reduction in the total?

Mr. Marsh

Yes: the hon. Member makes an interesting point, but one of the things that one has to do before one establishes whether or not the result of an agreement in industry is more than one can afford is to reach the agreement. When one knows how much is involved, then one can settle with the unions and is in a position to say whether it is too much or not.

But the Government did not know for how much the railway unions or the National Health Service unions would settle. They do not want to know. They are not interested in negotiation. They are interested in where this unhappy road is leading us. Why do they want to go there? I genuinely believe that the Government have deliberately embarked on this process purely and simply for electoral benefit. [HON. MEMBERS: "Rubbish."] Oh, yes.

I am interested to find hon. Gentlemen opposite suddenly so virtuous. Think of the General Election. In 1959 the Prime Minister told the nation that the British £ was better than ever before, but at that time he knew that Government policy was leading us into economic difficulties. Still, it won him the General Election. Hon. Members opposite would not have been here if the Prime Minister had not misled the electorate; and the right hon. Gentleman is getting ready for the next one.

It is too much to think that these unusual policies pursued by the Government, with direct Cabinet responsibility, on every issue are coincidences unless one is prepared to accept either that the Government are incompetent beyond our wildest fears or that this is all the deliberate result of Government policy.

Captain Walter Elliot (Carshalton)

What electoral benefit does the hon. Gentleman think the Government will get?

Mr. Marsh

I am sure that the hon. and gallant Gentleman does not really mean that question. Let us not hide this matter under a bushel. Everybody knows, except apparently the hon. and gallant Gentleman, that, traditionally, industrial action has been unpopular for the Labour Party. This is not a new truth which I have just invented. It is known to a great many people. Nowadays they call themselves sephologists. It is known that if there is mass industrial action, it reflects upon the Labour Party. This is a price which the Labour Party pays for its close ties with the trade union movement.

If what I say is not true and these things are not the result of direct Government policy, it will be fascinating to hear how right hon. Gentlemen opposite can explain them. It is not just a question of wages and salaries. The country is moving now into the most serious industrial unrest that it has faced for very many years.

To return to the main problem, I think that it has been deliberately engendered and that the unions have been deliberately provoked. The intervention by the Minister of Transport in the railway negotiations was calmly taken as a result of a Government decision. It was not something that he did off the cuff. It was not off the cuff that, having appointed the highest paid railwayman the country has ever had, he told Dr. Beeching that he was the only employer in the country not allowed to negotiate with his employees. It was the result of a decision taken at high level, and taken for a deliberate purpose. I should not be surprised if in the not too distant future we do not have the Prime Minister on the radio telling us, with a voice quivering with emotion, how the nation is imperilled by the wicked trade unions and that people of the country must stand shoulder to shoulder. Some sections of the national Press have started to prepare the ground.

If that is so, it is a tragedy. I believe that we cannot have a planned economy unless we have a planned wages policy. Regrettably, there are some people in the trade union movement who talk fiercely about a planned economy but are horrified if one talks about planning in the trade union movement. Nevertheless, I believe that we must have a wages policy within the trade union movement and a rational trade union structure within the trade union movement.

I believe that in some instances even a Labour Government might find it necessary to call for a wages pause. That has been done in the past, and it might well happen in the future. But I cannot conceive of any Labour Government deliberately giving away large sums of money, albeit to a small section of the community, first, and then pretending that they expect men to give up their rights of negotiation for much smaller sums.

I submit that we cannot expect organised labour today, rightly or wrongly the most powerful section in the country, to surrender rights of free negotiation. The argument is not about wages and whether an award is too big or too small. We have had that argument in every industry a hundred times, and we can get over that argument without difficulty. The argument at present, in very simple terms, is whether the Government accept the right of organised labour in 1962 to meet employers around the table, exchange points of view and come to mutually agreed decisions.

Mr. G. Wilson

How does one arrive at a sum total of the various claims which is not in excess of the income of the nation?

Mr. Marsh

It is difficult to follow the hon. Gentleman. There is no dispute between us and the Minister on this; we have been negotiating wage claims for a long time—

Mr. G. Wilson

The result has been the spending of more than the nation's income.

Mr. Marsh

That is another argument, and it is not true. If it is not true, one would have thought that the Government would have had a fleeting interest in some other aspects of the economy, such as takeover bids, over which they have no control at all and in which they say they are not even interested. They are not interested in land prices, in take-over bids or in public ownership. They are interested purely in this one field, and they deprive the trade unions of the right to negotiate voluntarily round the table claiming the right to come along at some stage and impose—as has happened—a ban upon dates of application. When there was a ban on the dates of application of wage agreements, it did not cause the great upheaval which many people expected. There have been many agreements made since the ban on the date of application was introduced, agreements reached voluntarily by both sides of industry, but the Minister was not satisfied with that. Since that worked, he has now put a ban on negotiations at any price, and that is the position we are in.

I hope that the Government will change their view, and that they will be prepared to re-examine the position and to allow people to discuss their claims freely and on equal terms. If they do not, this country will be plunged into industrial unrest which will do enormous damage to every section of the community, and the responsibility for it will lie four-square at the feet of the Government, whose policies have deliberately produced a situation for which they now try to disclaim responsibility.

5.42 p.m.

Mr. John Peyton (Yeovil)

The hon. Member for Greenwich (Mr. Marsh) has, with a good deal of energy, prophesied gloom. One may judge the actions and policy of the Government, or the proposals of the Opposition, but to judge so sweepingly on the motives, as the hon. Member did, is always dangerous. On this occasion, I think that the hon. Gentleman demonstrated the folly of the practice, because, whatever else he might think of the Government, or what I might think of my right hon. and hon. Friends who sit on the Front Bench, I cannot possibly conceive that they could be so silly, as politicians, as to risk engendering industrial disputes, or, as human beings, be so cruel, stupid and wanton. A great deal has been said about the motives of the Government, and here I think that the hon. Gentleman was wrong and even absurd in his charges.

The hon. Member for Southwark (Mr. Gunter), who opened the debate—we on this side have a very great respect for him, and I do not want to embarrass him—spoilt a very good speech, with a great deal of which I could agree. When he referred to the motives of the Government I regretted the sweeping exaggerations which he allowed his natural eloquence to lead him into.

Mr. Gunter

I tried to make it clear that the end which the Government had in mind commanded my support. It is the stupidity of their means that I deplore.

Mr. Peyton

I will not pursue the point.

When we in this country are in this desperately serious position, I do not think that anybody can say that planning will be the whole answer to our problem. We went through a period in which the great cry was that the gentlemen in Whitehall knew best. That led us to devaluation, and, in the end, the party opposite found itself in a very difficult position in 1950–51, from which it had to get out. Nor do I think that the most dogmatic Member on this side of the House would maintain that the various measures which have been tried by my right hon. Friends on the Front Bench, supported by the party behind them, have been overwhelmingly successful in avoiding these recurrent crises, which perpetually thwart our general aim of expansion.

In these circumstances, I find it very difficult to understand what the Opposition really want now. Hon. Members opposite mouth sentences about planning from time to time, but it does not seem to me that we are making any progress. On the Order Paper today we have a Motion, which has not been talked about very much, which seems to me to proclaim that the recognised and established machinery of negotiations and the arbitration procedures are to be in all circumstances sacrosanct.

I do not believe, for a start, that the Government can be completely neutral and detached and adopt a "come what may" attitude. This is particularly true in industries in which the Government themselves have a large and intimate measure of responsibility, and when those industries are themselves in what everybody must admit, for whatever reasons, a parlious financial state. Let us be perfectly clear about this, in case there is any misunderstanding.

I have a certain number of friends on the railways. I have taken a passing interest in railway matters, but my knowledge of railway affairs is minute compared with that of the hon. Member for Southwark. I concede that at once. Nevertheless, I ask the hon. Gentleman to believe that I myself, and, I am sure, a great many of my hon. Friends do not disagree, would like to see the railway industry restored to a position in which the railwayman can be assured of a reasonable career and standard of life. Whatever other reason, I beg the hon. Gentleman to realise that I myself have the greatest possible sympathy with the claim which is now being put forward. Lest I be open, however, to the charge of crocodile tears, I must make it absolutely clear that I am not saying for a moment that the claim now put forward should be conceded.

Mr. Marsh

Will the hon. Gentleman give way?

Mr. Peyton

No. The hon. Gentleman spoke at great length, and I should be obliged if he will now allow me to get on with my speech.

I feel that the Government are right—and this cannot be challenged—in saying quite firmly that they cannot simply contract out and be disinterested in the outcome of the established negotiating machinery and arbitration. I do not think that it is right, either, for the party opposite, as it has done from time to time, to proclaim the cause of expansion without going a little further and giving some thought not only to markets and demands for the goods which may be produced, but also to the question of prices, which, after all, is basic in our present difficulty. We all admit that the danger we saw last July was that we were pricing ourselves out of world markets, and had we failed to check it the whole lot of us would have been involved in the economic disaster which would have followed.

My right hon. Friend has far more knowledge than I have, but I can only say that I do not find it possible to share the confidence which he began to express this afternoon, though I hope sincerely that he is right and that his confidence will be justified.

Mr. Leslie Spriggs (St. Helens)

Would the hon. Member say that the Government should take the same interest in rents, interest and profits as they have done in wage negotiations?

Mr. Peyton

I do not want to get involved in a big argument about wages and profits, but it always seems slightly strange that whereas increases in wages nowadays normally anticipate a rise of productivity, profits are realised and dividends are paid out of profits which have been made.

Mr. Spriggs

At the expense of wages.

Mr. Peyton

I hope that the hon. Member has a chance of intervening later, but I do not want to follow that red herring now.

Far too often, the party opposite is content to join in the strident cries of the various pressure groups who torment us in these times with their insistence that more should be taken out of the same pot into which less is to be put back. To a certain extent, they show themselves to be unmoved by the fact that we are now making a habit of the awful business of paying ourselves increasingly large rewards unmatched by any increase in production. From the Government Front Bench my right hon. and learned Friend the Chancellor of the Exchequer again and again has repeated the figure of £1,500 million as the increase in salaries, wages and dividends which we paid ourselves in the last financial year, while the increase in our production, in the goods and services produced, was only £600 million.

Far too often the Government are content to repeat these things once or twice in the House of Commons without being prepared also to stump the country and explain in simple, intelligible terms what is happening. A great deal of the difficulty which has arisen over the pay pause has been the fact that its need has not begun to be understood. Somewhat naturally, attention has been concentrated much more on the unfairness and unreasonableness of the implementation. But all remedial actions of this kind are bound to be unpleasant. Attention has been concentrated on that rather than on seeking to understand the basic reason for the pay pause, which is simply that we have been taking out too much and anticipating the benefits which we have hoped future production might make possible. In common sense, that is folly.

We have all been told many times that the pay pause is only a temporary expedient, that it is not a policy. My right hon. and learned Friend has foreshadowed its demise at the end of March. What happens on 1st April I cannot be sure. We are to have a period of continued restraint, but I do not know how that restraint is to be brought about, nor who is to have a change of heart and mind.

The Government have been castigated a good deal this afternoon, but I would like to applaud the courage and resolution of my right hon. and learned Friend. Nobody likes doing unpopular things. It always seems incredible to accuse politicians of malice when they do something which is unpopular, because it almost stands to reason that for once they are showing courage. We all want to be liked and we pay a great deal too much attention to it. We are far too concerned to repeat the old shibboleths of the past without trying to face the vexing and intractable problems of the present. We go on with these old gambits of party warfare, which may have been relevant to 1900, but which are absolutely out of date and beyond the reach of sense today.

The time has come to take an enormous risk which politicians seldom take in days other than war—that of treating the British people as though they were adult and capable of digesting unpleasant facts and of acting upon them. There is a ghastly insult in this tendency to wrap things up in a pretty, chocolate-box wrapping, hoping that somehow or other people with other things to do besides wondering what a political speech means will undo the package and look at what is inside.

Mr. Robert Edwards (Bilston)

The hon. Gentleman is referring to the Prime Minister?

Mr. Peyton

I am making my own speech. This is only a plea that we should use words capable of understanding.

I cannot see how it helps at all to say to the people, "You have done quite well; you have to do just a little better." Something far more than that is now needed. We cannot say that while, at the same time, expecting people to accept the pay pause, with all the odium that it involves and with all the admitted temporary injustices that it carries with it. They cannot be asked to accept these policies while, at the same time, they are being congratulated on doing rather well.

We are not doing well and we have not been doing well for a long time. [HON. MEMBERS: "Hear, hear."] This is not a party point. It goes right back to and before the war, excluding the period of the war itself. I echo with profound admiration and agreement the words used by Mr. Harold Wincott in an article in the Financial Times in the middle of the summer. He called for the occasional use of a little imagination in our approach to some of these difficult problems. He said that only in two world wars had Britain been true to herself in our lifetime. I find it impossible to qualify that remark in any way.

I hope that the Government will try to practise those things, not just mumble to themselves and dish out the briefs, but really try to illumine these immensely complicated problems with an appeal to the imagination of the British people. Disraeli once said that man is never irresistible but when he appeals to the imagination. In my experience, appeals to the imagination of the British people, appeals which might unite them beyond the silly little "wars" which divide us so cruelly and so wastefully for so much of the time, are lacking and very few and far between. It is far more important that they should be made and that they should reach their target than that any of us should survive here to enjoy a long and honourable political career.

Finally, the Government are right and have been right to insist that the process of anticipating increases in productivity must cease. As I have said, my right hon. and learned Friend has shown great courage and resolution in saying that. But I am sorry that some of the Government's explanations of this difficult matter should have been so coy. I think that it is quite wrong to thump the table about the "greed" of the unions. It is always the case that what we all recognise as being greed in other people is, in ourselves, the most enlightened, intelligent and restrained self-interest. We have all experienced that. It is quite wrong to blame the unions simply for playing the cards which fate and the Government have dealt them. We can all find, if we want to do so, examples of greed all over the place. Having said that, however, I must observe that the hon. Member for Greenwich appears to assume that out of every wage negotiation there should come an increase. That cannot be the case if negotiation is real and if the whole process is not to become a mockery.

Let me put one plea to my right hon. and learned Friend. We on this side of the House have always proclaimed our belief in competition without practising it very assiduously. Members opposite have constantly professed their devotion to the Monopolies Commission in order to preserve competition. If we want competition, as I am sure we all must do, there is only one effective way by which to bring a wind of health to the economy. That is surely to lower tariffs and let British industry face the world instead of being hedged about with artificial protection, the reliability of which is not too good in the long term.

Consider the damage that has been done to the British economy by protection—the flabbiness that has been caused to us by the fact that it has removed from us the cruel necessity of living with the harsh facts of life. Realising that damage, the sooner we get back to facing facts and competing with other people on equal terms, the better. Most of us believe that, if the British people are shaken up, they can do a good job—and here I am referring to both sides in industry. Forced as the Government have been to adopt a temporary and unpopular expedient, they should nevertheless note not merely the criticism of the timing or of the reasons for such a policy but also the criticisms of methods which can only divide and further embitter an already difficult situation.

I have detained the House long enough, but I want to repeat two main points. The first is a plea to my right hon. and learned Friend and his colleagues that we should get back as quickly as possible to competition—free competition in a world where it is fully available, without protecting ourselves with cushions which are going to be worn out before long anyhow. Secondly, I ask the Government that, in explaining, as they must, the difficult problems which torture us today, they should have the courage to illumine those problems with imagination. An appeal to the imagination of the British people will, in the long run, bring far greater rewards than the constantly reiterated, rather nasty messages that we address to appetite.

6.4 p.m.

Mr. W. E. Padley (Ogmore)

At least I agree with the hon. Member for Yeovil (Mr. Peyton) that, having listened to the Minister of Labour's speech, none of us will be clear as to what is to happen after 1st April. A great part of the Minister's speech was obviously made in cloud-cuckoo-land. In his attempt to rebut the main part of the speech of my hon. Friend the Member for Southwark (Mr. Gunter), the right hon. Gentleman implied that my hon. Friend had suddenly become a wild man and that his denunciations of the Government's wanton interference with collective bargaining machinery and arbitration was not typical of trade union leaders in Britain.

I say to the right hon. Gentleman that nothing my hon. Friend said was more indignant than what had been said by Sir Ronald Gould and other leaders of the teachers a few months ago, nor by the leaders of the postal workers unions, the leaders of the civil service unions, and the leaders of all the railway unions. It is no use the right hon. Gentleman accusing responsible union leaders such as my hon. Friend—for my hon. Friend is that as well as being a member of the Shadow Cabinet—of irresponsibility and engaging in party claptrap.

The Minister's speech had one advantage. The latter part of it showed that the inquest today is not so much on collective bargaining and arbitration machinery as on the abject failure of the Government's economic policy. There have been many attempts by Governments in the post-war period to influence wages policy and the distribution of the national income, but it is only since July that the policy of diktat, of imposition, has been applied.

Whereas previous attempts at wage restraint, whether under Labour or Tory Governments, were seeking to hold things as they were, the policy announced last July sought to reduce the real value of the wages of the British workers by an average of about 5 per cent. That, of course, offends the normal criteria on which all arbitrators give awards.

Mr. Ronald Bell (Buckinghamshire, South)

Will the hon. Member explain what he means by that? I ceased to follow his argument at that point. He was saying that the attempt to impose a wage pause at this point amounted to inflicting a cut of 5 per cent. Is he assuming the continuance of inflation?

Mr. Padley

The hon. Member will get detailed facts and figures in a few minutes time. At the moment, my point is that because that was the nature of the Government's policy, there had to be this wanton interference with normal collective bargaining and arbitration machinery. But, of course, it will not succeed in the long run because, contrary to the illusions of Ministers and Members opposite, there is industrial unrest, confidence has been undermined, and there is a grave risk of trouble in the months ahead.

The wage pause—so-called—has been monstrously unfair. It is unfair as between wage and salaried earners on the one hand, and sections of the community who live on rent, interest and profit on the other hand. It is cant and humbug for the Minister of Labour to praise the "courage and wisdom" of the Chancellor of the Exchequer and make an appeal for national unity and a sense of responsibility after the unprecedented dividend and capital gains spree of the General Election year and 1960.

In the last twelve months, first, there has been a £45 million a year additional poll tax raised in the shape of increases in the National Insurance contributions. This bore most harshly on the lower-paid workers, including members of my own union, the National Union of Railwaymen, the agricultural workers and others. In April, £83 million a year was provided for the Surtax payers, when the Chancellor wept over the problems of a man with £5,000 a year who tried to educate his children decently. In July, there was the 10 per cent. impost of Purchase Tax and indirect taxes; £210 million a year to be raised from families without regard to their capacity to pay! After all that, there was the wages pause.

There was direct Government intervention in three ways. First, by control over the public services and the Civil Service; secondly, in regard to the nationalised industries; and thirdly, by interference with wages councils, which have not yet been mentioned and about which I wish to say something later. This afternoon we had no reply from the Minister on the question of the railwaymen's case except the answer about the finances of the railways. The plain fact is that, as a result of the Guillebaud Committee inquiry into what were regarded as comparable occupations, two years ago this month wage rates were laid down and the Prime Minister at that time said himself that financially the Government underwrote the basis of the Guillebaud settlement. Two years have gone by. The railwaymen have had more than a reduction of 5 per cent. in their real wages. If the attempt of the Minister to muddle up the normal negotiations on the railways delays a settlement until well past 1st April, the railwaymen still will have sustained, even after the settlement, a reduction in their real wages of more than 5 per cent. if the resulting wage increase is of the order of 2½ per cent. mentioned by the Government.

When this House was discussing the legislation to provide additional money for the National Coal Board, I well remember that the hon. Member for Kidderminster (Mr. Nabarro) and other hon. Members opposite belaboured the Minister of Power and asked for pledges that under no circumstances would the Government yield to the claim of the miners for more wages. The case was that it would be quite wrong for the price of British coal to be above the world price of coal. But, of course, the National Coal Board accounts have, in a way been "cooked" as much as the railway accounts have become astronomical. In the first ten years of nationalisation, on average, the price of British coal was roughly £1 a ton cheaper than the world price. The National Coal Board made a loss of £70 million on coal imported from abroad and sold in Britain.

If the doctrine of the hon. Member for Kidderminster and other hon. Members opposite had been adopted in the first ten years of nationalisation, there would have been an additional income of not less than £1,600 million, which would have meant that the National Coal Board would have liquidated not only compensation but the lotal value of all investments in the industry today and there would be in existence a reserve fund of roughly £800 million. In other words, if the accounts of the British coal industry had been kept on the same basis as the accounts of I.C.I. or Unilever, the Coal Board today would be relieved of interest charges on £40 million a year and of the need for the Minister to bring new legislation to the House.

There is one other point. The £1,600 million of which I am speaking is real. The only difference is that, because of the method of keeping the books, this amount figures in the reserves of the great private companies. For example, the mines in my constituency in South Wales feed the great Margam plant with coking coal as they have done for years, at prices lower than world prices up to very recently. This means that the Steel Company of Wales was able to build up large profits and plough large sums back into the industry, and so, in fact, the accounts of the nationalised industries have been "cooked" in the sense that the same criteria was not applied to them as was applied to the great private industries which, in effect, received a subsidy from the coal industry up to three years ago. One sees the rapid increase in productivity in the mining industry, and one recognises how, since 1957, the earnings of miners have been virtually stagnant while other earnings have been rising.

There has been a loss of 150,000 men, which may be accounted for in part by the necessary contraction of the industry. But that 150,000 figure includes tens of thousands of young virile men in areas where there is still a shortage of miners, as is the case in the South Wales area with which I am connected. I hope, therefore, that the Government will not tie the hands of Lord Robens in the same way as they tied the hands of Dr. Beeching if Lord Robens wishes to make an improved offer during the next set of wage negotiations in the mining industry.

About 60 wages councils influence the wages and working conditions of about 3½ million people in Britain. My own union is perhaps more involved than any other, though other unions, including the Transport and General Workers' Union and the General and Municipal workers, have a large interest in the matter. I would remind the House that wages councils were established to ensure a reasonable standard of life and leisure in industries and trades where, without statutory regulation, that would not have existed.

Mr. R. E. Winterbottom (Sheffield, Brightside)

Sweated industries.

Mr. Padley

The old trade boards related to sweated industries. The wages councils—it was Ernest Bevin who piloted the Act through the House in 1943 during the time of the Coalition Government—were designed to provide a reasonable minimum remuneration. On every occasion when the Government have sought to interfere in the matter of wages, they have sent letters to wages councils asking that the relevant White Paper or speech of the Chancellor be taken into account when settlements are reached.

Lord Monckton, when Minister of Labour, referred decisions back to the councils in order to delay the signing of orders. On this occasion the Minister of Labour has sent letters to the councils. Then, when the councils—including the independent members—have weighed the evidence, taken note of the Chancellor's statement and reached decisions, he has intervened and fixed operation dates some months ahead. I think there have been sixteen cases since the so-called pay pause began. At present, laundries, aerated waters, boot and floor polish, jute, cotton waste reclamation, sacks and bags, toys, unlicensed residential hotels wages councils orders have been postponed until 2nd April.

The case of the laundries is possibly the most shocking of all. The adult male rate under the wages council is £7 7s. 10d. a week and the female rate is £5 7s. 6d. a week. When the wages council met last September it found that since the last wage increase the index of retail prices had risen by 4.5 per cent. That may interest the hon. Member for Buckinghamshire, South. Despite an adult male rate of £7 7s. 10d. and a female rate of £5 7s. 6d., the independent members—voting with the employers' side—declined to recommend any increase in the adult male rate. Yet, even those independent members were so shocked at the adult female rate that they awarded a 5s. 4½d. a week increase. The Minister of Labour then said that there should be a four and a half months' delay. In that case, I tell the hon. Member for Buckinghamshire, South, laundry workers have already had a wage reduction in real terms of more than 5 per cent.

It is important that hon. Members should realise that most of these wages councils industries have adult male rates of £8 or less a week and female rates of not much more than £5 a week. It is said that in a sense these are fictitious rates and no one gets paid so little, but at the time when the Laundry Wages Council was dealing with the negotiations the Ministry's own figures showed that more than 20 per cent. of the male workers were getting less than £10 per week and nearly half the women were getting less than £6 a week. If we refer to the Ministry of Labour's annual report, we find that inspectors of the Ministry report that in many of these trades one firm out of six which is inspected is not carrying out these orders.

In some industries, alongside wages councils set up by Acts of Parliament, there is voluntary wages machinery. Virtually all the distributive trades are covered by wages councils, but, because of reasonable organisation among the workers and employers in the co-operatives, the multiples, and some, although not all, of the chain and departmental stores, voluntary agreements exist. Once the Minister intervenes in this fashion with the statutory machinery that inevitably has serious repercussions in the negotiations in the co-operatives and the multiples and where individual trade union agreements exist with large single firms. Inevitably interference with the statutory machinery affects negotiations through the voluntary machinery which probably covers 700,000 or 800,000 workers in the distributive trades.

If we consider the retail trades of Britain and wage rates fixed since the councils were first established and laid down rates in 1948, we find that from then until last autumn the Retail Food Wages Council rate rose from 98s. to 169s., an increase of 71s., but during the same period the price index rose by 64.3 per cent. The upshot is that in the thirteen years during which the retail wages councils have been operated it can be said that under the Retail Food Wages Council real wages have risen in the case of men by 8s. and of women 5s. 11d. a week. If we compare that movement with wage rates generally, we find that, so far from the relative position having improved, it has been sub-stantially worsened. That is even more true when one refers to earnings. It can be said that if following 1st April the Government continue to use wages council machinery as an instrument for imposing their wage policy, it is absolutely certain that by the time the next wage increase is negotiated in the retail wages councils real wages will be back to the 1948 levels. An analysis of the trend of the cost of living and the delay in achieving the increase will mean an attempt by the Government to reduce real wages by about 5 per cent.

Since he is the only senior Minister still in his place, I put to the Leader of the House that it is surely a most iniquitous policy to use wages council machinery affecting the livelihood of 3½ million of the most lowly paid workers as a principal instrument in the pay pause. Whatever may be the future wages policies, national income policies and policies in economic planning, I hope Ministers and all hon. Members will realise that we have a special responsibility to ensure that the lower paid workers, particularly those who over the years have needed statutory protection, should find their position improved.

Like my hon. Friend the Member for Greenwich (Mr. Marsh) and my hon. Friend the Member for Southwark, I recognise that any long-term economic planning for Britain involves changes in traditional attitudes towards wage bar- gaining. Those of us who have practical responsibilities in the trade union world and those of use who have participated in wage negotiations for many years have no love for the game of chasing our own tails, nor—to change the metaphor—forever being on the treadmill.

If there is to be a new approach, there are three essential decisions to be taken. First, the Government must seek agreement—and agreement can be achieved only if there is confidence. The gravamen of our charge against the Government is that their persistent actions since last July have shattered confidence in the great machinery of collective bargaining and arbitration. Secondly, any new approach must be founded on social justice. As long as we have Governments which give £83 million to the Surtax payers and deny the laundry lassies 5s. 4½d. a week when they are earning only £5 7s. 6d., there is no moral basis for planning or for an appeal for national responsibility. There can be no such moral basis when crimes of that kind are permitted as a regular feature of Government policy. Thirdly, there must be dynamic expansion.

That brings me to where I began my speech. In the dock today there has been not the collective bargaining machinery or the traditional arbitration structures in Britain. What has been in the dock today has been the abject and total failure of the Government's economic policy. I hope, though with little confidence, that the Government have been converted from their belief in the free-for-all. I hope, again with little confidence, that the Government are prepared to go forward with intelligent economic planning, allied with social justice, and to seek agreement with the leaders of the great trade unions, together with the employers' federations and the nationalised industries, for if they will not do that, they should resign and make way for those who will.

6.33 p.m.

Mr. Ronald Bell (Buckinghamshire, South)

When the hon. Member for Ogmore (Mr. Padley) said in his speech that the institution of the pay pause by the Government meant imposing a 5 per cent. cut in the wages of the workers affected by it, I was puzzled to know what he meant. Later in his speech he explained what he meant by that strange phrase. He meant that a degree of inflation had occurred since certain workers, whom he mentioned, had received their last pay increase. He meant—and I have no reason to question it—that the erosion of wages which those people had suffered was about 5 per cent. I suppose—there would have been no point in his mentioning it had not this been the case —that he argued that wage increases should not have been refused to the workers in those categories.

Mr. Padley

The point is that between March, 1960, when the previous increase was given under the Laundry Wage Councils Order, and September, 1960, when the last increase was negotiated, the interim price index rose from 110 points to 115 points, a rise of 4.5 per cent.

Mr. Bell

The hon. Member is merely confirming the impression which I gathered from the hon. Member's speech. Presumably his argument is that the wage increases should have been conceded during the period of the pay pause. I can well see, therefore, how it is that inflation has been endemic in this country for the sixteen or seventeen years since the end of the war.

Mr. Walter Monslow (Barrow-in-Furness)

rose—

Mr. Bell

I will not give way. I gave way to the hon. Member for Ogmore because I was dealing with a point which he had made, but I would rather continue my speech.

The reason that inflation has been endemic in the country for fifteen years or more is that, inflation having once occurred—and under the Labour Party we had a flying start for six years after the war—category after category of persons—I will use that neutral phrase; it does not matter whether they are salary earners or wage earners, for they are in receipt of personal incomes—began to stake claims to offset any reduction in the purchasing power of their remuneration which had already occurred and also to take account of any future reduction in purchasing power which they though might occur. It is this process of competitive claims, which the Chancellor of the Exchequer has called leapfrogging, which has been the motor driving forward the inflation from which we have suffered.

Mr. Monslow

rose—

Mr. Bell

I will not give way to the hon. Member.

The reason for the Government's policy, at present under discussion—whether hon. Members opposite agree with it or dissent from it—is the con viction of those who sit on this side of the House, and particularly of the Government, that in the national interest this process should be stopped now. I very much doubt whether any of the jagged edges of industrial relations which have been mentioned this afternoon are the result of interference with the negotiating machinery. I do not believe that they are.

Mr. Monslow

Nonsense.

Mr. Bell

I will explain why that is my belief.

Mr. Spriggs

Try working on the railways.

Mr. Bell

If it once be granted that the aim of the Government's policy is to conquer inflation, I should be inclined to agree with my hon. Friend the Member for Yeovil (Mr. Peyton) that it would perhaps have been wise for the Government to say explicitly last summer that the untrammelled existence during this operation of cost-of-living arrangements, wages council agreements and industrial arbitration procedures was not compatible with that aim. That is a very possible point of view, and probably the correct point of view, because if we have a large part of the population whose wages are governed by the cost of living, then we (ave a built-in machine of inflation, and it makes it all the more difficult, if we are operating only upon those who are not so circumstanced, to reverse that inflation.

Mr. Monslow

rose—

Mr. Bell

In a debate in which many hon. Members on both sides of the House want to speak, it is much fairer that hon. Members should make their speeches without interventions. I know that I intervened earlier in a speech, but it was purely for elucidation in order that I might take up the point later. But if the hon. Member for Barrow-in-Furness (Mr. Monslow) wants to intervene for elucidation, I will gladly give way to him.

Mr. Monslow

Is the hon. Member suggesting that the wages prevailing in the Post Office and on the railways under the wages councils are responsible for an inflationary situation? I suggest that the circumstances in which we find ourselves are due to the fact that there is a deflationary situation because their wages always lag behind those of other people.

Mr. Bell

I was not wrong in assuming, as I did, that the hon. Member's desire to intervene was to make a debating point and in no way to seek elucidation of something which I had said. He wanted to make sure that he made that point in case, Mr. Deputy-Speaker, he was not fortunate enough to catch your eye.

Mr. Spriggs

Disgraceful. The hon. Member should withdraw that statement.

Mr. Bell

The intervention did not arise out of anything which I have said.

If it be granted that the policy is to conquer inflation, it inevitably follows that the fact that a large part of the population is subject to cost-of-living agreements and to the decisions of wages councils and industrial arbitration procedures very greatly diminishes the Government's scope in carrying through any policy designed to resist inflation. It would have been entirely appropriate if the Government had formally announced last summer that if the need arose they would set aside these procedures for the clearly defined and temporary purpose of stopping inflation. When we arrive at a permanent solution of our economic difficulties—we hope in agreement with the T.U.C.—a complete reshaping of all these procedures will be an inevitable part of it, as I think that hon. Members on both sides of the House will probably agree.

The present state of industrial relations depends upon something quite different from and much wider than arbitration procedures or wages councils. Superficially, as many hon. Members opposite have already more or less suggested, labour relations are extraordinarily good and have been so for a long time. The hon. Member for Ogmore said that the number of strikes in this country has been steadily declining over the last few years. That may well be true. On the surface, labour relations are very good indeed. It is possible to argue that they are almost too good and that between the employing and employed sides of industry there is the sort of cosy relationship which only obtains in an inflationary economy.

I want to refer to something which the late Aneurin Bevan said. I am sorry that the hon. Member for Ogmore has left the Chamber, because this was said in a debate on the closing hours applicable to shops, in which the hon. Member for Ogmore had played a leading part. The late Aneurin Bevan said that there was a real risk that the producer was giving himself a black eye as consumer. For some time past there has been a remarkable cosiness in industrial relations between employer and employed at the expense of the consumer. Inflation proceeds cheerfully along, with higher wages and higher profits, but also higher prices to the consumer. Since the producer is himself a consumer, naturally he does not get very much net gain from the process. Certain categories of the population have experienced a particular disadvantage.

It has seemed to me that from time to time the process which I have just described has enjoyed something like acquiescence from various Governments. It is not difficult to understand why. It is a process and a state of affairs which is comfortable for everyone who takes part in it. For many years we have enjoyed full employment, rising standards of living, rising wages and rising profits. It would be surprising if, in these circumstances, there were not many who said, "This is a very nice way of life. Why should we alter it?"

Mr. Denis Howell

Hear, hear. That is what the Tories said at the General Election in 1959.

Mr. Bell

The answer to the question which that "Hear, hear" implied is that we must alter it; but not because of an urgent impending crisis. I have no doubt that the short-term measures will cure that, as they have cured it in the past. That is not the real problem. The nature of our problem is that we live in a relative world where we are bound to compare our performance with that of other people. It is because this country has been accustomed to occupying a pre-eminent position in the world that we are not willing to accept any dispensation, any arrangement of our affairs, which over a period of time seems likely to result in our losing that pre-eminent position.

That is why we are at the moment engaged in looking round—I trust all of us are—for a dispensation which will be better. That is the operation that we are engaged in. I do not think one ought to overstate the case by concentrating attention upon the factors which are of a temporary character and which could be cured under what I will call the existing dispensation. But it is common ground each time we cure them in that way we set back the growth of the economy. We want to avoid that if we can.

The nature of our economy is so familiar to hon. Members on both sides that it would be wrong to take up any time in describing it. For the purpose of my argument I will do so in a short paragraph. Since the war there has never seemed to be any problem in expending our economy. The growth of the economy takes place easily enough if the restraining hand of government is removed. Our problem is that, whenever our economy expands, one-quarter of the expansion must be exported to pay for the raw materials which made it possible. Expansion takes place easily enough for two years. We then find that one-quarter of the extra production is not going abroad and that someone has to do something about it. It is the Government who have to do it. Our task today is to find a better way of overcoming this difficulty than either party has managed to employ in the past.

The underlying cause of any deterioration in industrial relations today is this. The reason why when our economy expands, as it seems to do effortlessly if left alone, one-quarter of the extra production does not go abroad is that our personal incomes always expand at the same time faster, than production and an undue proportion of the extra production is kept at home. I think that we all accept this diagnosis. It has been said often enough in the past few months.

If we want to cure this problem, we must first ask why it happens. It is true that, when the economy has expanded in this way, company profits, dividends and other forms of income which are often described as unearned have risen. In the recent past they have risen more slowly than earned personal incomes. [An HON. MEMBER: "They are going down."] I know that company profits are going down at the moment. I was taking the last full year, because figures are often quoted for it.

A great deal of attention has been devoted—I think, unfortunately—to a figure which my right hon. and learned Friend quoted in his July statement. He said that dividends had risen by 20 per cent. in the previous year, whereas wages and salaries had risen by 8½ per cent. To seize upon that figure is to seize upon one single element in the unearned sector and take it in isolation. The most highly geared element is the dividends of ordinary shares in industrial companies.

My right hon. and learned Friend gave the right figure in his July statement. It was that wages had increased by 8½ per cent. while the other forms of income—rents, dividends, interest and income from self-employment—rose by 6½ per cent. One should not mount party campaigns on these rather narrow distinctions: I mention these figures merely in reply to those who have so often taken the single item out of the unearned element, namely, the increase of 20 per cent. in ordinary dividends. By doing so they have painted a very unfair picture.

If it is true that it is the excessive rise in personal incomes which causes inflation and which we have to cure, how are we to conduct the operation? In so far as company profits are an element in it, I would say that the existing credit squeeze always operates first upon them and is effective enough. When we come to wages and other forms of personal income, I am driven to this conclusion, which I offer to the House, although it may be controversial, in all sincerity. I find it inescapable that the basic reason is that there is a sort of militancy in the trade unions which has carried over from the last century into circumstances in the middle of this century in which there is no counterbalancing force on the other side.

We have unemployment since 1951, the period for which my party was responsible, running at about 1.6 per cent. for the country as a whole. That is a very fair figure for the period of the time with which we are concerned. In such a situation there will not be any militancy on the part of the employer. The great thing that he wants is to keep his factory running at all costs. Capital investment is a very heavy charge. The greatest disaster to him is a stoppage. On the whole, if he gives way, he can put the extra cost on the price of the product and the very inflation which wage increases create in the home market make it more likely that he will be able to sell the product at a higher price. So this process is going on. There is no counterbalance in the circumstances of the 1950s and 1960s to the militancy of the trade unions. There could be two reasons for this militancy, but I am not sufficiently expert in the subject to know which is the greater.

I believe that one is sheer momentum. The trade unions had a terrific job to do in the nineteenth century and without militancy they could never have done it. The other is the fact that the Communist Party in Britain has been consistently defeated in its attempt to enter Parliament. Most of its candidates lose their deposits when they stand for election. That being so, the Communist Party has concentrated all its efforts on the industrial front. Occasionally, this fact reaches the headlines, when something like the E.T.U. case occurs, but, whether it reaches the headlines or not, it remains true that the Communist Party has concentrated all its energy, which is very great, on the industrial front and not on the political and democratic front.

Mr. Denis Howell

Teachers?

Mr. Bell

I have engaged in many polemic activities with the hon. Gentleman, sometimes with him, as he knows, and sometimes against him, and I always appreciate those exchanges. But at this moment I am trying to put over a serious argument.

This concentration of the Communist Party on the industrial front is the second main reason for the militancy of the trade unions. I certainly declare my belief that, whatever its reasons, that militancy exists. What is more it is not merely concentrated in the leadership. The history of the strikes in this country since the end of the war shows that more than 90 per cent. of them have been unofficial strikes, entered upon against the advice of the trade union leadership.

I believe that the leaders of most trade unions, and certainly those who attain eminence in the T.U.C., recognise the country's problems, and although they may disagree with the Conservative Party on many things, they would like to go further in co-operation with us than they dare do. Their difficulty is that they are constantly being out-manœuvred from below. They are afraid that if they co-operate with us, or with the Government of the day, as I would prefer to say, so far as their own beliefs prompt them to, they would meet two disadvantages. First, they might not be able to deliver the goods, if I may use that expression, and secondly, they might be disowned or dethroned at the next union elections. I think that these are problems which they face and they may be extremely difficult because so much of the militancy is, in fact, on the shop floor and in the hands of the shop stewards' movement.

It is easier to diagnose these things, as I have done for my own benefit—I do not know whether I carry hon. Members with me or not—than to suggest a cure for them. I cannot see any way of finding a permanent solution of this problem—which faces Britain more than any other country because it has no raw materials and is subject to the 25 per cent. rule whereby if we increase our production by £100 million we have to increase our exports by £25 million to pay for our imports, this being the discipline to which we are constantly subjected—I cannot see any way in which we can solve it unless in some way or another that militancy is removed from the trade unions.

Mr. Gunter

Will the hon. Gentleman accept the assurance from me that the means that the Government have adopted over the last six months have been of the greatest inspiration to King Street, the headquarters of the Communist Party, than anything else that we have known? It may sound strange, but I am told that the toast in King Street is to "The Chancellor of the Exchequer. The best we have ever had."

Mr. Bell

I am less well informed on what goes on behind the closed doors at King Street than the hon. Gentleman obviously is. I do not take any part in that toasting. This might be true. This is the first time since the end of the war that a Government have at last decided to face up to this problem and it is idle to pretend that when the Government of the United Kingdom decides to face up to this problem and cure it there will not be heart-searching and trouble.

This is due to the process, which I have described, of production going ahead, and then somehow the adjustment between exports and the home market having to be met. if this is faced up to, and if its root cause lies in the growth of personal incomes, and if we accept that however much we may take countervailing action in regard to company profits, dividends, and so on, nevertheless it is industrial wages which are more than the core of the problem; they are four-fifths of it. If we accept all these facts King Street is bound to rejoice in the temporary opportunity which is afforded for its destructive activities. Nevertheless, it is a prime national interest that this attempt should be made and persisted in.

I knew that I was going to say something controversial, but I am sure that what I have said is right and that it ought to be said. Nothing that I am saying is in any sense hostile to the trade unions, which have an essential function to perform. They have performed it in the past and much of their work has been based on the 1875 legislation, which my party put through, but that does not alter the fact that in the 1960s there is an imbalance in the constitution of this country with the trade unions, somehow or other, not being answerable to anyone for the tremendous power and influence which they exercise.

I cannot tonight offer a solution to this state of affairs. This is a tremendous problem, the greatest of our time, and it is difficult to know how we are to solve it without destroying something which is vital to a balanced democratic society. Somehow or other we have got to solve it. I should be sorry indeed if it had to be solved by restoring the balance through higher unemployment.

Surely there is an alternative, namely, some kind of wages policy whereby both sides of industry carry out a basic appraisal of the value of services and construct a framework within which arguments can occur and industrial arbitration, wages councils and things of that kind can function. It is easy to arbitrate between two litigants, but when it is a question of what is the right wage to pay for people doing different jobs it is rather more difficult. It can only be based on comparability. There is no absolute yardstick. Until the general framework has been settled by some kind of basic agreement, I do not see how these processes to which the hon. Member for Southwark referred can be carried through successfully.

I hope that we shall always have the utmost vigour in party controversy in this House. I sometimes think that hon. Members are inclined to refer to each other in terms of undue respect and that we are not nearly sharp enough to each other. Perhaps when I resume my seat that state of affairs may alter. But here at least is a problem which, with all the sharpness of party controversy, we have got to solve between us quickly if we are to retain the pre-eminent position which we in this country have come to expect in the world and to which I am sure our abilities and character fully entitle us.

7.3 p.m.

Mr. Arthur Holt (Bolton, West)

In view of the wish which the hon. Member for Buckinghamshire, South (Mr. Ronald Bell) expressed at the end of his speech, I would say that I thought that most of his speech was quite deplorable and utterly incomprehensible. I was, however, delighted to hear him say that we should have a wages policy.

First, may I say a word or two on what the Minister said at the beginning of the debate. He seemed seriously to pretend that the Government had not undermined established wage negotiating policy and established arbitration procedure. In defence of his actions over the railways, he said that the Government were concerned with two things—first, the £140 million deficit of the railways and, secondly, in accordance with the Government's economic policy, that increases in wages should be permitted only within the total increase of production. Because of those considerations he was not prepared to allow wage negotiations to be finalised between the unions and the railways, and so the matter had to go to arbitration.

The right hon. Gentleman cannot pretend that those two considerations had been previously taken into account by arbitrators in industrial disputes. This is a new element, and surely this is the whole point of what the Chancellor has been saying for the past nine months, that in future if wages in the country as a whole are increased beyond the increase in the gross national product in a particular year there will be wage inflation.

The real criticism of this Government over the past twelve months and more is surely that they have thrown a spanner into the wheels of a hallowed negotiating machinery built up laboriously over many years to which many people in the trade unions and among the employers attach great importance. The point is that this machinery is now out of date. If the Government at the beginning had said this and had proposed something else to be put in its place, they would have found a great deal more support for even their temporary pay pause policy. But they have never done that, and it is to that fact that I should like to direct myself for a few moments.

The Minister said that the present policy consisted of three phases. First is the initial pause, which ends, we understand, on 31st March. Second is the continued restraint for another undefined period. Whether the Leader of the House in winding up the debate is prepared to give an indication of the length of this second interim period, I do not know. The third phase is a period when we have the right to assume that we are going to have a complete and rounded policy of wage negotiations in the future. Perhaps the Leader of the House will have something more to say about that.

The country at the moment is eagerly waiting to hear what the Government have got to say in a positive way. So far their whole attitude has been negative. People have been asked to forgo their natural desire to increase their incomes.

Mr. Charles Loughlin (Gloucestershire, West)

Only the wage earners.

Mr. Holt

I am talking about wage and salary earners at the moment. They have been asked to forgo their natural instinct to increase their wages, but without any clear indication from the Government about their policy. The Government must answer this question: are they seriously leading the country to adopting a wages policy? Whether the figure should be 2½ per cent. or 4 per cent. is a matter that we can discuss in great detail perhaps more appropriately in an economic debate, but if this is the policy, what sanctions are they proposing to use?

This is really the nub of the question. If the Government are not prepared to use sanctions, if employers give increases which are too great according to the guidance of the Council on Prices, Productivity and Incomes, or if industrial trouble arises and some unions co-operate while others fail to do so, how are they to be brought into line?

It is all very well talking about settling our troubles in a free society. We all want this. But we must recognise that there is a completely changed situation, particularly now when the Government have such a large direct and considerable indirect influence on the economy, through their own expenditure, as well as through local government and the nationalised industries. The encouraging thing is that more and more Members on both sides of the House are accepting the idea of a wages policy.

I was reading the report of an interesting short debate on industrial relations, in which I took part, on 17th March last, when the hon. Member for Greenwich (Mr. Marsh) spoke in favour of a wages policy and referred to the out-of-date method of settling wages by brute force. The hon. Member for Newton (Mr. Lee) said: I shall tell the House a secret which I hope will be kept inside these four walls. I nearly got thrown out of the Ministry of Labour ten years ago for producing a national wages policy. He went on in the next column: I still believe that in the age to which we must attune ourselves, the silly horse-dealing nonsense to which collective bargaining has come is quite inapplicable to the conditions of the future."—[OFFICIAL REPORT, 17th March, 1961; Vol. 636, c. 1979–80.] This afternoon we heard a leading trade unionist, the hon. Member for Ogmore (Mr. Padley), say precisely the same thing, namely, that he was in favour of a wages policy. It appeared to be his view that many other trade unionists were also in favour of such a policy.

As far as I am aware, the Labour Party Front Bench has never said that it is in favour of a wages policy. I hope that the right hon. Member for Belper (Mr. G. Brown) will indicate tonight whether his party is now officially in favour of the settlement of wages in a rational manner, guided by scientific assessments of people's contribution in their own work, and the like. I do not need to spell out the sort of things which go with what is understood by "a national wages policy".

Mr. Percy Collick (Birkenhead)

I think the hon. Gentleman is wrong when he talks about the trade unions not having a wages policy. All the trade unions have their own wages policy. It may not be the one that the hon. Gentleman likes, but they have a wages policy.

Mr. Holt

I do not think that what I am talking about is the same thing that the hon. Gentleman is talking about. It is certainly not what the hon. Member for Newton was referring to in the debate which I have mentioned. The jungle of collective bargaining cannot possibly be called a national wages policy.

Mr. William Shepherd (Cheadle)

Does the hon. Gentleman really believe that this arrangement under which the contribution of society is scientifically judged will work?

Mr. Holt

I do not pretend that it is not without great difficulties, but to those hon. Members who laugh it out of court I say, "Are you satisfied with the present arrangements? Do you think that they will go on for ever? Is this the best that we can do in settling wages in industry?" I do not think that anyone can come to the conclusion that it is. Therefore, I should have thought that in a pragmatic, empirical way we might endeavour to move towards a national wages policy in which these things are settled more rationally. This means, however, that those in the trade unions who agree to it are, by implication, giving up the idea that they can change the relationship between the incomes of wage and salary earners and incomes obtained in other ways.

There may be some idea that over the last few years—certainly this has been true in years gone by—due to strong negotiating, a larger proportion of the national income has gone to wage and salary earners than before. It may be said by some people that this is obviously not true because the Clores and other people have had a larger share. The figures in Government publications over the last ten years show that the proportion has hardly changed at all. Wages and salaries have accounted for two-thirds of the national income throughout the last ten years.

Wage negotiations are about differentials—between skills, between the unpleasantness and pleasantness of a job, between shift working and day working, between night work and day work, and so on. I would have thought that that was the sort of thing which should be settled on a rational basis. The settlement of it by some kind of brute force method is completely out of date.

Sir Spencer Summers (Aylesbury)

It would be very difficult in logic to dissent from the hon. Gentleman's argument that these things should be settled rationally. What we are waiting to hear is how he would deal with those who are not willing to settle them logically—in other words, sanctions?

Mr. Holt

One of the prerequisites which the hon. Member for Ogmore said that trade unions would lay down before agreeing to participate in a national wages policy was that the Government should seek the agreement of and obtain the confidence of both sides. Secondly, he said that the basis of such a policy should be social justice. This means that the Government must agree considerably to limit the extent to which they change people's net incomes through the Budget. The third thing that the hon. Gentleman mentioned was dynamic expansion.

It seems to me that sanctions is the nub of the matter. If we have a sanction, it may be that it will be very little used, but, if we have not a sanction, it seems to me that, although we might in the end achieve a national wages policy by a lot of people of good will on both sides plugging away hard at it, it will take a long time to achieve, and I do not think that we can wait that time.

We have to have a sanction, and I think that can be found through the Budget on firms. Suppose that the National Economic Development Council says that this coming year there can be average wage increases of 2½ per cent.—this is a purely hypothetical figure—then, since it fixes an average, it should also fix a ceiling. Most industries would comply with the average. Some industries which were expanding, needed to attract labour, and were doing very well and which could pay more than the average figure would be allowed to do so up to the ceiling. The sanction would be used on those industries which went over the ceiling.

Before an agreement under which a firm proposed to pay an increase which was more than the ceiling was made—this would apply to all agreements—it would be notified to the Ministry of Labour. Through the Ministry of Labour, or through the planning board of the Treasury, a message would be sent back saying, "What you propose is more than the ceiling. We do not agree that you should make this increase. If you do, a sanction will be applied." That sanction should be an increase in the company's Profits Tax.

Mr. Charles Curran (Uxbridge)

Let us suppose that what the hon. Gentleman is suggesting is done and that the arbitration tribunal makes an award which is in excess of the ceiling. Does the hon. Gentleman suggest that the Government should be authorised to override that award?

Mr. Holt

My support of this amendment is, as it were, conditional on the acceptance that under a national wages policy even arbitration machinery would be altered. I do not consider that the arbitration machinery is now in the form that it would be under what I describe as my national wages policy. Under such a policy the arbitrator would be subject to the limits which I have suggested firms would be under in their own free negotiations.

Mr. Hare

I hope that the hon. Member will find out from the Deputy Leader of the Opposition whether or not the Labour Party would wish to alter the arbitration machinery in the way that he suggests.

Mr. Holt

I should be delighted to discover that. I have asked the Opposition whether the Deputy Leader of the Opposition will tell the House tonight their view about a national wages policy. I should have thought that if they supported a national wages policy they would have to agree to some alteration in arbitration arrangements. That is not Ito say that it is right to break up the present system of arbitration before the new policy has been introduced. That is my criticism of the Government.

Mr. A. R. Wise (Rugby)

It is true that a sanction could be imposed by increasing a firm's Profits Tax, but would not that mean about 150 different rates of Profit Tax?

Mr. Holt

I would not have thought that there need to be an exact mathematical calculation that a firm's Profits Tax should be increased by a certain percentage. Rather, there should be certain penal rates of Profits Tax, and if a firm did not carry out what had been agreed as the national policy, perhaps its Profits Tax should be increased by 50 per cent or doubled.

Mr. R. E. Winterbottom (Sheffield, Brightside)

I am not so much interested in what happens after the institution of a national wages policy. I am wondering what happens before such a policy and how, in the hon. Member's opinion, one job would be related to another and we would start a national wages policy. Do we start merely at the time when the Liberal Party drops the hat, or do we say that we should have a Royal Commission, which should sit for the next ten years while Britain becomes bankrupt, before we arrive at the relationship between, say, the dustman and the dentist?

Mr. Holt

We cannot get everything perfect in this imperfect world. If agreement could be obtained on both sides on a national wages policy on the lines I have suggested, or in some other way—I am not particularly attached to what I have said; it is merely my suggestion—it should not be impossible to make a number of quick interim alterations in the differentials of people who obviously are getting less than they ought to be getting. It should not require a Royal Commission to settle that.

I hope that when the Leader of the House and, indeed, the Deputy Leader of the Opposition wind up the debate they will seriously apply their minds to the question of a national wages policy. Little though my experience is concerning industry, and it is even less concerning the trade union movement, I nevertheless feel that people as a whole are ready for a sensible method of settling wages. The whole atmosphere of the country is against strikes, unofficial strikes and all this crazy kind of chaos. People want to see fair wages in relation to the job that is being done. If we had a strong lead from the Government—which, whatever the niceties of political fighting in this matter, must have the support of both trade union leaders and, probably, the official Opposition—we could move into a new era in industrial relations.

7.23 p.m.

Mr. William Shepherd (Cheadle)

I feel certain that even the difficult question of a wages policy is not as difficult as the hon. Member for Bolton, West (Mr. Holt) made out. I was having a little argument with one of my constituents during the week-end and I said that the Liberal Party in the House of Commons was the most impracticable bunch of people I had ever met. My constituent dissented from this view. I only wish that I had brought him along to listen to the hon. Member for Bolton, West this afternoon.

It would be wrong of the House to take the view that there is anything sacred in the existing methods of wage negotiation and that there are not means by which we could improve the existing state of affairs. If, however, we could have the conditions under which a perfect wages system would work, we would not need a wages system at all.

The thing that strikes me today is the absence of any understanding by hon. Members opposite of the dire position in which the country stands. [Laughter.] Hon. Members opposite may laugh and think it highly amusing. Obviously, we cannot go about making declarations which are calculated to undermine the external value of the £. I ask any hon. Member opposite who laughs to consider what would have been the position of the country had not some of the external factors, the terms of trade and other things, been favourable during the last twelve months. [HON MEMBERS: "Hear hear."] Although hon. Members opposite say "Hear, hear", when it comes to appreciating the need for action to stem what would otherwise be a disastrous consequence hardly any member of the Opposition gives any support to a policy designed to save the £ from destruction.

I do not want to preach to hon. Members opposite, but I want to say this. In all the trouble that has existed in all the changes of fortune that have overtaken the country in the last seventeen years, apart from the short time that they were in office, the Front Bench of the Labour Party has never given any public support to the responsible elements of trade union leadership. I recollect only one declaration—it was made during the weekend—by the Leader of the Opposition in which, in his official position, he gave political support to the responsible leaders of the Labour movement in the trade union section. The action of Her Majesty's Opposition in these circumstances and the circumstances of the past, when they have failed to give support to the reasonable and responsible leaders of the trade union movement, is a grave dereliction of duty and, in my view, calculated to damage the country's prospects.

I do not pretend that an Opposition should support the Government. It is the duty of the Opposition to oppose. At the same time, however, it is the duty of the Opposition to bear in mind the basic position of the country and of the community. In my view, the Opposition have abysmally failed to give the sort of support that is needed.

Mr. Loughlin

I can understand the hon. Member putting forward that kind of argument, but I cannot understand why, when both the Opposition Front Bench and back benchers on this side were arguing with the Government Front Bench about the economic position of the country, we were told that we had never had it so good.

Mr. Shepherd

That ignores the situation with which we have to deal and the situation with which we have been dealing since July. I do not for one moment withdraw my strictures against the Leader of the Opposition.

I want to try to put the matter into perspective. In terms of our material welfare, we are in a fairly good position. Almost every member of the community is much better off than he expected to be ten years ago. The whole community, including those who happen to earn the lower wages, is relatively much better off than people expected to be a decade ago. It is not asking very much, in view of the seriousness of the external position, to say that for a short time there must be restraint on the pressure for wage increases.

We are not asking people who have no food to eat, or who do not know where they will find a pair of shoes for their children; we are asking people who, on the whole, have enjoyed one of the highest standards of living in the world to exercise temporary restraint so that there will not be danger to the whole community. I do not think that that is really asking too much of people of this kind.

Mr. Gunter

I do not think that the hon. Member is doing himself justice. What I tried to say was that we accept the aim and that we are fully cognisant of the necessity for restraint, but by the means they have used to achieve the end the Government have made it far more difficult to attain the desirable end—by the stupidity of their efforts.

Mr. Shepherd

I quite understand the hon. Member's view. I would not pretend to the House that I think that in a free society the task of trying to obtain even a temporary restraint is a simple one. I do not even think that it can be done with absolute fairness.

I am not pretending that I think that what the Government have done is absolutely fair, because by the very nature of things it means that those workers over whom the Government have direct or semi-direct control must of necessity feel these impacts more harshly than those in private enterprise, and it must mean, for example, that some workers cease to improve their situation, whereas, perhaps, some people engaged in a business activity can do very well indeed.

I accept that this cannot be equitable in all senses, but I do say, to those who contest my view, that the overall need of the country at present overrules any of these other considerations, and that if we do not try to safeguard our own external position we shall all crash down.

When we look at the country today we see a nation doing to itself what Hitler failed to do. I repeat that if conditions in terms of trade and other factors had not been favourable to us in the last twelve months we should have succeeded in driving ourselves into bankruptcy.

Mr. Spriggs

It is vital that we should understand the facts. Has the hon. Gentleman read the account in the national Press this morning about the rents of council houses in St. Helens going up by 7s. 6d. and, if so, whether he agrees with the Government's financial policy of forcing local authorities to put up rents?

Mr. Shepherd

I do not think that that is particularly relevant to what I have said.

Mr. Spriggs

It is relevant.

Mr. Loughlin

Of course it is.

Mr. Shepherd

I have said that I accept that it is inherent in this policy that there must he a certain amount of unfairness, that it cannot be avoided; but that what is at stake is so important that it is necessary to get this restraint, and that if we do not get this restraint we all go down.

I would now say a few words about what has been happening in terms of the use of industrial force. I am not one of those, as the House knows, who oppose the trade union movement. I have always been a strong supporter of trade unionism in every sense of the word, but I do see, with some uneasiness, what appears to be the growing use of force. In 1962, it is almost incredible that in a nation which is relatively well off, in which there is a very high level of employment and good working conditions on the whole, there should be this attempt to settle issues by force. Surely, by now, the idea of going to strike should almost have been removed from our minds. It is not, on the whole, the action of a civilised society.

Obviously, there must be differences between workers as to the relative values of their contributions to society. Obviously, there must be differences and there must be clashes, but to settle these sorts of differences by imposing upon themselves and upon others distress and loss surely is insupportable in 1962. I should have thought that we could have got some better suggestion in 1962.

Mr. Arthur Lewis (West Ham, North)

Tell the Government.

Mr. Shepherd

Surely the time has come when the trade union movement itself should consider whether it could not be a little more concerned with the rather lower-paid people, and not always the ones with the biggest industrial force, pressing their particular claim at the expense of the lower paid. I should have thought that the time had come, too, when the trade union movement should do something for the lower-paid workers without the higher-paid workers saying they are to get a proportion. If hon. Gentlemen opposite would do something within their own movement to prosecute that idea I should, personally, be very grateful for that.

Several Hon. Members

rose—

Mr. Speaker

Order. We shall make better progress if there is a little less interruption.

Mr. Shepherd

Clearly, one of the basic things needed, if we are to do some of the things I hope we all want to do, is the establishment of better industrial relations. The Minister of Labour said that those relations were good and that the machinery was well-established and, on the whole, working well. I accept all those statements, but I still think that there is a good deal which is lacking, and that what is lacking is in the positive sense. I feel no real urgency on the part of the employers and employed to contribute towards the national good. I see today still two nations instead of one, and I believe that we have got very quickly to the situation where we must have one nation instead of two, and that both sides have got to make a substantial contribution to this end.

I believe that employers should make the biggest contribution to this end, because I think that today they have not given the leadership they are capable of giving and which ought to have given. My hon. Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) said, very rightly I think, that there has been too often between employers and employed a very cosy understanding at the expense of the consumer. It is one of the difficulties in a full employment and very high demand society.

I say, however, that one of the biggest defects in our existing society, as compared with even sixty years ago, is the lack of leadership by employers. I know that to be an employer—as I am one—is not a particularly easy operation today, and that there are plenty of problems—and for expanding businesses there are many problems—but I think that employers have not paid enough attention to labour relations. They have relegated that to a rather minor position in the order of things instead of regarding it as one of the most important duties they have to carry out, and they have not given, in my opinion, the sort of leadership which it is necessary to give to make the nation conscious of its needs and its duties.

I will be harsh and say that many employers have become more National-Assistance minded than employees. Too many employers have the view that, if things are wrong to business, it is not a question of "What is wrong with us?" but, "What is wrong with the Government?" If employers do not display a spirit of independence and resilience they can hardly expect those who work for them—or with them, as it should be—to display the qualities which are necessary for our survival. I do not want to be harsh, because there are employers who do all these things. I know them. On the other hand, there are far too many who do not, and I say that the function of an employer as a leader of society in a full-employment State is a very important one, and that, on the whole, too many of them have failed to carry out their function.

I turn for a moment to the question of what we can do. We cannot, I am quite certain, do it by regulation, as the hon. Gentleman the Member for Bolton, West has just said. I am quite convinced that to establish machinery, however important it may be, is not in itself the answer. I quite understand that hon. Members opposite may want a different kind of machinery. I do not dissent from it, but what is important if we are to survive is that we should have a new spirit in the country. Nothing short of it will put us right.

If we try to establish by Government regulation the sort of control over the economy which is really needed, we inevitably must employ powers quite outside the scope of a free society, but whatever we do within the limits of a free society can be undone if the will of the people is not with what the Government are seeking to do. Therefore, the first essential in the community is a greater sense of national purpose than we have had up to now.

I know that hon. Members opposite will say that the Government have not supported and fostered that. I think there is some ground for criticism that if one appeals to people's purely material natures it is difficult to get them to pursue a policy of sacrifices. But whatever the mistakes may or may not have been what we require now is a greater sense of national purpose, because the difference between success and failure here is so small.

We are not a nation which is tottering on the brink of bankruptcy through sheer incompetence. On the whole, we are a level-headed lot of people with a fair amount of intelligence, a great deal of ingenuity and considerable skill and knowledge in industry, who ought, if we act sensibly, to be able to win ourselves a reasonable living in the world. There is little about us that is really wrong except a tendency to pursue not a national purpose and policy, but our own selfish sectional ends.

No amount of machinery or regulations devised by Government and no attempt to control the economy through economic or fiscal means will be a success unless we achieve a sense of national purpose. Unless we achieve that sense of national purpose we are doomed, but if we can achieve a greater sense of singleness of purpose we can go ahead in this latter part of the century and maintain our position in the world.

7.43 p.m.

Mr. Percy Collick (Birkenhead)

I have listened, as I always do with great interest to the speech of the hon. Member for Cheadle (Mr. Shepherd). I do not think that anyone can question his sincerity. I thought that he could well direct all he said to the Prime Minister, because if there was anything in what he said about a national purpose it seemed to me that the one person in the country who ought to understand that a little more than he does is the Prime Minister. Never once has anything of that kind come from the right hon. Gentleman. Never once has it come from any aspect of Government policy.

Sharing as I do a recognition of the economic plight of the nation, which is fundamental to the country, I can appreciate the drift of the hon. Member's arguments, but he might ask himself what hope he or anyone else can have of securing a national purpose in a situation in which the Government behave as they have behaved aver the pay pause and all that has gone with it. The happenings in London today are a testimony to that.

I have spent the best years of my life in association with the railways in one form or another, and I cannot recall an occasion when there has been such a sense of bitterness and frustration among railwaymen as there is today. The most pregnant thing that the Minister of Labour said today was that he did not want to talk about the railways. I can quite understand that, and I can also understand that possibly that may be the reason why the Government intend to leave the Minister of Transport on his seat rather than allow him to speak in this debate.

Apparently it is the Leader of the House who is to wind up the debate. Silence has been enforced permanently on the Minister of Transport, who is the one person who ought to give an account of himself at the Dispatch Box. But because the Government sense that he would be faced with an utterly impossible task, and because they have had a little experience of the speeches we get from the Minister of Transport, they have deemed it wise to give the Leader of the House the task of winding up.

Why is it that railwaymen feel so frustrated and that this bitterness has expressed itself in the way it has today? Anyone who knows the simple history of the facts, which I propose to recite in a moment, can see clearly why all this has happened. First, I do not know whether the Government really believe that the pay pause has been a success. Are they really proud of what has followed from it? If they are, they need to think about it a little longer. People like teachers, railwaymen and civil servants do not complain bitterly about the Government's actions if they think that they have been fairly treated. It just does not happen that way.

Why is it that this feeling persists? Even if one accepts that the country is facing an economic plight, and even if one accepts what the hon. Member for Cheadle said a moment ago about the reason for having something like a pay pause, I still cannot understand how any hon. Member opposite, including even the Chancellor, who wants the pay pause to be successful, could have gone about it in this way. The Chancellor must have been almost a madman to have gone about it in the way he did. He must be a one-eyed Chancellor who is little short of being a madman. [HON. MEMBERS: "Why?"] I will tell hon Members why.

How can we expect ordinary working people who count their shillings and pence to be influenced by any supposed national appeal such as that which the hon. Member for Cheadle had in mind when the very man who makes that appeal is the man who some months or so before he made it proposed in the House to give £83 million a year to the wealthiest people in the country? If we want a national appeal it must be based on ground other than that.

This is the difference between Sir Stafford Cripps and the present Government. Let it be said about Stafford Cripps, anyhow, that when he was faced with economic difficulties he made his appeal to the nation, and in the main the nation responded to it because he was a man of a moral integrity which was beyond any question. Who can say that about the Government? Who can say that about the Chancellor of the Exchequer, a man who makes cryptic remarks about the social injustice imposed by Surtax on a man with £5,000 a year? Then the Government expect the workers to accept a pay pause. Frankly, I think that a pay pause in these circumstances was nonsense and doomed to failure.

I will tell the House why I think so. A pay pause is not possible unless two considerations are satisfied. If one is to have a pay pause and enforce it, one must have a prices pause and a rent pause. I would go so far as to say that one could well have a profits pause, but a rent pause and a prices pause are essential if there is to be a wages pause. Neither the present Chancellor nor the most extraordinarily clever Chancellor of all time could get away with a pay pause unless he faced those two factors. I want to illustrate that in the practical terms of a railwayman.

The Government might say, not unreasonably, that they have not the machinery to enforce a prices pause or a rent pause. But they had the machinery—they deliberately invented it—to enable the landlords to push up rent by well over £100 million a year. It was deliberate policy, and the Government did it with understanding and forethought with the object of increasing by well over £100 million the rent going to landlords.

That is why the pay pause is ridiculous and impossible. It is the reason why so late in the day the Chancellor has decided to abandon it. We were told today that on 31st March it comes to an end. On April Fools' Day we are to start something else. We are then to have the "guiding light". I do not know what that is, but apparently something is going to guide us. [Interruption.] The guidance may he like that of the hon. Member for Bolton, West (Mr. Holt), not very brilliant. He tried to tell us something about a national wages policy. I was as clear about it when he finished as I was when he started. I imagine the "guiding light" will be something of that kind.

I have heard of this many times. We had it from the Minister of Transport, who has so discreetly kept out of the Chamber today. I should have liked to have said a few things to him, but he has not been here.

Mr. A. Lewis

Perhaps the Minister of Transport cannot get here because of the traffic jam outside.

Mr. Collick

At all events, the right hon. Gentleman is not in this Chamber, and that is where he ought to be. However, he might not be able to answer one or two of the questions that I should like to put to him.

Railwaymen feel aggrieved not so much over a few shillings this way or that. That is not the issue. They are aggrieved to an intensity they have never known before because the pay pause suddenly inflicted upon them affects a wages claim which has been outstanding since last May, long before the Chancellor had ideas about a pay pause. That claim has been going through the long, weary processes of the negotiating machinery. Suddenly, when the claim reaches a stage where they think some settlement may result, the Minister of Transport steps in and tells Dr. Beeching, in effect, "This must go to arbitration." This all happened in 24 hours.

I am a little puzzled about this. A very short time ago the Minister of Transport announced Dr. Beeching's appointment to the House, telling us that he was, presumably, something of a superhuman man. I felt that, according to the Minister, he was something like the Archangel Gabriel, and I hoped that he would be protected so that he would be given time to carry out his difficult job. What happened? Apparently this great man, upon whom the Minister of Transport relies to go far in getting British Railways out of their difficulties, is not to the Minister or the Government a fit and proper person to deal with the modest wage claimed by the railwaymen.

I do not blame Dr. Beeching for what has happened. There was reason to believe—I put it no higher than that, and I think I am as well informed about these matters as anybody—that Dr. Beeching was about to make an offer to the railwaymen on the merits of the case. When the Minister of Transport got to know this, he made it abundantly clear that it was not to be done and issued his famous letter in effect challenging Dr. Beeching to do it. Dr. Beeching understood enough to say, "If this is the Government's attitude, let them do it. Why should I take it on? It is for the Government to come out in the open and make their decision."

There is apparently no one on the Government Front Bench at the moment who is ready to answer for the Government. It is funny how the occupants of the Government Front Bench drift away when they are about to be faced with awkward questions.

Mr. A. Lewis

The Parliamentary Secretary to the Ministry of Labour is there.

Mr. Collick

Yes. Perhaps he will choose to answer.

Mr. Manuel

Answer.

Mr. Collick

Dr. Beeching made it clear that he was not willing to carry this out. That is why a decision was made so quickly—in about 24 hours. Then the Minister had to send a letter to Dr. Beeching making it clear that the Government were not parties to what was happening.

There are one or two pertinent questions which arise, and I should like the Government to give us the answers. Perhaps the Parliamentary Secretary to the Ministry of Labour is capable of taking a few notes.

The Parliamentary Secretary to the Ministry of Labour (Mr. Alan Green)

indicated assent.

Mr. Collick

I am glad to know that. One does not always know, because there are such changes on the Government Front Bench from week to week we hardly know who is who. Anyhow, I invite the hon. Gentleman to ask the Leader of the House to tell us frankly why Lord Robens, the Chairman of the National Coal Board, can make wages offers to the miners while the Chairman of the British Transport Commission cannot to his own employees. We expected an answer to this question at the beginning of the debate so that we could discuss it. Since we have not yet had it, perhaps we can have a word or two about it before the debate ends.

I want to speak now about the position as it appears to some railwaymen. There are plenty of men whom I personally know who are 55, 56 or 57 years of age, who have given a lifetime of service to the railways. Consequent upon the closures in Scotland and the curtailment of services they are now being told, "This depot is closing and you can go here, here or anywhere. If you do, you can retain a job." What does such a man say to himself, at 55, 56 or 57 years of age and after a lifetime of service on the railways? If he moves from the depot where he is and goes, for example, to Crewe, or anywhere else, what does he face? Because of the Tory Rent Act, he is faced with having to pay a rent double and treble what any reasonable rent ought to be.

Good gracious, I am trustee for a dear old lady, who lives in one room in Golders Green, and I pay £1 12s. 6d. every week for that one room in London. What on earth do hon. Members think the position of a locomotive driver is when he finds himself transferred from some other part of the country to London? If he has to pay £1 12s. 6d. for one room, what has he to pay for the rent of a house or a flat? The Government have made no exercise to control these rents, but, as every hon. Gentleman opposite knows and everybody on this side knows, they are responsible for having put them up, and having put them up to the absurd limits which we now know.

These are the practical problems, the practical issues and the day-to-day things that working railwaymen are having to face and make decisions about every day. Can any one wonder that, after all this long-drawn-out ten months of going through this procedure of wages negotiations, when the Government step in and say to the Minister, "No, you must not allow Dr. Beeching to make a settlement this must go to arbitration," does any reasonable person wonder that there are transport difficulties in London today?

What we ought to understand now is that these problems and difficulties lie directly at the door of the Government. After all, why are the railways in financial difficulties? They were perfectly solvent until 1953. Right up to 1953, when the Tory Government introduced its own Transport Act, British Railways were making surpluses, and every experienced transport person knows that it is largely because of the Government's transport policy that the British transport system, and the railways in particular, are now in the red. Now, we hear all this talk about the "guiding light" that is to determine wages after April Fool's Day. Hon. Members on the Government side have been making what appear to be quite serious contributions to this debate on economic theory and all the rest. I ask them to ponder this sort of question and to see for themselves the way in which this pay pause has been working out.

One of the first bodies of workers in dispute over this business were the airport loaders at London Airport, and what happened? The loaders at London Airport were making certain demands for wages increases, and, as everybody knows, for several days London Airport was virtually stopped. What did the Minister of Aviation do? What was his part in this job? I do not want to go through the whole rigmarôle of what happened in detail, because everybody knows broadly what happened. They reclassified the loaders, called them by another name, and put up their pay to more than the men themselves had been asking for. That was how that dispute was solved, and the Minister of Aviation was responsible, on behalf of the Government, for what happened.

The next dispute that come along under the pay pause was the dispute affecting the electricity industry. What happened there? It is very illuminating. The Chairman of the Electricity Authority, who knows his job no less than anybody on the Treasury Bench knows his, understood that unless he did something about this—if I am rightly informed—it looked as if they were going to lose a considerable number of their most highly skilled men. In order to save the industry from losing these men, they made a wages agreement, and the Minister of Fuel and Power, so far as we know, made no interference. Certainly, the Chairman was called over the coals later by the Government. The point is that the demand was met.

What was the next one? The miners had a claim, and Lord Robens, for the National Coal Board, made the miners an offer. Again, no interference. That has happened in every case. Then come the railwaymen, and the Minister of Transport says, "No. No negotiations, you go to arbitration." Will the Leader of the House please tell us tonight—if the hon. Gentleman on the Front Bench will kindly make the necessary notes—why these differences? These are the practical questions to which the men want answers.

Let us take another thing affecting the railwaymen, in which the Government are directly involved. For two long years, what was called the Guillebaud Committee of Inquiry 'held an inquiry into railwaymen's wages. The railwaymen put up with all this business for two long years, and the railway unions, my own among them, were saying to their members, "All right, you wait, we shall get the report and act on it." For two long years, the railwaymen have been waiting for that report, and ultimately it came, and the Prime Minister stood at that Box and said that, on behalf of the Government, they accepted the principles of the Guillebaud Report and would see that they were 'honoured.

If we want to find out the cause of half the trouble among the railwaymen today, I say that it is because they do not know where they stand in regard to the Guillebaud Report. Is the Guillebaud Report still to be honoured by the Government, or have the Government run away from it? The railwaymen believe that the Government have run away from it, and they have reason, and documents to prove it if need be. It is the fact that the vocal railwaymen of this country believe that the Government have now gone back on the Guillebaud Report which is largely responsible for some of the things that are now happening.

Another wage settlement has recently been reached, and I put this to hon. Gentleman opposite who today have been talking about productivity and who have been saying that our economy is so stretched that it might stand perhaps 2½ per cent. or no more than 3 per cent. This is the very argument which one hears about this new "guiding light", which will determine wages of the basis of productivity. I put this proposition to hon. Members opposite. The fire brigades union recently had a campaign, with which every Member of Parliament is familiar, and arising out of that campaign they had a settlement. I make no complaint about that, because I have an immense admiration for firemen and the work they do, but I understand, from information that has reached me, that a fire station officer's rate will go up now 18.8 per cent. What hon. Members opposite have to answer is how the wages of a fireman are determined on the basis of productivity. Are they saying the bigger the fire the bigger the pay? That is why this economic jargon is utter nonsense. Haw is the 18 per cent. of the fire station officer to be related to the wage of a locomotive driver?

I was interested in a letter which appeared in the Daily Express last Thursday from the Mayor of Peterborough to the Minister of Transport. I do not know where the right hon. Gentleman is. He has not been in the Chamber since the first speech of the debate, but I was going to ask him what reply he intended to send to the Mayor of Peterborough, Mr. Charles Swift, who asked the Minister of Transport: Would you be kind enough to tell me it I am wasting my time and talent on British Railways? After deductions I take home less than £9 15s. a week". He is a locomotive driver. My chauffeur's pay and conditions are far better. The attendants at the city council's conveniences receive £12 6s. 5d. for a 52-hour week. By comparison I would receive £12 8s. 24d. for the same hours. The gentlemen who empty our dustbins average £12 15s. Apart from my chauffeur, no atom of responsibility is required, nor training. How can that sort of thing be justified? I assure the Minister of Transport that not only the Mayor of Peterborough but 60,000 other locomotive men are keenly interested in his answer.

Hon. Members seem to get less and less material answers from Ministers to pertinent questions. In our debate on the Transport Bill in November, I asked about the Guillebaud Report. I asked the Government to make it clear where they stood in that matter. The Home Secretary wound up that debate, and we must give him credit for being the first person to admit that he knew nothing about transport. He began his speech by saying something akin to that. I suppose that he can excuse himself by saying that he knew nothing about the matter.

But tonight there will be thousands of railwaymen waiting to hear the Government's reply to the debate. They had expected a reply from the Minister of Transport, who is the villain of the piece. They can now be told that the Minister of Transport discreetly chose to keep out of the Chamber for the whole debate. If the Government think that that is a creditable way of treating the House of Commons on a day like this, then that is an opinion which will not be shared by their own supporters, or by those who support us.

8.15 p.m.

Sir Spencer Summers (Aylesbury)

Almost every speaker during the last two hours or more has taken at least 30 minutes to make his speech. [HON. MEMBERS: "So what?"] I was about to say that I hope to take half the time which most other hon. Members have taken. If there are fewer interruptions, it will be shorter still. I apologise for the fact that I was unable to be present for the two opening speeches. My absence was accounted for by the fact that I was concerned with the Select Committee on Estimates.

Because I want to be brief, I do not want to say much about the speech of the hon. Member for Birkenhead (Mr. Collick), but I must say that when he poured scorn on what he called economic jargon and almost any kind of restraint, and was sarcastic about productivity, he should have remembered that if people mistrust placing power in the hands of the trade unions, because they fear that it may be used solely for selfish purposes, what he said will only intensify that mistrust.

The situation we are debating is very serious and I do not think that the public—by that I mean the working folk—the trade unions or the Government can escape responsibility for it. It has just been said that a pay pause is not possible or workable—which I take to mean acceptable—unless there is rent and price control. I do not believe that the public agrees. I do not believe that there is fundamental criticism of the essence of the Government's case, namely, to try to prevent the cost of living from rising by keeping a restraint on wages. The method of implementing it may be challenged here and there, but people realise that wages play a predominant part in costs and that a start has to be made somewhere.

For ten or fifteen years no Government have been able to halt inflation, and public opinion is now determined to support any Government which are believed to be able to stop inflation. For that reason, I believe that the public fundamentally accepts the notion behind the Government's policy. [HON. MEMBERS: "No."] I shall be very much quicker if hon. Members allow me to make my speech without interruption or, if they stand up to interrupt if I give way. [An HON. MEMBER: "You talk such rubbish."' Mr. Deputy-Speaker, I heard an hon. Member opposite say, "You talk such rubbish". I hope he was not referring to you.

I find fault with the Government not for the essence of their policy, but for the way in which they have presented it to the public. My right hon. Friend the Lord Privy Seal has had great success with the Common Market issue because of his ability to present complicated matters in understandable language which the man in the street is able to appreciate. But the same cannot be said of the Government's efforts to present their case for the restraint of wages and what has, unfortunately, been termed the pay pause. If they wish their policy to be governed by consent, as is essential, they have to be far more effective about presenting it.

The idea that the Government should interfere with arbitration has been challenged. But it is essential, if inflation is to be halted, that certain areas, which have been thought sacrosanct—"hallowed ground" was one phrase I heard earlier—should suffer interference if we are to produce changes from what has been the situation since the war.

Mr. Manuel

rose—

Sir S. Summers

No. I will not give way. I said earlier that I came into this debate late. I wish to take half the time taken by other hon. Members, and I will not prolong it by giving way to other hon. Members.

I criticise the unions because, despite their objections to the Government's handling of pay affairs since last July, they should have joined the National Economic Development Council as soon as the opportunity was afforded. Since the offer was first made nothing fundamental has changed in the situation. The unions claim to be partners with a party which attaches great importance to the planning of the economy. One cannot apply planning to the country's needs and omit wages.

Mr. Manuel

rose—

Sir S. Summers

It is no use interrupting. I shall not give way. The hon. Gentleman had better leave me alone, even if he is enjoying himself.

It was, therefore, quite inappropriate for the unions to fail to take the opportunity afforded to them of joining the new Council. When it comes to the working folk, I cannot help thinking that something very strange is happening, because, although there are only about two months to go before the restrictions are over, people seem impatient and unwilling to wait that length of time until the things they object to are out of the way. I see that hon. Members shake their heads.

Mr. Monslow

The hon. Gentleman is creating a number of erroneous impressions. Is he really suggesting that the Post Office workers and the railwaymen are responsible for the inflationary situation? They are in a deflationary situation.

Sir S. Summers

That interruption has nothing to do with the points I am making. There are two months to go before the restrictions of which complaint is made come to an end. There is no good reason why they should not wait until the situation has changed instead of resorting to unofficial strikes, which is contrary to the express request of their union leaders. Why Members opposite should resent criticism of unofficial strikes when they seek to support trade unions is past understanding. It is quite contrary to what their own leader said the other day.

Mr. Manuel

rose—

Sir S. Summers

The hon. Gentleman had better sit down. I would rather he kept quiet, even if he has a smile on his face. I shall not give way.

This is typical of the situation. It is a malaise, of which I shall have more to say in a moment, that people are unwilling to wait such a short time. What constructive comments should one make within an analysis of that kind? It has been said that it is dangerous to issue the figure of 2½ per cent. as the limit for increases above which harm might follow to the economy, because it will be treated as a minimum for demands. I do not think that that argument is valid, because one can hardly imagine a wage increase of less than 2½ per cent. Had the minimum been 5 or 6 per cent. then it would have been an arguable proposition to regard that as dangerous, but to build upon 2½ per cent. puts paid to that argument.

If it is dangerous to negotiate a settlement in excess of 2½ per cent.—and that is a minimum which a great many people would think insufficient—then one thing follows as surely as night follows day: the sooner we can get production up by more than 2½ per cent. so that wage increases in excess of 2½ per cent. can be offered without danger to the economy, the better.

Mr. A. Lewis

rose—

Sir S. Summers

I am not going to give way.

Mr. A. Lewis

Where are the members of the Government?

Sir S. Summers

I am not going to take notice of the hon. Member for West Ham, North (Mr. A. Lewis). I hope that you, Mr. Deputy-Speaker, will not have to, either.

I want to say a word about the railway situation on which great stress was laid by the hon. Member for Birkenhead.

Mr. A. Lewis

Another member of the Government has just arrived.

Sir S. Summers

For goodness' sake, let the hon. Member for West Ham, North keep quiet. I shall get through my speech so much quicker if he does.

The railway situation cannot be treated in isolation. I am well aware that, on the ground of comparability, there is a case for increases for railwaymen. I am also aware that, in certain parts of England, the need for an increase is much greater than the need in other parts. But this cannot be treated in isolation.

Mr. S. Silverman

Why?

Sir S. Summers

I shall explain.

Mr. S. Silverman

I shall try intelligently to follow an intelligent answer.

Sir S. Summers

If I am provoked into taking a few minutes more, I hope that my hon. Friends whose time I will take up will forgive the discourtesy to which I am being subjected.

The situation of the railways cannot be decided purely on grounds of comparability. Their financial situation makes it more difficult to deal impartially with claims that may be made for increases. What has constantly happened in the past is that people have judged their pay not by what their work is worth, but by how they compare with some other industry or some other occupation. It is quite certain that if, at the time when restraint is still needed, a significant increase were made in railwaymen's wages sufficient to make good the disparity which has accrued on account of the delay in dealing with their affairs, it would be the signal for inordinate increases in other occupations which would completely destroy any prospects of defeating inflation.

It seems quite inevitable, therefore, that the railways must be treated with reference to other occupations and to the economy as a whole. Where this will end, I do not know. It may be that there will be a widespread strike. I find it very hard to believe that rational, commonsense people, such as are to be found on the railways, will decide, when told that their claims can be sent to arbitration, to have a railway strike in face of a proposal of that kind. At any rate, I hope that the Government will, if necessary, put it to the test, because I am quite certain that that is the only reasonable way, in the circumstances, to handle their affairs.

8.29 p.m.

Mr. John Hynd (Sheffield, Attercliffe)

One would find it rather difficult, as I did, to realise that we are discussing this subject in the House of Commons in 1962—a House which has hitherto been regarded as the temple of a free democratic society in which matters of wages, salaries and income in industry are decided by conciliation and negotiating procedure, which have been built up after many generations as the only alternative to industrial strife. What is happening now is taking place under a Government which not so very long ago were fighting Elections on the slogan, "Set the people free. Let each win for himself what prizes he can. Let the best man win." That was the famous slogan of 1945 and of 1950. After listening to today's debate and to other debates which have preceded it, one wonders whether this is the same Government, the same Parliament and the same country.

We have heard a long and depressing story about the economic troubles and chaos into which a Tory Government have got the country after eleven years. Hon. Members opposite who have spoken have agreed that it has resulted in what we admit to be the underpayment of some of the essential workers of the country, and it is a situation to which, apparently, they see no solution. The performance of the Minister of Labour this afternoon, apart from being tragic, was a demonstration of the fact that he did not know what he was talking about. What has happened? Over and over again from the Government and their supporters we have heard that the Government have not interfered in the discussions going on between the British Transport Commission and the unions with regard to conditions of employment.

What actually happened was that when the British Transport Commission met the railway unions it told them that in the view of the Commission adequate wages must be paid to those engaged in the railway industry so that staff of the right calibre could be recruited. Since the last pay settlement there had been changes in the situation, including general rises in wages, which undoubtedly necessitated a review of the adequacy of railwaymen's wages. One of my hon. Friends gave instances of some of the improvements in wages and conditions since the pay pause. He did not refer to the increase given to the policemen or to the increase in Army pay. These increases have nothing to do with the measure of productivity for which the recipients are responsible.

The Minister says that he has not interfered with conciliation. He has told the railwaymen to go to arbitration which is part of the negotiating machinery. What the right hon. Gentleman has failed completely to understand is that to go to arbitration means to get somebody to arbitrate on the different views of two parties. In this case that situation does not exist. As I have said, the British Transport Commission told the unions that it agrees that there is a case for the review of wages and salaries and that the Commission is prepared to make an offer. It has not been allowed to make the offer. The Government have said, "Go to arbitration." Suppose that, on the invitation of the Government, the railwaymen went to arbitration. What is there for the tribunal to arbitrate about? There is only one proposition, which had already been accepted in principle by the other side.

When the decision of the arbitration tribunal is made known, what will happen? Will the Government then say to the tribunal, to the railwaymen and to the Commission that they are not to be allowed to put the decision of the tribunal into operation? Of course the Government must do that, because the Minister said that there were two reasons why this attempt to get a settlement of the railwaymen's wages had been sabotaged by the Government. The first was the alarming financial position of the railways, in view of which there was no justification for imposing further on the taxpayers.

In passing, it is interesting to note that this alarming financial position of the railways, which involves the Government in contributing £140 million this year, is something less than half—nearly one-third—of what a Tory Government and their supporters cheerfully pay every year to the farming industry—and consider it in the national interest to do so—partly to enable a decent wage to be paid to farm workers. But with the railways it is another matter. Because of the alarming financial position of the railways, as it appears again this year, there is no justification for imposing further on the taxpayer. The financial position will still be the same on 1st April. If this is the basic consideration, shall we be told again on 1st April that because the financial position has not improved in the intervening two months the Government are still unable to agree to anything?

The tribunal must logically agree on the pay to railwaymen, because its co-position, as the Minister informed us today will be such that there will be three parties represented—the railway unions, the Commission and an independent chairman. The unions and the Commission have already agreed that there is a case for an increase. Therefore, as the chairman is to be independent he will have no alternative but to agree with them. There will be nothing further about which to arbitrate. We shall therefore be in the position from which we started. The two parties will have agreed that there is a case for an immediate increase and the Government, which has refused to allow an increase, will have to refuse again after the arbitration. The arbitration will have been shown to have been a complete waste of time and will get us eventually only to the original position.

In the light of the financial position, which has been given as their main excuse, the Government must therefore—following the arbitration and, presumably, also from 1st April—discover that as the financial position is still the same they are unable to give anything at all. The fact is that this argument about the financial position of the railways—as I think hon. Members opposite and the Government will agree—is irrelevent, although it is put by the Minister as the first consideration. It is irrelevant because the attitude of the Government to the railway pay claim has been consistent with their policy on what they call the pay pause. That is the real reason. Whether there had been a deficit in railway finances or not, the Government would still take this attitude, because until 1st April there is to be no increase given where the Government can possibly avoid it. I think, therefore, that the Government should cut out the argument about the present financial position of the railways. Nevertheless the Government themselves have recognised—

Mr. A. Lewis

Will my hon. Friend note that there are only two hon. Members on the back benches opposite who have troubled to attend this debate, and that has been the position for most of the time?

Mr. Hynd

Of course, they are not involved in the income pause, as the Government call it. The hon. Member for Aylesbury (Sir S. Summers) criticised the Government, not because of their pay pause policy, but because he thought that they had not presented it properly to the country. I wish he were present now. The Government have done much better than he did, because they have tried to present it as a check on incomes whereas he frankly said that it was a check on wages and nothing else.

The Government have said that in their view there are special factors which warrant some limited increase in the remuneration of railway workers. If it is justified, why should they say that it must be postponed until 1st April? Why bring in the question of the railway deficit if it is not to prepare us for further delay? They might as well be frank about it. The Minister said that the reason was the economic position of the country. He said today that the reason behind it all is that we have been spending more than has been justified by the increase in national production. Who is meant by "we"? Who has been spending more than is justified? Does the Minister mean the Mayor of Peterborough, the railway engine driver or signalman, or the laundry girl on £5 10s. a week? Have they been responsible for inflation? Are they spending more than is justified by the national economic position?

If the Government say that railwaymen earning £10 a week are spending more than is justified, I should like any hon. Member opposite to tell me that he is not spending more than they are. Is any hon. Member opposite able to say that he is spending less? No, they will not say that. Is it the people behind them who are urging the Government into this pay pause? How many of them are spending more than is justified by the present economic position? Who is telling the Government all this?

What is this pay pause, anyway? It came into operation in July last year, but it had already been started by the Government as early as 1957 when they stopped the increase which had been promised to National Health Service employees. The Government were by then aware of the economic position into which they were getting the country. A long time after that they decided it was desirable to give the richest people of all—the Surtax payers—a handsome bonus out of the economy which cannot afford to pay railwaymen more than £10 a week. Why did they give this to Surtax payers last April? It was to provide them with an incentive to more production and more exports, but what results have we had?

This afternoon the Minister claimed it even as a virtue of Government policy that dividends and profits were down. Dividends and profits are down, not because of any voluntary sacrifice on the part of shareholders or company directors, but because business is down, because exports are down and because, in spite of all the incentives to Surtax-payers, there has not been the result we were told that there would be.

The Surtax payers had to have their pound of flesh, but there was no incentive offered to men actually doing the job and producing the goods for export. A few minutes ago a representative of the steel industry was lecturing the workers on the need for restraint. In the last few months steel production has been going down and in Sheffield and Scunthorpe workers are on short time for the first time since nationalisation of the industry. That is another achievement of this Government and of the representatives and supporters of the Government who are now lecturing steel workers, railwaymen and others about the need to make sacrifices.

The pay pause came in July last year just after the gift to Surtax payers, on top of the Rent Act, the increase in National Health contributions and prescription charges, on top of the cutting of support for orange juice for children and for school meals. Every one of those was an imposition on the same class of people, those with lowest incomes, while at the same time gifts were handed out to people at the top who were the likeliest to spend on things which they could do without.

The Ministry of Transport, who has rightly been described as "the villain of the piece", decided very soon after the pay pause to appoint Dr. Beeching to the British Transport Commission with an increase of no less than £240 a week in order to inform railwaymen that the country could not afford to give them a 2½ per cent. increase. I do not know whether Dr. Beeching is worth that sum of money, but it does not make sense to railwaymen to be told that the national economy is in such a state and everyone has to make sacrifices in spending power when the Minister who is telling them that appoints the head of the Commission with an increase of £240 a week and at the same time, because of the serious financial position of the railways, says there is need to restrict their spending power.

Eleven years of Toryism have brought us to this position. The Surtax boys must not suffer, we are in a serious economic position; therefore, as usual, the workers must suffer. On 26th July last year The Times put it very frankly: Employers in every private industry in the country will be only too ready to respond to the Government's appeals to keep wages level until productivity rises. "Only too ready" is the effective phrase in that quotation.

In this situation, what do the Government expect the workers to do? Tributes have been paid to the statesmanship, reasonableness and wisdom of the trade union leaders. These tributes were paid by the hon. Member far Yeovil (Mr. Peyton) and by the Minister, who chided the workers, rightly I think, who have come out on unofficial strike for having taken such unofficial action against the advice and direction of their trade union leaders. He urged them to pay heed to those leaders and to follow their instructions and not the instructions of a lot of wildly irresponsible shop stewards and others.

This is very encouraging, because it is quite likely that as a result of the Government's policy the workers on the railways and elsewhere will be getting official instructions from their trade union leaders for official action, and if we are to take any meaning from the Minister's statement this afternoon, we are encouraged to hope that he will give the workers, Who come out in reply to those official instructions, at least his moral support. That will be a great help.

What alternative have the workers? For years we have tried to persuade them to use the conciliation machinery—sometimes with great difficulty, because some trade unionists have been very suspicious of this conciliation machinery. But after a great deal of persuasion and practice they have accepted it, and it has been the one safeguard against unnecessary industrial disruption. But what are they to do when the Government of the country denies them the right to use that negotiating machinery or frustrates it when they try to use it? There is only one weapon left—the right to strike. This is a terrible thing to say in the House, but we have always understood that the right to strike was a good, healthy, basic, democratic right which was defended by Tories, Liberals and Socialists—indeed, by everybody in a democratic country. We have always understood that it was a good, healthy, democratic right which was essential to a democratic constitution.

It is the only weapon which is left to the workers if they are to do anything about this situation. I refer not to unofficial strikes, of course, but to official strikes led by the same statesmanlike, wise and tolerant leaders to whom so many tributes have been paid this afternoon, and who have enabled us to come thus far without any breakdown in our economy or any serious industrial trouble. But they will be left with no other alternative if we do not enable them to use the negotiating and conciliation machinery which exists for that purpose.

Having heard the Government's statements and having recalled some of the statements which they made a few months ago when we were faced with another serious situation on the railways, I wonder whether the Government want to avoid a railway strike. One reads the reports in The Times of last year and reads statements which have been made by Ministers up and down the country, and one relates them to the facts and the logic of the situation in which the Government are risking plunging the country into a national railway strike when they themselves say that in two months' time, without knowing what the position will be, they will be able to concede something to the railwaymen. It means that for the sake of two months they are prepared deliberately to allow a situation to develop in which the railwaymen are not allowed to use the ordinary conciliation machinery to avoid having to take the ultimate action. Are the Government, in anticipation of an early General Election, trying to incite a railway strike in order to try to get for the Government the sympathy of the population?

We in this country have very often, in our foreign affairs debates in particular, attacked Communist practices in other parts of the world where the distribution of incomes is decided by Government edict. We have boasted of our free society, of our free trade unions and of our methods of industrial conciliation. At least in the Communist countries, when incomes are divided according to Government decree, they are divided for everybody, for every section of the population. We may say what we like about the emphasis given to one section or to another, but at least the Government deal with them all. Our Government have taken the worst aspect of the Communist society and have applied it only to one part of the population—those who are least able to bear it. This is what the Tory Government have brought this country to, and this is the kind of thing which, unhappily, we have to debate in the House of Commons today.

The Government can say goodbye to any hopes of the workers co-operating and assisting to get the country out of the economic situation into which the Government have brought us and cooperating in the planning council which has now been set up, which the T.U.C. rightly showed a right deal of hesitation about joining, if they intend to force this issue through as they have threatened to do. The one thing which has prevented trade unions throughout their history from wholehearted co-operation in such joint boards or planning councils has been their suspicion that the dice are loaded against them all the time. If in respect of the railwaymen's claim the Government are to sabotage the operations of the proper negotiating and conciliation machinery, they can say goodbye to any hopes of getting the Trades Union Congress or the trade unions to co-operate on the planning council, because if the planning council is to attract the co-operation of the trade unions and the working people it must be a planning council for all incomes and not just for the incomes of the lowest paid sections of the population.

What we are seeing today is one of the most blatant demonstrations of the class war which has been seen in this country for many years and which has been waged by the Tory Party.

8.51 p.m.

Mr. David James (Brighton, Kemptown)

Out of deference to the right hon. Member for Belper (Mr. G. Brown) I shall speak for only about five minutes, so I will not rise to any of the lovely lures which have been cast across the Floor by hon. Members opposite during the course of the last three hours. Nor do I intend to give way, because I have only a limited time and I want to cover a certain amount of ground.

I believe that this debate got off to a very unfortunate start because the hon. Member for Southwark (Mr. Gunter), whose sincerity I greatly admire, got his hats muddled up on his way to the Chamber. If he had come here to speak as a railway trade unionist his job—the job for which he is paid—would unquestionably have been to urge at all times for an increase in the pay of railwaymen.

Mr. A. Lewis

My hon. Friend is not paid. He is not like the Tories.

Mr. James

I am sorry. If he had been speaking as a trade unionist, he would have been right to apply his mind to the narrow point of a wage increase for a particular section of the community, but as he was speaking as a statesman from the Opposition Front Bench, if that is not a contradiction in terms, in a debate of major importance, it was important that he should have applied his mind to the wider issues underlying the railway fiasco which arose today.

These wider issues are two-fold. First, we all know that continual wage inflation upsets our balance of payments and could lead to a further devaluation of the £. This was fully recognised by Sir Stafford Cripps from 1947 to 1950. Notwithstanding the fervour and zeal with which he pursued his policies, devaluation occurred, with all its attendant disadvantages to our people.

The second point is that every wage claim which leads to a devaluation of the £ is a straightforward fraud on old-age pensioners. I get sick and tired of people weeping crocodile tears over the plight of the aged and the poor when they are not prepared to do anything to preserve the purchasing power of their pensions.

The truth is that all of us, so long as we are at work, are, in the naval phrase, "inboard". We all know that sooner or later wages will be made good, relative purchasing powers will be recovered, and so on. But at the moment a man stops working he faces nothing but a continual attrition of his life's savings and his pension by virtue of increased wages all round. This happens from the moment he retires. I do not believe that we shall ever be able to see the continued economic expansion we all want, nor an increase of 100,000 in the number of houses completed each year, nor an increase in the amount we spend on education and all the other good things, until we can increase the gross national product without imperilling our balance of payments owing to inflationary pressures.

I want to make it abundantly plain that I do not blame the unions for this state of affairs, because it is quite obvious that union leaders exist for no other reason than to get the best terms they can for the people who employ them. I very much blame the private sector of industry, which has realised that it is all too easy to give an increase and pass it on to the consumer. Everyone who is in work is still on the merry-go round and it is only the old-age pensioners who suffer.

I was talking only a couple of days ago to a friend of mine who was responsible for a major wage negotiation. I intend to clothe this story, because it would be unfair to refer to an individual. He told me that in the end both sides settled for an extra 12s. I asked him, "Why?" He said, "You know, they are very nice chaps who work for us. We have had a good year and, naturally, we like to carry them along with us, and so we gave a wage increase of this amount." When I asked him whether he had thought of reducing the price of his product, he said, "No, as a matter of fact, we are going to increase it." I said, "Why?" He said, "My dear boy, costs have increased, so have wages." It is a conspiracy, but not, admittedly, an intended conspiracy, between the people who are at work to devalue the £, but it is the old-age pensioners who have to pay. If any hon. Member opposite is laughing, I hope that he will have an opportunity of controverting this in due course.

The Government, therefore, had to give a lead within that sector of the economy for which they were responsible. I have no doubt about that. If private enterprise was not going to give a lead and industrialists have been too weak-kneed about this, the Government had to do so, and this has taken place in one or two sectors of industry where it is particularly painful. We all have a weak spot for the railwaymen, and everyone dislikes the fact that they who are almost invariably the last, should at the moment be at the thick end of the stick, but the Government had to operate in the sphere for which they bore responsibility. I make no excuse for the Government at last deciding that they would govern.

The hon. Member for Southwark complained of the Government's irresolution, but, if he looks at his speech, he will see that it has been the Government's resolution of which he has been complaining. I would be prepared to censure the Government only if they were to relax any of their efforts and if the Chancellor and the Ministries, which have had to bear the Departmental brunt of the very unpleasant decisions were to relax in protecting the £, in preserving us from devaluation, and so doing something to preserve the purchasing power of the old-age pensioners.

8.56 p.m.

Mr. George Brown (Belper)

I always knew that there was a very strong argument against Eton and Balliol, and now I know what it is. I have listened with interest to what the hon. Member for Brighton, Kemptown (Mr. James) had to say. I can only say that from my point of view he is completely out of touch with what is going on in the world outside. While I am sure that he believes every single word he said, I believe that a great many people in Kemptown, when they read his speech as I hope they will, will find it very difficult to understand why he believes it.

Mr. James

I hope that the right hon Gentleman will realise that in limiting myself to five minutes instead of fifteen, in deference to him, I had to leave out quite a lot of balancing points which I should like to have mentioned.

Mr. Brown

If the hon. Member had spoken for more than fifteen minutes it would have been even worse for the electors of Kemptown. They are lucky to have got away with five.

The background of this debate, which no hon. Member opposite has mentioned, from the Minister of Labour right the way through to the hon. Member for Kemptown, is the continually reiterated plea that Tory freedom has failed, that after eleven years of rule by Ministers opposite, some still in power, some who have failed and some who have come from the back benches, like the right hon. Member the Chanceller of the Duchy of Lancaster, they have, between them, now reached a situation where the country is in grievous trouble and we have to restrict, to hold back, to direct and to control.

It used to be said that the difference between them and us was that we were for direction and control and they were for freedom. Clearly, today this is no longer true. They are for direction and control, but they are for directing and controlling the people at the lower end of the income scale, whereas we are for directions and controls where they have to do with the national interest. That is the background to the story.

We opened with a speech from my hon. Friend the Member for Southwark (Mr. Gunter)—the borough in which I was born and where I am proud to be represented by him—which must have impressed all those who heard it. It was a speech of power, sincerity and responsibility. It did not seek to make party points. I am sure that the Chancellor of the Duchy of Lancaster, who is to follow, will accept that.

My hon. Friend was followed by the Minister of Labour. Here, I speak as one who served his time as a P.P.S. in the Ministry of Labour. I should think that everybody who heard the right hon. Gentleman will agree that his speech fell far below the events that we are discussing, and far below the level of my hon. Friend's speech. It was a speech that never once recognised the issues and the problems, a speech which had in it many elements of sheer humbug—things which nobody in the Ministry of Labour would have written for him.

The people in the Ministry of Labour who now handle industrial relations were serving their time in similar posts to mine when I was serving my time there. They never wrote that brief. What the Minister of Labour was reading was a Treasury brief, in which he himself did not believe, and I wish that he had had the guts to refuse to read it.

Mr. Hare

I do not mind insults, but I do object to the accusation that I have not got guts.

Mr. Brown

If the right hon. Gentleman has them, they were not on parade today.

Let us be clear about the background to this debate. While we were debating, hundreds of thousands of people were sitting in buses and cars, were walking, were frustrated, irritated and angry and were kept from their useful occupations. They were kept from producing. Factories and offices were short of people who ought to have been in them. People were advised to come to work late. It took me nearly two hours to complete a quarter of an hour's journey to get here this morning, and I did not leave as early as most people left. They were advised to leave early to get home. So the background is one of industry kept short; of people, irritated, angry and bitter.

None of these is due to an industrial conflict. None of these is due to a conflict between a worker and an employer. All of this bitterness is due to deliberate action by the Government superseding industrial negotiations and problems. The Government must understand that this is not a charade. It is not one of those debates where there is a party line. This debate concerns many of us who, as my hon. Friend the Member for Southwark said, after the Mond-Turner talks and the crisis which preceded them, devoted our lives to building up decent negotiating arrangements and decent human relations in industry. We feel really angry that we are in the situation in which we find ourselves today because the Government decided to butt in, to upset everybody and to upset all the arrangements purely for political reasons which had nothing to do with industrial relations.

The Minister of Labour was asked many questions while he was speaking. The evasions to which he had to resort to get out of the trouble that he was in seemed to me, and I think to all of his hon. Friends, a tragic business. I could go through what he had to say about the Railway Staff National Tribunal. It was pathetic; it was a pity; it was a tragedy. He tried to deny that the Government had interfered in arbitration. He tried to show that arbitrators were still free. He tried to show that the Ministry of Labour still cared about industrial negotiations. It really was pathetic.

The real trouble in this Ministerial setup is that one is hunting the wrong fox. The Minister of Labour, the Postmaster-General and the Minister of Transport, who has not bothered to come back into the Chamber, are not Ministers in the sense that we understand Ministers. They are not men responsible for what they do. They are men directed by the Chancellor of the Exchequer. Ernest Bevin, George Isaacs, or any of the Ministers of Labour since 1945 would not have stood for this from any Chancellor of the Exchequer. The tragedy is that this Minister of Labour stands for it from the present Chancellor of the Exchequer, who is not a very great Chancellor of the Exchequer. That is a good measure of the difference.

The first mistake that the Government made was last year, when the Chancellor of the Exchequer suddenly decided, I think quite rightly, that after ten years Tory economic doctrines had failed. He decided, with a good Leninist-Marxist background, that a new economic policy was required. At that stage, the obviously sensible thing to do was to consult not only politicians, but the British Employers' Confederation and the T.U.C. The extraordinary thing is that he consulted neither body. It was not only the T.U.C. which complained that he did not consult it. He did not consult the B.E.C., either. He acted like a rogue elephant. [An HON. MEMBER: "Elephant?"] Perhaps "elephant" is putting it a bit high, but I want to be polite.

The Chancellor of the Exchequer started thrashing about him. I see that his other "Parliamentary Secretary", the Minister of Transport, has arrived. As I say, the right hon. and learned Gentleman began thrashing about him without consulting anybody. Then he began to make his really tragic decisions. They were tragic. They were tragic in their consequences. He began to break firm agreements. The Minister of Labour today tried to pretend—the Leader of the House, who was the previous Minister of Labour, ought to face this, too—that firm agreements have not been broken. This is absolute rubbish. It is quite untrue.

Firm agreements that had been entered into were broken. One of them was with the Post Office engineers. The Postmaster-General had signed the terms of reference to arbitration. Then he permitted himself to be misused by the Chancellor and to say that those terms could not be applied and that the arbitrators must not operate on those terms. In those terms, he had given the date that could be the operative date. Subsequently, after signing those terms, he said that it could not be the operative date, but that it had to be later because of the Government decision. That was the breaking of a firm agreement.

The men in my union, who are called the M-rate men, had a firm agreement signed by both sides, but the Chancellor said that it had to be broken, and broken it was. The Admiralty industrial workers had a firm agreement, but it was broken on instructions from the Chancellor.

Not only were agreements broken. Negotiating machinery was interfered with. Today, the Minister of Labour took refuge in arguments, of which tomorrow he will feel ashamed, that these were not interferences but that the negotiating bodies were still free. This simply is not true. The postmen were not left free. The Postmaster-General is still, apparently, unwilling to say that he will meet the union, sit down and negotiate the problem. The reason he cannot say that is that he is not free to say it. He is not left free to do it.

The Minister of Transport cannot let Dr. Beeching sit down with the railway unions, because he is not free to let Dr. Beeching do so. The fact is that if Dr. Beeching sat down with the unions to get the workers' co-operation in a great programme, he might be willing to make an agreement. And so the Minister of Transport, acting as the puppet for Charlie McCarthy, steps in and says that Dr. Beeching may not do it.

The Chancellor of the Duchy of Lancaster (Mr. Iain Macleod)

Charlie McCarthy is the puppet.

Mr. Brown

If the Minister is Charlie McCarthy, the Chancellor is Edgar Bergen. But it does not matter which is Charlie McCarthy and which is Edgar Bergen. The result for the workers is the same.

The point is that a puppet is acting in the case of the railwaymen and says, "You may not have it." A puppet is acting in the case of the postmen and a puppet is acting in the case of the Post Office engineers. In every case, long-built-up negotiating machinery that ought to operate is prevented from operating.

When Government speakers say, as they have been saying today, that people should not go on strike and should not do these things that have caused the chaos today, as an honest, blunt man I simply ask: what do they expect to happen? [HON. MEMBERS: "Tell us?"] I did not learn my debating in a union debating society. I will say exactly what I think.

There are only three things that workers can do. They can negotiate, they can arbitrate, or they can fight. Ministers stopped them negotiating. They stopped them arbitrating. What, then, do they expect them to do? There is only a third alternative.

For all the lifetime of the Post Office the Union of Post Office workers has never been forced to do what it has been forced to do now. Never.

The Postmaster-General (Mr. Reginald Bevins)

I am grateful to the right hon. Gentleman for giving way to me, but he might at least respect the truth.

Mr. James Callaghan (Cardiff, South-East)

Does the Postmaster-General deny it?

Mr. Bevins

I have negotiated with the Union of Post Office Workers for six months. Our negotiations broke down.

I then invited the union to go to arbitration. It has refused all along to go to arbitration.

Mr. Brown

What the right hon. Gentleman offered were negotiations of his choosing, on his terms of reference. What he refused, and what today he is still refusing, are negotiations on free terms of reference between the two of them. It is no good the right hon. Gentleman waving his hand. I put this question to him. Will the Postmaster-General meet the U.P.W. tomorrow and discuss how the claim can be dealt with? Will he?

Hon. Members

Answer.

Mr. Bevins

That is perfectly easily answered. The answer is yes, provided the union calls off industrial strife and the negotiations are free on both sides.

Hon. Members

Hear, hear.

Mr. Brown

And free on both sides means that there is no limit to the increase which they might get and there is no pre-fixed date. Does it mean that? [HON. MEMBERS: "Answer."] Does it mean that?

Mr. Bevins

I should have thought it had been made perfectly clear by my right hon. and learned Friend the Chancellor of the Exchequer—[HON. MEMBERS: "Ah."]—and by my right hon. Friend the Minister of Labour that any agreed figure would be post-pause.

Mr. Brown

Hon. Members opposite cheered when the Postmaster-General said that it was free on both sides. I ask hon. Gentlemen opposite: is it free on both sides? Is it? The Postmaster-General has now said it cannot be till after the wage pause is ended. What is free about that? He is still Charlie McCarthy, and this is the problem: there are no negotiating positions left open, and there are no arbitrating positions left open.

I understand that the Prime Minister is very involved in this matter. I hope that he will listen to this, because I imagine that in the end, if one looks for the real Edgar Bergen, one finds him there, and one would like to make one's arguments apply to him.

It is not only negotiations which are not any longer free, but arbitrators are still instructed. I listened today to the Minister of Labour trying to make it apparent that arbitrators were not instructed. But they are. Even from here on they will not be free. This is the first time I know of in our industrial relations history that the Government have hampered, tied and directed arbitration.

We are one of the countries in the world now which has directed arbitrators, and it is not much use the Prime Minister prattling away in fireside chats about democracy. When I was in the dictatorship countries I always told them, and when the Stalinist rule still was running—in Poland, and some of my hon. Friends were with me at the time; and I said it in Spain—that one of the differences between them and us was that we had free negotiating and arbitrating machinery.

Nobody could go to an Iron Curtain country and say that today, because the only arbitrating machinery we can have, as the Postmaster-General has made perfectly plain, is arbitrating machinery limited by the conditions laid down by the Government. We have ceased to be, in industrial terms, a free democracy. This country has become under this Government, for the very first time, a place where it can be said by any enemy of democracy that we, too, are directed by the Government as to what can be done, what can be awarded, and how and when.

The really pathetic thing about it is that it has been done by Ministers who do not know what they are doing. I even doubt whether the Chancellor of the Exchequer knows what he is doing. He is destroying something that took a great deal of building up, something of immense value. Why are the white collar workers, the civil servants, postmen and Admiralty servants now in the forefront of the claim, and why are teachers in the front of the industrial battle? These are most unlikely people to have in the front. It is the Government who have brought it about, and they have brought it about because they have interfered with and broken up negotiating machinery. They have prevented free arbitration in the areas where they thought they could get away with it, and with the people with whom they thought they could get away with it, and—does the hon. Member for Aylesbury (Sir S. Summers) wish to say something?

Sir S. Summers

I was only laughing at the number of "withs".

Mr. Brown

That is the sort of snobbish thing that the hon. Member would do. The argument is not about whether I speak grammatically, but about the industrial damage that the hon. Member's right hon. Friends are doing. If they ever got that into their heads they might make some progress.

Let us be clear about this situation. The railwaymen are not allowed to negotiate in case their employers make them an offer. The civil servants are not allowed to have free arbitration in case the arbitrators make the award restrospective. The Postmaster-General cannot negotiate with the U.P.W. because he is not allowed to discuss all the terms that the Post Office workers want to raise with him. The Post Office engineers are not allowed to have their case because they have been already given an award by the arbitrators and the Postmaster-General is not allowed to grant it. The Admiralty men are not allowed to have their award by arbitration because the Chancellor says that they must not have it. The lower-grade men are not allowed to have what they have been allowed by arbitration because the Chancellor says that they cannot be granted it.

This is what has caused the chaos outside the House today and this is what has made people bitter and angry. The Government have done this. [HON. MEMBERS: "No."] I understood that the case was not that they had not done it. I understood that the case was that they had done it for good reasons. That was what the Minister of Labour said—not that they had not done it, but that their reason for doing it was good.

What was the reason? It was that incomes must match production. On one occasion the Minister said "production" and on another "productivity". I gather that the point is that we must not be taking in our incomes more than we are earning by our production. Is that the case? I see the Minister nodding. But what do the landlords produce? They have had enormous increases granted to them by the Government. Indeed, the Government have passed Bills to give them more money. What are the landlords producing? What are the take-over kings producing? What is Mr. Clore producing to justify his increased income? There are many others like him.

Mr. David Webster (Weston-super-Mare)

Mr. Charles Clore is the proprietor of one of the few British shipyards with a full order book today and with fully employed workpeople. That is one thing that he is producing.

Mr. Brown

I am talking about takeover bids and the making of capital gains which are not taxed, but which mean an enormous increase in income. What is the production against which that sort of thing is to be set?

Mr. Charles Doughty (Surrey, East)

rose—

Mr. Brown

If the hon. and learned Gentleman wishes to intervene, it will come out of the Minister's time.

Mr. Doughty

Surely Mr. Clore's takeovers and business of that kind are subject to tax in every direction?

Mr. Brown

Is the hon. and learned Gentleman telling me that no capital gains arise out of these transactions? If he is not saying that, I do not know why he has taken time out of the Minister's period for reply. That is the whole point of my case, that capital gains are not taxed and are not set against production.

One can even go on from this if production has to rise to justify incomes rising. A very large number of friends of the Conservative Party are getting increased incomes, but are not contributing in increased production. I will go even further than that. Production generally is not rising. Why? Is it because ordinary workers do not work hard enough? That is rubbish. Our people do not decide the rate at which the machines turn. It is the Chancellor, by his credit squeeze, his high-interest rate policy and his deflationary policy, who decides at what rate industry turns.

When the Minister of Labour spoke today about profits and dividends—he was so unsure of himself that he could not answer a subsequent question—he could have gone further. It is true that profits were rising at a very much lower rate at the end of the year, but that was because production had fallen at the end of the year. But dividends were still rising, which meant that firms were paying out what they were not earning. The point is that production had fallen, and that was because of Government policy and the Chancellor's economic and financial policy.

It is absolute rubbish to blame this on lowly paid public servants, on the most dedicated men, those in Government service, in transport, in hospitals, in schools and other places. All this is due to the Government's own economic and financial policy. If they changed it, then we could raise production again. We shall not do it by picking a row with people who are already living on incomes which are not much more than, and in many cases are a good deal less than, £10 a week.

I hope that hon. Gentlemen opposite understand what they are doing. Some of the men on whom we are picking in this policy have a weekly wage of less than £9 a week. Do not let us "kid" ourselves that we are dealing here with men with large incomes. We are dealing with the lowest-paid and most defenceless of all the people, and if hon. Gentlemen opposite think that we are unfair when we mention Mr. Clore they should remember the hundreds of thousands of people, for whom we have some responsibility, whose wages are such that none of us would even consider living on them at all.

We do not say that there is not a problem here. Obviously, there is, and we press this House to deal with it. Had the Government begun by setting up an effective planning authority, had they been willing to control where controls were obviously required, had they been willing to deal with price margins where there was plenty of slack to be taken up, had they been willing to end the land racket, had they been willing to consult with the T.U.C. and the British Employers' Confederation, had they been willing to have a fair taxation policy instead of making great hand-outs to Surtax payers while pressing everybody else, had they been willing to have a capital gains tax, had they been willing to end the credit squeeze in the unselective way they have done it, had they been willing to do all that in that sort of order, we might well have had the answer to the problem that faces us today.

My challenge to the Government is that they end this unfair business of taking it out of the little people with small incomes while letting others get away with it, that they recognise that they are responsible for the chaos that we saw in London today, and that they either adopt the sort of policy to which I have referred or get out and make way for a Government that will.

9.33 p.m.

The Chancellor of the Duchy of Lancaster (Mr. Iain Macleod)

This is the fourth debate we have had since 25th July last year, and each of them has stemmed from what my right hon. and learned Friend the Chancellor of the Exchequer said then. In each of them, using slightly different words in the Motions which they put before the House, the Opposition have sought to show the policy of that date, and, for that matter, the policies of today, to be unfair, arbitrary and irrelevant. Equally, those who have been the spokesmen for the Government have tried to show these policies to be in the national interest.

This is still the argument that we are having today, but the argument itself is entering a slightly new phase because of two factors, and I will come to both of these as I try to answer this debate.

First, is the announcement made today that phase one of the pause is to end on 31st March, and second is the decision, which I am sure we all welcome, of the T.U.C. to join the National Economic Development Council. Most of the debate has been taken up with the Civil Service, and the railways, and about the wider problem of industrial relations and how we are to secure better human relations today. I take straight away a good text on that from the hon. Member for Southwark (Mr. Gunter), who opened the debate, who said, if I got his words aright, that good human relations is a matter of good business. So it is. I am certain that, however much we may differ today, there is profound truth in that.

Before I turn to these big subjects, I would like to say a few words about the speech of the hon. Member for Ogmore (Mr. Padley), who dealt with an immensely important part of our wages system, the wages councils system, which affects no fewer than 3½ million workers, something we are apt to forget. He put one or two points to me with which I should like to deal straight away, because, however important they are, to some extent they are a side stream from the main river of the debate.

I am sure that he agrees with me that under the tripartite method, which both he and I in different spheres know so well the wages councils system works very well indeed. However, he did not tell the whole of the story when he referred to the Laundry Workers' Wages Council. For instance, he said that my noble Friend Lord Monckton referred back wages councils orders. So he did, but we should also remember that so did George Isaacs. George Isaacs did it for the same reason, referring to the speeches and exhortations of the Chancellor of the Exchequer at the time. What Ministers of Labour do in this respect does not differ because they are Tory or Socialist Ministers of Labour, nor because the exhortations which they put before the wages councils have been produced by Tory or Socialist Chancellors of the Exchequer.

The other point which he made a little inadequately was when he dealt with the level of wages. The facts are that the average earnings for men in the laundry industry are £5 a week above the minimum, to which he referred most of the time, while those for women are £1 a week above the minimum.

Mr. Padley

It will be within the memory of the House that I also said that at the time the negotiations took place 22 per cent. of the adult males in the industry were receiving less than £10 a week and 45 per cent. of the women less than £6 a week and that averages therefore settled nothing.

Mr. Macleod

All the same, it is only by giving averages for earnings as well as wage rates that we can get the picture. The hon. Member's main question, which was very important and which I would like to answer categorically was this he said that even as we entered phase two, on the doctrine which the Minister of Labour had applied in recent months following the statements on 25th July and action on subsequent wages councils orders, the Minister of Labour might still put off from week to week and month to month the effective date of the wages councils awards. I will tell him—because more than anyone else in the House he is concerned with the matter—that as we enter phase two, from 1st April, wages councils orders will be made in the normal course. I hope that that answers his question. As I am seeking to show and as we have showed throughout, this phase of Government policy should come to an end at the end of March.

I now turn to a discussion of the question of arbitration in the Civil Service. I recall two sentences from what my right hon. and learned Friend the Chancellor of the Exchequer said on 25th July: …a pause is essential as a basis for continued prosperity and growth. In those areas for which the Government have direct responsibility we shall act in accordance with this policy."—[OFFICIAL REPORT, 25th July. 1961; Vol. 645, c. 223.] From those two sentences flows everything that has happened. [Interruption.] Yes, indeed. I admit straight away—I have no wish to disguise this at all—that the Government's action in relation to the Civil Service was, of course, an interference with the ordinary procedure. It would be quite wrong of me to attempt to disguise that for a moment. That is not the question.

The real question is whether or not there were grounds of public policy on which it was right for us to take this action. That is the point. Immediately after the Chancellor of the Exchequer had made his statement, he saw the leaders of the Civil Service unions and explained how the pause would be applied. He said that the commitments already entered into would be met. Where a firm offer had been made the Government would stand by the offer and any operative date attached to it; and negotiations proceeding or about to start on the "first sound" of the post-Priestley surveys by the Pay Research Unit would continue.

The House, of course, can and does and is debating criticisms of the original policy, but all I am concerned with for the moment is to show the arguments about the date, and the question of whether this is or is not the right thing to do flow inescapably from the major decision of Government policy. For the rest, the Government would need to ensure that during the pause there were no increases of pay in the Civil Service.

The hon. Member for Southwark said, I think, that he would have felt it to be more straightforward—I do not know if I am using his exact words—if we had been bold enough to withdraw arbitration altogether. But, with respect to him, that is a false view, because it is laid down with absolute clarity in paragraph 95 of "Staff Relations in the Civil Service" that …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 organisations. That is the position.

Mr. Gunter

I must make this clear. I was referring to the railway dispute. I said that I would have had far more respect for the Government if they had boldly and clearly said that, in view of the economic crisis, they were now prepared to breach the agreements instead of evading the issue by saying that they were only advising the British Transport Commission.

Mr. Macleod

I shall come to that point about the railways directly.

Mr. W. R. Williams (Manchester, Openshaw)

I suppose the House will concede that one of the biggest emergencies we have had in recent times was from 1939 to 1945. Can the right hon. Gentleman say whether any Government during that period exercised this so-called right?

Mr. Macleod

I do not know whether there are particular examples in that period. My impression is that there were. But I am not entirely sure about that. [An HON. MEMBER:" The right hon. Gentleman does not know."] On the contrary, I do know now. I have just found out. Paragraph 98 says: It is not unknown for the Government to go to arbitration; during the war the Official Side took the National Staff side to arbitration on a claim for revised compensation for Sunday duty. The point of Government policy in these matters is, of course, simply this: it would have been possible to have withdrawn arbitration altogether. Paragraph 95 makes it, quite clear that that can be done and that that right is reserved to the Government. But we did not wish do to that. We thought it right to impose this period of the pause, and from that followed the exclusion of the date from arbitration and also the question of the agreement in relation to terms of reference. So it seems to me abundantly clear that what was done in relation to the Civil Service—although I have conceded that it was an interference with the ordinary processes of negotiation—falls within the discretion inevitably kept to Governments and especially relevant to them by paragraph 95 which I have quoted.

I turn, as I promised I would do, to the question of the railways which, perhaps more than any other, has been the subject of questions throughout this discussion. The unions at their meeting today agreed to seek a meeting with Dr. Beeching later this week, and I have no later information than that to give to the House. I wish to take up the question of whether or not it was right for my right hon. Friend the Minister of Transport to issue his letter—hon. Members may call it a "request" or "directive", whichever they wish for the purposes of this argument—to the Transport Commission. It seems to me, as was said by my hon. Friend the Member for Yeovil (Mr. Peyton) that it would have been unthinkable and utterly wrong for the Government to have stood aside and not let their views be known on this most important matter.

My right hon. and hon. Friends have made clear why that is so. If I may summarise them there are three reasons. First of all, the deficit on the railways, which in 1961 exceeded £140 million. Secondly, the Government's policy—I agree under fierce attack—that increases in income should, so far as one can do it, be brought into realistic relationship with increases in the national output. And thirdly, the Government's recognition that there are special factors—the letter points straight to these—which warrant some limited increase in railway wages.

I cannot believe that it would have been right for my right hon. Friend to have let the negotiations proceed without making the Government's view on this important matter crystal clear—

Mr. Collick

rose—

Mr. Macleod

I wish to develop my argument for a few sentences more, and then I will give way.

The next question was, at what time should this point of view be made known? Because, of course, the final stage is arbitration and the preceding stage is discussion in the Railway Staffs National Council. The Council was to meet on 23rd January, having had a meeting, I think, exactly two months before, on 23rd November. I have no doubt at all that had my right hon. Friend put forward his view as early as 23rd November he would have been even more bitterly criticised than he has been for putting it forward now. Nor can I think that any particular time in between those dates would have been regarded as appropriate. Therefore, the point is—this is the argument which I am putting to the House—if it be right—I claim that it is—for a Government to make their views clear on this matter, then I am certain that my right hon. Friend was right to put this before the meeting on 23rd January on the latest possible date.

Mr. Collick

Will the Minister please reply to the question which I raised in the debate? If it be right for the Chairman of the Coal Board to have the freedom to negotiate wages, why is it wrong for that same freedom to be given to the Chairman of the Transport Commission?

Mr. Macleod

Largely because of the difference in relation to the very first point that I put to the House of the deficit in regard to the railways. Certainly [Interruption.] We take the view that the date which I have mentioned, which is to say the end of the financial year or 1st April, 1962, is right for two reasons; first, because that date is compatible with the policy we have followed throughout and the date which we have announced for a possible end to the pay pause; and secondly, that the Government are not prepared to place a further burden on the taxpayer in the current financial year in view of the present size of the British Transport Commission's deficit.

It has been asked on so many occasions that I think I should reply to it, would the Government accept the results of arbitration? The answer is that the results are not binding on the parties and the parties are the Commission and the unions. The Government themselves are not a party to an arbitration which I hope will take place—[HON. MEMBERS: "Oh."]—I am answering the question quite straightforwardly—and the Government cannot commit themselves in advance without knowing what the attitude of the parties is to any award.

Mr. Gunter

If the trade unions and the British Transport Commission agree to accept the findings, will the Government then accept them?

Hon. Members

Answer.

Mr. Macleod

I have no intention of committing myself in advance—[HON. MEMBERS: "Oh."]—any more than the hon. Member for Southwark will commit himself about the unions accepting them.

Mr. Gunter

rose—

Hon. Members

Oh.

Mr. Speaker

Order. We must have less noise. It is becoming difficult to hear.

Mr. Gunter

I am entitled to ask that question for this reason. We are being directed to arbitration. We are not asking to go to arbitration. Let it be perfectly clear to the House, we are not in dispute with the B.T.C. They have told us in their own words that they are not declining our claim. We are not in dispute and do not want to go to arbitration. The burden is on the Government.

Mr. Macleod

The hon. Member for Southwark knows perfectly well, because he knows these positions perfectly well—

Mr. Manuel

Better than the right hon. Gentleman does.

Mr. Macleod

—of course, better than I do—that the unions have often not accepted arbitration. He knows perfectly well that he is reserving his position, and so am I.

I have been asked a number of questions about the second phase, what sort of period the Government have in mind, what sort of exemptions they have in mind and how they intend to make their policies more clearly known in these matters. I shall briefly reply to these points.

The hon. Member for Bolton, West (Mr. Holt) asked how long. My right hon. and learned Friend the Chancellor said in the debate on 18th December that although it is bound to take many months to evolve a long-term national incomes policy, the Government's aim is to get ahead with this as fast as they can. We now have the N.E.D.C. set up and one might reasonably hope to have results in something like twelve months' time.

My hon. Friend the Member for Yeovil said that he hoped these matters would be explained as clearly as possible to the country. I take that point. We have been discussing how best this can be done, and without attempting to cover the whole of the possibilities in the last few minutes which remain to me, perhaps I may say that my right hon. and learned Friend the Chancellor proposes to lay a White Paper on these matters before the House explaining in as much detail as we can the position and the development of phase two.

I want to take as the text for the last thing which I shall say something which was said by the hon. Member for Greenwich (Mr. Marsh) about strikes and about industrial relations generally. He thought that I was disagreeing with him about strikes. On the contrary, I have said from this Box many times—and the House will remember this—that the effect of strikes on our economy is greatly exaggerated in this country.

Mr. Dan Jones (Burnley)

That is why you do not mind promoting them.

Mr. Macleod

The amount of time per working man lost in this country per year comes to about one hour. It is just as well to keep that figure in perspective when we remember how generally good industrial relations are throughout the whole of the country. We have a better record in this country than almost every other industrial country—under both Governments, of course, and over the years. Naturally I am proud of this. I was Minister of Labour for four year, and I am deeply proud of it.

Mr. Manuel

Then why sully it?

Mr. Macleod

The right hon. Member for Belper commented, "Up till now". With respect, these charges have been part of the stock in trade of the Labour Party for the whole of the ten or eleven years that we have been in office. Exactly the same charges were made against my noble Friend Lord Monckton in 1952. [HON. MEMBERS: "No."] Yes. I will quote. Lord Robens said then of his action in relation to wages councils that it might be a turning point in the relations between the trade union movement and the Government and that in any case it was likely to bedevil relations between the Ministry of Labour and the trade unions.

We have heard that every year since. It was said to me when I decided to abandon the system of compulsory arbitration. It was said with great firmness by the hon. Member for Southwark in the last debate, when he said to my right hon. Friend the Minister of Labour,

"Therefore, many of us feel that the Ministry of Labour has lost a lot of the honour that it held in the minds of prominent trade unionists over the past few years".—[OFFICIAL REPORT, 18th December, 1961; Vol. 651, c. 1060.]

They have said this for ten years, and we still have a fine record of freedom from strikes, and we still have a splendid record of high employment in this country.

It is in the national and not in a party interest that this situation should continue, and it is in the national and not in a party interest that industry and the Government should sit together in the N.E.D.C. The great question ever since 25th July has been this: were the measures introduced by my right hon. and learned Friend in the national interest or were they not? At the end of four debates, I claim that everything which has been said ever since shows that we were right and that we are right now.

Question put:— That this House deplores the damage done to industrial relations consequent upon the interference by Her Majesty's Government with the established forms of negotiation and the freedom of arbitration courts to arrive at unfettered decisions.

The House divided: Ayes 229, Noes 315.

Division No. 47.]	AYES	[9.59 p.m.
Abse, Leo	Davies, Ifor (Gower)	Hale, Leslie (Oldham, W.)
Ainsley, William	Deer, George	Hall, Rt. Hn. Glenvil (Colne Valley)
Albu, Austen	Delargy, Hugh	Hamilton, William (west Fife)
Allaun, Frank (Salford, E.)	Dempsey, James	Hannan, William
Allen, Scholefield (Crewe)	Diamond, John	Hart, Mrs. Judith
Baxter, William (Stirlingshire, W.)	Dodos, Norman	Hayman, F. H.
Beaney, Alan	Donnelly, Desmond	Healey, Denis
Bellenger, Rt. Hon. F. J.	Driberg, Tom	Henderson, Rt. Hn. Arthur(RwlyRegis)
Bence. Cyril	Ede, Rt. Hon. C.	Herbison, Miss Margaret
Bennett, J. (Glasgow, Bridgeton)	Edelman, Maurice	Hewitson, Capt. M.
Benson, Sir George	Edwards, Rt. Hon. Ness (Caerphilly)	Hill, J. (Midlothian)
Blackburn, F.	Edwards, Robert (Bilston)	Hilton, A. V.
Blyton, William	Edwards, Walter (Stepney)	Holman, Percy
Boardman, H.	Evans, Albert	Holt, Arthur
Bowden, Rt. Hn. H. W. (Leics. S. W.)	Fernyhough, E.	Howell, Charles A. (Perry Barr)
Bowles, Frank	Finch, Harold	Howell, Denis (Small Heath)
Boyden, James	Fitch, Alan	Hoy, James H.
Braddock, Mrs. E. M.	Fletcher, Eric	Hughes, Cledwyn (Anglesey)
Brockway, A. Fenner	Foot, Dingle (Ipswich)	Hughes, Emrys (S. Ayrshire)
Broughton, Dr. A. D. D.	Foot, Michael (Ebbw Vale)	Hughes, Hector (Aberdeen, N.)
Brown, Rt. Hon. George (Belper)	Forman, J. G.	Hunter, A. E.
Butler, Herbert (Hackney, C.)	Fraser, Thomas (Hamilton)	Hynd, H. (Accrington)
Butler, Mrs. Joyce (Wood Green)	Galpern, Sir Myer	Hynd, John (Attercliffe)
Callaghan, James	George, Lady Megan Lloyd (Crmrthn)	Irvine, A. J. (Edge Hill)
Castle, Mrs. Barbara	Ginsburg, David	Irving, Sydney (Dartford)
Cliffe, Michael	Gooch, E. C.	Janner, Sir Barnett
Collick, Percy	Gordon walker, Rt. Hon. P. C.	Jay, Rt. Hon. Douglas
Corbet, Mrs. Freda	Gourlay, Harry	Jeger, George
Craddock, George (Bradford, S.)	Greenwood, Anthony	Jenkins, Roy (Stechford)
Cronin, John	Grey, Charles	Johnson, Carol (Lewisham, S.)
Crosland, Anthony	Griffiths, David (Rother Valley)	Jones, Rt. Hn. A. Creech(Wakefield)
Darling, George	Griffiths, Rt. Hon. James (Llanelly)	Jones, Dan (Burnley)
Davies. G. Elfed (Rhondda, E.)	Griffiths, W. (Exchange)	Jones, Elwyn (West Ham, S.)
Davies, Harold (Leek)	Grimond, Rt. Hon. J.	Jones, J. Idwal (Wrexham)
	Gunter, Ray
Jones, T. W. (Merioneth)	Noel-Baker, Rt. Hn. Philip(Derby, S.)	Stonehouse, John
Kelley, Richard	Oram, A. E.	Stones, William
Kenyan, Clifford	Oswald, Thomas	Strachey, Rt. Hon. John
Key, Rt. Hon. C. W.	Owen, Will	Strauss, Rt. Hn. G. R. (Vauxhall)
King, Dr. Horace	Padley, W. E.	Stross, Dr. Barnett (Stoke-on-Trent, C.)
Lawson, George	Paget, R. T.	Swain, Thomas
Ledger, Ron	Pannell, Charles (Leeds, W.)	Swingler, Stephen
Lee, Frederick (Newton)	Pargiter, C. A.	Symonds, J. B.
Lee, Miss Jennie (Cannock)	Parker John	Taylor, Bernard (Mansfield)
Lever, Harold (Cheetham)	Parkin, B. T.	Thomas, George (Cardiff, W.)
Lever, L. M. (Ardwick)	Pavitt, Laurence	Thompson, Dr. Alan (Dunfermline)
Lewis, Arthur (West Ham, N.)	Pearson, Arthur (Pontypridd)	Thomson, G. M. (Dundee, E.)
Lipton, Marcus	Peart, Frederick	Thornton, Ernest
Loughlin, Charles	Pentland, Norman	Thorpe, Jeremy
Mabon, Dr. J, Dickson	Plummer, Sir Leslie	Timmons, John
McCann, John	Prentice, R. E.	Tomney, Frank
MacColl, James	Price, J. T. (Westhoughton)	Ungoed-Thomas, Sir Lynn
McInnes, James	Probert, Arthur	Wade, Donald
McKay, John (Wallsend)	Proctor, W. T.	Wainwright, Edwin
Mackie, John (Enfield, East)	Randall, Harry	Warbey, William
McLeavy, Frank	Rankin, John	Watkins, Tudor
MacMillan, Malcolm (Western Isles)	Redhead, E. C.	Weitzman, David
MacPherson, Malcolm (Stirling)	Reid, William	Wells, Percy (Faversham)
Mahon, Simon	Reynolds, G. W.	Wells, William (Walsall, N.)
Mallalieu, E. L. (Brigg)	Rhodes, H.	White, Mrs. Eirene
Mallalieu, J.P.W.(Huddersfield, E.)	Roberts, Albert (Normanton)	Whitlock, William
Manuel, A. C.	Roberts, Goronwy (Caernarvon)	Wigg, George
Mapp, Charles	Robertson, John (Paisley)	Wilkins, W. A.
Marsh, Richard	Robinson, Kenneth (St. Pancras, N.)	Willey, Frederick
Mason, Roy	Ross, William	Williams, D. J. (Neath)
Mayhew, Christopher	Shinwell, Rt. Hon. E.	Williams, LI. (Abertillery)
Mellish, R. J.	Silverman, Julius (Aston)	Williams, W. R. (Openshaw)
Mendelson, J. J.	Silverman, Sydney (Nelson)	Williams, W. T. (Warrington)
Millan, Bruce	Skeffington, Arthur	Willis, E. C. (Edinburgh, E.)
Milne, Edward	Slater, Mrs. Harriet (Stoke, N.)	Wilson, Rt. Hon. Harold (Huyton)
Mitchison, G. R.	Slater, Joseph (Sedgefield)	Winterbottom, R. E.
Monslow, Walter	Smith, Ellis (Stoke, S.)	Woodburn, Rt. Hon. A.
Moody, A. S.	Snow, Julian	Woof, Robert
Morris, John	Sorensen, R. W.	Wyatt, Woodrow
Moyle, Arthur	Soskice, Rt. Hon. Sir Frank	Yates, Victor (Ladywood)
Mulley, Frederick	Spriggs, Leslie	Zilliacus, K.
Neal, Harold	Steele, Thomas	TELLERS FOR THE AYES:
Noel-Baker, Francis (Swindon)	Stewart, Michael (Fulham)	Mr. Rogers and Mr. Short
NOES
Agnew, Sir Peter	Bryan, Paul	Digby, Simon Wingfield
Aitken, W. T.	Buck, Antony	Donaldson, Cmdr. C. E. M.
Allan, Robert (Paddington, S.)	Bullard, Denys	Doughty, Charles
Allason, James	Bullus, Wing Commander Erie	Drayson, G. B.
Amery, Rt. Hon. Julian	Burden, F. A.	du Cann, Edward
Ashton, Sir Hubert	Butcher, Sir Herbert	Duthie, Sir William
Atkins, Humphrey	Butler, Rt. Hn. R.A. (Saffron Walden)	Eccles, Rt. Hon. Sir David
Balniel, Lord	Campbell, Sir David (Belfast, S.)	Eden, John
Barber, Anthony	Campbell, Gordon (Moray & Nairn)	Elliot, Capt- Walter (Carshalton)
Barlow, Sir John	Carr, Compton (Barons Court)	Erroll, Rt. Hon. F. J.
Barter, John	Carr, Robert (Mitcham)	Farey-Jones, F. W.
Batsford, Brian	Carr, Sir Robert	Farr, John
Baxter, Sir Beverley (Southgate)	Channon, H. P. G.	Finlay, Graeme
Beamish, Col. Sir Tufton	Chataway, Christopher	Fisher, Nigel
Bell, Ronald	Clark, Henry (Antrim, N.)	Fletcher-Cooke, Charles
Bennett, F. M. (Torquay)	Clark, William (Nottingham, S.)	Forrest, George
Bennett, Dr. Reginald (Gos & Fhm)	Cleaver, Leonard	Foster, John
Berkeley, Humphrey	Cole, Norman	Fraser, Hn. Hugh (Stafford & Stone)
Bevins, Rt. Hon. Reginald	Collard, Richard	Fraser, Ian (Plymouth, Sutton)
Bidgood, John C.	Cooke, Robert	Freeth, Denzil
Biffen, John	Cooper, A. E.	Galbraith, Hon. T. G. D.
Biggs-Davison, John	Cordeaux, Lt.-Col. J. K.	Gammans, Lady
Birch, Rt. Hon. Nigel	Corfield, F. V.	Gardner, Edward
Bishop, F. P.	Costain, A. P.	Gibson-Watt, David
Black, Sir Cyril	Coulson, Michael	Gilmour, Sir John
Bossom, Clive	Courtney, Cdr. Anthony	Glyn, sir Richard (Dorset, N.)
Bourne-Arton, A.	Craddock, Sir Beresford	Godber, J. B.
Box, Donald	Critchley, Julian	Goodhart, Phlip
Boyd-Carpenter, Rt. Hon. J.	Crosthwaite-Eyre,-Col. Sir Oliver	Goodhew, Victor
Boyle, Sir Edward	Crowder, F. P.	Gough, Frederick
Braine, Bernard	Curran, Charles	Gower, Raymond
Brewis, John	Currie, G. B. H.	Grant, Rt. Hon. William
Bromley-Davenport, Lt.-Col. Sir Walter	Dalkeith, Earl of	Grant-Ferris, Wg. Cdr. R.
Brooke, Rt. Hon. Henry	Dance, James	Green, Alan
Brooman-White, R.	d'Avigdor-Goldsmid, Sir Henry	Gresham Cooke, R.
Brown, Alan (Tottenham)	Deedee, W. F.	Grosvenor, Lt.-Col. R. G.
Browne, Percy (Torrington)	de Ferranti, Basil	Gurden, Harold

Hall, John (Wycombe)	Macleod, Rt. Hn. Iain (Enfield, W.)	Russell, Ronald
Hamilton, Michael (Wellingborough)	MacLeod, John (Ross & Cromarty)	Scott-Hopkins, James
Hare, Rt. Hon. John	McMaster, Stanley R.	Seymour, Leslie
Harris, Frederic (Croydon, N-W.)	Macmillan, Rt. Hn. Harold (Bromley)	Sharpies, Richard
Harris, Reader (Heston)	Macmillan, Maurice (Halifax)	Shaw, M.
Harrison, Brian (Maidon)	Maddan, Martin	Shepherd, Willam
Harrison, Col. Sir Harwood (Eye)	Maginnis, John E.	Simon, Rt. Hon. Sir Jocelyn
Harvey, sir Arthur Vere (Macclesf'd)	Maitland, Sir John	Skeet, T. H. H.
Harvey, John (Walthamstow, E.)	Manningham-Buller, Rt. Hn. Sir R.	Smith, Dudley (Br'ntf'd & Chiswick)
Harvie Anderson, Miss	Markham, Major Sir Frank	Smyth, Brig. Sir John (Norwood)
Hastings, Stephen	Marlowe, Anthony	Soames, Rt. Hon. Christopher
Hay, John	Marples, Rt. Hon. Ernest	Spearman, Sir Alexander
Heald, Rt. Hon. Sir Lionel	Marshall, Douglas	Speir, Rupert
Hendry, Forbes	Marten, Neil	Stanley, Hon. Richard
Hicks Beach, Maj. W.	Mathew, Robert (Honiton)	Stevens, Geoffrey
Hiley, Joseph	Matthews, Gordon (Meriden)	Steward, Harold (Stockport, S.)
Hill, Dr. Rt. Hon. Charles (Luton)	Maudling, Rt. Hon. Reginald	Stodart, J. A.
Hill, Mrs. Eveline (Wythenshawe)	Mawby, Ray	Stoddart-Scott, Col. Sir Malcolm
Hill, J. E. B. (S. Norfolk)	Maxwell-Hyslop, R. J.	Storey, Sir Samuel
Hirst, Geoffrey	Maydon, Lt.-Cmdr. S. L. C.	Studholme, Sir Henry
Hobson, John	Mills, Stratton	Summers, Sir Spencer (Aylesbury)
Hocking, Philip N.	Montgomery, Fergus	Talbot, John E.
Holland, Philip	More, Jasper (Ludlow)	Tapsell, Peter
Hollingworth, John	Morgan, William	Taylor, Sir Charles (Eastbourne)
Hopkins, Alan	Morrison, John	Taylor, Edwin (Bolton, E.)
Hornby, R. P.	Mott-Radclyffe, Sir Charles	Taylor, W. J. (Bradford, N.)
Howard, John (Southampton, Test)	Nabarro, Gerald	Temple, John M.
Hughes Hallett, Vice-Admiral John	Neave, Airey	Thatcher, Mrs. Margaret
Hughes-Young, Michael	Nicholson, Sir Godfrey	Thomas, Leslie (Canterbury)
Hulbert, Sir Norman	Nugent, Rt. Hon. Sir Richard	Thomas, Peter (Conway)
Hutchison, Michael Clark	Oakshott, sir Hendrie	Thompson, Kenneth (Walton)
Iremonger, T. L.	Orr, Capt. L. P. S.	Thompson, Richard (Croydon, S.}
Irvine, Bryant Godman (Rye)	Orr-Ewing, C. Ian	Thorneycroft, Rt. Hon. Peter
Jackson, John	Osborn, John (Hallam)	Thornton-Kemsley, Sir Colin
James, David	Osborne, Sir Cyril (Louth)	Tiley, Arthur (Bradford, W.)
Jenkins, Robert (Dulwich)	Page, John (Harrow, West)	Tilney, John (Wavertree)
Johnson, Dr. Donald (Carlisle)	Page, Graham (Crosby)	Touche, Rt. Hon. Sir Gordon
Johnson, Eric (Blackley)	Pannell, Norman (Kirkdale)	Turner, Colin
Johnson Smith, Geoffrey	Partridge, E.	Turton, Rt. Hon. R. H.
Jones, Rt. Hn. Aubrey (Hall Green)	Pearson, Frank (Clitheroe)	Tweedsmuir, Lady
Joseph, Sir Keith	Percival, Ian	van Straubenzee, W. R.
Kaberry, Sir Donald	Peyton, John	Vane, W. M. F.
Kerans, Cdr. J. S.	Pickthorn, Sir Kenneth	Vaughan-Morgan, Rt. Hon. Sir John
Kerby, Capt. Henry	Pike, Miss Mervyn	Vickers, Miss Joan
Kerr, Sir Hamilton	Pilkington, Sir Richard	Wakefield, Sir Wavell (St. M'lebone)
Kershaw, Anthony	Pitman, Sir James	Walder, David
Kirk, Peter	Pitt, Miss Edth	Walker, Peter
Kitson, Timothy	Pott, Percivall	Walker-Smith, Rt. Hon. Sir Derek
Lagden, Godfrey	Powell, Rt. Hon. J. Enoch	Wall, Patrick
Lancaster, Col. C. G.	Price, David (Eastleigh)	Watkinson, Rt. Hon. Harold
Langford-Holt, Sir John	Price, H. A. (Lewisham, w.)	Webster, David
Leavey, J. A.	Prior, J. M. L.	Wells, John (Maidstone)
Leburn, Gilmour	Prior-Palmer, Brig. Sir Otho	Whitelaw, William
Legge-Bourke, Sir Harry	Profumo, Rt. Hon. John	Williams, Dudley (Exeter)
Lewis, Kenneth (Rutland)	Proudfoot, Wilfred	Williams, Paul (Sunderland, S.)
Lilley, F. J. P.	Pym, Francis	Wills, Sir Gerald (Bridgwater)
Linstead, Sir Hugh	Ramsden, James	Wilson, Geoffrey (Truro)
Litchfield, Capt. John	Rawlinson, Peter	Wise, A. R.
Lloyd, Rt. Hn. Geoffrey (Sut'nC'Idfield)	Redmayne, Rt. Hon. Martin	Wolrige-Gordon, Patrick
Lloyd, Rt. Hon. Selwyn (Wirral)	Rees, Hugh	Wood, Rt. Hon. Richard
Longbottom, Charles	Rees-Davies, w. R.	Woodhouse, C. M.
Longden, Gilbert	Renton, David	Woodnutt, Mark
Loveys, Walter H.	Ridley, Hon. Nicholas	Woollam, John
Lucas, Sir Jocelyn	Ridsdale, Julian	Worsley, Marcus
Lucas-Tooth, Sir Hugh	Rippon, Geoffrey	Yates, William (The Wrekin)
MacArthur, Ian	Robinson, Rt Hn Sir R. (B'pool, S.)	TELLERS FOR THE NOES:
McLaren, Martin	Rodgers, John (Sevenoaks)	Mr. Edward Wakefield and
Maclay, Rt. Hon. John	Roots, William	Mr. Chichester-Clark.
Maclean, Sir Fitzroy (Bute & N. Ayrs.)	Ropner, Col. Sir Leonard
	Royle, Anthony (Richmond, Surrey)