Commons Sitting of 9 August 1966

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  WHITLEY BAY PIER BILL [Lords]
  As amended, considered; to be read the Third time.
  TEES VALLEY AND CLEVELAND WATER BILL (by Order)
  Third Reading deferred till Tuesday, 18th October.
ORAL ANSWERS TO QUESTIONS
  OVERSEAS DEVELOPMENT

    Overseas Aid
    Mr. Boyd-Carpenterasked the Minister of Overseas Development which countries which had expropriated the properly of British subjects without proper compensation are receiving grants and loans from his Department.
    The Minister of Overseas Development (Mr. Anthony Greenwood): If the right hon. Gentleman refers to the property of U.K. citizens, and if technical assistance be counted as grants, the list is Argentina, Brazil, Burma, Ceylon, Indonesia, Mexico, E1 Salvador, Syria, Tunisia and the United Arab Republic. In most cases, negotiations or discussions concerning the claims to compensation are in train.
    Mr. Boyd-Carpenter: Is that not a formidable list of countries helped by the British taxpayers which have looted the property of British citizens? Would not the negotiations be expedited if it were made clear to them that there would be no assistance until they had come to a settlement of their just debts with Britain?
    Mr. Greenwood: I think that reluctance to negotiate on claims would affect
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    our attitude to aid, but I doubt whether an exchange of views across the Floor of the House would help the negotiations. The right hon. Gentleman should remember that Argentine, Brazil and the U.A.R. were promised help by his Government when he was a Treasury Minister.
    Mr. Boyd-Carpenter: In view of the unsatisfactory nature of the Reply, I beg to give notice that, if I am fortunate, I will raise this matter on the Adjournment as early as possible.
    Mr. Greenwood: Good.
    Sir C. Osborneasked the Minister of Overseas Development what is the total amount of aid he proposes to give during the current year; how much will go to each country; what is the estimated income per capita, respectively, of each country; on what basis is the aid granted; how much is in repayable loans and gifts, respectively; and what are his estimates for the coming year.
    Mr. Greenwood: Because of the length of the Answer, I will, with permission, circulate it in the OFFICIAL REPORT.
    Sir C. Osborne: I am grateful for those figures. Will the right hon. Gentleman warn recipient countries that he may not be able much longer to give this aid, since we are lending money which we have not got and which we have not earned but which we have borrowed and which we are not likely to be able to repay?
    Mr. Greenwood: I repudiate the hon. Gentleman's lack of confidence in our ability to face this country's economic future, and I hope that when he asks questions of that kind he will bear in mind that we are helping countries where the income per head ranges upwards from £12 per year and that 90 per cent. of our aid goes to countries with per capita incomes of less than £100 a year.
    The following is the information:
    The expectation is that British Government economic aid expenditures in 1966–67 will amount to £225 million. Details of voted expenditure in respect of £138·2 million are available in the printed Estates. It would not be in accordance with customary procedure to go beyond this in making detailed forecasts of amounts expected to be disbursed to individual countries and on other forms of aid.
    Precise and fully comparable figures of per capita income of countries receiving aid

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    from the United Kingdom are not available, but it is estimated that they range upwards from £12 a head, and about 90 per cent. of our aid goes to countries with incomes of less than £100 per head. (This compares with a United Kingdom figure of £517.)
    On the question of the basis on which aid is granted, I would refer the hon. Member to Chapters I and VII of the White Paper: "Overseas Development: The Work of the New Ministry" (Cmnd. 2736) published in August, 1965.
    In 1965–66 the provisional breakdown between grants (including technical assistance and contributions to international organisations) and loans was £108·5 million grants and £93·7 million loans. In the current year, the figures are expected to be nearer 50 per cent. for each category.
    I cannot at present give details of estimates for 1967–68.
    Mr. Goodhartasked the Minister of Overseas Development what proposals he has to increase the proportion of overseas aid which is tied to British exports.
    Sir C. Osborneasked the Minister of Overseas Development why his aid is not linked to total purchases from Great Britain; and why he continues to give aid to countries which threaten to leave the Commonwealth and work against this country's interests; and if he will make a statement.
    Mr. Greenwood: My hon. Friend explained the position in his reply of 26th May to the hon. Member for South Angus (Mr. Bruce-Gardyne) and emphasised that it is our policy to ensure that as much aid as possible is used to supply British goods. I have no plans for a change in the system. I do not accept the implication of the second part of the Question from the hon. Gentleman the Member for Louth (Sir C. Osborne).
    Mr. Goodhart: Does the right hon. Gentleman appreciate that at a time of financial stringency tied aid makes far fewer demands on our foreign currency position than any other sort of aid?
    Mr. Greenwood: Yes, I fully appreciate that, and it is why we do everything possible to tie aid where it is practicable to do so. But I know that the hon. Gentleman realises that we have special obligations to dependent territories and also to independent territories with whom we have entered into agreements in the past to give budgetary support.
    Sir C. Osborne: The hon. Gentleman says that a certain amount of this aid is spent in this country. Does he not know roughly what proportion is spent in this country, and can he also say generally where the rest is spent?
    Mr. Greenwood: Generally speaking, the balance is spent on local costs. I had imagined that the hon. Gentleman would have gone into the subject himself and looked up previous answers on the subject, from which he would have seen that £54 million of bilateral financial aid last year was wholly tied and 16 per cent., or £21 million, was partly tied.
    Mr. Godman Irvineasked the Minister of Overseas Development what was the total spent in overseas aid since 1945, setting out the details of all main items such as gifts, loans, with details of those free of interest and which have been repaid, defence, technical assistance, Commonwealth Development Corporation, including India, Pakistan, Burma, and all foreign countries.
    Mr. Greenwood: The collection and presentation of information in the detail for which the hon. Member asks will be both costly and time-consuming. I am therefore arranging in the interim to circulate in the OFFICIAL REPORT a statement covering the broad headings as far as practicable now, and I will write to the hon. Member in greater detail when it is possible to do so.
    Mr. Godman Irvine: Would the right hon. Gentleman consider making this information available in the form of a White Paper, or some other convenient form, as it would be of very wide interest?
    Mr. Greenwood: Yes. In the recent debate on the Overseas Aid Bill we agreed that we should issue some publication giving information on this kind. No doubt the hon. Gentleman is aware of the existence of a publication which appeared in June and which gave the statistics of official economic aid by this country to developing countries.
    Mr. David Price: Would the right hon. Gentleman consider including in the White Paper the future cash flow position and the future commitments he has made so that we can know each year where we stand in terms of local and foreign currency?
    Mr. Greenwood: In many cases that would be a departure from precedent, but I will certainly consider the point.
    Following is the information:
    Estimates for the earlier years of the period do not clearly distinguish between economic and other aid, but on the basis of the best allocation now possible disbursements of economic aid in the period from 1st April, 1945. to 31st March, 1966, were as follows:

    Million

    £

    Grants

    …

    …

    813

    Loans

    …

    …

    748*

    Technical Assistance

    …

    …

    168

    Multilateral Aid

    …

    …

    231

    Total

    …

    …

    1,960

    * Includes interest-free loans of £68 million, and Exchequer drawings by the Commonwealth Development Corporation of £123 million.

    United Nations (Contributions)
    Mr. Goodhartasked the Minister of Overseas Development whether British subscriptions to United Nations development funds will be reduced as a result of the recent cuts in overseas spending.
    Mr. Greenwood: The contributions which the United Kingdom has pledged to the United Nations Development Programme for this year have already been paid. I am not in a position to make any statement about our contribution in future years.
    Mr. Goodhart: Does the right hon. Gentleman appreciate that, at a time of financial stringency, it probably does less damage to our reputation to see a reduction in our contributions to multilateral funds rather than a cut in projects for which we alone are responsible?
    Mr. Greenwood: I appreciate what the hon. Gentleman has said. I assure him that I attribute a great deal of importance to the United Nations Development Programme and also other multilateral aid measures. He will appreciate that we are the third largest donor to the United Nations Development Fund.

    Overseas Students
    Mr. Colin Jacksonasked the Minister of Overseas Development how many overseas students have been placed in practical training by his Department
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    since May, 1965; and how many applications were received from persons who could not be placed.
    The Parliamentary Secretary to the Ministry of Overseas Development (Mr. A. E. Oram): 1,888 have been placed: no precise details of unsuccessful applications are available, but the number is very small.
    Mr. Jackson: Does that very small number include private students, as opposed to sponsored students, who wish to receive training? The hon. Gentleman will, of course, realise that these private students are also valuable subsequently in promoting commercial relations between Britain and overseas territories.
    Mr. Oram: No, I am afraid that the figure does not include the private students. The Ministry operates under our technical assistance arrangements only for trainees put forward by overseas Governments. We are not responsible for private schemes.
    Mr. Marten: Have any been placed in technical colleges in this country and, if so, how many?
    Mr. Oram: I have not that information, but if the hon. Gentleman puts down a Question I will gladly answer it.

    Kenya (Land Resettlement Scheme)
    Mr. Wallasked the Minister of Overseas Development if he will make a statement on the new four-year land resettlement scheme negotiated with the Kenya Government, stating how valuations will be ascertained; and whether, in event of a dispute, reference can be made to an impartial tribunal.
    Mr. Oram: Her Majesty's Government have now agreed with the Kenya Government the arrangements for the purchase of European mixed farming land within the overall figure of 400,000 acres previously announced. The basis of valuation for purchases by the Kenya authorities will be current market values as assessed by professional valuers of the Kenya Lands Department. Since purchases will continue to be on a willing buyer/willing seller basis without compulsion, an independent tribunal is not necessary.
    Mr. Wall: While welcoming that statement, is the hon. Gentleman aware that Kenya farmers particularly requested an independent tribunal in view of the unfortunate experiences which they have had over valuation? Is this scheme likely to include all those British subjects who wish to sell their farms, and how much will it cost Her Majesty's Government?
    Mr. Oram: I am aware, of course, that the farmers had in mind the first point which the hon. Gentleman mentioned, but the working party considered it carefully and that is the basis of the agreement between our two Governments. I think I can give the assurance that it is designed to cover all those who wish to sell, but I cannot give the figure.

    Caribbeans (Aid)
    Mr. Martenasked the Minister of Overseas Development what further aid the Government propose for the Caribbeans.
    Mr. Oram: I have no new proposals going beyond those covered by the colonial development and welfare allocations made last year, which were announced by my right hon. Friend's predecessor in her reply to a Question by my hon. Friend the Member for Wandsworth, Clapham (Mrs. McKay) on 21st December, 1965, and in the reply given to my hon. Friend the Member for Barons Court (Mr. Richard) on 9th March this year.
    Mr. Marten: Has the Ministry studied the Report of the Tripartite Economic Survey of the Eastern Caribbeans? In view of the generosity of the Canadian Government over and above the British Development Division in Barbados, what are the Government to do in the light of the report about the Caribbeans?
    Mr. Orme: We shall try to follow the recommendations of the survey which we have studied, but in present circumstances I cannot hold out any hope of additional British aid being made available for these purposes.

    South Vietnam (Economic Aid)
    Mr. Hoosonasked the Minister of Overseas Development what is the extent of Great Britain's economic aid to South Vietnam; and what form it takes.
    Mr. Greenwood: Our economic aid to South Vietnam in 1965–66 totalled £81,000. We supplied road making equipment, diesel engines and portable anaesthetic machines. We also financed some training, which is the subject of the hon. and learned Member's later question, and three visits and a longer term assignment by medical and educational experts.
    We have also just recruited a paediatric team of ten, whose leader, Dr. Philip Evans, arrived in Saigon on 28th July.
    Mr. Hooson: Is the right hon. Gentleman aware that in the map published by his Ministry called "Aid Overseas" South Vietnam is not shown as a country in receipt of any aid from this country? Why was South Vietnam so omitted? Can he tell the House the form of the training which is part of this aid?
    Mr. Greenwood: I am not aware of the map, but I will certainly look into that matter. Without notice, I would not be able to give more information about the type of training received.
    Mr. Goodhart: As the Government are very free with the advice given to the South Vietnamese Government, would it not be a little better for the honour of this country if we were more generous with our concrete help?
    Mr. Freeson: Will my right hon. Friend do his best to avoid confining aid, when giving help to the people of Vietnam, to those living South of the partition border, and will he seek to give aid, as far as it is possible to do so, to all the people of Vietnam, starting, for example, by sending a medical aid team north of the border as we have sent one to the South?
    Mr. Greenwood: South Vietnam is covered by the Colombo Plan.

    Rhodesia (University College of Salisbury)
    Mr. William Hamiltonasked the Minister of Overseas Development whether he will now consider the withdrawal of financial assistance to the Rhodesian University, in view of recent developments there.
    Mr. Greenwood: I am very conscious of the considerations my hon. Friend has

    1369
    in mind, and I am in touch with those in British universities who are equally concerned. Before I come to any conclusion, I shall want to know the view of the College itself on the question whether conditions still exist in which the College can carry out its multiracial function under its Royal Charter.
    Mr. Hamilton: Is my right hon. Friend aware that the illegal régime is now rooting out and has rooted out the most liberal elements of the university which is no longer anything but a racial institution? Will he give an assurance that he will withdraw this aid immediately he is satisfied on that point and transfer it, preferably to Zambia?
    Mr. Greenwood: Recent events have been most disturbing. I have had talks with three of the lecturers who have been deported from Rhodesia, and I shall be having further talks with other interested parties in the next few days, including Professor Ingold, who has just been investigating the situation on behalf of London University. I shall want to satisfy myself on a number of points in the discussions which I propose to have.
    Sir Knox Cunningham: Would not what the hon. Member for Fife, West (Mr. William Hamilton) suggests be a very short-sighted policy? Will not the right hon. Gentleman consider that it is much wiser to give aid to a multiracial university in Rhodesia than to the United Arab Republic, having regard to what it is doing in South Arabia?
    Mr. Greenwood: The two points on which I want to satisfy myself are, first, what is in the best interests of the students and, secondly, whether in the present climate of opinion in Rhodesia it is practicable for the College to carry on effectively as a multiracial institution. I want to get information on those matters before I am in a position to reach a conclusion.

  TECHNOLOGY

    Nuclear Fusion (Research)
    Mr. Brooksasked the Minister of Technology if he will give details of the research currently being undertaken by the Atomic Energy Authority into the controlled nuclear fusion reaction; and
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    whether such research has involved, or is intended to involve, co-operation with the European members of Euratom.
    The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Peter Shore): This research is carried out by the Authority's Culham Laboratory; the programme is shown in chapter VII of the Authority's Eleventh Annual Report.
    Culham co-operates actively with many overseas centres of research in nuclear fusion, including those laboratories in Europe collaborating in Euratom's research programme.
    Mr. Brooks: I thank my hon. Friend for that reply, but would he not agree that this is a field of scientific research in which some of the most remarkable developments can confidently be expected in the foreseeable future? In view of the advantages of international co-operation in such a field, would it not be well to ensure that whatever Government initiative is taken to negotiate membership of the European Economic Community, we should now seek the earliest membership of Euratom?
    Mr. Shore: As my hon. Friend points out, this is certainly an important field, although when results might be expected from the research activity is at present difficult to judge. On co-operation with Euratom, there is an overall U.K.-Euratom agreement, and although there is not a specific Culham-Euratom agreement, it may be that the arrangements are proving satisfactory.
    Mr. David Price: Will the hon. Gentleman bear in mind that Culham might be suitable for the creation of a centre of international excellence along the general lines proposed by Lord Fleary?
    Mr. Shore: I think that, in a broad sense, it is already an international centre of excellence, and it has attracted to it a number of research workers from other laboratories within the Euratom countries.
    Sir H. Legge-Bourke: When thinking of international corporations of the future, will the hon. Gentleman bear in mind the very great success that has been achieved by the Dragon process under O.E.C.D. auspices? Would he consider at Culham changing over from

    1371
    Euratom, which is undergoing some difficulties these days, to O.E.C.D. auspices?
    Mr. Shore: That raises wider questions, but there are certain aspects of the work going on at Culham which may in future be co-ordinated with O.E.C.D. as well as with the Euratom agencies.

    Production Engineering Research Association (Reports)
    Mr. Harold Walkerasked the Minister of Technology to whom the reports and information from the Production Engineering Research Association are made available; and what restrictions are placed on their dissemination.
    Mr. Shore: The Association's Annual Report is sent to the Press and other non-member bodies. Other reports are confidential to members of the Association but are also available to Government Departments, and general release is made after three years. Reports on sponsored projects normally remain confidential to the sponsor.
    Mr. Walker: Does my hon. Friend realise that one of the great defects of this and similar institutions is that, in a period of our development when we are desperately in need of scientific research, we are deliberately starving the small firms and individuals who can make best use of assistance, instead of making sure that the taxpayers' money going into these institutions provides results that are made available to those providing the money in the national interest?
    Mr. Shore: I understand and sympathise with my hon. Friend's point of view, but I would point out that the reports that are normally produced by the P.E.R.A. are made available to members. There are well over 1,000 members, and I do not think this provision is particularly restrictive. Where the restriction comes in is in relation to those projects that are paid for on a sponsor basis by individual members, and it is rather difficult to insist that such reports should be made available to everyone. We should have to look at this position very closely, indeed.
    Mr. J. H. Osborn: Is it not possible that membership by these firms would give them the information they want?
    Mr. Shore: That is a fair point, because, as far as I can see, membership is open virtually to all firms in the engineering industry. As I say, a very large number of firms—1,100 or so—are members, and there is also a category of associate member which brings in many technical colleges and departments of engineering at universities.

    Small Firms (Management and Administration)
    Mr. Harold Walkerasked the Minister of Technology what steps he is taking to ensure that small firms are assisted and encouraged in introducing up-to-date managerial and administrative techniques.
    The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Edmund Dell): I have nothing to add yet to the Answer my right hon. Friend gave to the hon. Member on 27th June, 1966.
    Mr. Walker: Will my hon. Friend look again at the usefulness of building up a consultancy agency to provide information in management techniques for the smaller firms which cannot afford to engage the very expensive firms operating in this field? Would he not agree that a considerable benefit would stem from this to the national interest?
    Mr. Dell: We are giving consideration to that point and will be reporting to the House later. We are already doing something in this field through regional offices and industrial liaison centres.
    Mr. David Price: Will the hon. Gentleman bear in mind that he will have full support from this side in his activities in this direction, and will he recall that this was in the Conservative election manifesto at the last election?

    Machine Tools
    Mr. Brooksasked the Minister of Technology what action he intends to take to reduce the average age of machine tools used throughout British industry.
    Mr. Shore: The recent census of machine tools published by Metalworking Production has been considered by the Machine Tool E.D.C., on which my Department is represented. It is up to the firms themselves to decide their replacement policy, but the new system of

    1373
    investment grants is designed to encourage the modernisation of plant and machinery by manufacturing industry.
    Mr. Brooks: Is my hon. Friend aware of the unsatisfactory situation that has been demonstrated in many industries as a result of the recent survey? In particular, would he give thought to the possibility of improving the situation in industries such as shipbuilding, where some three-quarters of the machine tools are more than 10 years out of date?
    Mr. Shore: Yes, I will certainly undertake to do that.
    Sir Ian Orr-Ewing: Will the hon. Gentleman use his persuasion on his right hon. Friend the Chancellor of the Exchequer to reintroduce investment allowances, as these were very much more effective in modernising industry in regard to machine tools?
    Mr. Shore: That is a very different point. I happen to agree with my right hon. Friend the Chancellor of the Exchequer that the investment grant is superior to the investment allowance system which it is shortly to replace.

    Exports
    Mr. J. H. Osbornasked the Minister of Technology what arrangements have now been made between the Atomic Energy Authority and British industry to promote the export of capital equipment and ancillary products; what will be the annual cost attributable to his Department; and whether there will be any commission or income to offset this cost, based on "know-how" given, or plant and equipment exported.
    Mr. Shore: The U.K. Atomic Energy Authority and the three nuclear consortia have set up a joint organisation known as the British Nuclear Export Executive to co-ordinate sales presentation and promotion of British reactor systems in overseas markets. The Authority's contribution to the first year's cost of B.N.X., is provisionally estimated at £24,000. The Authority will stand to gain from the stimulation of overseas orders by reason of increased fuel business and by royalty income from the use of the Authority's "know-how" and patents.
    Mr. Osborn: Can the hon. Gentleman state whether this is Britain's answer to the high-pressure salesmanship of Westinghouse, General Electric and other firms in the export field? Is he satisfied that this organisation will be effective and competitive? What is the basis of Government finance, and who pays if the agency makes a loss?
    Mr. Shore: I cannot yet say that I am fully satisfied with this new organisation, because it has only just been created. We shall certainly be watching its progress. Basically, its job is to exercise a co-ordinating function in respect of overseas inquiries and orders. The main work of preparing tenders will devolve upon the individual consortia and upon the A.E.A. itself, and their expenditure under these headings will be considerably larger than the relatively small expenditure for the B.N.X. organisation as a whole.
    Mr. J. H. Osbornasked the Minister of Technology if he will tabulate in the OFFICIAL REPORT the value by industrial category of the main items of exports in the atomic energy industry for each of the six-month periods ended 30th June, 1966, 31st December, 1965, and 30th June, 1965, respectively; what has been the total value of goods and products exported in each of these periods, respectively; what firm contracts and orders are on hand at the present time; and if he will estimate the value of exports expected in each of the next two six-monthly periods.
    Mr. Shore: The appropriate extracts from the trade statistics will be tabulated in the OFFICIAL REPORT. Comprehensive forecasts of exports are not possible on present information, but discussions are going on with a number of prospective buyers of reactor systems.
    Mr. Osborn: What effect will B.N.X. have on this position? Is it too early to predict whether it will have a marked effect?
    Mr. Shore: I think that it is really too early to predict this. The B.N.X. organisation will be mainly concerned with large orders for reactor systems, whereas the information which the hon. Member seeks and which is to be published in the OFFICIAL REPORT is mainly

    1375
    concerned with smaller components, isotopes, and other products of the atomic industry.
    Mr. David Price: Will the Parliamentary Secretary bear in mind that the Americans are doing their best to knock the A.G.R., saying that the boiling-water reactor is better? Will he see that we send out the toughest salesmen we have

    UNITED KINGDOM EXPORTS

    £'000

    1965

    1966

    Commodity

    Jan.-June

    July-Dec.

    Jan.-June

    Radio-active and associated materials—

    Fissile chemical elements and isotopes; other radio-active chemical elements and radio-active isotopes; compounds inorganic or organic, of such elements or isotopes, whether or not chemically defined; alloys, dispersions and cermets, containing any of these elements, isotopes or compounds—

    Inorganic—

    Artificially produced isotopes and inorganic compounds thereof

    281

    218

    353

    Other

    770

    154

    178

    Organic

    155

    84

    154

    Isotopes and their compounds, inorganic or organic, whether or not chemically defined, not elsewhere specified

    29

    10

    24

    Compounds, inorganic or organic, of thorium, of uranium depleted in uranium-235, of rare earth metals, of yttrium or of scandium, whether or not mixed together

    111

    139

    158

    Uranium depleted in uranium-235, thorium, and their alloys (including waste and scrap), unwrought or wrought, and articles thereof

    18

    5

    17

    Nuclear reactors and parts

    238

    858

    340

    Total

    1,602

    1,468

    1,224

    NOTE: Figures for industry earnings in the nuclear field are not extractable from statistics. Much of industry's nuclear work is submerged in the activities covered by other broad headings in the trade statistics.

    Computers
    Mr. David Priceasked the Minister of Technology what consideration he is giving to the use of small modulator computers, costing less than £15,000, in the public sector and in Government Departments.
    Mr. Dell: The Ministry of Technology has been examining the whole question of the future need for and use of small computers. The National Research Development Corporation has also been considering proposals in this field.
    Mr. Price: Would not the Parliamentary Secretary agree that these new small-type computers introduce an entirely new factor into the economics of automation, and will he assure us that he will ensure that every Government Department now reassesses its opportunities for the increased
    to put over the A.G.R. in the markets of the world?
    Mr. Shore: I cannot myself now give the assurance that the hon. Gentleman seeks, but quite clearly the purpose of setting up B.N.X. is to give new thrust and drive to our export effort in this field.
    Following are the extracts:
    efficiency which these computers offer?
    Mr. Dell: There is certainly a very clear use for small computers. The hon. Gentleman will be aware that there are still differences of view among the experts as to the proper use of small computers for specific tasks and large computers for more general tasks. We shall certainly ensure, as far as we can, that small computers are used as far as is appropriate.

    Research Establishments (Staff)
    Mr. David Priceasked the Minister of Technology what steps he has taken to review the future staff needs of all research establishments coming under his responsibility, and especially the Atomic Energy Authority, with a view to encouraging trained scientists and engineers

    1377
    to move into science-based industries or into teaching where they are urgently needed.
    The Minister of Technology (Mr. Anthony Wedgwood Benn): Both my Department and the United Kingdom Atomic Energy Authority regularly review the staff needs of the research establishments. I am well aware of the considerations referred to by the hon. Member.
    Mr. Price: While recognising the efforts which have been made by the A.E.A. to reduce its staff, may it not be the case that there are still too many mature engineers and scientists in their 30s and early 40s working in the A.E.A. when there is a shortage of such men in industry? Would not many of them have better career prospects in moving out into general industry?
    Mr. Benn: This is one of the considerations in my mind when discussing this problem with the A.E.A.
    Mr. Neave: Can the right hon. Gentleman say whether progress has been made in regard to transferability of pensions to those who wish to go into industry?
    Mr. Benn: The A.E.A. have an interchange arrangement regarding the public sector and a discretion in certain circumstances with private firms to preserve pension rights. This is a problem affecting private firms, the universities and public services. It is a matter of great importance, and I have it very much in mind.

    Institutes for Advanced Studies of Design
    Mr. Hannanasked the Minister of Technology what plans he has for implementing the recommendation of the Feilden Committee that Institutes for Advanced Studies of Design in particular industrial fields be established.
    Mr. Benn: The first institute, devoted in this case to advanced machine tool and control technology, will soon be established on the National Engineering Laboratory site at East Kilbride. Other institutes will follow.
    Mr. Hannan: Is my right hon. Friend aware that his reply will give great
    1378
    pleasure to the people of Scotland? What consultations has he had with the Scottish Economic Planning Council and with the University of Strathclyde? When does he think that this institute can start work?
    Mr. Benn: I am grateful to my hon. Friend for saying what he did say, because this is an important development. Talks have gone on with industry and the Scottish Economic Planning Council. Although the establishment will be a Ministry of Technology establishment, the steering committee will represent industries, trade unions and the university. It will be based on Strathclyde and, until buildings are available for it, the National Engineering Laboratory will house it. I cannot say definitely when it will start work, but the director will be appointed soon and will be a full member of the university.

    British Standards
    Mr. Crouchasked the Minister of Technology what directions he has given to the British Standards Institution to revise standards which are now considered out of date.
    Mr. Dell: Steps have been taken to ensure that the British Standards Institution is in a better position to speed the updating of standards.
    Mr. Crouch: Will the Minister bear in mind the great importance of the British Standards Institution and give the House an assurance that his Ministry will take urgent steps to see that the British Standards Institution is strengthened?
    Mr. Dell: We are very well aware of the importance of the British Standards Institution and have taken a number of steps to assist it. For instance, there has been an increase in Government grant contributions from 75 per cent. to 100 per cent.
    Dr. Gray: Will my hon. Friend ask British Standards Institution to improve standards from the point of view of stringency both in quality and safety? I am thinking particularly of electrical apparatus, because its standards compare poorly with continental countries, particularly Holland and Sweden.
    Mr. Dell: I shall certainly bring the remarks of my hon. Friend to the notice of the Institution.
    Mr.David Price: Does the hon. Gentleman agree that the two biggest obstacles to achieving what the House wants are shortages of engineers in the B.S.I. and the extremely complicated machinery by which the committees write new standards? Will he assure us that he will take action on both these points?
    Mr. Dell: I accept the hon. Member's first point. We are doing a great deal to assist in this matter by the use of people from research stations. On the second point, we have had a management consultants report on B.S.I. as a result of which there has been some streamlining of procedure.

    Post Office (Reorganisation)
    Sir H. Legge-Bourkeasked the Minister of Technology what changes he expects will flow from the reorganisation of the Post Office, in so far as his sponsorship of the telecommunications industry is concerned.
    Mr. Benn: It is too soon to say.
    Sir H. Legge-Bourke: Bearing in mind the fact that the right hon. Gentleman's predecessor in his present office failed to make any impact at all on the telecommunications front in sponsorship of that industry, will the present Minister express an earnest resolve to do more than his right hon. Friend did?
    Mr. Benn: I think the hon. Member is being a little ungenerous to my predecessor, because when I went into the office I discovered that a great deal had been done and will continue to be done in this field. The Question asked what results are expected to flow from a change in the organisation of the Post Office. It it too early to say that.
    Mr. Marten: Will the right hon. Gentleman take the opportunity of this reorganisation to make a take-over bid for communications satellites and getting these away from the Post Office, because I believe that his Ministry is much more suitable to get this thing launched than the Post Office, which is more interested in ground stations?
    Mr. Benn: That is a separate question, but just before the 1964 General Election the hon. Member's Government signed on behalf of the Post Office an agreement under which we now operate and under
    1380
    which "Early Bird" is now operating. That raises another question.

    Procurements
    Sir H. Legge-Bourkeasked the Minister of Technology whether he will make a statement on the changes in the arrangements for procurement financed by public funds, which have been made in accordance with the terms of reference of his Department set out by the Prime Minister on 26th November, 1964.
    Mr. Benn: Work on this project, which is necessarily long term, has confirmed the advantages of simplifying specifications, variety reduction and co-ordination of purchasing. These points will be increasingly evident in procurement arrangements.
    Sir H. Legge-Bourke: Will the right hon. Gentleman seek to be a little more specific and explain what advantages have come about from the creation of his Department compared with what was prevailing before the new relationship between the D.S.I.R. and the Board of Trade, for example?
    Mr. Benn: This is a very much broader business. I could give the hon. Member some examples on the use and insistence on British Standards, the purchase of British computers and the fact that 25 per cent. of local authority housing consists now of industrialised buildings, pre-production orders and so on, but he will agree that this is essentially a long-term job and we cannot expect dramatic proposals to come overnight.

  NATIONAL FINANCE

    Inland Revenue Computer
    Mr. Ashleyasked the Chancellor of the Exchequer what plans he has for siting an Inland Revenue computer in the Midlands; and if he will take into account the case for Stoke-on-Trent to be chosen.
    The Chief Secretary to the Treasury (Mr. John Diamond): None so far, but at the appropriate time a review will be made of all likely areas.
    Mr. Ashley: Will my right hon. Friend bear in mind the considerable importance

    1381
    of this question to Stoke-on-Trent, particularly in view of the city's excessive dependence on pottery and mining and in view of the fact that unemployment figures in the city are twice the regional average?
    Mr. Diamond: My right hon. Friend will, of course, bear all those points in mind.

    Petrol (Tax)
    Mr. Gresham Cookeasked the Chancellor of the Exchequer if he will give an assurance that the increase of fuel tax by 4d. will be temporary only, for the period of the present emergency, as was done at the time of Suez.
    Mr. Diamond: No, Sir.
    Mr. Gresham Cooke: Does that mean that the increase in petrol tax is permanent? If the right hon. Gentleman wants to reduce costs, would not the quickest way be to take the tax off?
    Mr. Diamond: It means that my right hon. Friend is not prepared to anticipate fiscal changes.
    Mr. Marten: Nevertheless, would the right hon. Gentleman get his right hon. Friend to look with a little more sympathy than the Minister of Health did at the question of helping those who have invalid tricycles and have to pay this increased tax?
    Mr. Diamond: My right hon. Friend has heard what the hon. Member has said.

    Civil Service Recruitment (Political Employees)
    Mr. Dodds-Parkerasked the Chancellor of the Exchequer how many former employees of Labour Party organisations have been recruited into the Civil Service since October 1964; and how many have been established or are awaiting establishment.
    The Chancellor of the Exchequer (Mr. James Callaghan): As no central records are kept, this information could not be produced without disproportionate cost and effort.
    Mr. Dodds-Parker: May I regret that the Prime Minister has side-stepped this question and handed it to the Chancellor,
    1382
    because this affects the whole Civil Service? Will the Chancellor give an assurance that he will not repeat the previous Socialist disaster called the "Cripps wage freeze", when Socialists were recruited as public relations officers for Government Departments and then established, as civil servants, which became an embarrassment and a liability to subsequent democratic administrations?
    Mr. Callaghan: The hon. Member's history is quite inaccurate. So far as the present situation is concerned, there are a number of people moving into and out of the Civil Service. I. notice that one is proposing to go to the Conservative Central Office after a sojourn in the Civil Service. I think his movement into and out of Government service is a good thing.
    Sir Ian Orr-Ewing: Can the Chancellor tell us without too much research how many of the 50 extra public relations officers who have been appointed to Ministries come from Labour organisations and how many have now resigned through disillusion?
    Mr. Callaghan: No records are kept of these matters, except for security purposes, and I think it would be improper to do so. I hope the hon. Member will not revert to the old technique of the Conservative Party in opposition of indulging in the smear and the sneer.

    British Army of the Rhine (Foreign Exchange Costs)
    Mr. Bruce-Gardyneasked the Chancellor of the Exchequer whether he has yet received the reaction of the Federal German Government to his proposals for the full coverage of the foreign exchange costs of the British Army of the Rhine; and if he will make a statement.
    Mr. Callaghan: I am not yet ready to make a statement on this matter.
    Mr. Bruce-Gardyne: Does the Chancellor of the Exchequer still hope to achieve a full offset of the exchange costs of the Rhine Army by 30th September, or has this hope been abandoned, as some reports have suggested? Will he bear in mind that, if all the cuts in Government overseas expenditure are to fall in Europe, this will throw a very sinister light on the Government's priorities?
    Mr. Callaghan: I do not think that any question of a date for recovering the full amount was put on the question of the offset payments, but it is certainly our intention in these negotiations to recover the costs in full, by one means or another. I note what the hon. Gentleman said in the second part of his supplementary question.
    Mr. Shinwell: Has my right hon. Friend observed that the Federal Government are now pleading economic difficulties as an excuse for not meeting the foreign exchange costs? To relieve them of some of their difficulties, if they are not prepared to pay up, can we have the troops brought home?
    Mr. Callaghan: It is the policy of Her Majesty's Government, in so far as it is not possible to offset the total cost of these troops, that they should be brought home.
    Mr. Iain Macleod: As the Chancellor has relied heavily on this matter ever since the Budget, will he be able to make a statement before we go into Recess for the summer?
    Mr. Callaghan: No, I do not think so. We have had a reply from the German Government, and this is now being considered, but the negotiations will go on certainly until the early autumn.

    Savings
    Mr. Grantasked the Chancellor of the Exchequer what effect he anticipates the recent economic measures will have upon national and private savings.
    Mr. Callaghan: The measures will have no direct effect on National Savings, but they will on balance tend to increase personal savings.
    Mr. Grant: Does the Chancellor agree that, in the present economic circumstances and difficulties, an increased level of savings is more necessary than ever? As last week the level of National Savings fell below that for the same time last year, will the right hon. Gentleman look again at the many schemes which have been put before him and not be so complacent?
    Mr. Callaghan: I thought that a factual answer could not betray either
    1384
    complacency or the lack of it. As to the particular point the hon. Gentleman raises, National Savings have done well this year because of the introduction of the new National Savings Certificate, but there always are withdrawals in the holiday weeks. I hope that the level of savings will pick up again when the holidays are over.
    Mrs. Thatcher: In making that reply, what assumptions has the Chancellor made about the level of interest offered by building societies?
    Mr. Callaghan: There will be an answer on that, I hope, if my right hon. Friend the Minister of Housing and Local Government catches Mr. Speaker's eye at the end of Questions.

    National Plan (Printed Copies)
    Mr. Grantasked the Chancellor of the Exchequer how many copies of the National Plan have been printed: how many have been distributed; what is the total cost thereof; how many copies remain undistributed; and whether he proposes to print any more.
    Mr. Callaghan: 25,000 copies of the Plan were printed at a cost of £13,250. Of these, 3,843 are still in stock.
    Mr. Grant: What is to happen to the copies which are undistributed? Will they be destroyed, or will they be enshrined as an awful warning to future Governments? When the amendments are to be made, will the right hon. Gentleman urge whoever is responsible for the D.E.A. at that time that he should be a little more cautious and modest than the present incumbent?
    Mr. Callaghan: I am sure that the hon. Gentleman and the House will be glad to know that a profit has been made on the sales of the Plan. As for the balance, I could send the copies to hon. Members opposite so that they could read during the Recess those sections which deal with the deep-seated origin, during the last thirteen years, of the balance of payments deficit.
    Sir C. Osborne: Did the £13,000 cost merely mean the printing costs, or did it include the amount it cost to compile the Plan? Could the Chancellor tell us how much loss has resulted if all the costs are included?
    Mr. Callaghan: No, not without notice.

    Customs and Excise (Press Advertisement)
    Mr. John Wellsasked the Chancellor of the Exchequer what was the cost of an advertisement on 31st July in the Sunday Times headed, "Do you find our customs exasperating"; in how many other newspapers or other advertising media similar advertisements have been inserted by the Customs and Excise; and if he will discontinue such advertising in view of the present financial difficulty and curtailed travelling.
    Mr. Diamond: £1,096; seven other newspapers or weekly publications. There would be no advantage or financial saving in curtailing this small campaign; it is due to end in mid-August.
    Mr. Wells: Is the Chief Secretary aware that this absurd and frivolous advertisement has caused a great deal of offence to many people? As the present Government have broken so many promises, they might well cancel this advertisement and nobody would miss it.
    Mr. Diamond: No, I am not so aware. In fact, there has been considerably increased co-operation on passage through the Customs as the result of this advertisement. Some 50,000 requests have been made to Customs headquarters for this helpful pamphlet. There have been precisely two protests at the expenditure.

    Defence Expenditure
    Rear-Admiral Morgan Gilesasked the Chancellor of the Exchequer following the Government's new economic measures, what is now their policy regarding the percentage of the gross national product which is spent on defence.
    Mr. Callaghan: The policy of Her Majesty's Government is to reduce the proportion of defence expenditure to the gross national product to a level no higher than 6 per cent. by 1969–70.
    Rear-Admiral Morgan Giles: This will involve a reduction. Will the Chancellor always bear in mind what was said in the Government's Defence Review, which emphasised that British Armed
    1386
    Forces overseas play a very important part in the maintenance of world peace? The Review also said that no country with a sense of international responsibility would abandon such a task.
    Mr. Callaghan: Yes, Sir. The Answer I gave was based on the White Paper. The Review also says that it is important that our strength should not be overstrained. It is certainly the policy of the Government that our contribution to world peace-keeping should be as great as, though not necessarily greater than, all the other nations of the world.

  GIBRALTAR
  Mr. Braineasked the Prime Minister whether, in view of the breakdown of the Anglo-Spanish talks on Gibraltar, he will now transfer responsibility for this British territory to the Home Department.
  The Prime Minister (Mr. Harold Wilson): As my right hon. Friend the Foreign Secretary made clear yesterday, the talks have not broken down, Sir. The second part of the hon. Member's Question does not arise, though the suggestion made by him was dealt with in Answers on 1st, 7th and 26th July.
  Mr. Braine: Is the Prime Minister aware that the object of the Question was to get him to identify the British Government with the people of Gibraltar who are under considerable pressure, indeed persecution, from Spain? Will he now make plain to the House and to the whole world, as the Foreign Secretary failed to do yesterday, that, as long as Gibraltarians wish it, we are in Gibraltar and mean to stay there?
  The Prime Minister: On the first part of the supplementary question. I have dealt with this fully before. My own visit to Gibraltar suggested that the local authorities in Gibraltar would not be in favour of a transfer to the Home Office. The second point was dealt with by my right hon. Friend yesterday. I am bound to say that I find it particularly nauseating that hon. Members opposite, who tried to make party capital out of our attempt in regard to frigate supplies to Spain, at the very moment when Spain was laying claim to Gibraltar, should show such a deplorable lack of consistency.
  Mr. Maudling: Is the Prime Minister aware that the answers given by the Foreign Secretary yesterday, to which he has referred, were totally evasive? Will the Prime Minister make it absolutely clear on his own authority, as head of the Government, that the Government will not contemplate a transfer of sovereignty over Gibraltar to Spain against the wishes of the people of Gibraltar?
  The Prime Minister: As my right hon. Friend said, negotiations are going on. In those circumstances, one cannot give the final answer. I can tell the right hon. Gentleman, however, that Gibraltar is in much safer hands with this Government than with the previous Government.
  Mr. Colin Jackson: Would my right hon. Friend take this opportunity, when party politics seem to be involved, at any rate to assure the people of Gibraltar that we appreciate their loyalty and devotion to this country and we shall continue to support them?
  The Prime Minister: Yes; and, as I have said, we did not herald the attack on Gibraltar and the pressures made by the Spanish Government by entering into a deal of the kind that right hon. Members opposite did for party reasons.
  Mr. Heath: Is the Prime Minister aware that his equivocation on this matter and his refusal to give the clear assurance for which we have asked him and the Foreign Secretary lead to only one interpretation, which is that he is prepared to hand over the sovereignty of Gibraltar to Spain? Is he aware that this will meet with utmost opposition from the House of Commons and from the people of this country?
  The Prime Minister: It leads to no such conclusion. The right hon. Gentleman had better await the outcome of the negotiations. Once again he will find that he has gone a little too far ahead of himself. I repeat to the right hon. Gentleman that his position would have been stronger if, when I attacked the frigate deal because of the Gibraltar situation, right hon. Members opposite—[Interruption.] I know that this is embarrassing for them. When I said that this was a dangerous thing to do against the background of Spain putting pressure on Gibraltar, right hon. Members opposite
  1388
  said that if we took that line we were not even fit to be in opposition.
  Mr. Heath: Is the Prime Minister aware that it is because of his attitude towards the frigate matter when he was in opposition that so much of the bad blood with Spain has arisen? Is he also aware that, so long as he shows equivocation on this matter, he will not get a sound agreement with Spain? Will he, therefore, confirm the last paragraph of his own White Paper of last year, or will he say whether he now repudiates it?
  The Prime Minister: There is no repudiation of our White Paper, but negotiations are going on and I would rather we said what we have to say to the Spanish in this matter. There will be plenty of time to tell the House of Commons, and then we may possibly have some appropriate comment from the Leader of the Opposition. But the right hon. Gentleman is quite wrong in saying that the bad blood was caused by the frigate cancellation and that this has led to the Spanish pressure—although the party opposite tried to stir it up, of course. The cancellation of the frigates was not the cause of the pressure. The decision by the Spanish to put pressure on Gibraltar occurred just before the frigate deal was started by right hon. Members opposite.
  Mr. Braine: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest opportunity—I hope before the Summer Recess.

  MINISTERS (MEMBERS' LETTERS)
  Mr. Bruce-Gardyneasked the Prime Minister if he will give directions to Members of Her Majesty's Government to expedite their scrutiny of letters from hon. Members.
  The Prime Minister: Ministers already deal as expeditiously as possible with correspondence, but there are times when the volume of letters received does entail some delay.
  Mr. Bruce-Gardyne: Is the Prime Minister aware that the length of time

  1389
  which seems normally to elapse now between the sending of a letter and the receipt of a reply is running at about five or six weeks? Since the whole machinery of Government is grinding to a halt because of the idiotic legislation introduced by the Government, how does he think that Government Departments will cope with the thousands of letters they will receive from firms affected by the prices and incomes freeze?
  The Prime Minister: The hon. Gentleman makes a statement that I do not accept as fact. I recognise that there was a delay in dealing with one letter, and he has had an apology from my right hon. Friend the Chancellor of the Exchequer about that case. If he has other cases, perhaps he will bring them to my attention. But there is no such general delay as he suggests, and to judge from my own postbag there is widespread support in the country for our measures to deal with the rising cost of living.

  NATIONAL PLAN
  Mr. Martenasked the Prime Minister if he is satisfied with the coordination between Ministers dealing with the National Plan; and if he will make a statement.
  The Prime Minister: Yes, Sir, and I have nothing to add to my right hon. Friend's Answer to the hon. Members for Barkston Ash (Mr. Alison) and Stratford-on-Avon (Mr. Maude) on 26th July.
  Mr. Marten: As the Government planners have now got a policy of purposive stop-go and reverse, would it not be in the national interest, as the right hon. Gentleman wishes to get the whole nation pulling together in order to get the country out of the mess into which the Government have led it, if he apologised to the electorate for the totally misleading election pledge that there would be no stop-go if a Labour Government were returned?
  The Prime Minister: The hon. Gentle-will realise that I do not accept his view of the responsibility for the economic situation of the country. Certainly, when the nation is pulling together I am sure
  1390
  that he will be in the small minority urging it not to do so.

  HOUSE OF COMMONS (SPECIALIST COMMITTEES)
  Mr. William Hamiltonasked the Prime Minister what progress has now been made in his talks with leaders of Her Majesty's Opposition on the establishment of specialist committees.
  The Prime Minister: I have as yet nothing to add to the Answer I gave on 23rd June to a similar Question by my hon. Friend.
  Mr. Hamilton: Is my right hon. Friend aware that these talks are getting bogged down, like a lot of others? Can he say what the sticking point is and whether there is any prospect of getting specialist committees this Session?
  The Prime Minister: There was considerable delay, to which the Leader of the Opposition drew attention, between the reference to this in the Gracious Speech and our submitting proposals to the Opposition. There has now been a delay of precisely the same length in the reply from the Opposition, which I am glad to say we had this morning. We shall now need to consider the reply, but I think that I can say on the basis of the reply that progress is being made.

  RHODESIA
  Mr. Dribergasked the Prime Minister if he will now assess the extent to which the sanctions so far applied have weakened the illegal régime in Rhodesia; what effect these sanctions are expected to have by the end of October; and what further action is proposed by Her Majesty's Government.
  The Prime Minister: This question is subject to continuous assessment, Sir, and there can be no doubt that the economic sanctions are biting deep. As I explained yesterday, we intend vigorously to maintain our sanctions policy. Any further intensification of sanctions must depend on the developments of the next few weeks.
  Mr. Driberg: Would my right hon. Friend agree that Mr. Smith's speech of

  1391
  last Saturday, to which my right hon. Friend referred adversely yesterday, makes it impossible at any rate to include Mr. Smith and his colleagues in any future Government of Rhodesia?
  The Prime Minister: I referred yesterday to Mr. Smith's speech. As I stated, I think it was most unfortunate, even though he was addressing some of the most fanatical of his supporters. But, as I made clear, I do not think that the speech is any reason why we should not go on with these probing talks which have now been renewed.
  Mr. Longden: What further intensification of sanctions short of force can there be?
  The Prime Minister: I have said that this must depend on developments in the next few weeks. As the hon. Gentleman will be aware, the Zambian Government are intensifying their trade pressures against Rhodesia which up to now, for reasons we all understand, have not been quite so deep as those of some other countries.
  Mr. Raphael Tuck: If the stalemate goes on much longer, will my right hon. Friend consider sterner measures?
  The Prime Minister: We must, as I have said, await developments of the next few weeks. Informal talks are now to start and we must see how far they get and what result there may be from them. If, however, there is clear intransigence and unwillingness to move forward from the previous position, we shall obviously have to consider the position.

  DEFLATIONARY MEASURES (COMMUNICATIONS)
  Mr. Dribergasked the Prime Minister how many communications on the subject of the deflationary measures imposed by Her Majesty's Government have been received by his office, and by the other departments primarily concerned, from the national headquarters and local branches of trade unions, from the constituency and local organisations of political parties, from employers' associations, from chambers of trade and commerce, and from other responsible and representative bodies; how many of these communications, in each category,
  1392
  expressed, broadly, approval of these measures and the unemployment which they are designed to cause; and how many expressed disapproval.
  The Prime Minister: I regret that this information could only be made available at a disproportionate expenditure of time and money.
  Mr. Driberg: Without giving exact details now, can my right hon. Friend say whether, broadly, as one would expect, the approval comes from bankers and big business rather than from the workers and the party he himself leads, in general, with such brilliant ability?
  The Prime Minister: An examination of my postbag does not suggest that all the letters are from one side or another. My experience, which is probably shared by a large number of hon. Members, is that there have been far more letters on the subject of pirate radio and the Medical Termination of Pregnancy Bill than on the question of the prices and incomes freeze.
  Mr. A. Woodburn: Is my right hon. Friend aware that the ordinary workers, apart from any question of their leaders, think that something must be done to stop the inflationary tendencies and welcome what my right hon. Friend is doing?
  The Prime Minister: I think that there is a widespread degree of support, which has been confirmed by recent public opinion polls and in other ways, for really vigorous measures to deal with the prices and incomes problem. I think that the whole House recognises—as did the previous Government—that it is essential to solve this problem if we are to get consistent and balanced growth without running into balance of payments difficulties as we have so often.
  Sir G. Nabarro: The Prime Minister has referred to opinion polls. Will he confirm that the majority of his letters commiserate with him in the matter of his own decline in popularity in those polls?
  The Prime Minister: I am glad to say that I have had no letters on that subject—and I have also had no letters pointing out that the position of the right hon. Member for Bexley (Mr. Heath) is now the lowest that any Leader of the Opposition has ever had.

  ANGLO-FRENCH-ISRAELI TREATY (OCTOBER 1956)
  Mr. Dickensasked the Prime Minister if he will place a copy of the Anglo-French-Israeli Treaty of October, 1956 in the Library of the House; and if he will make a statement.
  Mr. Molloyasked the Prime Minister if he will seek the consent of the French and Israeli Governments to publication of the secret treaty that the three countries signed prior to the attack on the Suez Canal in 1956.
  The Prime Minister: In accordance with the accepted convention in these matters, the Government can have no knowledge of any engagement of this kind which may have been made by a previous Administration but which, in the nature of things, can no longer be valid or operative.
  Mr. Dickens: Notwithstanding that reply, will my right hon. Friend confirm whether or not this treaty exists? Will he not also reconsider whether it would not be advisable to place a copy of the treaty in the Library on, say, the 10th anniversary of the signing? If there happen to be any difficulties about the precise date, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) no doubt will be helpful.
  The Prime Minister: As my right hon. Friend knows, it is a convention that documents which are internal to a particular Administration are not seen by a later Administration. Only those are seen which bear on their relations with other countries. Since this treaty cannot be regarded as valid or operative today, it would be contrary to convention for me even to see it, and I have not seen it.
  It is a fact that, since many recent disclosures, including the frank statement of M. Pineau, the then French Foreign Minister, there is clear prima facie evidence that there was collusion, and it is now up to the Leader of the Opposition or a colleague to make a clear statement as to why this House was so grievously misled, in the absence of which the House will have to decide what action is appropriate.
  Mr. Molloy: In view of M. Pineau's frank revelations—and he was French
  1394
  Foreign Minister at the time—does not my right hon. Friend think that there should now be an official inquiry into the alleged collusion between the Tories and the other Governments so that the House can know the position at the time and the very serious circumstances involved?
  The Prime Minister: The prima facie evidence, including the evidence of M. Pineau, now suggests that there was a clear agreement in advance and collusion that a joint attack should be planned in this way and that, so far from British intervention being to separate the Egyptian and Israeli forces, as we were told, the whole thing was a put-up job.
  The House was kept in ignorance and misled on the question, and so, I believe, were three-quarters of the then Cabinet. Thus, all the prima facie evidence suggests that it is now up to right hon. Gentlemen opposite to dispel the very strong feeling that everyone having read or heard this evidence must feel.
  Sir Ian Orr-Ewing: Is not the right hon. Gentleman aware that if it had not been for the actions of his predecessor those operations would have been successful and the Suez Canal would still be an international waterway?
  The Prime Minister: I am not sure to what operations the hon. Gentleman, who was I think a junior Service Minister at the time, is referring——
  Sir Ian Orr-Ewing: I was not a junior Service Minister. The right hon. Gentleman must withdraw that.
  The Prime Minister: Of course, I will accept that. Whether the hon. Gentleman was or was not, he would not have been told anyway. If he is saying on such authority as he must later have enjoyed that the operation was designed to stop the nationalisation of the Suez Canal, then he is confirming all that is being said by M. Pineau. What the House of Commons was told at the time was that this was a peace-making move to stop the Israelis and Egyptians fighting one another and not to reverse the nationalisation of the Suez Canal.
  Mr. Grimond: Does the Prime Minister remember that one of our colleagues was driven from public life partly because he is said to have misled the House of

  1395
  Commons? In view of the very direct accusations which the Prime Minister has made this afternoon, which would imply possibly that other people have misled the House, can he tell us what further action is being taken? I hardly feel that this matter can be left here. Does the right hon. Gentleman intend to have a debate in the House of Commons if no statement is made?
  The Prime Minister: I would say that the prima facie evidence, based on M. Pineau, who was one of the parties to the alleged treaty, as well as other information coming from the Israeli Chief of Staff at the time—which would be more interesting if we could see the chapter which has been suppressed from the book—suggests that the House was gravely misled at the time. I believe that the right action to be taken is for the Members of the then Government who held the responsibility, particularly the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), but also the right hon. Gentleman who was the Chief Whip and persuaded so many of his hon. Members to accept these stories, to get up and give the House the whole facts.

MORTGAGE INTEREST RATES
The following Question stood upon the Order Paper:
Mr. BOYD-CARPENTER: To ask the Minister of Housing and Local Government whether in present circumstances he intends to interfere with the action of the building societies in fixing rates of mortage interest.
The Minister of Housing and Local Government (Mr. Richard Crossman): With permission, I will now answer Question No. 19, which has been put down for Written Answer.
No, Sir. There is no basis for compulsion here. As my right hon. Friend the First Secretary made clear, Part IV of the Prices and Incomes Bill does not apply to interest rates, which are dealt with under Clause 2.
The absence of compulsion only emphasises the need for voluntary action in this sphere. I have now had a discussion with the Chairman of the Building
1396
Societies Association. I told him of the importance that the Government attach to achieving the prices and incomes standstill, and emphasised that in this the building societies have an important part to play.
In the Government's view, the national interest will best be served if increases in interest rates notified to existing borrowers, but not yet effective, are not implemented until the National Board for Prices and Incomes has reported on this subject. This report should be available towards the middle of October.
I have asked the Chairman of the Building Societies Association to inform the members of his executive of the Government's wishes in this matter, and, if it agrees, to advise all member societies as soon as possible to comply with the policy.
Mr. Boyd-Carpenter: Is the right hon. Gentleman aware that so far as the powers sought to be taken are concerned his statement does little to diminish the chaos which was created by the First Secretary of State?
On the substance of the matter, will the right hon. Gentleman tell the House how he suggests that the building societies should maintain their flow of funds for loans in a situation in which general interest rates are being raised by Government action, so as to prevent a further falling-off in their lending and, therefore, in the house-building programme in the private sector?
Mr. Crossman: There was no chaos. There was a misunderstanding which was caused by a Press flash. As far as I have read HANSARD, there is no misunderstanding as a result of anything said by the First Secretary during the whole of the debate in Committee. He made clear throughout what I have said here, that this all falls under Clause 2 and that action can only be voluntary and not compulsory.
I have made it clear to the building societies that what we ask them to do is to postpone action until the middle of October. We considered the matter very carefully together and I do not think that the right hon. Gentleman is justified in thinking that this degree of postponement would have the dangerous results which he anticipates.
Sir K. Joseph: As the right hon. Gentleman has just confirmed that the freeze, such as it is, is only voluntary, how does he justify the allegations of his right hon. Friend the First Secretary of State, which he is now apparently supporting, that the Press was distorting the truth when it said that the legal prices freeze does not apply to mortgage interest rates?
Mr. Crossman: That is not quite what the Press said. I would suggest to the right hon. Gentleman that he could discuss this at some length later this afternoon, but if the right hon. Gentleman wishes to have it from me he can. The Press did not say this. The Press tried to make it clear, or implied, that there was to be a complete absence of any control or compulsion. What I have said is that there is an absence of compulsion, but as a result I am asking the building societies to do what I asked the local authorities to do about rents, which is to join in on a voluntary basis and to keep the freeze on a voluntary basis. There was nothing in what my right hon. Friend said which contradicted that.
Sir K. Joseph: Then surely the Press was quite right that there is no legal freeze and that the freeze is purely voluntary.
Mr. Crossman: In that case, I am delighted to hear that the Press and my right hon. Friend agree with themselves, and I do not know why the Committee wasted such a lot of time.
Mr. Freeson: Would my right hon. Friend not agree that much of the problem could be obviated if the building societies were to undertake a fundamental review of their policy about reserves?
Mr. Crossman: This is one of the subjects which is being studied by the Prices and Incomes Board. One of the points we referred to was whether, under modern conditions, the amount of reserve now normally retained by building societies is either adequate, too much or too little. I would be inclined to agree with my hon. Friend that there is a great deal in his contention.
Mr. Lubbock: Does not the Minister agree that if the mortgage rate is held at its present level, voluntarily or compulsorily,
1398
that also means that the investment rate if frozen as well, and that under these circumstances the inflow of funds to the building societies would dry up? Will the Minister, therefore, take powers to grant loans to the building societies at the present investment rate, so as to allow them to continue to support the private house-building programme at its current level?
Mr. Crossman: It was precisely because I realise that there are the dangers to which the hon. Gentleman has drawn attention that I did not ask the building societies, for instance, to hold things level for a year or even six months. I asked them to hold things level until October because I thought that it was ridiculous that, when the matter had been referred to the Prices and Incomes Board to discover the answers to the questions raised by the hon. Gentleman, the rate should go up before the Board's decision had been taken.
Mr. Winnick: During the general freeze on incomes would the Minister recommend owner-occupier to refuse to pay an increase in mortgage interest rates quite regardless of what the building societies recommend?
Mr. Crossman: I certainly would not.
Mr. Rippon: Does not the Minister understand the damage that has been done to the housing programme by the continued uncertainty about the position? Does he not understand that the person who wants to buy a house wants to know what he will have to pay? What day this week will the Minister make his promised statement about the mortgage option scheme? Does he not have a qualm of conscience that what we are arguing about is whether it should be 6¾ per cent. or 7⅛ per cent.? Will the right hon. Gentleman tell us when it will be 3½ per cent. and consult his right hon. Friend the First Secretary about that?
Mr. Crossman: The House would think that I was overlong to answer all six of the right hon. and learned Gentleman's questions. He asked me about the option mortgage scheme. My reply is that I made a fairly full statement on this when talking to a builders' conference the other day and that there is

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no reason for any doubt whatever on the part of anybody who is buying a house as the position is explained to such people absolutely explicitly.
The scheme will be included in our subsidies Bill. I described in detail what the scheme was and I reminded people, once again, that they could switch to it and, therefore, that they could buy straight away. Hon. Members opposite who go on saying that there is doubt are only increasing the difficulties and are not helping to get the houses sold.
Mr. Robert Howarth: Does my right hon. Friend appreciate that millions of owner-occupiers expect that if their incomes are frozen during the next six months mortgage interest rates should also be frozen?
Mr. Crossman: I appreciate this. That is the view not only of mortgage holders. We are aiming at an overall freeze of prices as well as incomes. Therefore, rents and mortgages form a very important part. [HON. MEMBERS: "Rates?"] Rents, I said. I dealt with rents and mortgages and I said that we are dealing with these first. I take my own order of answering the questions.
Rents and mortgages form an important part of this subject and, therefore, although both are voluntary—that is, council rents and mortgages—I have called upon councils and building societies, and I have had a very much better response from them than I have had from hon. Members opposite—to come and help in doing this job.
Mr. Kitson: What discussions does the Minister intend to have with the Minister of Agriculture, as the Agricultural Mortgage Corporation has raised its rates by ¾ per cent. and the Government are responsible for nominating two directors to that Corporation?
Mr. Crossman: That is another question, which the hon. Member might address to another Minister.
Mr. St. John-Stevas: Surely the Minister has misled the House yet again by saying that a mortgage is not covered by Clause 26 of the Prices and Incomes Bill. Surely, a mortgage is a loan of money, that is, a service, for which interest is
1400
paid—that is, a charge—and this comes directly within Clause 26. What is important is what the Bill says and not what the Minister says.
Mr. Crossman: I listen always with great attention to the hon. Member. All I can tell him is that my legal advisers advise me differently.
Several hon. Members Several hon. Members rose——
Mr. Speaker: Order. Mr. Jay. Statement.

SHIPBUILDING INDUSTRY
The President of the Board of Trade (Mr. Douglas Jay): On 24th March I expressed the Government's appreciation of the work of the Geddes Committee and announced the acceptance by the Government of its Report as a basis for considering the future of the shipbuilding industry. I said then that the Government would be prepared to play their part, broadly along the lines indicated in the Report, if those in the industry were prepared to play theirs.
At the end of June I received memoranda from both the employer and union organisations reporting the conclusions that they had reached on the main recommendations which the Report addressed to them, and indicating the action which they were taking. The Government are now satisfied, both from knowledge of what has already been achieved such as the recent important demarcation agreement, as well as from the memoranda submitted by each side—[Interruption.]
Mr. Speaker: Order. The background of noise makes it difficult to follow the statement.
Mr. Jay: I am satisfied that the industry has accepted the basic recommendations in the Report and that both sides are prepared to co-operate in giving the industry a fresh start. I can now therefore confirm the Government's decision to play their part also in the reorganisation of the shipbuilding industry.
We have already taken steps in the Finance Bill to provide by Order for shipbuilders to be relieved of certain indirect taxes in respect of home orders. We shall make this Order shortly to come into

1401
force cm 12th September. We intend to introduce legislation this Session establishing a Shipbuilding Industry Board to promote the reorganisation of the industry.
We have in mind ceiling commitments for Exchequer assistance of the kind proposed by the Geddes Committee, but the precise financial arrangements to be included in the legislation need further study. The actual expenditure will mainly depend on the progress made by the industry itself and, before giving financial support to new groupings, we shall want to be satisfied that all possible steps will be taken to ensure competitive efficiency and viability.
I am glad to announce that Mr. William Swallow, until recently Chairman and Managing Director of Vauxhall Motors Ltd., has agreed to accept the chairmanship of the Shipbuilding Industry Board when it is set up; and I hope to announce the names of two other members in the near future. They will be able to hold discussions with firms and unions in advance of legislation as recommended in the Report.
Another important recommendation in the Report concerned naval orders. The Government agree on the desirability of concentrating orders for frigates and destroyers in a few yards specialising in the production of this kind of sophisticated vessel. The detailed arrangements for giving effect to this change, including the placing of naval orders, will be worked out in consultation with the Shipbuilding Industry Board in the light of the reorganisation of the industry as a whole.
I hope that this statement provides the necessary basis for both sides of the industry to proceed with their plans. The Government believe that any lasting solution of the industry's problems can only be achieved by the reorganisation of the industry and a new relationship between the two sides along the lines suggested by the Committee. On both these fronts the industry has made a fresh start since the Report was published. In the months ahead the two sides of the industry will need both to carry this much further in consultation with the Government and the new Shipbuilding Industry Board, and to complete the work on hand in individual yards without delays.
An excellent opportunity now exists in shipbuilding for a rapid increase in
1402
productivity which could bring substantial benefits to the balance of payments.
Mr. Barber: I should like to add my tribute to that of the President of the Board of Trade on the speedy way in which both sides have responded to the Geddes Report. Perhaps I may put to the right hon. Gentleman four brief questions. First, what effect will the wages freeze have upon productivity bargains which are already in hand and which are so important in the context of the Geddes Report? Secondly, will the proposed Industrial Reorganisation Corporation have any part to play in the rationalisation of this industry? Thirdly, in view of the progress which has been made under the Geddes Report, would it not be better to defer for the time being the transfer of responsibility for shipbuilding from the Board of Trade to the Ministry of Technology, which, as the Minister knows, was decided without any consultation with the shipbuilders and is against their wishes?
Finally, does the President of the Board of Trade agree with the Geddes Committee that the answer to improved competitiveness in the shipbuilding industry does not lie in nationalisation, or State participation, to use the Committee's words? Does not the right hon. Gentleman recognise that if full cooperation is to be forthcoming from the shipbuilding industry he must say now that as far as the shipbuilding industry is concerned nationalisation is out?
Mr. Jay: The implementation of productivity bargains will, of course, be deferred for six months, in accordance with the principles of the White Paper, in this industry as in other industries. The Industrial Reorganisation Corporation will work closely together with the Shipbuilding Industry Board and it is quite possible that finance may be required from the I.R.C. as well as directly from the Government.
The transfer of responsibility from the Board of Trade to the Ministry of Technology was stated in the announcement by my right hon. Friend the Prime Minister as being planned to occur after this statement had been made, which closes the first chapter of the operation. That is still our intention and I think that that is the best way to put this plan into effect.

1403
As to nationalisation and other matters of that kind in the future of the industry, the Government's policy is as I have stated it this afternoon.
Mr. Grimond: Have the Government been able to give any advice about, or have they any policy for, the single yards in isolated shipbuilding centres?
Mr. Jay: That is matter which should now be considered by the Shipbuilding Industry Board in consultation with the industry, and, of course, in the light of what was said in the Geddes Report, but we would not like to lay down any dogmatic conclusion now.
Mr. Shinwell: Is my right hon. Friend aware that the statement which he has made about the creation of the Shipbuilding Industry Board will be warmly welcomed by all sections of the shipbuilding industry, which have already conveyed their views to many hon. Members, on both sides of the House?
May my right hon. Friend answer two questions? First, is it not important that the legislation should be proceeded with at the earliest possible moment and that there should be no delay? Secondly, I note that my right hon. Friend has suggested the appointment of a chairman, but it is not important that in the appointment of personnel the trade union side should be adequately represented?
Mr. Jay: Yes, I agree with my right hon. Friend on both points. It is intended to legislate this Session. The importance of trade union representation is fully understood.
Mr. Maudling: The president of the Board of Trade will be aware that one of the problems is that British shipowners can often get better credit terms from foreign yards than they can from domestic yards. Does he recall that the previous Conservative Government gave a £75 million credit scheme to deal with this problem? Do the present Government propose anything similar to that?
Mr. Jay: Yes, and I also recall that the previous Conservative Government failed to provide adequate credit for exports of ships. We intend to do both.
Mr. Blenkinsop: Will my right hon. Friend do everything he can to speed up the completion of the membership of the
1404
Shipbuilding Industry Board? Is he aware that we welcome very much its setting up, and that we very much want to see it getting on with its job?
Mr. Jay: Yes. I hope that the other members will be appointed very shortly.
Mr. Galbraith: Can the President of the Board of Trade tell the House whether the Government's object is to encourage amalgamations which flow naturally between firms, or whether he wishes to force them together against their natural affinities—by, for example, giving or withholding naval orders, to which he referred in his statement? Are these unions to be shotgun marriages? Or are they to be allowed to develop naturally without unfair pressure being put on them by the Government through the placing of naval orders?
Mr. Jay: What we want to see are groupings which will ensure a maximum increase in efficiency and productivity in the industry. On individual cases, we shall act in the light of the advice of the S.I.B.
Mr. Hector Hughes: Will my right hon. Friend define the exact powers of the Shipbuilding Industry Board and say when it will begin its work?
Mr. Jay: It will begin its work on a non-statutory basis immediately. Its powers will be, of course, to advise the Government, both on the powers which it will have now and the statutory powers which we hope it will have later, if the House agrees.
Dame Irene Ward: While there are many things to be extremely proud of in the amount of rationalisation which has been so successfully carried on, may I ask the right hon. Gentleman whether, in view of the fact that there are a great many details which are not very clear, and some issues on which we must have satisfactory answers, is it not rather a pity that this great industry is not able to be debated before the House goes into recess? May I have an assurance that there will be a debate immediately after our return?
Mr. Jay: I shall be very willing to have that, but I think the latter part of the hon. Lady's question ought really to go to the Leader of the House.
Dame Irene Ward: No. Let the right hon. Gentleman get on with it.
Mr. Small: Will the ordering of frigates be directly by the Board or departmentally with the yards?
Mr. Jay: The orders for naval vessels will, of course, be in the future as in the past by the defence Departments.
Dame Joan Vickers: In view of the fact that it is the custom for the Royal Naval dockyards to build frigates and that at present work for them is essential because already unemployment is starting, can the right hon. Gentleman assure me that he will not take away any future orders from the Devonport and other dockyards?
Mr. Jay: There is no such intention. I think that if the hon. Lady wants further details she ought to address that question to my right hon. Friend the Minister of Defence.
Mr. Ian Lloyd: Is the right hon. Gentleman aware that a widely held view about the weakness of the industry is that it has resulted from the failure to build building docks? In view of the report from John Brown's, published last week, giving encouragement to that view, will he give the maximum possible assistance to these groups which have decided to go ahead with building building docks?
Mr. Jay: We will certainly give encouragement to this idea.
Mr. Noble: Will the right hon. Gentleman make certain that the Board bears in mind that in the race for efficiency some of the smaller yards are now well ahead of the bigger ones, although it is the bigger ones which get the publicity and Government money? Will he try to ensure that the smaller yards, whether on the Clyde or the Tyne or elsewhere, do not get forgotten in the rush for the big names?
Mr. Jay: Yes, I think that that is certainly true, in some cases, though not necessarily all.
Mr. Barber: I think that the President of the Board of Trade must have misunderstood my last question, because he failed to answer it. In the Geddes Report it is stated:
"We are not recommending policies of nationalisation or State participation in shipbuilding".
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Does the right hon. Gentleman agree, or does he not agree, with that?
Mr. Jay: As I said, the Government's policy is exactly as I gave it in my statement this afternoon.
Mr. Buchan: Will my right hon. Friend, if the industry requires it, say that State participation will be forthcoming, as we have done with regard to Fairfield's? What will be the relationship on the question of research? Will it be tied up with the Ministry of Technology, or will the industry be encouraged to establish research centres? Will my right hon. Friend ensure that the colleagues of the chairman already appointed will be not merely luminaries of commerce, but representatives of the trade unions and practising shipbuilding engineers?
Mr. Jay: It is part of this scheme that loans should be made to the industry by the Government. It would be a large part of the job of the Board to advise on that. Responsibility for research will, of course, rest with the Minister of Technology.

GIBRALTAR
Mr. Heath: Would this be the right moment, Mr. Speaker, to ask for authority to move the Adjournment of the House under Standing Order No. 9?
I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
"the refusal of the Prime Minister to give the House an undertaking that British sovereignty over Gibraltar will not be diminished other than with the agreement of the people of Gibraltar."
I would suggest that this is a specific matter, because nothing can be more specific than the matter of sovereignty, and in this particular case British sovereignty over Gibraltar; and that is of great importance to the House and to the people of this country. There can be no doubt about that. I would also suggest that it is urgent, because the negotiations or discussions are due to be resumed shortly, as the Foreign Secretary told the House yesterday, and as far as

1407
I can see there will be no further opportunity for the House, before it rises, to discuss this matter and be able to express its view in the Division Lobbies about it.
It might, of course, be possible to argue this policy as a reason why the House should not adjourn, when we debate the Motion for Adjournment for the Recess, or to ask for more time to discuss that Motion, but in neither case would it be possible for the House to express its view in the Division Lobbies about Government policy.
Therefore, I would suggest that this Motion stands on all the reasons required by Standing Order No. 9.
Mr. Speaker: The right hon. Gentleman asks leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
"the refusal of the Prime Minister to give the House an undertaking that British sovereignty over Gibraltar will not be diminished other than with the agreement of the people of Gibraltar."
I cannot thank the right hon. Gentleman for letting me know in advance that he intended to raise this matter, but I make no complaint about that in view of the circumstances which have arisen.
Among the rules governing acceptance or otherwise of an application under the Standing Order one is that if an ordinary Parliamentary opportunity would occur the Motion cannot be put to the House. The House will find numerous instances of this, and of the application of this rule, on page 365 of Erskine May. When debate on a Motion to adjourn for a Recess is coming before the House—as it is—an opportunity is provided for raising any matter of the administration for which the Government is responsible, and that provides an opportunity which prevents me from allowing the application to move the Adjournment under the Standing Order.
Mr. Heath: Of course, we accept your Ruling, Mr. Speaker, on the question of Standing Order No. 9, but may I, in this case, ask for your guidance? In debate on the Motion for the Adjournment for the Recess—all the time I have been a Member of the House it has been so—hon. Members are given opportunity to
1408
state reasons why the House should not adjourn, but in no case is it given an opportunity to argue the substance of a reason being put forward why the House should not adjourn.
Therefore, are we to understand that the rule is now to be changed and that we may have substantive debates on particular items on the Motion for the Adjournment, because that, in all my experience, would be completely different? In any case, we cannot decide upon one subject on a Motion for the Adjournment. As you are aware, Mr. Speaker, it covers a whole variety of subjects, and we could not distinguish Gibraltar from any other.
Mr. Speaker: There are two Motions for the Adjournment. One is that the House should adjourn, when the House decides whether it should adjourn. On that occasion, it is possible for right hon. and hon. Gentlemen to argue that it should not adjourn and bring forward important reasons why they think that it should not adjourn. That would be one opportunity to raise this matter. The other is during the ordinary Adjournment debates which take place after the House has come to a decision on the Motion for the Summer Adjournment.
Mr. Heath: Further to that point of order, Mr. Speaker. I think that you will agree that when there is an Adjournment on a Friday it is not possible for hon. Members to express in the Lobbies their collective view on the subject under debate. That was the point which I was trying to submit to you earlier. Therefore, the House can reach no decision on any of these matters.
As far as the Motion to adjourn for the Recess is concerned, may I ask for further guidance? Is it not a fact that one may not argue the substance of a question, but only bring forward reasons for the House to go on sitting so that, at a later date, it should have the opportunity to discuss the substance of the question? Is that not always the Ruling which has been given by your predecessors?
Mr. Speaker: The right hon. Gentleman is perfectly right. I understand that one of the reasons why he sought to raise this matter under Standing Order No. 9 was that he was not prepared for the House to adjourn until he got satisfaction from the Prime Minister

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about the point which he raised on Gibraltar. But he will have the opportunity to urge this on the Motion that the House do adjourn.
Mr. Woodburn: Further to that point of order, Mr. Speaker. Is it not the case that the House was sitting all night last night and that this matter could have been raised by the right hon. Gentleman at any time during the night?
Mr. Speaker: Order. That is a matter of argument, and not a point of order.
Mr. Heath: Further to that point of order, Mr. Speaker. Ought not the decision to be made absolutely clear——
Mr. Shinwell Mr. Shinwell rose——
Mr. Speaker: Order. I am being addressed by the right hon. Member for Bexley (Mr. Heath) on the point of order.
Mr. Heath: Ought not the position to be made absolutely clear that Gibraltar was one of the subjects notified to you for discussion on the Consolidated Fund Bill, but not reached because the Government closure of the debate?
Hon. Members: Oh.
Mr. Speaker: Order. Noise does not help Parliament at all.
Mr. Shinwell: With great respect, Mr. Speaker. The other day, when a similar Motion was sought to be moved, I think by an hon. Member opposite, you informed the House that having given your decision you would not listen to any argument. With respect, may I ask why you are listening to a hypothetical argument advanced by the right hon. Member for Bexley (Mr. Heath)?
Mr. Speaker: I think that the right hon. Member for Easington (Mr. Shinwell) wants to be fair. I did not understand the right hon. Member for Bexley to question my Ruling. What he was asking for was advice as to how he should proceed under the Ruling which I had given if he sought to raise the question of Gibraltar.
Mr. Shinwell: Is the right hon. Gentleman an apprentice, or something?
Mr. Paget: Mr. Speaker, the effect of your Ruling would appear to be that Standing Order No. 9 is inoperative for a certain period before the end of any Session. Could you tell us for how long a period Standing Order No. 9 is inoperative before the end of a Session?
Mr. Speaker: The hon. and learned Member for Northampton (Mr. Paget) is now generalising. I am not prepared to give a generalised ruling about the opportuneness or otherwise of attempts to raise a matter under Standing Order No. 9.
Several Hon. Members Several Hon. Members rose——
Mr. Speaker: Order.

BILL PRESENTED
  ROAD SAFETY
  Bill to make further provision with respect to persons driving or being in charge of motor vehicles after consuming alcohol or taking drugs and with respect to goods vehicles, presented by Mrs. Barbara Castle; supported by Mr. Jenkins, Mr. Ross, Mr. Hughes, and Mr. Attorney-General; read the First time; to be read a Second time Tomorrow and to be printed [Bill 109.]

LIVESTOCK EXPORT CONTROL
4.5 p.m.
Mr. Michael Clark Hutchison: I beg to move,
That leave be given to bring in a Bill to restrict the export of cattle, sheep and pigs, and for purposes connected therewith.
The purpose of my proposed Bill is to prohibit the export of live animals—to wit, cattle, sheep, goats and pigs—for slaughter overseas. As the House will know, the export of horses for slaughter has been banned, and rightly so, and the Bill is aimed at a further extension of the ban. Where cruelty and suffering are involved, there is no logic in protecting one class of animal and not others. I believe that that principle will be generally agreed.
Before giving the reasons for asking leave to introduce the Bill, I should like to explain that it will not apply to animals going overseas for breeding or exhibition purposes. The production of a certificate from the appropriate and registered breeders' or exhibitors' organisation is all that will be required in cases of that nature.
The reasons for the Bill rest on two grounds, the first of which is cruelty and distress to the animals concerned. Any reasonable person and all good farmers agree that animals should be slaughtered as near to their homes as possible and that they should not have to journey about the country or overseas before slaughter.
At the moment, animals going for slaughter overseas go to West Germany, Holland, Belgium and France. There are agreements, known as the Balfour agreements, which aim to reduce, suffering. Animals must be slaughtered within 100 kilometres of the point of landing, for example. But these assurances are not stated in any international treaty or convention. They are merely set out in letters between embassies. There are several gaps and weaknesses.
For example, some of the cattle boats are under foreign flags. We have no control when the animals leave these shores. There is no time limit by which the animals have to be slaughtered. There is nothing to prevent the animals being
1412
taken to continental markets before slaughter, because it is impossible to keep track of them once they are embarked, and we have no inspectors on the Continent.
I leave it to the imagination of hon. Members what can happen. The animals may have a long journey in this country before being loaded on the ships, and there are difficulties of getting on board by means of steep and narrow gangways. Storms and rough seas can blow up, making watering and feeding impossible. Damage can occur when animals have horns. Then there are difficulties of unloading and entraining on the Continent. Thereafter, the animals face the unknown.
I was very much struck by a leading article in the Veterinary Record of October last year. That article has never been contradicted, and I quote a few extracts:
"Those who practise medicine should use their knowledge and authority to see that suffering is not brought about by thoughtlessness, indifference or greed, and should be prepared to speak out plainly against abuses. The transport overseas of live animals for slaughter is a case in point."
The article also makes the point that, even if conditions were ideal, the existing knowledge of animal psychology makes it certain that the transport of livestock by road or rail followed by loading into ships, unloading and further transport for slaughter can hardly be justified in terms of humanity. Finally, the article says that
"Since it is virtually impossible to ensure that live animals intended for slaughter abroad will always be treated humanely it is our duty to say that such traffic should stop."
I now turn to the economics of the trade. They are complex, but the idea that it is valuable to the nation is faulty. Claims made on this ground are not based on good evidence. About 700,000 animals were exported for slaughter in 1965 to the countries that I have mentioned, but their value is almost exactly equivalent to the value of meat, canned meat and meat extracts which we import from those countries—so there is no gain. Over and above this, Britain is a huge importer of meat.
In addition, exporting on the hoof is uneconomic in terms of space, besides being wasteful and slow. Not only that;

1413
the leather trade suffers. The United Kingdom is heavily dependent on imported supplies of hides and skins, and the trade has sometimes been placed in the absurd position of having to buy back the hides and skins of animals exported from this country.
It is quite definite that this process costs the trade more, and also that the hides and skins reach the buyers late. This adds to the prices, which, in turn, makes the leather dearer and affects our export trade. The answer to this problem, if there it to be the export of meat from this country for any good reason, is that it should be in carcase form. This was recommended by the Balfour Committee. I know that the Secretary of State for Scotland is aware of the advantages of exporting meat in carcase form and that he wishes to encourage it. Ireland is having great success in this matter.
I know that at one time it was considered by certain authorities abroad and by the American forces in Europe which bought our animals that British slaughterhouses were not of a high enough standard. This led to an increase in the live trade. But this position has now changed. In England 56 slaughterhouses are approved for the export of meat, and 13 slaughterhouses in Scotland are so approved. Quite apart from air traffic, I have evidence that the road haulage industry can meet any transport demands for refrigerated vehicles or trailers. There are no real difficulties here.
During the seamen's strike the Government imposed a ban, which has only just been lifted. According to a recent report, butchers feared that the lifting of the ban might lead to higher prices, but there have been no such ill effects. I believe that hon. Members will support the Bill. It is sponsored by Members on both sides of the House, and I know that many thousands of people outside the House favour it.
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Many respected and powerful organisations wish it well. I have had much help from the R.S.P.C.A. and the Scottish S.P.C.A. Other bodies which favour it, and which have expressed opposition to the export of animals for slaughter, include the Universities Federation for Animal Welfare, the British Leather Federation, the National Council of Women of Great Britain, the National Association of Meat Traders, the Scottish Housewives' Association——
Mr. Speaker: Order. I hesitate to interrupt the hon. Member, but this Motion is being introduced under the Ten Minute Rule.
Mr. Clark Hutchison: I have just about finished, Mr. Speaker.
The National Federation of Women's Institutes also favours the Bill, as does the Church of Scotland. I have no reason to believe that other Churches take a different view.
Mr. John Rankin Mr. John Rankin rose——
Mr. Speaker: Does the hon. Member seek to oppose the Bill?
Mr. Rankin: I am supporting it, Mr. Speaker.
Mr. Speaker: The hon. Member is not in order in seeking to speak in support of the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Clark Hutchison, Mr. Bence, Mr. Bessell, Mr. Burden, Sir Beresford Craddock, Mr. Dance, Mr. Goodhew, Mr. John Hall, Mr. Oswald, Mr. Rankin, Sir John Rodgers, and Mr. Edward M. Taylor.

LIVESTOCK EXPORT CONTROL
  LIVESTOCK EXPORT CONTROL
  Bill to restrict the export of cattle, sheep and pigs, and for purposes connected therewith, presented accordingly and read the First time; to be read a Second time upon Friday, 2nd December, and to be printed. [Bill 105.]
ORDERS OF THE DAY

  PRICES AND INCOMES BILL
  As amended (in the Standing Committee), considered.
  4.16 p.m.
  Sir Keith Joseph: On a point of order. As you will be aware, Mr. Speaker, the main principles lying behind Part IV of the Bill were not discussed on the Floor of the House——
  The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown): They were.
  Sir K. Joseph:—and I think that it would help the House if you could let us know whether you will allow a fairly wide debate on Amendment No. 25, in page 21, line 35, to leave out Clause 25, when the first Clause in Part IV comes before the House for the first time. That would be very helpful.
  Mr. Speaker: The debate on Clause 25 can be a fairly wide one. I understand that the principles of the latter were debated in the House, but I will allow a fairly wide debate on Clause 25. With new Clause 1 we can take Amendment No. 43, in page 27, line 31, to leave out Clause 30.

  PRICES AND INCOMES BILL

    New Clause.—(PROTECTION FOR EMPLOYERS WHO DISREGARD PAY INCREASES IN EXISTING CONTRACTS AT GOVERNMENT'S REQUEST.)
    If in compliance with the request by the Government that employers should for the period from 20th July 1966 to 31st December 1966 disregard pay increases in existing contracts any employer does so disregard them for that period and complies with the conditions set out in subsection 2 of section 30, then such an employer shall not be liable in respect of a breach of a contract to which this section applies for failure to pay remuneration at the rate provided by the contract.—[Sir T. Brinton.]
    Brought up, and read the First time.
    Sir Tatton Brinton: I beg to move, That the Clause be read a Second time.
    Amendment No. 43 appears, on the face of it, to fly directly against the new Clause. It would be our preference that Clause 30 should be omitted altogether, in accordance with Amendment No. 43, because it is highly distasteful to any
    1416
    employer to find himself in the position of having to denounce or abrogate a freely arrived at agreement that he already has with his employees concerning an increase in remuneration during the period of standstill, namely, from the month of July until the end of December.
    That is distasteful enough, and that would be our first preference. But since the Government have already shown a ruthless determination to have their Bill in the form in which it now stands, and have shown that determination by a considerable disregard for the normal niceties of Parliamentary procedure, we must budget for the situation which will arise if Clause 30 is included in the Bill. If it is included we come up against a very important anomaly, which the Bill creates in any case.
    Throughout the White Paper and all through the discussion in Committee, it has been made clear that the Government are asking for the sweeping powers conferred by Part IV in the hope that the possibility of their being invoked will be sufficient to ensure voluntary co-operation which will carry out the terms of the whole Bill, especially Part IV, without the necessity of actually using the powers conferred. Clause 25 indicates that Part IV will not come into operation unless Her Majesty should so direct by Order in Council. Therefore, until that is done Part IV in effect does not exist.
    One of the voluntary actions which employers are asked to undertake under Clause 30 is to refuse to pay any increased remuneration during the standstill period, even though it is already agreed and confirmed between the employer and employee by an agreement arrived at before 20th July. The Clause contains protection for an employer against the reasonable consequences of breaking his agreement, namely, possible legal action.
    I am not clear whether all industrial agreements are legally enforceable. I think not, but at least all those which are incorporated in contracts of employment must be legally enforceable, as well as any that are the subject of a proper legal contract. This should, therefore, include nearly all industrial agreements today, if employers are carrying out the provisions of the Contracts of Employment Act. There is a legal remedy against a breach

    1417
    of an agreement, but the protection envisaged by Clause 30 will not exist unless Part IV is in force, and it can be brought into force only by introducing at the same time all the compulsory apparatus which the Government are seeking, and they have said that they do not wish to do this unless they are absolutely forced to do so.
    This point was brought up in Committee and it was not very satisfactorily answered. The Solicitor-General confirmed that there was no legal protection for an employer who broke his agreement voluntarily, unless Part IV was brought into operation. Pressed on this point, the First Secretary said that the employer must go to his employees, the relevant trade union or the relevant employee—it might be a single person—and negotiate, presumably appealing to the worker to forgo his rights and thereby settle the matter.
    This is not a matter which is truly negotiable. To my mind, a negotiation starts with two people somewhat apart, and eventually, if a negotiation is to be effective, they probably meet somewhere in the middle. This is what usually happens in industry, but here is a situation of a straight "Yes" or "No". Does one break one's agreement as an employer or defy the Government? If one goes to one's employees or their trade unions and they say, "No, we have our rights and we stand by them "—I have every sympathy with them if they do—one is in a cleft stick.
    Do we refuse to pay what we should pay or do we drive a coach and horses through the Bill, which, the Government say, we must carry out, however distasteful we may think it? Most employers would say, whatever the Government, that the Bill puts a duty on employers, and that they should attempt to make it work even if they disagree with it, as I do. That is the anomaly. What shall we do to solve the problem? I suggest that there are only three choices. One can accept substantial breaches of the voluntary system that the Government have asked for; one can bring in Part IV; or one can accept the Clause which we put forward.
    Mr. George Brown Mr. George Brown indicated dissent.
    Sir T. Brinton: I see that the right hon. Gentleman is already shaking his head. He may have a fourth choice.
    1418
    The best of all would be to throw out Clause 30, which we suggest in Amendment No. 43. Perhaps that is the fourth and best choice, but I assume that the First Secretary will not accept it.
    If he is willing to accept the Clause, which would give purely temporary protection during the six months' standstill, and which would require compliance with Clause 30(2), whereby proper notice must be given, and so on, he will solve the very substantial difficulty in which employers will be placed.
    That is all we ask, but we suggest that if he accepts it it must go into Part I, because that is the part which will in any case be operative. The object of moving the Clause is to give this protection and enable it to be placed in a part that the Government will introduce and bring into force in any case. They would then not have to bring any other part into force, unless they saw fit, merely to provide this protection.
    Mr. Norman St. John-Stevas: I support the very weighty argument put forward by my hon. Friend the Member for Kidderminster (Sir T. Brinton). First, I support Amendment No. 43, to delete Clause 30, which is quite contrary to the basic principles of our law. I am glad that the Attorney-General is here today. The Clause is an attack on the freedom of contract and on the good faith of those entering into contracts, because it is a basic foundation of our law that agreements freely entered into shall be kept. By Clause 30 the Government are holding out to those who have entered into contracts an inducement to break them.
    The Government, having already undermined the prestige of Parliament by their procedure on the Bill, are now attacking the law itself. I hope that we shall hear something from the Attorney-General on this point. The only justification for the Clause brought forward in Committee was an argument by the Solicitor-General on the grounds of expediency, that it was necessary for the Government's policy. That is an argument for changing the policy; it is not an argument for supporting the Clause.
    The second point one must consider in relation to the Clause—and I hope that we shall hear the views of the right hon. Member for Nuneaton (Mr. Cousins) on

    1419
    this—is the effect on industrial bargaining. Industrial bargaining and agreements depend on good faith, which is built up over a long period, and the Clause would wantonly set those agreements aside. This must constitute a blow to confidence which will persist long after this freeze is only a bad memory.
    I also agree with my hon. Friend that if we are to have this bad Clause, and the bad Measures which have given rise to it, it should be applied equitably. That is the purpose of the Clause which he so ably moved. What will be the position of those who are observing a voluntary freeze during the period before Part IV of the Bill comes into operation?
    According to the First Secretary's argument, there seemed very small likelihood of Part IV coming into operation early. He has gone out of his way on numerous occasions to say that it will be brought into operation only as a last resort. If the Government are to adopt this approach, some defence should be given to those employers who attempt to co-operate with the Government during this period.
    I therefore hope that the Government will withdraw their opposition to the deletion of Clause 30, which would be the best course. But if they are not prepared to do that, I hope that they will at least acknowledge the equity of the arguments that have been put forward and accept the Clause.
    4.30 p.m.
    Mr. Raymond Gower: There can be no answer to our case on this new Clause. If the Government reject it, they will, virtually, be telling an employer, "You must obey our request, but if you do so you will do it at your own legal risk and, ultimately, at your own financial risk". If the Government ask employers to break existing contracts, it is only reasonable for them to allow some exoneration or reprieve from the natural consequences of breach of such contracts.
    Mr. George Brown: One of the interesting facets of experience in going through a Standing Committee, which I have not done for nearly 20 years, is the closeness one gets to folk and the degree of understanding one develops of people who, in the House, are figures shadowy
    1420
    and away. During the Committee stage of the Bill, I came to have quite a regard for the hon. Member for Kidderminster (Sir T. Brinton) and an understanding of him which, I suppose, I would never otherwise have gained. I know why he has moved this new Clause. I know exactly what inspires him, and I know the patriotism which led him to do what he did as a carpet manufacturer going in to defend a Government policy with which he did not altogether agree. So I start here, I believe, really understanding the motive behind this proposal.
    I must say again to the hon. Gentleman and to his right hon. and hon. Friends—my right hon. and hon. Friends know it, so I address myself to the Opposition—that we want this policy to operate by agreement. We want it to be a voluntary acceptance of something which the force of events makes inescapable. We can argue about whether one has read events aright, about whether our policies were responsible for leading up to those events, about what other policies might have produced—that is another matter which can occupy us for a long time—but, having got to that point, however we did, we recognise the need for a breathing space, the need for a pause. I think that this is accepted in pretty well all quarters of the country.
    Having got over that, having swallowed that much, the next question is: do we do it by compulsion because we do not believe that it can be done in any other way, or do we do it up to the very last minute of the eleventh hour by persuading folk to do it for themselves? I choose the latter course. If I choose the latter course—this is the answer I gave the hon. Gentleman in Committee and the answer I must give again now—then there really must be no compulsion until the very last minute of the eleventh hour. No compulsion means not even nice-looking compulsion, and what the hon. Gentleman has proposed would, of course, look nice to an employer but would be horribly nasty compulsion to an employee.
    Seeing as I do the motives behind the hon. Gentleman's proposal, I still have to resist it, on his own argument given again and again in that marathon Standing Committee, that we do not activate Part IV until it has been shown beyond a peradventure that it cannot work by

    1421
    persuasion or the voluntary method. The hon. Gentleman knows exactly what I should be doing if I were to accede to his proposal. I should be compelling the employee under the guise of being kind to the employer, because by the mere act of giving the employer this degree of protection I should be authorising him, covering him, giving him my authority, for compelling the employee to give in. If I were to do that, beguiling as the hon. Gentleman's arguments are, I should be saying right from the beginning that it will not work by agreement.
    At this stage, we are genuinely trying to pursue this policy by agreement. There is a lot of evidence that folk want to do it by agreement. I accept that there is some evidence that some folk do not want to do it at all, but there is a lot of evidence that a lot want to do it by agreement. The C.B.I. has leaned over backwards to show that it wants to do that, and the T.U.C. has done the same. Some quite remarkable and very impressive groups of trade unionists have shown that they want to do it. In this situation, it would be a mistake to make any move that looked as though we doubted this.
    This is why I say that I cannot call this provision into operation unless I call the whole of Part IV into operation. If I call the whole of Part IV into operation, I can use it for any particular purpose. I could use it for this purpose alone, I could use it for price operations alone, I could use it for wage or salary operations alone, or for any of these in combination. But I ask the House to accept that it would be wise not to call it into operation at all, and certainly not to try to bespeak it for any one of these combinations.
    If I were to give in to the hon. Gentleman on this point, I would then be asked to call in some other part without actually activating Part IV. Before we knew where we were, by the end of this Report stage the whole protection which we have written into Part IV for the voluntary system would have gone because we would be bringing in bits of it out of context. I want the House to realise that it would be a great mistake on everyone's part—at least, on the part of all those who want the policy to work on the voluntary principle—to push me into pulling in in compulsory fashion any
    1422
    one piece which is part of the whole system.
    Sir T. Brinton: I put three points to the right hon. Gentleman. First, according to the newspapers—I have not the means to check it—the representatives of about 3 million workers have already declared themselves against the policy and will, therefore, presumably, resist the standstill on increases of the kind we are now discussing. Second, under Part IV not the entire onus, but the main onus, of refusing these increases is put upon employers, with the penalty of heavy fines in the background. It is provided also that no one must press employers to break the standstill, and a trade union can be in trouble too, but the main onus is upon the employer. Third, there are far fewer employers than employees.
    Therefore, it is easier to work this scheme through a small number of people than through a large number, and it is precisely this small number of rather key people, who might—I think in the main they would—help the right hon. Gentleman, who will in many cases be put in an impossible position.
    Mr. Brown: On the last point, I think that the hon. Gentleman has not really taken my argument, and I shall try to put it again. On the question of what the newspapers say, I think that I must be regarded now as a not unbiased observer. From my experience, whether in the ordinary hours of the day or even late at night, I do not find them the best of guides as to what is going on. If I were the hon. Gentleman, I would not accept the simple statement by newspapers that 3 million workers are against it and will, therefore, resist it. I would not take it at its face value.
    Sir T. Brinton: I said "the representatives of about 3 million workers".
    Mr. Brown: That is a better way of putting it, although that does not mean that 3 million workers will resist. Some of us will face the representatives, be it of 1 million or 3 million workers. We will do our utmost to persuade people that, perhaps, their representatives are not all that right. We must stand for the merits of the policy.
    It is true that there are fewer employers than employees. I understand that only too well. It is also true that if one

    1423
    wanted to operate this compulsorily one could operate it by giving protection to the few and thereby compel it on the many. That is really what the hon. Member for Kidderminster is proposing. It is what I do not want to do and do not propose to do. Indeed, I do not think that it is what the House would wish me to do. I want to give the whole policy a genuinely fair run on a voluntary basis. It would be very wrong of me to try to compel the many by covering the few for that reason. It would not be genuinely giving the policy a fair run as a voluntary business.
    It is far better that all of us, on whichever side of the House we sit and whether we wholly agree with this policy or only partially agree with it, to say that the Government should go out and face everybody with the situation, persuade them or fail to persuade them, before we come round to deciding whether we want to operate this compulsorily, And if we do operate it compulsorily at any stage, the right thing to do would be to call in the whole of Part IV and not merely try to compel the many under the guise of giving cover to the few.
    I know how deeply the hon. Member for Kidderminster feels on this subject and I respect the action he took. However, it would be wrong of us to do what he asks. I am sure that what we have suggested represents the right advice to give to employers. During this period we will try to genuinely operate this policy as a voluntary business. We must say, "You, the employers, you, the trade unions, and we, the Government, must sit down and see whether we can work this out". If that fails, then a new situation will be created and I will then take the action that I should take.
    Sir Spencer Summers: Having been closely following the right hon. Gentleman's reasoning for suggesting that the new Clause should be rejected, would he say whether he would regard in the same light as the remarks he has just made the power in Part IV, when called in, to protect employers who might have been subjected to legal action as a result of following the policy which he himself would wish them to follow? This is not exactly the same point as would be covered by the proposed Clause, but it does have a bearing on it.
    Mr. Brown: During the voluntary period we must run it voluntarily. I therefore do not expect any employer to hit his employees, his trade union chaps, over the head. During the voluntary period we will genuinely work it voluntarily, which will mean that the hon. Gentleman or his friends who run his family firm will meet with people and get agreement, or they will not get agreement. If they get agreement there is no problem. If they do not get agreement—and if this happens in a sufficient number of cases—then the case, to my regret, will have been made out for calling into operation the whole of Part IV.
    That is a much more satisfactory way of going about this and I am certain that the hon. Gentleman would not wish me, with some of his hon. and right hon. Friends listening, to say that I would then give restrospective cover for actions that were not legal at the time.
    4.45 p.m.
    Mr. Mark Carlisle: I was not a member of the Committee upstairs and the First Secretary will, therefore, appreciate that my knowledge and reading of the Bill may not be as detailed as it should be. Having listened to him explain why the new Clause should be rejected, I have a number of points to put to him since it appears that some of his remarks were wholly illogical.
    The right hon. Gentleman said that if one turns to Clause 30 one finds that a defence is given for a breach of contract by an employer who refuses to pay an increased rate of pay to an employee after the coming into force of the effective Part IV of the Measure. However, if one looks at Clause 28 one sees that that specifically states that on the coming into force of Part IV it shall be an offence for an employer to pay
    "… remuneration … at a rate which exceeds the rate of remuneration paid by him for the same kind of work before the date of the coming into force of …"
    Part IV.
    I am sure that the Attorney-General would agree that that Clause in itself gives a defence to any claim against an employer after the coming into force of Part IV, and that, therefore, the vast majority of cases with which Clause 30 is designed to deal would already be covered by Clause 28 because from the date of the coming into force of Part IV

    1425
    there would be a compulsory prevention of paying an increase, which would mean that any contract to pay an increase would be frustrated and could not be enforced in the courts.
    An important point to consider is the position before Part IV comes into force and where there is no statutory preventive measure to prevent an employer from paying more and, therefore, no possible defence, against any action brought by anyone who sued him for failing to carry out the terms of the contract. I appreciate the First Secretary's point—which he made in a way that, as a layman, I was able to understand—about the purpose of desiring to have a voluntary basis on both sides. However, it is wrong to suggest that the Clause has anything to do with compelling an employer to do anything.
    It may be right that, from the First Secretary's point of view, he would like the employer and employee to agree between themselves not to press for an increase, but to freeze it for a period of a certain number of months. But if the employee says "No, I want the increase" and the employer replies "I am sorry. I must stand by my duty to the Government and I cannot let you have it," then there is no possible legal defence to an action that may be bought.
    What would be the First Secretary's answer to this example? The right hon. Member for Nuneaton (Mr. Cousins) would probably agree on this point. Say a union has negotiated, on behalf of a number of people, a pay increase which is based on a contract to come into force during this period. Say the employer then goes to his employees and says, "In view of the Government's policy and in the light of my desire to help in that policy, I feel that I should not pay you the additional sum this month, but that it should wait for a period of six month".
    Suppose that then the union, on behalf of its members, says, "We agree. We will co-operate." And suppose that one member of that union working for that employer says, "I do not agree." That is an example of a voluntary means of negotiating. One has the sort of voluntary co-operation which the First Secretary wishes to see being given the opportunity to flower between the union and employer, yet one member of the union
    1426
    who works for that employer says, "No", and refuses to wait, and it would appear to mean that the employer could be sued unless the protection of the new Clause is given to him.
    Let us consider another example. Suppose that four people who are on a similar contract of employment with a firm expect pay rises at particular times. Suppose that three of them agree, while the fourth does not agree. What should the employer do? If he does not pay then, according to the First Secretary, he has done his best to provide the voluntary co-operation about which the right hon. Gentleman spoke. But, unfortunately, in such a case one out of the four employees does not agree and in such circumstances the employer may lay himself open to being sued by the one or, alternatively, having to say, "One of the four will not agree, so I must pay because of possible actions in the courts", and, therefore, the whole policy collapses. I suggest, therefore, that it is before the coming into force of Part IV, far more than afterwards, that the proposed Clause is necessary.
    Mr. Frank Cousins: As my right hon. Friend the First Secretary said, in some long and protracted discussions in Committee we came to understand each other's points of view and the different standpoints from which we should examine the principle of the new Clause. We are also unable, in many instances, to get the answers we sought. Answers were given, but not the ones we wanted. In our debate today, I am sure that we shall have a good deal more talk about this kind of Clause and will get to know each other even better—sometimes for the worse.
    I am sure that the adjectives "voluntary" and "compulsory" will be thrown across the Chamber, as they were in Committee. It will be said that this can be done on a voluntary basis, provided that one does everything which is said in the White Paper. I may be wrong, but I feel that if I told members of my organisation who have come, by discussion and negotiation, to an agreement with an employer for an adjustment in their rates of pay to take place either before 20th July or since, but not yet applied in either case, "We now have a voluntary understanding that that agreement should not

    1427
    be applied", they will think that I have gone crazy, and I will think the same.
    There are not, as my right hon. Friend said, 3 million trade unionists who have yet gone on record saying that they will not accept the Bill when it comes into being, but if we say that it is only their representatives who take this attitude it is equally true to say that it is only the representatives of those who agree with the Bill who take their attitude. It is interesting that substantial numbers of members of organisations who are on record as approving of this principle have written to me saying how much they agree with the stand which we are taking on their behalf.
    Something needs to be clearly understood. A member of a union is entitled to demand that the law should protect him if an employer is in breach of contract with him. The employer is not protected by the declaration of a Prime Minister, to whichever party he belongs. One cannot say that contracts for selling a man's services, which have become accepted as law, can be breached because someone so wishes. Nor can one accept that an offence is committed if an employer says that he will honour the contract even though someone at top level in the Government would prefer him not to do so. The new Clause could not possibly be supported, because it asks that the House should agree that an offence is committed if someone observes a contract. It says, "Will the law guarantee protection if I observe the law?" This is crazy.
    A substantial number of people, during this period of argument and debate from 20th July to the end of the year, will honour obligations which they have under contract with their employees, some of them by agreement with the unions, some simply because it is the only way in which they can retain their personnel. They will not be committing offences. Therefore, the Clause is not required and should be withdrawn.
    Mr. Charles Fletcher-Cooke: The First Secretary is putting employers in an impossible position. He made a most moving plea for the trial of a voluntary system, but compulsion already exists, and this is a flaw in his analysis. Those employers who have entered into legally binding contracts to pay certain
    1428
    sums are already under compulsion. No attempt by the First Secretary, even in his most persuasive manner, to pretend that we are still in the voluntary era and have not yet moved into the compulsory can escape that fact. That entirely destroys his case. They are compelled by law to pay these sums.
    That being so, they have no negotiating power and such power of persuasion as they have is likely to be extremely limited, particularly in view of the frank speech of the right hon. Member for Nuneaton (Mr. Cousins). What is the employer to do? He will be faced with a conflict of duties, which is grossly unfair. I therefore appeal to the First Secretary to disabuse his mind of the impression that this is moving into the compulsory zone of Part IV if he merely removes a compulsion which already exists. This is what a legal obligation to pay under a firm and concluded contract amounts to.
    Mr. R. T. Paget: The hon. Member for Chelmsford (Mr. St. John-Stevas) said that the new Clause is a novel proposition. He is quite wrong. There is almost a precisely similar clause in the Statute of Labourers, which was passed at the end of the 100 Years' War. Indeed, that clause was one of the principal causes of Jack Cade's rebellion. One cannot introduce a licence allowing one side to a contract to default on that contract without getting resistance from the other side. We do not want another rebellion, and this is just the kind of Clause which would get us one.
    Mr. Angus Maude: Although the right hon. Member for Nuneaton (Mr. Cousins) and the First Secretary both opposed the new Clause, their speeches, taken together, brought out the inherent conflict and the difficulty behind the policy of which Part IV is the culmination. I listened carefully to the First Secretary—I accepted much of the logic of what he said and certainly the sincere and disarming way in which he expressed it—but I am not clear whether he has appreciated the enormous psychological and industrial harm which will be done between employers and employees and between employers and employers while the voluntary system is being tried.

    1429
    Although that means that the least patriotic employees in the categories which the First Secretary mentioned will make the initial gains and, for a certain period, will have an advantage over their more patriotic mates, it follows that it will be the less patriotic and more unscrupulous employers who will take advantage of every loophole. I ask the First Secretary to consider what happens when an employer seeks to default on an agreement with his employees into which he entered voluntarily.
    The employees would say, "We know that we can sue you. You say that the Government do not want to keep your word, but you know that you do not have to take any notice of the Government." Which is the good employer—the man who says, "I will keep the word I have given", or the man who says, "I will do what the Government want, because the Government say, and maybe I believe, that it is in the interests of the country."? Which of those two is the good employer?
    5.0 p.m.
    This may seem like hair splitting and logic chopping, but it is at the bottom of the whole argument. It makes absolute nonsense of the policy, because some people whom the First Secretary might regard as bad employers will say that it is perfectly right that the Government cannot compel them to do what the Government ask and that they will not risk being sued for failing to carry out their undertaking and will therefore implement the agreement. Certainly, some employers will take the easy way and they will pay.
    Then the first Secretary has to decide—and this, again, is one of the crucial questions to which he has not addressed himself—how much inroad he can allow into the voluntary policy before deciding to activate Part IV. He may find that a whole industry has gone. He may find that a part of 20 industries has gone. It may be that we shall have half the country saying that those who have given way are bad employers and the other half saying that they are good employers. But inside the firms and inside the industries, in addition to this, the damage which will have been done, as between employer and employee, to
    1430
    industrial relations and trust and faith will be incalculable.
    That is what the trouble is about and the First Secretary has not answered that at all.
    Sir Gerald Nabarro: This is the first time that I have had occasion in this Parliament to refer to a speech made by my hon. Friend the Member for Kidderminster (Sir T. Brinton). As I sat in his seat for nearly 15 years, I have some knowledge of the conditions in the industry which he himself now largely represents here and the magnificent record of peaceful negotiations and the absence of stoppages and strikes in the carpet industry. I therefore want to support what he said in Committee upstairs and here about the extremely delicate position in which many employers will now find themselves as a result of the arbitrary provisions of the Bill.
    My purpose in intervening is in parallel with that of my hon. Friend the Member for Kidderminster and to draw attention for the first time, at least on Report, although it may have been alluded to in Committee—I did not have the privilege of being a member of that Committee; I wish that I had been—to the position of wages councils, which dominate and control the wages of millions of employees.
    Mr. George Brown: Not in order.
    Sir G. Nabarro: This is perfectly in order, in my judgment. To recall the statutory position, wages councils make recommendations to the Minister of Labour. The Minister of Labour may accept a recommendation of a wages council or reject it, but he may not amend it.
    Mr. Cousins Mr. Cousins indicated assent.
    Sir G. Nabarro: I am glad to have the agreement of the right hon. Member for Nuneaton (Mr. Cousins). The First Secretary will recall that 10 or 12 years ago, when the late Lord Monckton of Brenchley was Minister of Labour, he had occasion to reject a recommendation of a wages council. There was a great row in the House from the then Opposition.
    Mr. George Brown: Nothing to do with the new Clause.
    Sir G. Nabarro: This is the effect of the Clause.
    Mr. Deputy Speaker (Sir Eric Fletcher): There is an Amendment which deals with wages councils and anything which the hon. Member for Worcestershire, South (Sir G. Nabarro) has to say about that subject would be better deferred until then.
    Sir G. Nabarro: I will rest my argument on a very narrow issue in advance of that Amendment, if that is your wish, Mr. Deputy Speaker.
    I am told that there are several wages council decisions affecting many employees in industry and taking effect after 20th July. What, then, is to be the position of the employer? Is he to obey the Statute, because it is a statutory order that he should obey? Is he to obey the instructions of the Minister of Labour to pay the increase, or is he to abide by the Prime Minister's statement of 20th July that there is a complete wage freeze?
    Mr. George Brown: On a point of order. We shall get ourselves into terrible trouble if we go from here to there. My submission is not intended to hamper the hon. Member for Worcestershire, South (Sir G. Nabarro). This very issue arises on a later Amendment, when we shall be willing to defend and explain our position. The new Clause deals only with private employers. By definition, it cannot deal with wages councils and with what the Minister of Labour should or should not do. May I ask you to rule, Mr. Deputy Speaker, that we should now deal with private employers and deal with wages councils and the Minister of Labour when we get to Amendment No. 31?
    Mr. Deputy Speaker: Discussion of wages councils must be deferred until we get to Amendment No. 31.
    Sir G. Nabarro: The First Secretary has just said that the Clause applies to private employers. Wages councils also apply to private employers who employ millions of employees.
    Mr. George Brown: By statutory order.
    Sir G. Nabarro: Exactly, but such an employer may find himself in the same
    1432
    invidious position as the result of a wages council decision and the order put upon him by the Ministry of Labour as the position related by my hon. Friend the Member for Kidderminster.
    Mr. Deputy Speaker: I have ruled that any discussion of wages councils should be deferred until we get to Amendment No. 31.
    Sir G. Nabarro: I have made my point and I accept your Ruling with the greatest reluctance, Mr. Deputy Speaker, because the First Secretary in disarming fashion, to use the words of my hon. Friend the Member for Stratford-on-Avon (Mr. Maude), has misled you.
    Mr. Geoffrey Wilson: I was not a member of Standing Committee B, so I have been listening to this debate with interest. I want to raise merely one quite short and simple issue, speaking as a member of the junior arm of the legal profession, as a solicitor. What is the position if there arises a situation in which an employer comes to an agreement with the representatives of the trade union representing his employers that an agreed contract of increased wages shall not be paid, but, nevertheless, one individual then proceeds to sue?
    What does the First Secretary say? Is he saying that because one person has taken legal proceedings, the right hon. Gentleman will take the necessary action to bring in Part IV, or is he saying that the employer should just stew in his own juice and pay up? It seems an enormous nutcracker to crack a nut and to implement Part IV in order to deal with one legal action which may be quite small, but, on the other hand, it will be very difficult for the employer if he just has to pay.
    Mr. Carlisle: Would not the right hon. Gentleman be too late if he implemented Part IV, which relates only to increases taking effect after he has implemented it, so that he would be implementing it after that particular increase had been paid?
    Mr. Wilson: I should like to know about that, too, because the First Secretary has referred to acting retrospectively. Is he saying that he could retrospectively protect the employer in those circumstances?
    Sir S. Summers: I do not want to prolong the discussion very much, but I am bound to say, having started quite strongly biased in favour of the new Clause, that the more I have heard in this debate the less I have liked it. I am not at all sure that I could now support my hon. Friends. With the very best of reasons, they are trying to find a way of escape for an employer who is put into an impossible position by the Government. They are seeking to protect him from the consequences of a breach of contract.
    It would be a dangerous precedent to pass legislation providing protection from the consequences of a breach of contract purely because the Government of the day suggested that a certain course was in the national interest and too proposed to steamroller it through, with the necessary number of hon. Members in the Lobby.
    This could be called in aid on any future occasions to relieve contracts of the consequences of their breach in circumstances far more disagreeable and potentially dangerous than is the case here. But we are undoubtedly creating a precedent if we go ahead with the proposition that contracts can be set aside by the dictate of Government by means of a Bill, and those who consider that their rights have been removed in the process will have nothing to say because of the steps that have been taken.
    Nothing I say does other than leave the employer in an utterly untenable position. If he has to choose between supporting the Government by breaking his contract, or maintaining his contract and, perhaps, bringing nearer the day when compulsory powers are substituted for voluntary ones, it seems to me that his course is clear. He should try to get set aside the contract that he entered into, but if he is not successful in getting it set aside he must honour the contract regardless of the effect on the Government of the day. It would be very much sounder in the long run to leave the matter in that way, and I hope that I have said enough to justify my point of view.
    Sir K. Joseph: First, Mr. Deputy Speaker, I should like to ask your guidance about a power of the House to vote on Amendment No. 43. There are those of us, and I think that I speak for
    1434
    all my hon. Friends, who abominate Clause 30, which would be removed by the acceptance of Amendment No. 43, which we are taking with this Clause. There are those of us who very much wish to put new Clause 1 on the Statute Book, but our decision whether or not to vote against the Government on new Clause 1 will be affected by whether we have the right to divide on Amendment No. 43.
    Mr. Deputy Speaker: The position is that Mr. Speaker has selected new Clause 1 for debate, and that can be divided on. He has indicated that Amendment No. 43 can be discussed with it. Amendment No. 43 has not been selected for a Division. Amendment No. 43 does not arise for some time. If the Opposition prefer not to divide on new Clause 1, they can reserve their rights to ask Mr. Speaker if he will allow a Division on Amendment No. 43, when we come to it. But I cannot give any assurance one way or the other.
    Sir K. Joseph: I am grateful to you, Mr. Deputy Speaker——
    Sir G. Nabarro: Further to that point of order, I am not grateful to you, Mr. Deputy Speaker, at all. If we are denied the right of a decision at this minute, how are we to decide how to treat new Clause 1? We are an Opposition. Surely, we should receive some guidance from the Chair, and I am asking for that guidance, Mr. Deputy Speaker.
    Mr. Deputy Speaker: The position is clear. When the debate on new Clause 1 is concluded, I will put the Question. Those who wish to vote for it can vote for it, and there will be a Division if any one wishes to divide on it. When we come, subsequently, to Amendment No. 43, hon. Members will be able to ask Mr. Speaker if he will allow a Division on that Amendment.
    Sir G. Nabarro: Further to that point of order, Mr. Deputy Speaker. That statement does not meet my case at all. As my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) will spend a few minutes winding up the debate—and you have already called him—would it not be possible for you, with great expedition, to dispatch a messenger to Mr. Speaker and ask him whether he proposes to call the Amendment later?

    1435
    There is plenty of time to go the 50 yards to the Speaker's House and get an answer, so that I know what to do on new Clause 1. Otherwise, Mr. Deputy Speaker, you are putting me in an impossible position—[HON. MEMBERS: "And a good job!"] It is not a good job—this is a valid point. I must, therefore, ask you, Mr. Deputy Speaker, to send a messenger to Mr. Speaker to rule on Amendment No. 43.
    Mr. Deputy Speaker: It is quite irregular. New Clause 1 has been selected for debate and a Division, and there may be a Division if any hon. Member so desires. Amendment No. 43 has not been selected for a Division, and it will not be reached for some time. When we come to Amendment No. 43, it will be open to any hon. Member to ask Mr. Speaker if it may be divided on, but the present Ruling is that Amendment No. 43 has not been selected for a Division.
    5.15 p.m.
    Sir K. Joseph: We on this side, Mr. Deputy Speaker, strongly urge Mr. Speaker, through you, to give us the opportunity to divide on Amendment No. 43, and I hope that you will be good enough to convey that view to Mr. Speaker.
    Before coming to the main subject of our debate, I would remind the First Secretary that we are also discussing Amendment No. 43, which seeks to omit Clause 30, and I should like to take him up on his promise to give us his further views on the recoverability of money forgone by voluntary or compulsory standstill under the Bill and the Government's policy. The right hon. Gentleman will remember that in Committee we discussed to what extent men deprived under Clause 30 of an increase would have the right to recover the money forgone, if at all, after the freeze was over.
    The hon. and learned Gentleman the Solicitor-General, replying in the Committee used words suggesting that the increase forgone would not
    "… be recoverable, at any rate during the standstill period."—[OFFICIAL REPORT, Standing Committee B, 4th August, 1966; c. 730.]
    My hon. Friends and I pressed him to elucidate what that remark meant, because we took from the hon. and learned Gentleman's words straight contradiction
    1436
    of the First Secretary's interpretation of the Government's policy, namely, that any increase forgone would be an increase lost for ever. In Committee, the First Secretary undertook to tell us who was right—the Solicitor-General, who implied that an increase might be recoverable after the standstill was over, or the Government, through the First Secretary, who said previously that it would never be recoverable. I ask the First Secretary to honour his undertaking when he replies to this debate.
    I come now to the subject of the debate, and I should like to say, with all respect, what an extraordinarily high-quality, though brief, debate it has been. The First Secretary was at his most charming, and I particularly welcomed his tribute to my hon. Friend the Member for Kidderminster (Sir T. Brinton).
    The fact remains that the Government are putting employers in an almost impossible predicament. Employers and their employees have to bear in mind three considerations. First, there is the question of contract. Some employers are bound by contract to increase pay during the standstill period. They are at the very heart of the controversy of whether the Government should or should not, during the compulsory or during the voluntary phase, protect employers who abrogate their contracts.
    The Government have already put in the Bill, and my hon. Friend the Member for Aylesbury (Sir S. Summers) will have noticed it, protection for employers who abrogate their contract when Part IV is activated. What we are discussing now is whether employers who break a contract at the Government's request, though not under legal compulsion—and Clause 30 is the Clause concerned—shall get legal protection.
    In addition to contract, employers will want to take account of their moral obligation, and I know that the First Secretary would take this as seriously as anyone in the House. The moral obligation is as important as is the employer's contractual obligation when it comes to his relationships with the staff.
    Thirdly, and I mention this only as a passing reference, there is the economic context, because if the Government have succeeded in increasing unemployment during the coming months the economic

    1437
    strength of the employees in holding the employer to what may not be a contractual but only a moral obligation—I wish to withdraw the word "only"—to a moral obligation, will be slightly different from their economic strength if there is no increase in unemployment. There are those three different aspects of the employer's obligation and overriding all those there is the question whether the Government are operating a voluntary or a compulsory legal wage and price freeze.
    As between the Committee stage and today, the First Secretary has made a big change in his argument, and we welcome it. Today, he has said that he clearly understands that an employer could not go ahead with abrogating a pay increase during the voluntary phase if that employer's employees do not agree. That is a very different attitude from what the Government were maintaining in Committee. It is a tribute to my hon. Friend's approach to this new Clause and we welcome the realism which the right hon. Gentleman has shown.
    Of course, it follows from the First Secretary's attitude now that to a limited extent—I certainly do not want to make his job more difficult—the voluntary phase may be slightly less effective, but we would only ask him not at a later stage to blame employers if under the combined effect of contractual and moral obligations and of the Government's recognition that they should not abrogate contracts even when the Government ask them to do so unless their employees agree. The Government and the First Secretary should not blame employers in those cases where they do not break contracts.
    We are getting only too used to employers getting the blame for taking one or other horn of the dilemma on which the Government place them. My view is that if we have the chance to vote against Clause 30 as a whole we should, in the light of the Government's recognition that employers should not abrogate contracts or moral agreements unless all the employees—not simply trade union representatives because that would leave individual employees free to bring an action against an employer—in the light of the Government's realistic recognition that no employer can be asked in that situation
    1438
    to abrogate a moral or legal contract unless his employees agreed that he should do so, my impression is that my hon. Friends will be glad to vote against that Clause rather than on new Clause 1.
    We would, naturally, want to hear the First Secretary comment on the debate before making a final decision. I hope that he will take the opportunity to clear up the doubt about recoverability of any forgone increase and clear up whether he or the Solicitor-General, who used the
    "… at any rate during the standstill period",
    words, stated Government policy.
    Mr. John Rankin: Before my right hon. and learned Friend the Attorney-General replies, may I put one very short point to him? I have listened to all the discussion that has taken place on this Clause and, as a result, I find myself in rather a puzzled position. That sort of situation is not unusual in this House.
    On 20th May this year the Prime Minister in this House solemnly guaranteed to general practitioners and other medical men a certain increase in their salaries. So far as I understand, the Government are really the employers of the men to whom they promised in honour that increase in their salaries. That promise, in my view, was shabbily broken. Now the Government, as the employers of this section of the community, are asking the House to give the Government protection against the Government themselves. I ask my right hon. and learned Friend when he replies if possible to solve the conundrum which this new Clause has presented to the House.
    The Attorney-General (Sir Elwyn Jones): This debate, at the very beginning of this Report stage, raises important matters of principle which it is right that the House should consider. As I see it, two main issues have emerged from the debate. The first is: do we want the voluntary system in respect of the policy of prices and incomes to work? If so, are we prepared to give it an opportunity to work? It is because the answers that the Government give to those questions are in the affirmative that we reject the new Clause.
    This is a challenging period and a challenging phase for the people of our country. We are appealing frankly, as

    1439
    a Government, to their patriotism and public spirit. I hope that in making that appeal the Government have the support of the whole House. It is an essential element of this appeal that our people, employers and employees, should have an opportunity voluntarily and by agreement to operate what we regard as a vital experiment, a vital phase, for the country to emerge out of recurring difficulties which Government after Government have tried to face and have tried in vain to resolve.
    We are convinced that it is essential that we should first try the voluntary approach to this policy. It is for that reason that we think that to introduce this new Clause, which would give the employer a statutory power of compulsion—at least, it would give him statutory indemnification in breaking his contracts—would introduce into this voluntary phase of the standstill an element of statutory compulsion which would be foreign to the voluntary principle which we think is the right principle to approach.
    It is only if events show that the voluntary principle cannot work that the admittedly drastic powers under Clause 30 of the Bill will be brought into operation. Let me remind the House and the wider public outside that those drastic powers will be introduced only after both Houses of Parliament have had the opportunity of considering whether the gravity of the situation is such as to justify giving to the Government these drastic powers. There will then be an opportunity for an inquest by this House into the circumstances which have arisen and for a no doubt agonising appraisal of the situation in which we then find ouselves.
    5.30 p.m.
    Therefore, there will be abundant opportunity for the voluntary system to be put to the test. It will be ended, and the compulsory powers will be introduced, only if there is evidence that certain elements in the community have fallen short of their public duty and have chosen, by an attitude of recalcitrance, to challenge the policy which the Government feel is in the best interests of the nation at this time.
    It is also right that the House should appreciate, not only that these drastic powers are of temporary duration, but also that the Bill signs their death warrant, because after the termination of one
    1440
    year Part IV lapses. The warning is clear. The conditions are very restricted.
    I have described the powers themselves as drastic and admittedly unattractive. They are especially unattractive to a lawyer. Any interference with a contract which parties have voluntarily arrived at is a most serious matter which the legislator should ponder about long and carefully before doing. I would indeed be a very remarkable bird as an Attorney-General if I did not accept that. Nevertheless, there are precedents by which the legislature, in the public interest, in pursuance of public policy, has most flagrantly interfered with privity of contract.
    Sir G. Nabarro: All bad ones.
    The Attorney-General: Exchange control is an example. Import controls are an example. I do not know whether the hon. Member for Worcestershire, South (Sir G. Nabarro) will regard them as good examples. They are certainly examples of controls that many previous Governments—indeed, most Governments since the war—have at one stage or another thought it proper to introduce. Therefore, while we speak of the sanctity of contract, it has not apparently been regarded as blasphemy by previous Administrations to interfere with contract in the interests of the community.
    Mr. A. P. Costain: Does the Attorney-General agree that in the examples he gave there was no question of the Government's saying that either party should negotiate? The First Secretary said today that the two parties should negotiate. How does the right hon. and learned Gentleman think that they can?
    The Attorney-General: My right hon. Friend has rightly said—I agree wholeheartedly with his speech—that in the voluntary phase what is expected—what is certainly hoped for—is that there will be voluntary negotiations between employers and employees and that in this critical six-month period, when the nation's economy will be at challenge, there will be a willing forgoing, a voluntary coming together of the parties, which will achieve the desired result without the necessity of the Government undertaking the statutory powers it seeks under the Bill.
    Sir Hugh Lucas-Tooth: If there is neither agreement nor disagreement but a number of employees take less wages than is due to them under protest, surely this will leave a legal claim which will be valid for a number of years and which will put the undertaking concerned in a completely hopeless position?
    The Attorney-General: We will have to see how these things work out in practice. It is true that during the voluntary phase there will be no power of compulsion. There will be no enforceability in the agreement; it will be a matter of agreement between the parties. It has been rightly said that rights that exist in that phase will not by statute be interfered with. We are saying to employers and employees in this phase, "Please, in this period of trial and testing of the public-spiritedness of the people "—[Interruption.]—I am sorry to repeat it. I am surprised that this should be sneered at by any right hon. or hon. Member opposite, especially by the right hon. and learned Member for St. Marylebone (Mr. Hogg), who so often appears to appeal to the best instincts of the nation.
    Mr. Quintin Hogg: I did not sneer. I said only that it was not only so much trial and testing as trial and error.
    The Attorney-General: I do not know whether that was intended to be a clarion call for co-operation by the nation. However, that is the call that the Government make in all sincerity.
    I have been asked certain questions about the contractual results which will flow in this voluntary period. No power of retrospective protection is given to the employer for anything he does during this voluntary period. He will, in the event of non-co-operation by his employees, undoubtedly be in a position of difficulty. We insist that this voluntary phase must be given an opportunity to work.
    As I understand the reaction from certain quarters on the other side of the House at the moment, they seem to be against giving the opportunity for the voluntary phase to work. Is that their point of view?
    Sir G. Nabarro Sir G. Nabarro rose——
    Mr. Gower: No. Will the right hon. and learned Gentleman give way?
    The Attorney-General: Just a second. I repeat that right hon. and hon. Members opposite sneer at the matter, because undoubtedly unavoidable difficulties will arise and no skill in the world will eliminate them all. In this phase the Government and, I should have thought, most right hon. and hon. Members, want the voluntary phase to be given the chance to work, difficult though it may be. Now I give way.
    Sir G. Nabarro: I am grateful to the Attorney-General. It is all so imprecise. A few minutes ago the right hon. and learned Gentleman said, "in the interests of the community".
    The Attorney-General: Yes.
    Sir G. Nabarro: The Attorney-General agrees. Does not "in the interests of the community" mean exactly the same as "in the public interest"? When it is all put together, do not these two terms mean "what the Government want" and nothing else?
    The Attorney-General: I hope that they do mean the same thing. I hope that what the Government want is in the public interest.
    Sir G. Nabarro: No, it is not. That is the point. It is not in the public interest.
    The Attorney-General: My right hon. and hon. Friends are pressing these policies for that reason, and that reason alone. Accordingly, we say that this voluntary phase must be given the chance to operate.
    I was asked by the right hon. and learned Member for Leeds, North-West (Sir K. Joseph) a question in regard to the operation of Clause 30, which was much discussed in Committee. My hon. and learned Friend the Solicitor-General made it quite clear at column 731 of the OFFICIAL REPORT that increments which would have accrued during the period of the statutory standstill will not be recoverable.
    Mr. Carlisle: Surely the reason for that, as I said earlier, is that under Clause 28 it would be an offence to pay the extra once Part IV comes into force.

    1443
    If, during the voluntary period, the additional sum is not paid, then has an employer any defence whatsoever if five years, eleven months later he is sued?
    The Attorney-General: I have explained the position that the contractual liability of the employer remains during the voluntary period and there is no getting away from that fact. I make the following point in reference to what was said by the hon. Member for Runcorn (Mr. Carlisle). Even after Part IV comes into force, Clause 30 will be needed only in relation to contracts broken voluntarily by employers. As the hon. Gentleman pointed out, special provision for indemnification will be unnecessary in cases which are subject to a statutory standstill under Clauses 28 and 29.
    Sir K. Joseph: How does the right hon. and learned Gentleman explain the phrase
    "… should not be recoverable, at any rate during the standstill period …".—[OFFICIAL REPORT, Standing Committee B, 4th August, 1966; c. 730.]
    If he thinks that is wrong and he adheres to what was said in column 731, we expect a withdrawal of the comments of the learned Solicitor-General.
    The Attorney-General: My hon. and learned Friend the Solicitor-General said that at 6 o'clock in the morning and corrected himself immediately. I should have thought the right hon. Member for Leeds, North-East (Sir K. Joseph) would display the generosity which I hope is reflected in all our deliberations, because my hon. and learned Friend put the position accurately and beyond peradventure within a second or two of making the error. Accordingly, I invite the House to reject the new Clause and give the voluntary system a fair wind and a chance to operate.
    Mr. Harold Gurden: I want to put a short question to the right hon. and learned Gentleman. The legal arguments are fascinating, particularly as he puts them. But now I want to deal with the employer himself and I will try and put myself in the position of an employer in order to put a direct question to the Attorney-General. Supposing I am faced, as an employer, by an employee who says, "I
    1444
    must have my contract honoured"? Do the Government say to me that I should pay or that I should not pay? That is the question of the man in the street. It is as this situation appears to the mass of employers and employees beyond the legal arguments.
    The Attorney-General: I have said more than once in my speech that contract remains valid, the liabilities under contract remain. There is no more to be said during the voluntary phase but I come back to the question that I put to the Opposition. Do they want to say that there shall be no voluntary phase and that we should immediately go to compulsion? That is the issue in this Amendment.
    Mr. Gurden: The right hon. and learned Gentleman has given the legal answer, but I put another question. I asked what the Government's advice is to the employer.
    The Attorney-General: I repeat that the advice the Government give to the parties is, "Please, in this phase, come to terms remembering the public interest."
    Sir K. Joseph: The answers given by the Attorney-General have given us even more misgiving on this side than before.
    Mr. George Brown: On a point of order, Mr. Deputy Speaker. I should like to know the rules of order so that we can all observe them. Are we in Committee or on Report?
    Mr. Deputy Speaker: I was about to say that the right hon. Gentleman the Member for Leeds, North-East (Sir K. Joseph) can speak again only by leave of the House.
    Sir K. Joseph: I beg your pardon, Mr. Deputy Speaker. Perhaps I may have leave of the House to make a final and very short intervention before my hon. Friend the Member for Kidderminster (Sir T. Brinton) seeks leave to speak again.
    We shall reserve our rights strongly to vote on Clause 30 which—and I hope that the House will take seriously what it does—should be entitled, "A Clause to authorise employers to steal some of their employees' money and to keep it."

    1445
    [Interruption.] If we were in Government, that is what hon. Members opposite would be saying.
    The right hon. and learned Gentleman has said that it is the public duty of both sides in employment to renegotiate contracts and to the extent that it is a public duty on both sides it was better as originally presented by the First Secretary of State—simply as an appeal to the employers. We shall reserve our rights under Clause 30. What my hon. Friend the Member for Kidderminster wishes to do about new Clause 1 is a matter for him.
    Sir T. Brinton: The further we have gone into this—may I have leave of the House to reply?
    Mr. Deputy Speaker: The mover of a new Clause or Amendment does not require leave to speak again.
    Sir T. Brinton: I am sorry, Mr. Deputy Speaker. From the glower that I got from the benches opposite I thought I did. Perhaps the First Secretary of State paid me some charming compliment.
    The further we go into this the greater the difficulty there seems to be. We have learnt that the voluntary observance of restriction of wage increases will depend entirely on the unanimous good will of all the employees. We have at least elicited that and so long as it is understood by the country new Clause No. 1 has served its purpose.
    It would not be my desire nor, I am sure, that of my hon. Friends, to be in the position of moving a Clause enabling employers to break their contracts. Our idea was merely to cover a point which was already in Part IV. I therefore beg to ask leave to withdraw the Motion, provided that we shall be able to vote on Amendment No. 43.
    Mr. Deputy Speaker: I think the House may assume that if new Clause 1 is, by leave, withdrawn, or no Division takes place on it, Mr. Speaker will allow a Division on Amendment No. 43.
    Motion and Clause, by leave, withdrawn.

    New Clause.—(CO-PARTNERSHIP AND PROFIT-SHARING SCHEMES.)
    Nothing in this Act shall prejudice the operation of any scheme of co-partnership or profit-sharing, which has been created for
    1446
    the benefit of the employees in a particular industry, company or firm:
    Provided that such a co-partnership or profit-sharing scheme shall have been in operation at least six months before the passing of this Act; and all provisions in this Act relating to terms and conditions of employment, incomes and earnings shall be deemed to disregard payments to be made to employees in accordance with the terms of such copartnership and profit-sharing schemes as aforesaid.—[Mr. Gower.]
    Brought up, and read the First time.
    5.45 p.m.
    Mr. Gower: I beg to move, That the Clause be read a Second time.
    Do I understand that we can discuss with it Amendment No. 38, Mr. Deputy Speaker?
    Mr. Deputy Speaker: Amendment No. 38 would be more conveniently discussed in conjunction with new Clause No. 3.
    Mr. Gower: For the purpose of this new Clause I want to use the definition of profit sharing formulated by the International Congress on Profit-Sharing in Paris in 1889, endorsed by a similar Congress in 1900 and by the International Co-operative Congresses in 1896 and 1897. The definition is:
    "Definite arrangements under which employees receive, in addition to their wages or salaries, a share, on some pre-determined basis, in the profits of the undertaking, the sum allocated to employees varying with the level of the profits."
    There is no similar definition in the case of co-partnership but I agree with the broad definition contained in the Ministry of Labour Gazette of May, 1956, on page 166:
    "By implication, the term covers any arrangement in which a business is so organised and conducted that the employees feel that, by virtue of their services, they are genuinely partners with the employers in a joint undertaking …"
    In passing, I suggest that never has British industry appeared more likely to benefit from this spirit of co-partnership in its wider sense. Nationalised as well as private industry could benefit from an infusion of this ideal. For the purpose of the new Clause, however, I adopt the narrower definition of co-partnership which was also contained in the Ministry of Labour Gazette for May, 1956. By this, co-partnership is described as:
    "A system which ensures that there shall be a sharing of profits with employees, supplemented by arrangements for the employees

    1447
    to acquire some share in the control of the undertaking by owning share capital and in other ways."
    I had the honour to initiate a debate as long ago as 28th January, 1955, when I submitted a Motion to the House which was eventually passed, dealing with profit sharing and co-partnership. As may be seen from the OFFICIAL REPORT for that day, at col. 563–576, I did not claim that co-partnership and profit sharing offered a magic sesame to a new industrial era, nor do I today suggest that a firm is a good firm merely because it has one or another of these schemes in operation. I submitted then, and I submit today, that the fact that a company or firm has instituted a co-partnership or profit-sharing scheme often reflects an achievement of general efficiency and the maintenance of good industrial relations in the firm.
    In a mixed economy like ours we have perhaps looked too often at the comparative merits of free enterprise and nationalisation. In such a mixed economy it seems certain that we shall long retain a number of nationalised industries and a very large number of industries in the private sector. Should we not look for an increased and useful contribution from companies which practise profit sharing and co-partnership?
    These have a unique quality of producing a sense of partnership among employees in an industry. They also tend to lessen the harshness of those frontiers which often divide nations into employees and employers. In debate on 28th January, 1955, the Government spokesman, now Lord Watkinson, undertook to see what the Ministry of Labour could do by way of a regular publication of statistical information. I must confess that up to date the result has been somewhat disappointing.
    The last comprehensive data published by the Ministry of Labour Gazette was as long ago as May, 1956, in the article I have already mentioned. The information then published was for 1954. According to the article there were then 421 undertakings operating profit-sharing schemes at the end of 1954. The firms in question then employed 611,713 persons of whom 389,433 were entitled to participate in the schemes.
    1448
    Unfortunately, similar figures for copartnership were not then available. I wonder whether the Government spokesman can give us the latest comparable figures about these schemes. It must be obvious that profit sharing and co-partnership still affect only a relatively minor segment of our industry. This is a very tender plant which all too easily could be destroyed. I hope that the Government do not intend to destroy it and I would remind some hon. Members opposite that the Cooperative Movement has a long and honourable connection with copartnership and profit sharing.
    I had to draft the Clause rather hastily and I realise that its wording is certainly not perfect, but the Government should at least state that they accept the principle that it contains. It is a valid criticism of recent economic policy, including the Bill before us, that it is mostly restricting. The acceptance of the principle contained in this Clause, without hampering seriously or significantly the general prices and incomes policy, would offer something creative and dynamic.
    Question put, That the Clause be read a Second time.
    The House proceeded to a Division.
    Sir K. Joseph (seated and covered): On a point of order. My hon. Friend seriously and briefly moved a new Clause and there has been no Government reply. No Government spokesman has answered and we are now to take a Division without hearing any answer. Is this in order?
    Mr. Deputy Speaker: It is not a matter for me. No one on either side of the House rose, and it was therefore my duty to put the question.
    The Under-Secretary of State for Economic Affairs (Mr. William Rodgers) (seated and covered): On a point of order. It was not the wish of this side of the House to show any discourtesy to the House. We had anticipated that there would be a short pause, in which we would be enabled to see whether other right hon. or hon. Members rose and in the event of their not doing so, my hon. Friend the Parliamentary Secretary intended to reply. There was no discourtesy involved and we would have wished to reply had the opportunity occurred.
    The House divided: Ayes 146, Noes, 202.

    Division No. 161.]

    AYES

    [5.55 p.m.

    Alison, Michael (Barkston Ash)

    Gresham Cooke, R.

    Orr-Ewing, Sir Ian

    Allason, James (Hemel Hempstead)

    Griffiths, Eldon (Bury St. Edmunds)

    Osborne, Sir Cyril (Louth)

    Barber, Rt. Hn. Anthony

    Grimond, Rt. Hn. J.

    Pardoe, John

    Batsford, Brian

    Gurden, Harold

    Pearson, Sir Frank (Clitheroe)

    Berry, Hn. Anthony

    Hall, John (Wycombe)

    Peel, John

    Biffen, John

    Hamilton, Michael (Salisbury)

    Percival, Ian

    Blaker, Peter

    Hastings, Stephen

    Pike, Miss Mervyn

    Body, Richard

    Hawkins, Paul

    Pink, R. Bonner

    Boyd-Carpenter, Rt. Hn. John

    Heath, Rt. Hn. Edward

    Price, David (Eastleigh)

    Braine, Bernard

    Higgins, Terence L.

    Prior, J. M. L.

    Brewis, John

    Hill, J. E. B.

    Pym, Francis

    Brinton, Sir Tatton

    Hobson, Rt. Hn. Sir John

    Quennell, Miss J. M.

    Brown, Sir Edward (Bath)

    Hogg, Rt. Hn. Quintin

    Ramsden, Rt. Hn, James

    Bruce-Gardyne, J.

    Hordern, Peter

    Rawlinson, Rt. Hon, Sir Peter

    Buck, Antony (Colchester)

    Howell, David (Guildford)

    Ridsdale, Julian

    Bullus, Sir Eric

    Hunt, John

    Rodgers, Sir John (Sevenoaks)

    Carlisle, Mark

    Hutchison, Michael Clark

    Rossi, Hugh (Hornsey)

    Clegg, Walter

    Jenkin, Patrick (Woodford)

    Royle, Anthony

    Cooper-Key, Sir Neill

    Jennings, J. C. (Burton)

    Russell, Sir Ronald

    Costain, A. P.

    Johnson Smith, G. (E. Grinstead)

    Scott, Nicholas

    Craddock, Sir Berestord (Spelthorne)

    Johnston, Russell (Inverness)

    Sharples, Richard

    Crouch, David

    Jopling, Michael

    Shaw, Michael (Sc'b'gh & Whitby)

    Crowder, F. P.

    Joseph, Rt. Hn. Sir Keith

    Sinclair, Sir George

    Cunningham, Sir Knox

    Kaberry, Sir Donald

    Smith, John

    Currie, G. B. H.

    King, Evelyn (Dorset, S.)

    Stodart, Anthony

    Dance, dames

    Kirk, Peter

    Stoddart-Scott, Col. Sir M. (Ripon)

    Davidson, James (Aberdeenshire, W.)

    Kitson, Timothy

    Summers, Sir Spencer

    d'Avigdor-Goldsmid, Sir Henry

    Legge-Bourke, Sir Harry

    Talbot, John E.

    Dean, Paul (Somerset, N.)

    Lewis, Kenneth (Rutland)

    Tapsell, Peter

    Deedes, Rt. Hn. W. F. (Ashford)

    Lloyd, Ian (P'tsm'th, Langstone)

    Teeling, Sir William

    Dodds-Parker, Douglas

    Loveys, W. H.

    Thatcher, Mrs. Margaret

    Doughty, Charles

    Lubbock, Eric

    Tilney, John

    Eden, Sir John

    McAdden, Sir Stephen

    Turton, Rt. Hn. R. H.

    Elliot, Capt. Walter (Carshalton)

    Mackenzie, Alasdair (Ross&Crom'ty)

    van Straubenzee, W. R.

    Evans, Gwynfor (C'marthen)

    Maclean, Sir Fitzroy

    Vaughan-Morgan, Rt. Hn. Sir John

    Eyre, Reginald

    Macleod, Rt. Hn. Iain

    Vickers, Dame Joan

    Farr, John

    Macmillan, Maurice (Farnham)

    Wainwright, Richard (Colne Valley)

    Fisher, Higel

    Maddan, Martin

    Wall, Patrick

    Fletcher-Cooke, Charles

    Maginnis, John E.

    Weatherill, Bernard

    Fortescue, Tim

    Mathew, Robert

    Webster, David

    Foster, Sir John

    Maudling, Rt. Hn. Reginald

    Wells, John (Maidstone)

    Fraser, Rt. Hn. Hugh (St'fford & Stone)

    Maxwell-Hyslop, R. J.

    Whitelaw, William

    Gibson-Watt, David

    Maydon, Lt.-Cmdr. S. L. C.

    Wills, Sir Gerald (Bridgwater)

    Giles, Rear-Adm. Morgan

    Miscampbell, Norman

    Wilson, Geoffrey (Truro)

    Gilmour, Sir John (Fife, E.)

    Munro-Lucas-Tooth, Sir Hugh

    Winstanley, Dr. M. P.

    Glover, Sir Douglas

    Murton, Oscar

    Worsley, Marcus

    Glyn, Sir Richard

    Nabarro, Sir Gerald

    Goodhew, Victor

    Neave, Airey

    TELLERS FOR THE AYES:

    Gower, Raymond

    Nott, John

    Mr. Younger and

    Grant, Anthony

    Onslow, Cranley

    Mr. David Mitchell.

    NOES

    Albu, Austen

    Brown, R. W. (Shoreditch & F'bury)

    Edelman, Maurice

    Allaun, Frank (Salford, E.)

    Butler, Herbert (Hackney, C.)

    Edwards, Robert (Bilston)

    Alldritt, Walter

    Butler, Mrs. Joyce (Wood Green)

    Ellis, John

    Allen, Scholefield

    Callaghan, Rt. Hn. James

    English, Michael

    Armstrong, Ernest

    Cant, R. B.

    Ensor, David

    Ashley, Jack

    Coleman, Donald

    Faulds, Andrew

    Atkins, Ronald (Preston, N.)

    Concannon, J. D.

    Finch, Harold

    Atkinson, Norman (Tottenham)

    Conlan, Bernard

    Floud, Bernard

    Bacon, Rt. Hn. Alice

    Corbet, Mrs. Freda

    Foot, Michael (Ebbw Vale)

    Barnes, Michael

    Crawshaw, Richard

    Forrester, John

    Baxter, William

    Crosland, Rt. Hn. Anthony

    Galpern, Sir Myer

    Benn, Rt. Hn. Anthony Wedgwood

    Darling, Rt. Hn. George

    Gardner, A. J.

    Bennett, James (G'gow, Bridgeton)

    Davies, Dr. Ernest (Stretford)

    Garrow, Alex

    Bidwell, Sydney

    Davies, G. Elfed (Rhondda, E.)

    Gordon Walker, Rt. Hn. P. C.

    Bishop, E, S.

    Davies, Harold (Leek)

    Gourlay, Harry

    Blackburn, F.

    Davies, Ifor (Gower)

    Greenwood, Rt. Hn. Anthony

    Blenkinsop, Arthur

    Delargy, Hugh

    Gregory, Arnold

    Booth, Albert

    Dell, Edmund

    Griffiths, David (Rother Valley)

    Boston, Terence

    Dewar, Donald

    Hamilton, James (Bothwell)

    Bottomley, Rt. Hn. Arthur

    Diamond, Rt. Hn. John

    Hamilton, William (Fife, W.)

    Bowden, Rt. Hn. Herbert

    Dickens, James

    Hannan, William

    Braddock, Mrs. E. M.

    Dobson, Ray

    Harper, Joseph

    Bray, Dr. Jeremy

    Donnelly, Desmond

    Harrison, Walter (Wakefield)

    Brooks, Edwin

    Dunnett, Jack

    Hart, Mrs. Judith

    Brown, Rt. Hn. George (Belper)

    Dunwoody, Mrs. Gwyneth (Exeter)

    Haseldine, Norman

    Brown, Bob (N'c'tle-upon-Tyne, W)

    Dunwoody, Dr. John (F'th & C'b'e)

    Hazell, Bert

    1450

    1451

    Healey, Rt. Hn. Denis

    Marsh, Rt. Hn. Richard

    Rowlands, E. (Cardiff, N.)

    Herbison, Rt. Hn. Margaret

    Mayhew, Christopher

    Sheldon, Robert

    Horner, John

    Mellish, Robert

    Shinwell, Rt. Hn. E.

    Houghton, Rt. Hn. Douglas

    Mendelson, J. J.

    Shore, Peter (Stepney)

    Howarth, Harry (Wellingborough)

    Mikardo, Ian

    Silkin, John (Deptford)

    Hughes, Roy (Newport)

    Millan, Bruce

    Silverman, Julius (Aston)

    Hunter, Adam

    Molloy, William

    Silverman, Sydney (Nelson)

    Jackson, Colin (B'h'se & Spenb'gh)

    Morgan, Elystan (Cardiganshire)

    Skeffington, Arthur

    Janner, Sir Barnett

    Morris, Alfred (Wythenshawe)

    Slater, Joseph

    Jay, Rt. Hn. Douglas

    Moyle, Roland

    Small, William

    Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)

    Mulley, Rt. Hn. Frederick

    Snow, Julian

    Jenkins, Hugh (Putney)

    Newens, Stan

    Spriggs, Leslie

    Jenkins, Rt. Hn. Roy (Stechford)

    Norwood, Christopher

    Steele, Thomas (Dunbartonshire, W.)

    Johnson, Carol (Lewisham, S.)

    Oakes, Gordon

    Stewart, Rt. Hn. Michael

    Johnson, James (K'ston-on-Hull, W.)

    Ogden, Eric

    Storehouse, John

    Jones, Rt. Hn. SirElwyn (W. Ham, S.)

    O'Malley, Brian

    Summerskill, Hn. Dr. Shirley

    Jones, J. Idwal (Wrexham)

    Oram, Albert E.

    Symonds, J. B.

    Kerr, Russell (Feltham)

    Orbach, Maurice

    Taverne, Dick

    Lawson, George

    Orme, Stanley

    Thomas, George (Cardiff, W.)

    Leadbitter, Ted

    Oswald, Thomas

    Thomas, Iorwerth (Rhondda, W.)

    Ledger, Ron

    Owen, Dr. David (Plymouth, S'tn)

    Thornton, Ernest

    Lestor, Miss Joan

    Page, Derek (King's Lynn)

    Tinn, James

    Lever, Harold (Cheetham)

    Pannell, Rt. Hn. Charles

    Tomney, Frank

    Lever, L. M. (Ardwick)

    Park, Trevor

    Varley, Eric G.

    Lewis, Ron (Carlisle)

    Pavitt, Laurence

    Wainwright, Edwin (Dearne Valley)

    Lomas, Kenneth

    Peart, Rt. Hn. Fred

    Walker, Harold (Doncaster)

    Loughlin, Charles

    Perry, George H. (Nottingham, S.)

    Watkins, David (Consett)

    Luard, Evan

    Prentice, Rt. Hn. R. E.

    Watkins, Tudor (Brecon & Radnor)

    Lyon, Alexander W. (York)

    Price, Christopher (Perry Barr)

    Weitzman, David

    Lyons, Edward (Bradford, E.)

    Price, Thomas (Westhoughton)

    Wellbeloved, James

    Mabon, Dr. J. Dickson

    Probert, Arthur

    Whitaker, Ben

    McBride, Neil

    Pursey, Cmdr. Harry

    Whitlock, William

    McCann, John

    Randall, Harry

    Willey, Rt. Hn. Frederick

    MacColl, James

    Redhead, Edward

    Williams, Alan Lee (Hornchurch)

    Macdonald, A. H.

    Rees, Merlyn

    Williams, Clifford (Abertillery)

    McKay, Mrs. Margaret

    Rhodes, Geoffrey

    Williams, Mrs. Shirley (Hitchin)

    Mackie, John

    Richard, Ivor

    Willis, George (Edinburgh, E.)

    McMillan, Tom (Glasgow, C.)

    Roberts, Gwilym (Bedfordshire, S.)

    Wilson, Rt. Hn. Harold (Huyton)

    McNamara, J. Kevin

    Robinson, Rt. Hn. Kenneth (St. P'c'as)

    Wilson, William (Coventry, S.)

    Mallalieu, J. P. W.(Huddersfield, E.)

    Rodgers, William (Stockton)

    Wyatt, Woodrow

    Mapp, Charles

    Ross, Rt. Hn. William

    Marquand, David

    Rowland, Christopher (Meriden)

    TELLERS FOR THE NOES:

    Mr. Ioan L. Evans and Mr. Grey.

    Mr. John Hall: On a point of order. Before we discuss the next new Clause, Mr. Deputy Speaker, and to avoid a repetition of the problem which we have just experienced, may I suggest that it would be helpful to the House, so that the debate does not come to an untimely end, that, if the Government benches decide not to respond to the debate they should hoist a flag of some kind, perhaps the flag which a ship displays when it wants a pilot?
    Mr. George Brown: I was not present, Mr. Deputy Speaker, but I gather that everybody realises that there was a misunderstanding. Of course, it will be the intention of the Government to reply to every debate and we will ensure that from now on the appropriate signal will be given which is normally given when one goes into action and is about to shoot the enemy straight out of the water.
    Sir Lionel Heald: On a point of order. Arising out of what has been said, Mr. Deputy Speaker, are you aware that it was announced that the Division was off, that there was no second
    1452
    bell and that a number of hon. Members who were in the Library and other places were not acquainted of the fact that something had apparently been done to remedy that state of affairs?
    Mr. Deputy Speaker: I was not aware of that, but I will have inquiries made about it.

    New Clause.—(BONUS PAYMENT SCHEME FOR PRODUCTIVITY.)
    Nothing in this Act shall prejudice the operation of any scheme which has been created for the employees in any particular industry, company or firm, for the payment to the said employees of bonuses (additional to earnings) based on improvements or increases in productivity or production:
    Provided that such a scheme shall have been in operation at least six months before the passing of this Act; and all provisions in this Act relating to terms and conditions of employment, incomes and earnings, shall be deemed to disregard payments to be made to employees in accordance with the terms of such schemes for bonus payments as aforesaid.—[Mr. Gower.]
    Brought up, and read the First time.
    Mr. Gower: I beg to move, That the Clause be read a Second time.
    Mr. Deputy Speaker: I think that it would be convenient to the House to discuss at the same time Amendment No. 38, in Clause 28, page 25, line 37, at end insert:
    "a wage increase reflecting an actual increase in output achieved under a productivity agreement shall not be subject to such an order".
    Mr. Gower: In some ways the new Clause is analogous to the last new Clause, which we can hardly be said to have debated but which we considered prior to the last Division. It appears that there is less comprehensive information available about schemes and arrangements of this kind because whereas, as I indicated, certain statistical evidence is published intermittently in the Ministry of Labour Gazette which gives details of profit-sharing and co-partnership schemes, I do not think that any similar statistical information is published about schemes and arrangements comparable with those described in the new Clause. As we all know, however, they exist in a variety of forms and in many industries all over the United Kingdom.
    I expect that hon. Members, in every part of the House, can easily think of examples of schemes and arrangements which have been instituted increasingly each year since the war. I am well acquainted with several in and around my constituency. There is a scheme of this kind in many parts of the cement industry whereby, at the end of an accounting period, the employees receive a bonus based upon the production result of the undertaking for the year.
    As I indicated in connection with the earlier Clause, we here have an opportunity of inserting something creative and, perhaps, dynamic into a Bill which is based almost entirely on restriction. As with the previous Clause, I do not pretend to offer the House any economic panacea, but, as my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said when the problem was briefly considered in Committee, any productivity arrangement has a useful part to play in improving the earnings of the investors, the managers and the works and in reducing the cost of the product or the service. I think those words are worthy of repetition now.
    1454
    Surely the Government, in seeking to obtain a degree of stability in prices and earnings, do not wish to remove from our industry everything which is dynamic, everything which promotes effort, and everything which leads to greater production and productivity? The Government need productivity, they need improvement of efficient production, as much as they need stability of prices and earnings. If the Bill is not amended by the insertion of a Clause of this kind, the Bill, I feel, rather than aiding the Government's professed objects, can act only as a very serious disincentive to some of those progressive qualities which the country sadly needs. I submit that, in principle, this Clause offers the Government a late opportunity of supplying the real need in their present economic policy——

  ROYAL ASSENT
  6.11 p.m.
  Message to attend the Lords Commissioners:
  The House went:—and, having returned:
  Mr. SPEAKER Mr. SPEAKER reported the Royal Assent to:

  1. Appropriation (No. 2) Act 1966.

  2. Building Control Act 1966.

  3. Docks and Harbours Act 1966.

  4. Singapore Act 1966.

  5. Reserve Forces Act 1966.

  6. Criminal Appeal Act 1966.

  7. Selective Employment Payments Act 1966.

  8. Ministry of Housing and Local Government Provisional Order Confirmation (City of Oxford) Act 1966.

  9. Oldham Corporation Act 1966.

  10. Saint Mary, Ealing Act 1966.

  11. Greater London Council (Money) Act 1966.

  12. Mersey Docks and Harbour Board (Seaforth Works) Act 1966.

  13. Blackfriars Bridgehead Improvements Act 1966.

  14. Tees and Hartlepools Port Authority Act 1966.

  15. Yorkshire Registries Amendment Act 1966.

  1455

  16. Manchester Ship Canal Act 1966.

  17. Greater London Council (General Powers) Act 1966.

  18. United Kingdom Oil Pipelines Act 1966.

  19. Leeds Corporation Act 1966.

  20. British Transport Docks Act 1966.

  21. Thames Conservancy Act 1966.

  22. London Transport Act 1966.

  PRICES AND INCOMES BILL
  6.25 p.m.
  Mr. Gower: I was stating that I submitted respectfully that the principle expressed in the new Clause offers the Government a great opportunity to supply a deficiency in their present economic policy. I would impress upon the Government that many of the schemes involving the payment of bonuses for greater production and productivity were concluded only after long and sometimes difficult negotiation between management and unions. It is my experience that, before their inception, a lot of them were regarded with a degree of mistrust by some of the parties concerned. I appreciate that the schemes and arrangements within the larger companies might survive an incomes squeeze of six months, but many of the schemes in the smaller companies might be imperilled. In some respects, these can be regarded as the shining lights of our industrial economy. Even today we have been reminded in a statement about the shipbuilding industry of the importance with which the Geddes Committee regarded an increase of productivity in the industry.
  It is also in accordance, in the widest possible way, with overall Government policy. Not long ago at Question time, the Prime Minister stated that it was Government policy that earnings based on increases in productivity should become more widely accepted. I cannot remember the exact terms of his statement, but I believe that it was in answer to one of my hon. Friends.
  Should we, at this stage, put these arrangements at risk without any commensurate benefit in terms of an earnings policy? I believe that these are too
  1456
  valuable to be put at risk. They are a necessary ingredient for our ultimate recovery. It may be that shorter-term problems will be assuaged or cured by the strictest application of a standstill, as enunciated in many of the Clauses of the Bill. However, in the long term, I feel that it would be damaging to the economy and the industry of our country if we were to take any step which would lessen the potential of agreements based on productivity. We should not put these at risk, and that is why I have tabled this new Clause.
  6.29p.m.
  Mr. Ian Lloyd: I am sure that the House will agree that the essence of the criticism of stop-go as we knew it was that, for monetary reasons, the growth either of real output or of real income was restricted. That happened from time to time, and it was because of the legitimate and serious criticism of the whole broad range of economic policy that it came to be known as "stop-go".
  We presume that it is the Government's intention that, wherever possible, even during the next six months, the static or, what is more likely, the slowly rising disposable net income of the community should be matched by rising real output, and that the matching should take place provided that it requires no additional strain on the balance of payments to permit that real output to rise. This is the only way to put value back into the pound. It is the most fitting response to the many sections of the community who for years have been taking value out of the pound. What we all now want to achieve is a set of economic circumstances in which value is put back into the pound in conjunction with a real rise in the net standard of living.
  6.30 p.m.
  If there is a bright feature on the rather dismal economic horizon to which we have become so used in Britain recently it is the success of the Fawley type of productivity agreement. This example has been widely followed, with considerable justification, and if we are going to get out of our difficulties it should be more widely followed.
  It may be that I am one of the few hon. Members who have succeeded in extracting from the Prime Minister that

  1457
  wonderful word "Yes". The other day I asked him whether he would emphasise
  "that where increases in income are directly and demonstrably related to increases in productivity, it is in the national interest that both should take place"
  and the right hon. Gentleman's answer was quite unequivocal. It was "Yes". He went on to say:
  "We have always stressed the importance of pay and productivity agreements where one can be really satisfied that it is not just an aspiration about productivity but where there are clear guarantees that the additional income will be earned out of changes in productivity, particularly changes in manning.—[OFFICIAL REPORT. 28th July, 1966; Vol. 732, c. 1906.]
  I submit that he has made an unequivocal statement by using the word "Yes". He has said that this is Government policy. Can we now take it that it is the Government's clear intention that where increases in income can be demonstrably and specifically related to increases in output and productivity even during the next six months those increases in income shall be paid?
  Mr. Speaker: Mr. Biffen.
  Mr. John Hall: I am a little puzzled——
  Mr. Speaker: Order. I called Mr. Biffen.
  Mr. John Biffen: The Clause is a very important one and is to be commended because it seeks to offer to productivity schemes what encouragement can be offered in the context of the Bill. There is a growing realisation of the importance of such schemes to our economic well-being, and also of the fact that these schemes are born after only a great deal of negotiation between unions and employers and that their execution is not suitable for a six months' freeze.
  A six months' freeze is often likely to cause a set-back to the whole inception and working out of a productivity scheme. For example, the British Oxygen Company's productivity scheme, which has been the subject of a good deal of Press comment in recent weeks, took about 18 months to execute, and the possibility of a six months' freeze applying to such a scheme could lead to jeopardising its success. Earlier this afternoon the Attorney-General talked to
  1458
  us in rather unnecessary terms about patriotism and the need to carry out this policy. We shall not get this policy accepted by appeals to patriotism. I am convinced of that not least because of an article which appeared in the Statist on 17th June, written by Mr. Tony Corfield, the Secretary of the Education and Political Department of the Transport and General Workers' Union, in which he said:
  "No less unrealistic is the supposition that workers will be especially responsive to what is held to be 'the national interest' over wages issues."
  That is a fair comment, and I am not ashamed to commend it. Nor do I in any sense deprecate the fact that Mr. Corfield should have written in such terms, because the people on the shop floor want to get something out of extra productivity, and if the whole thing is to be put in suspension for six months we will not get the unions to accept the productivity deal and make the necessary sacrifice. There must be some tangible reward. Since we are all united in laying emphasis upon the value of productivity I hope that the Government will accept the Clause.
  Mr. John Hall: I apologise, Mr. Speaker, for having begun to speak when you called my hon. Friend. I have had difficulty in catching the eye of the Chair in the past, and have sometimes called for candles. On this occasion, however, perhaps I should have called for a deaf aid, because I did not hear my hon. Friend's name called.
  I was a little puzzled by the new Clause, because my impression was that it would be quite in order for an employer to pay bonuses based on improvements in productivity although it would not be in order to pay bonuses by way of recognising merit, or anything of that kind. I was therefore interested more specifically in Amendment No. 38, which refers to
  "a wage increase reflecting an actual increase in output achieved under a productivity agreement …"
  I support what has been said by my hon. Friend the Member for Barry (Mr. Gower) and other of my hon. Friends, in pointing out that what the country requires are agreements which encourage productivity. It is because we have failed to achieve the targets which have

  1459
  been set for our industry that the Government have been forced to bring forward this ill-conceived Measure which is producing the freeze. It will not have the desired effect. I would have thought that anything that can be done to encourage the development of wage agreements based on real productivity should be done.
  Amendment No. 38 offers one way of doing this and I hope that the Government will look upon our proposal favourably. I cannot see that anything but good can come from exempting from the voluntary or compulsory provisions of the Bill those agreements which are designed specifically to increase productivity and to reward those engaged in industry in return for that increased productivity. I hope that this argument will weigh with the Government.
  Mr. Charles Doughty: I support Amendment No. 38. One, of the troubles affecting this country is the failure to achieve a sufficient increase in productivity. Amendment No. 38 provides that
  "a wage increase reflecting an actual increase in output achieved under a productivity agreement shall not be subject to such an order".
  and the Government's own proposal in Clause 30 provides that
  "any person who has worked for the employer since before that date is to receive remuneration for the same kind of work for any period after that date which is at a higher rate than that at which he was being remunerated for work of that kind immediately before that date."
  What we are saying here is that where there is an increase in productivity there should be a related wage increase for that specific purpose. The Amendment is desirable; it is in accordance with the Government's own provisions, and it is common sense. For those reasons I hope that it will be accepted.
  Mr. William Rodgers: This is a difficult issue, because my hon. Friends and I very much agree with the general sentiments which have been expressed and which were also expressed in Committee. We want to see the growth of productivity and we do not want to place needless obstacles in its way. As the hon. Member for Barry (Mr. Gower) said, it is essential to have rising productivity if we are to achieve a dynamic economy. Whatever problems we now face we all
  1460
  hope that within a reasonable period—when we have got over the immediate difficulties with which the Bill, among other things, is designed to deal—we shall be able to move forward again, because so much depends upon the growth of the economy. This has been said time and time again. When we were formulating the policy upon which the Bill is based, we made it clear that it was a policy for productivity, prices and incomes and that it would work in all three fields because they were very closely related.
  In deciding to tighten the policy, we have still had in mind that we should not do anything needlessly which would impede the growth of productivity. The very fact that we have felt obliged to bring in the Bill is a measure of the extent to which, despite all our hopes, productivity has not risen fast enough. We all know, and it was said very clearly by the right hon. Member for Leeds, North-East (Sir K. Joseph) in Committee, that many so-called productivity agreements have not been productivity agreements at all. The language has simply been used to dress up something which was in other ways indefensible.
  It is very interesting that at the present time we know of very few examples of productivity agreements which have been caught by the new policy. One was mentioned by the hon. Member for Oswestry (Mr. Biffen), but it is a measure of the extent to which these agreements have not been reached often enough that we are not aware how many of them will be affected by the decisions we now feel obliged to take.
  The point was made in Committee that the work of the National Board for Prices and Incomes is also directed towards the growth of productivity, and many of us consider that its success should be measured less by the immediate impact of its reports have on an individual price or incomes problem than by the effect they have on long-term productivity considerations. We see in the reports which have come from the Board that it has regarded this long-term problem as central to all its work on the references which have been made to it.
  When we come to the consideration of the proper criteria for the second six months, after discussion with the T.U.C. and the C.B.I., the question of productivity agreements should be borne very

  1461
  much in mind. It would be wrong to anticipate our decisions because consultations must take place first, but representations will no doubt be made to us and we shall no doubt be sympathetic to the view that if the second period of six months is to be flexible genuine agreements on productivity should be taken into account.
  Mr. Costain: In the building industry there is an agreed productivity bonus. If so many bricks are laid a bonus is paid. Does the Bill now say that that must cease, or that as long as the target is the same it is in order to keep it going?
  Mr. Rodgers: If I understand the question which the hon. Gentleman is putting, this is provided for by paragraph 18(ii) of the White Paper. But we are not discussing specific issues on this Clause but the much wider issue of productivity.
  We all acknowledge that some so-called productivity agreements have been bogus. We acknowledge also that there should not be simply two parties to a productivity agreement, that it is not simply a matter of management and unions carving up the extra increment which is obtained in one way or another from the abandonment of practices which were obstacles to growth. The public interest must be considered. In the past, this has not always been acknowledged, and it has been assumed that the extra increment resulting from such an agreement should be divided between two parties and not between three.
  I now come to the immediately relevant question of whether, in framing the policy and particularly in introducing the Bill, we should have made special provision for existing productivity agreements, which I understand is the point made by the hon. Member for Barry, or for productivity agreements which may be reached in the next six months or which would otherwise be caught by the standstill starting on the 20th July.
  This was a very difficult issue and we spent a lot of time considering how rigid the policy should be. As is so often the case, it was a question of balance of advantages. If we tried to make some exceptions, would not this result in a breach of the dam? Would not many people argue that their agreements were eligible for consideration, whether or not
  1462
  we felt that they were genuine productivity agreements?
  In the end we decided—I am sure quite rightly—that we had to maintain the standstill in every respect, except with regard to the very special exceptions which are spelt out in paragraph 18 of the White Paper, and particularly in paragraph 18(ii) which deals with specific cases where increases in pay result directly from increased output. We drew this very narrowly indeed, because we felt that if we did not do so agreements would slip through which would in the long run breach the policy.
  6.45 p.m.
  Mr. John Tilney: Before he leaves that point, will the Minister say whether the policy includes those productivity agreements with personnel who are selling our exports overseas yet are paid by a British registered company, and who, if they are not paid a decent rate, will go to exporters from other countries?
  Mr. Rodgers: I acknowledge, and we have done so throughout the discussions on the Bill, that problems arise and that there may be difficulties. I was rash enough at one stage to use the word "countervailing" and that got a response from the Opposition which I might have expected. We are prepared to admit that some consequences which flow from our actions may in a sense be counterproductive, taking the total economic problem with which we are dealing. But we are considering only the short period of six months and the flexible six months' period to follow and I am sure that we are right to say that we must be tough during that period. If we were not tough there would be more anomalies and greater injustice.
  As the hon. Member for Oswestry said, productivity agreements take a long time to negotiate. I think that he mentioned a period of 18 months in connection with the productivity agreement with which he was particularly concerned. For this reason, there is no earthly reason why those who are thinking of negotiating productivity agreements or who are negotiating them at present should not go forward. This period can be used, as it has not been in other comparable circumstances in the past, as a breathing

  1463
  space in which both sides of industry can say, "We now recognise that genuine productivity agreements are in the interests of management, the unions and the country as a whole. Let us use this standstill so that at the end of the period we shall have far more than we have at the present time".
  Therefore, whereas we insist upon the standstill, we feel that it can be used intelligently to the general good.
  Mr. Terence L. Higgins: It was significant that when we discussed in Committee whether or not the word "productivity" was still included in the Government's policy the First Secretary said that it was, that the policy was the productivity, prices and incomes policy; but the word "productivity" does not appear in the title of any of the series of White Papers on this subject.
  We have just had a typical reply from the Under-Secretary of State, who says, in effect, "This is a very difficult question, and we do not think that we can possibly face up to it." Nothing is more important in the whole of the policy than that the Government should take a constructive rather than a restrictive line. It was very much the attitude of my hon. Friend the Member for Barry (Mr. Gower) that nothing in the Bill is really constructive. For that reason, we on this side of the House believe that the Clause and Amendment which we are now considering are very important.
  The productivity arrangements which have been built up in recent years have taken a long time to develop. Even now this is a fragile flower because, as the right hon. Member for Nuneaton (Mr. Cousins) pointed out in Committee, unions do not like to give up the security which they have in restrictive trade practices which were built up in the 1920s and 1930s. Only if they can get the confidence
  of management and if unions and management can work together can we hope for arrangements and agreements to be built up which result in a genuine increase in productivity and a genuine elimination of restrictive practices.
  We on this side do not accept the Under-Secretary of State's view that it is impossible to distinguish between the genuine productivity agreement and one which is merely window-dressing. We agree that there is need to distinguish between them, but we think that it can be done. On that basis, we consider it most important that such agreements should not be deterred either by the provisions in Parts I, II and III or by the provisions in Part IV. If we do not incorporate Amendments of the kind we are now discussing, there will be grave danger that the whole climate in which this kind of improvement in industrial relations can ben made and brought up to date will be adversely affected.
  We are disappointed at the hon. Gentleman's inadequate reply, and I hope that my hon. Friend the Member for Barry, who moved the new Clause so admirably, will call on us to divide in favour of it.
  Mr. Paget: I was not on the Standing Committee. Could my hon. Friend enlighten me on one point? How does co-partnership come into the Bill at all? Taking, for example, the John Lewis Partnership——
  Mr. Speaker: Order. We are on new Clause 3, not new Clause 2.
  Mr. Gower: The Under-Secretary of State, in rather general phrases, supported the idea of the Clause but rejected its application. I ask my right hon. and hon. Friends to divide.
  Question put, That the Clause be read a Second time:—
  The House divided: Ayes 155, Noes 233.

  Division No. 162.]

  AYES

  [6.52 p.m.

  Alison, Michael (Barkston Ash)

  Brinton, Sir Tatton

  Craddock, Sir Beresford (Spelthorne)

  Allason, James (Hemel Hempstead)

  Bromley Davenport, Lt. Col. Sir Walter

  Crouch, David

  Barber, Rt. Hn. Anthony

  Brown, Sir Edward (Bath)

  Crowder, F. P.

  Batsford, Brian

  Bruce-Gardyne, J.

  Cunningham, Sir Knox

  Berry, Hn. Anthony

  Buck, Antony (Colchester)

  Currie, G. B. H.

  Biffen, John

  Bullus, Sir Eric

  Dance, James

  Birch, Rt. Hn. Nigel

  Carlisle, Mark

  Davidson, James (Aberdeenshire, W.)

  Blaker, Peter

  Carr, Rt. Hn. Robert

  d'Avigdor-Goldsmid, Sir Henry

  Body, Richard

  Clark, Henry

  Dean, Paul (Somerset, N.)

  Boyd-Carpenter, Rt. Hn. John

  Clegg, Walter

  Deedes, Rt. Hn. W. F. (Ashford)

  Boyle, Rt. Hn. Sir Edward

  Corfield, F. V.

  Dodds-Parker, Douglas

  Brewis, John

  Costain, A. P.

  Doughty, Charles

  Eden, Sir John

  Joseph, Rt. Hn. Sir Keith

  Pym, Francis

  Elliot, Capt. Walter (Carshalton)

  Kaberry, Sir Donald

  Quennell, Miss J. M.

  Farr, John

  King, Evelyn (Dorset, S.)

  Ramsden, Rt. Hn. James

  Fisher, Nigel

  Kirk, Peter

  Rawlinson, Rt. Hon. Sir Peter

  Fletcher-Cooke, Charles

  Kitson, Timothy

  Rodgers, Sir John (Sevenoaks)

  Fortescue, Tim

  Knight, Mrs. Jill

  Rossi, Hugh (Hornsey)

  Foster, Sir John

  Lewis, Kenneth (Rutland)

  Royle, Anthony

  Gibson-Watt, David

  Lloyd, Ian (P'tsm'th, Langstone)

  Russell, Sir Ronald

  Giles, Rear-Adm. Morgan

  Loveys, W. H.

  Scott, Nicholas

  Gilmour, Sir John (Fife, E.)

  Lubbock, Erie

  Sharples, Richard

  Glover, Sir Douglas

  McAdden, Sir Stephen

  Shaw, Michael (Sc'b'gh & Whitby)

  Glyn, Sir Richard

  MacArthur, Ian

  Sinclair, Sir George

  Gower, Raymond

  Mackenzie, Alasdair (Rose & Crom'ty)

  Smith, John

  Grant, Anthony

  Maclean, Sir Fitzroy

  Stodart, Anthony

  Gresham Cooke, R.

  Macleod, Rt. Hn. Iain

  Stoddart-Scott, Col. Sir M. (Ripon)

  Griffiths, Eldon (Bury St. Edmunds)

  Macmillan, Maurice (Farnham)

  Summers, Sir Spencer

  Grimond, Rt. Hn. J.

  Maddan, Martin

  Talbot, John E.

  Gurden, Harold

  Maginnis, John B.

  Tapsell, Peter

  Hall, John (Wycombe)

  Marten, Neil

  Teeling, Sir William

  Hamilton, Michael (Salisbury)

  Mathew, Robert

  Thatcher, Mrs. Margaret

  Harrison, Col. Sir Harwood (Eye)

  Maude, Angus

  Tilney, John

  Hawkins, Paul

  Maudling, Rt. Hn. Reginald

  Turton, Rt. Hn. R. H.

  Heald, Rt. Hn. Sir Lionel

  Maxwell-Hyslop, R. J,

  van Straubenzee, W. R.

  Heath, Rt. Hn. Edward

  Maydon, Lt.-Cmdr. S. L. C.

  Vaughan-Morgan, Rt. Hn. Sir John

  Heseltine, Michael

  Miscampbell, Norman

  Wainwright, Richard (Colne Valley)

  Higgins, Terence L.

  Morgan, W. G. (Denbigh)

  Wall, Patrick

  Hill, J. E. B.

  Munro-Lucas-Tooth, Sir Hugh

  Ward, Dame Irene

  Hobson, Rt. Hn. Sir John

  Murton, Oscar

  Weatherill, Bernard

  Hogg, Rt. Hn. Quintin

  Nabarro, Sir Gerald

  Webster, David

  Hooson, Emlyn

  Neave, Airey

  Wells, John (Maidstone)

  Hordern, Peter

  Noble, Rt. Hn. Michael

  Whitelaw, William

  Hornby, Richard

  Nott, John

  Wills, Sir Gerald (Bridgwater)

  Howell, David (Guildford)

  Orr-Ewing, Sir Ian

  Wilson, Geoffrey (Truro)

  Hunt, John

  Osborne, Sir Cyrll (Louth)

  Winstanley, Dr. M. P.

  Hutchison, Michael Clark

  Pardoe, John

  Wood, Rt. Hn. Richard

  Jenkin, Patrick (Woodford)

  Pearson, Sir Frank (Clitheroe)

  Worsley, Marcus

  Jennings, J. C. (Burton)

  Peel, John

  Younger, Hn. George

  Johnson Smith, G. (E. Grinstead)

  Percival, Ian

  Johnston, Russell (Inverness)

  Pike, Miss Mervyn

  TELLERS FOR THE AYES:

  Jones, Arthur (Northants, S.)

  Pink, R. Bonner

  Mr. David Mitchell and Mr. Eyre.

  Jopling, Michael

  Prior, J. M. L.

  NOES

  Albu, Austen

  Cullen, Mrs. Alice

  Greenwood, Rt. Hn. Anthony

  Allaun, Frank (Salford, E.)

  Darling, Rt. Hn. George

  Gregory, Arnold

  Alldritt, Walter

  Davies, Dr. Ernest (Stretford)

  Grey, Charles (Durham)

  Allen, Scholefield

  Davies, G. Elfed (Rhondda, E.)

  Griffiths, David (Rother Valley)

  Anderson, Donald

  Davies, Harold (Leek)

  Hamilton, James (Bothwell)

  Archer, Peter

  Davies, Ifor (Gower)

  Hamilton, William (Fife, W.)

  Armstrong, Ernest

  Davies, Robert (Cambridge)

  Hannan, William

  Ashley, Jack

  de Freitas, Sir Geoffrey

  Harper, Joseph

  Atkins, Ronald (Preston, N.)

  Delargy, Hugh

  Harrison, Walter (Wakefield)

  Atkinson, Norman (Tottenham)

  Dewar, Donald

  Hart, Mrs. Judith

  Bacon, Rt. Hn. Alice

  Diamond, Rt. Hn. John

  Haseldine, Norman

  Barnes, Michael

  Dickens, James

  Hazell, Bert

  Baxter, William

  Dobson, Ray

  Healey, Rt. Hn. Denis

  Bennett, James (G'gow, Bridgeton)

  Doig, Peter

  Herbison, Rt. Hn. Margaret

  Bidwell, Sydney

  Donnelly, Desmond

  Horner, John

  Binns, John

  Dunnett, Jack

  Houghton, Rt. Hn. Douglas

  Blackburn, F.

  Dunwoody, Mrs. Gwyneth (Exeter)

  Howarth, Harry (Wellingborough)

  Blenkinsop, Arthur

  Dunwoody, Dr. John (F'th & C'b'e)

  Howarth, Robert (Bolton, E.)

  Boardman, H.

  Edelman, Maurice

  Hughes, Emrys (Ayrshire, S.)

  Booth, Albert

  Edwards, Robert (Bilston)

  Hughes, Roy (Newport)

  Boston, Terence

  Ellis, John

  Hunter, Adam

  Bottomley, Rt. Hn. Arthur

  English, Michael

  Hynd, John

  Bowden, Rt. Hn. Herbert

  Ennale, David

  Jackson, Colin (B'h'se & Spenb'gh)

  Boyden, James

  Ensor, David

  Jackson, Peter M. (High Peak)

  Braddock, Mrs. E. M.

  Faulds, Andrew

  Janner, Sir Barnett

  Bray, Dr. Jeremy

  Finch, Harold

  Jay, Rt. Hn. Douglas

  Brooks, Edwin

  Fletcher, Raymond (Ilkeston)

  Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)

  Brown, Rt. Hn. George (Beiper)

  Fletcher, Ted (Darlington)

  Jenkins, Hugh (Putney)

  Brown, Bob (N'c'tle-upon-Tyne, W)

  Floud, Bernard

  Jenkins, Rt. Hn. Roy (Stechford)

  Brown, R. W. (Shoreditch & F'bury)

  Foot, Michael (Ebbw Vale)

  Johnson, Carol (Lewisham, S.)

  Butler, Herbert (Hackney, C.)

  Ford, Ben

  Johnson, James (K'ston-on-Hull, W.)

  Butler, Mrs. Joyce (Wood Green)

  Forrester, John

  Jones, Rt. Hn. SirElwyn (W. Ham, S.)

  Callaghan, Rt. Hn. James

  Fraser, John (Norwood)

  Jones, J. Idwal (Wrexham)

  Cant, R. B.

  Fraser, Rt. Hn. Tom (Hamilton)

  Kelley, Richard

  Carter-Jones, Lewie

  Freeson, Reginald

  Kenyon, Clifford

  Coleman, Donald

  Galpern, Sir Myer

  Kerr, Russell (Feltham)

  Conlan, Bernard

  Garrett, W. E.

  Lawson, George

  Corbet, Mrs. Freda

  Garrow, Alex

  Leadbitter, Ted

  Crawshaw, Richard

  Gordon Walker, Rt. Hn. P. C.

  Ledger, Ron

  Crosland, Rt. Hn. Anthony

  Gourlay, Harry

  Lee, Rt. Hn. Jennie (Cannock)

  1466

  1467

  Lestor, Miss Joan

  Oram, Albert E.

  Slater, Joseph

  Lever, L. M. (Ardwick)

  Orbach, Maurice

  Small, William

  Lewis, Ron (Carlisle)

  Orme, Stanley

  Snow, Julian

  Lomas, Kenneth

  Oswald, Thomas

  Spriggs, Leslie

  Loughlin, Charles

  Owen, Will (Morpeth)

  Steele, Thomas (Dunbartonshire, W.)

  Luard, Evan

  Page, Derek (King's Lynn)

  Stewart, Rt. Hn. Michael

  Lyon, Alexander W. (York)

  Pannell, Rt. Hn. Charles

  Stonehouse, John

  Lyons, Edward (Bradford, E.)

  Park, Trevor

  Summerskill, Hn. Dr. Shirley

  Mabon, Dr. J. Dickson

  Pavitt, Laurence

  Symonds, J. B.

  McBride, Nell

  Pearson, Arthur (Pontypridd)

  Taverne, Dick

  McCann, John

  Peart, Rt. Hn. Fred

  Thomas, George (Cardiff, W.)

  MacColl, James

  Pentland, Norman

  Thomas, lorwerth (Rhondda, W.)

  Macdonald, A. H.

  Perry, George H. (Nottingham, S.)

  Thornton, Ernest

  McKay, Mrs. Margaret

  Prentice, Rt. Hn. R. E.

  Tinn, James

  Mackie, John

  Price, Christopher (Perry Barr)

  Tomney, Frank

  Mackintosh, John P.

  Price, Thomas (Westhoughton)

  Urwin, T. W.

  McMillan, Tom (Glasgow, C.)

  Probert, Arthur

  Varley, Eric G.

  McNamara, J. Kevin

  Pursey, Cmdr. Harry

  Wainwright, Edwin (Dearne Valley)

  Mallalieu, J. P. W.(Huddersfield, E.)

  Randall, Harry

  Walker, Harold (Doncaster)

  Manuel, Archie

  Redhead, Edward

  Watkins, David (Consett)

  Mapp, Charles

  Rees, Merlyn

  Watkins, Tudor (Brecon & Radnor)

  Marquand, David

  Rhodes, Geoffrey

  Weitzman, David

  Marsh, Rt. Hn. Richard

  Richard, Ivor

  Whitaker, Ben

  Mayhew, Christopher

  Roberts, Gwilym (Bedfordshire, S.)

  Whitlock, William

  Mellish, Robert

  Robinson, Rt. Hn. Kenneth (St. P'c'as)

  Willey, Rt. Hn. Frederick

  Mendelson, J. J.

  Rodgers, William (Stockton)

  Williams, Alan Lee (Hornchurch)

  Mikardo, Ian

  Ross, Rt. Hn. William

  Williams, Clifford (Abertillery)

  Millan, Bruce

  Rowland, Christopher (Meriden)

  Williams, Mrs. Shirley (Hitchin)

  Molloy, William

  Rowlands, E. (Cardiff, N.)

  Willis, George (Edinburgh, E.)

  Morgan, Elystan (Cardiganshire)

  Ryan, John

  Wilson, Rt. Hn. Harold (Huyton)

  Morris, Alfred (Wythenshawe)

  Sheldon, Robert

  Wilson, William (Coventry, S.)

  Morris, John (Aberavon)

  Shinwell, Rt. Hn. E.

  Woodburn, Rt. Hn. A.

  Moyle, Roland

  Shore, Peter (Stepney)

  Woof, Robert

  Mulley, Rt. Hn. Frederick

  Short, Mrs. Renée (W'hampton, N. E.)

  Wyatt, Woodrow

  Newens, Stan

  Silkin, John (Deptford)

  Yates, Victor

  Norwood, Christopher

  Silkin, S. C. (Dulwich)

  Oakes, Gordon

  Silverman, Julius (Aston)

  TELLERS FOR THE NOES:

  Ogden, Eric

  Silverman, Sydney (Nelson)

  Mr. Bishop and Mr. Ioan L. Evans.

  O'Malley, Brian

  Skeffington, Arthur

  PRICES AND INCOMES BILL

    Clause 2.—REFERENCES OF QUESTIONS TO THE BOARD
    Sir K. Joseph: I beg to move Amendment No. 2, in page 3, line 4, at the end to insert:
    (c) relating to any situation in which any employer, employee or trade union agree or arrange, whether enforceably at law or not, that the number of persons employed in any process, activity or undertaking or the way in which they are employed is in any way, other than for health or safety, restricted or affected so as to conflict with the objectives set out in paragraph 1 of Schedule 2 to this Act.
    We now come to Part I of the Bill which sets up in statutory form the Prices and Incomes Board and entitles Ministers to make references to it. The point we are making in the Amendment is a simple one. It is that Ministers should be entitled to refer to the Board not only increases in pay and prices but also restrictive labour practices.
    My hon. Friends and I do not for a moment maintain that restrictive labour practices are the fault of only the workers. We think that the workers are generally the leading creators of restrictive labour practices, but they can by hypothesis have been created only with the connivance, positive or negative, of the employers. Thus, we are not making a
    1468
    narrow, sectional point but are coming to the heart of our economic difficulties, unit costs, since unit costs reflect the relatively low output for each unit of labour and we believe that this, above all, should be referable to the Board.
    The House will remember that the Board is really the Productivity Prices and Incomes Board, to give it is full, notional title. It was, therefore, set up with the purpose of looking at labour practices as well as at prices and pay. We have noticed with appreciation how much Mr. Aubrey Jones and his team have concentrated on management and labour practices in the industries they have examined. This is extremely valuable work. Indeed, our support for the Board is largely because we thoroughly approve of the idea of using the Board as a spotlight on restrictive labour practices. We are, therefore, extremely keen that the opportunity should be taken in this legislation, under Part I of the Measure—remembering that Part I is the only part of the Bill with which we have any sympathy whatever—to give powers to Ministers to refer restrictive labour practices as such to the Board.
    I do not think it is necessary for me to develop this argument at length,

    1469
    except, perhaps, to say that the Government might reply, "We have some sympathy with your objectives, but what would happen once the Board had reported "? Our reply is that publicity about restrictive labour parctices has a certain value of itself.
    My hon. Friends would go further and probably change the law to cover the most recalcitrant management and labour units which resisted the calls of the Board and of publicity to change their ways, but we are not on this occasion asking the Government to go as far as changing the law. We merely ask them to say that the weapon of publicity—the weapon of daylight—should be made available against restrictive labour practices.
    Mr. Emrys Hughes: I wish that the right hon. Member for Leeds, North-East (Sir K. Joseph) had explained exactly what he means by "restrictive labour practices". I was interested in the speech of my right hon. Friend the Member for Nuneaton (Mr. Cousins) who also referred to the question of restrictive practices, and asked whether they applied to the legal profession. I gather from the nods of assent from the hon. Member for Oswestry (Mr. Biffen) that I have his agreement in pressing this matter.
    Would the right hon. Member for Leeds, North-East agree that a union which might be affected by this legislation should be able to consult counsel without having to go through a solicitor? This is one of the greatest bottlenecks in terms of restrictive practices. I see no reason why the members of the legal profession should not make the same sacrifices in the next 12 months as others are being asked to make, particularly since that profession is likely to gain most out of this legislation.
    Mr. F. P. Crowder: Would the hon. Gentleman even consider consulting a surgeon without first going to a general practitioner?
    Mr. Hughes: That is one of the interesting questions which must be answered by the Opposition. I am attempting to make some exploratory remarks because I want to find out exactly what the official Opposition considers
    1470
    to be restrictive practices. I understand that the people who will make the most out of this legislation in the next few months are the members of the legal profession.
    The Transport and General Workers' Union, represented here by my right hon. Friend the Member for Nuneaton, will perpetually be consulting counsel about its agreements. Ins0tead of being able to go direct to learned counsel, who may understand this legislation—or who, on the other hand, may not—the union must go via a solicitor. In that way the legal profession is carrying on what I believe to be one of the most restrictive practices likely to be employed in relation to this legislation. If the right hon. Member for Leeds, North-East includes practices of that sort in his references to "restrictive labour practices", he should say so.
    Mr. Eric Lubbock: If the hon. Gentleman reads the Amendment he will see that it is probably too narrow to be one of the most restrictive practices cause it does not refer to a situation in which work of a particular kind is restricted to members of a certain organisation. It deals only with the situation in which a
    "… number of persons employed in any process, activity or undertaking … is in any way … restricted or affected so as to conflict with the objectives set out in paragraph 1 of Schedule 2 to this Act."
    Mr. Hughes: From that intervention I am not sure whether the hon. Gentleman is coming to my assistance or is supporting the Opposition. Certainly he has not answered my question. I simply want to know whether the restrictive labour practices mentioned by the right hon. Member for Leeds, North-East include the operations of the legal profession. Just as the miners, railwaymen and everybody else must contribute their share to the nation in this hour of financial crisis, so should the members of the legal profession.
    If the right hon. Member for Leeds, North-East says, "Yes. I mean also the restrictive practices of the legal profession and I agree that they should also be referred to the Board," I will be tempted to support him and vote with the Opposition, but I would need a very definite guarantee about that.
    Mr. Lubbock: I support the Amendment but, as I indicated in an intervention while the hon. Member for South Ayrshire (Mr. Emrys Hughes) was speaking, I do not believe that its wording is wide enough because it allows one to deal only with certain types of restrictive practices. I do not believe that it would permit the Prices and Incomes Board to consider the matter raised by the hon. Member for South Ayrshire; whether one should employ a solicitor or barrister in a particular legal dispute. I should prefer the wording of the Amendment to be wider, so that the matters which the hon. Gentleman raised could be considered as part of the general reference on restrictive practices to the Prices and Incomes Board. The phrase "restrictive practices" does not appear in the Amendment. It speaks only of the number of persons being
    "… restricted or affected so as to conflict with the objectives set out in paragraph 1 of Schedule 2 to this Act"
    This is odd wording. I am sure that what the right hon. Gentleman means is the case of the number of employees in a particular process exceeding a certain level.
    I should like to see the Board consider the question of the number of people employed in the bus services, and whether it is necessary in all cases that so many people should be employed as conductors in some urban areas. If this question could be referred to the Board and a satisfactory solution obtained, it might do something to relieve my constituents of the ever-increasing burden of bus fares which we are forced to accept.
    I do not believe that the Prices and Incomes freeze or any other Measure of the Government will benefit my constituents in that respect. What is needed is a fundamental review of the workings of the London Transport Board, such as this Amendment or some other device might bring about. For the reasons which I have given, I think that the Amendment, limited though it is in scope, should be accepted.
    Mr. Paget: I suppose that we are all agreed, at least in theory, that we should get rid of restrictive practices, but it is naive to imagine that Mr. Aubrey Jones' Board is likely to be able to uproot these ancient and deeply rooted practices, which are rooted in ancient fears, especially when
    1472
    we are passing a Bill which will reinforce those fears. One has to look to the cause of restrictive practices. Basically, it is fear of unemployment. It is the fear that there will not be enough work to go round. Gradually, since the war, over a long period of full employment, this fear has declined, but it is still a deeply rooted fear for organised labour, and one which can be revived suddenly and strongly.
    We are now doing all the things to revive that fear. If hon. Members opposite imagine that a reference to Mr. Aubrey Jones will do what 20 years of full employment have failed to do, in the circumstances of reversing that full employment policy, they are a little naive.
    We must also consider the other effect of the Bill. There is only one way, judging from American experience, of getting rid of restrictive practices. It is management's job. Management's instrument for doing that is pay. If we are to get rid of restrictive practices, we will have to buy our way out; this is precisely what the Bill will prevent. In America, where they have not far short of double our productivity——
    Sir K. Joseph: Three times.
    Mr. Paget: It depends where one looks: in some cases, as the right hon. Gentleman says, they have three times as much.
    How has this been achieved? It has been done realistically, first by working out what is the optimum productivity for a man in a factory who is working all-out. American experience shows that this is a little under a six-hour day. They have got down to something like that and have also realised that to get men to go to a factory where life is not leisurely, the incentive must be pay.
    But we are producing a Measure which is almost sure to interfere with agreements already negotiated and men are hanging on to see if they can make up their losses with overtime. We are giving Mr. Aubrey Jones power to tell them how naughty this is. This does not measure up to the problem.
    Mr. R. Gresham Cooke: The hon. Member for South Ayrshire (Mr. Emrys Hughes) is right. There are restrictive practices in the legal and medical professions and others, but they are controlled by Act of Parliament and

    1473
    based on a reasonable division of labour. Also, they come into force only after a man has taken an examination, whether as a doctor or a lawyer, to differentiate him from unqualified people. That is the true reason for the divisions of labour in the professions and in industry. But this practice becomes intolerable in industry in such cases as the failure of an electric light bulb, when only an electrician is allowed to put in another bulb.
    Another example could be that of a steel works in the middle of the night, when some ordinary defect occurs in the cooling system of a furnace. The tap could be mended by the turn of a spanner, but the whole steel works is held up for an hour or two until someone has sent for a plumber to deal with the matter. The hon. and learned Member for Northampton (Mr. Paget) is right. These things ought to be put right by management, pay arrangements and so on.
    There is an example of a restrictive practice today in my constituency which ought to be reported to the Prices and Incomes Board. In the Twickenham film studios, a man has been properly working as a scene painter and is a member of the National Association of Theatrical and Kinematograph Employees. He has had a anion ticket for some time, but has now been told that he must also become a member of the Amalgamated Society of Decorators and Painters. The union has said that its members will go on strike unless he joins. He has been told by his employers that he must go. He has been given the sack and is now picketing the film studios asking for reinstatement. I would call that a restrictive practice and the sort of thing which is holding up our effort. This man was already a member of a union, with a union ticket, working peacefully, and was asked out of the blue to join another union and because he did not do so, the employers had to give way. That is why I think this sort of thing should be within the process of the Bill.
    Mr. Paget: Does the hon. Gentleman seriously think that that situation would be altered by a report from Mr. Aubrey Jones?
    Mr. Gresham Cooke: The light of the publicity which would be thrown on that sort of practice would surely show both
    1474
    employers and trade unions that they had to recognise their responsibilities.
    Mr. R. B. Cant: I should like to speak at very great length on the wisdom of my hon. and learned Friend the Member for Northampton, but I will comment only very briefly on the speech of the right hon. Member for Leeds, North-East (Sir K. Joseph). He went back to the Hilton Committee on Trusts in 1919, saying as it did that light is the sovereign antiseptic and the best of all policemen when dealing with restrictive practices. I should like him to reflect on the example of the motor tyre industry. The Monopolies Commission investigated this industry and said that a number of its restrictive practices were against the public interest and the industry registered those practices with the Restrictive Practices Registrar who told the industry to desist. The industry was then reported because it was not desisting, but was operating on the basis of price information agreements and each firm was fined £10,000. Which does the right hon. Gentleman think the better, the limelight, or the penal code?
    Mr. William Rodgers: In the course of this discussion we have covered some of the ground covered on the previous Amendment. Arguments about restrictive practices are part of the agument about productivity. We want restrictive practices of all kinds to be abandoned as quickly as possible, but, as my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) pointed out, they are not limited to one side of the equation, or to one group of unreasonably minded men, such as the right hon. Member for Leeds, North-East (Sir K. Joseph) has in mind. There are many restrictive practices in all the professions and we want those to be abandoned as rapidly as any others. There is far less reason for such practices in the professions than there are for some of the restrictive labour practices which have been continued for some of the reasons mentioned and which we can all understand.
    I want to say quite clearly what the National Board for Prices and Incomes can do. The Board can consider, on the basis of references made to it, all questions related to productivity, and in this

    1475
    respect the right hon. Gentleman was pushing at an open door. When the Board considers a reference and considers the productivity element involved, of course it may find itself considering restrictive practices on both the management and the other side. In this respect the Amendment is unnecessary. If obstacles to efficiency are to be overcome and the Board has any part to play, it will consider restrictive practices in the normal course of its investigations and will be looking at the sort of questions mentioned by the hon. Member for Orpington (Mr. Lubbock), for example.
    First, the operations of the Board will cover restrictive practices by encompassing them in its work and in its reports on problems of productivity. Secondly, if we were to do as the right hon. Gentleman proposes, we should pre-judge the Board's reports. The right hon. Gentleman said quite openly, as he said in Committee, that he wanted the spotlight to be turned on restrictive practices. If we carried through the implications of that, we should be referring restrictive practices to the Board and pre-judging their nature before the Board had had an opportunity to consider them.
    It is far better to make references to the Board on prices or incomes questions and assume that in the course of its investigations it will consider restrictive practices. In that way we shall not prejudge its investigations or its conclusions, which is precisely what we would do if we made an issue of restrictive practices in the way which the right hon. Gentleman has in mind.
    I half agree with what my hon. and learned Friend the Member for Northampton (Mr. Paget) said. Many restrictive practices on the labour side have grown up over a long period as a defence against unemployment and as a reaction to the fear of unemployment. For that reason, we can be sympathetic towards these practices where they have existed, but I certainly do not take as gloomy and cynical a view about the impossibility of overcoming them. There is no room for conservatism of any kind, even if it is conservatism born of a proper desire to defend oneself against the consequences of unemployment. I take a much more optimistic view of the capacity of the great majority of men and women to
    1476
    consider the current situation and to regard it as greatly different from the situation of 20 or 30 years ago, despite immediate problems.
    We should seek to understand why restrictive practices grew up while at the same time not seeking to perpetuate them in any way, either by word of mouth or failing to draw attention to them when they are properly obstacles to efficiency. I must ask the House to resist the Amendment, but in doing so I say again that where restrictive practices impede efficiency, we hope that they will be abandoned and that we think that they are something which should be properly encompassed by the Board's inquiries and reports.
    Mr. Biffen: I am a little disappointed by the Under-Secretary's answer. I do not think that there would be any element of pre-judgment in a reference to the Board, because the whole approach has been that the Board should be encouraged to make a dispassionate study of the problems referred to it, whether they are problems of prices or incomes, or of demarcation or overmanning or alleged overmanning. I imagine that the hon. Gentleman would not argue that the Government have prejudged in any of the 18 instances which they have referred to the Board and on which the Board has already reported.
    The point made by my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) is still the most valid. It is that we are discussing the policy in its totality, with prices, incomes and productivity. Clause 2(1,a) specifically refers to prices; Clause 2(1,b) refers specifically to incomes and it is only right that there should be a Clause 2(1,c) referring specifically to the elements of productivity.
    It has been made clear that the problems which concern us are the widespread allegations—I do not say whether they are fair or unfair—that there exist within British industry substantial elements of overmanning and demarcation difficulties which inhibit the proper and most economic utilisation of labour. There is a good case for arguing that the Board ought to be able to identify, in cases referred to it, areas where overmanning scales have or might be reduced, to identify the kind of agreements which led to such reductions and the extent to which

    1477
    health and safety arguments were sustained or not borne out by subsequent reductions. The arguments concerning health and safety are obviously legitimate in any determination of manning scales.
    7.30 p.m.
    It is quite true that already in the work of the Board there has been evidence that it is able to deal with them. In the baking industry report I understand that there was a productivity agreement which was, at least in part, facilitated by the Board's studies, and which, incidentally, has been put in the deep freeze for six months. It is precisely that kind of circumstance that we think might be facilitated by the acceptance of the Amendment.
    I am sorry that the hon. Member for South Ayrshire (Mr. Emrys Hughes) has left the Chamber; he seemed to think that our proposal did not go wide enough, but my reading of the Bill leads me to believe that what concerns him would be covered by Clause 2(1). Even if our Amendment does not in his view go wide enough, I am sure that his many friends in another place could assist him by seeking to widen the Amendment during their deliberations later in the week.
    The hon. and learned Member for Northampton (Mr. Paget) quite rightly argued that it was management's job to contest restrictive practices. No one would disagree with that view, nor with the view that the reports of Mr. Aubrey Jones would help to solve the matter. We on this side have constantly argued that there is essentially a useful rôle in which Mr. Aubrey Jones's activities can assist. They are the areas of illumination. The hon. and learned Gentleman may argue that this is a very limited rôle, but it
    is a valuable one, and I do not think that he would deny that we have had some very valuable reports from Mr. Aubrey Jones.
    I accept three reasons above all others why we should be most concerned about the most economical utilisation of our labour force. The first is that, whatever the extent of the credit squeeze, skilled labour in particular will continue to be in short supply. Any analysis of population statistics suggests that our working population is likely to be such that future demand on it will be very great. Secondly, a widespread acceptance—which may not be shared by the hon. and learned Gentleman—that we must continue with tight controls on Commonwealth immigration will accentuate the tightness of the labour market, and we must accept the consequences. The selective employment premium is a third reason why we should constantly seek to examine how industry makes use of the labour. At the end of the day we must be in a far better position than now to comment on accusations that occasionally appear in newspapers like the Sunday Times, with Mr. Allen describing Britain as a part-time nation.
    I do not prejudge that we are a nation which over-indulges in restrictive practices, but I say that if the Prices and Incomes Board has legitimate rôles, this is one of them. I am disappointed that the Under-Secretary should have answered as he has done, and I fear that we have no option but to carry this Amendment to a Division.
    Question put, That those words be there inserted in the Bill:—
    The House divided: Ayes 155, Noes 233.

    Division No. 163.]

    AYES

    [7.33 p.m.

    Alison, Michael (Barkston Ash)

    Carlisle, Mark

    Eyre, Reginald

    Allason, James (Hemel Hempstead)

    Carr, Rt. Hn. Robert

    Farr, John

    Barber, Rt. Hn. Anthony

    Clark, Henry

    Fisher, Nigel

    Batsford, Brian

    Clegg, Walter

    Fletcher-Cooke, Charles

    Berry, Hn. Anthony

    Corfield, F. V.

    Fortescue, Tim

    Bessell, Peter

    Costain, A. P.

    Foster, Sir John

    Biffen, John

    Craddock, Sir Beresford (Spelthorne)

    Gibson-Watt, David

    Birch, Rt. Hn. Nigel

    Crouch, David

    Giles, Rear-Adm. Morgan

    Blaker, Peter

    Crowder, F. P.

    Gilmour, Sir John (Fife, E.)

    Body, Richard

    Currie, G. B. H,

    Glover, Sir Douglas

    Boyd-Carpenter, Rt. Hn. John

    Dance, James

    Glyn, Sir Richard

    Boyle, Rt. Hn. Sir Edward

    Davidson, James (Aberdeenshire, W.)

    Gower, Raymond

    Brewis, John

    d'Avigdor-Goldsmid, Sir Henry

    Grant, Anthony

    Brinton, Sir Tatton

    Dean, Paul (Somerset, N.)

    Gresham Cooke, R,

    Bromley-Davenport, Lt. Col. Sir Walter

    Deedes, Rt. Hn. w. F. (Ashford)

    Griffiths, Eldon (Bury St. Edmunds)

    Brown, Sir Edward (Bath)

    Dodds-Parker, Douglas

    Grimond, Rt. Hn. J.

    Bruce-Gardyne, J.

    Doughty, Charles

    Gurden, Harold

    Buck, Antony (Colchester)

    Eden, Sir John

    Hall, John (Wycombe)

    Bullus, Sir Eric

    Elliot, Capt. Walter (Carshalton)

    Hamilton, Michael (Salisbury)

    Harrison, Col. Sir Harwood (Eye)

    Maginnis, John E.

    Russell, Sir Ronald

    Hawkins, Paul

    Marten, Nell

    Scott, Nicholas

    Heald, Rt. Hn. Sir Lionel

    Mathew, Robert

    Sharples, Richard

    Heseltine, Michael

    Maude, Angus

    Shaw, Michael (Sc'b'gh & Whitby)

    Higgins, Terence L.

    Maudling, Rt. Hn. Reginald

    Sinclair, Sir George

    Hill, J. E. B.

    Maxwell-Hyslop, R. J.

    Stodart, Anthony

    Hobson, Rt. Hn. Sir John

    Maydon, Lt.-Cmdr. S. L. C.

    Stoddart-Scott, Col. Sir M. (Ripon)

    Hooson, Emlyn

    Miscampbell, Norman

    Summers, Sir Spencer

    Hordern, Peter

    Morgan, W. G. (Denbigh)

    Talbot, John E.

    Hornby, Richard

    Munro-Lucas-Tooth, Sir Hugh

    Tapsell, Peter

    Howell, David (Guildford)

    Murton, Oscar

    Teeling, Sir William

    Hunt, John

    Nabarro, Sir Gerald

    Thatcher, Mrs. Margaret

    Hutchison, Michael Clark

    Neave, Airey

    Thorpe, Jeremy

    Jenkin, Patrick (Woodford)

    Noble, Rt. Hn. Michael

    Turton, Rt. Hn. R. H.

    Jennings, J. C. (Burton)

    Nott, John

    van Straubenzee, W. R.

    Johnston, Russell (Inverness)

    Orr-Ewing, Sir Ian

    Vaughan-Morgan, Rt. Hn. Sir John

    Jones, Arthur (Northants, S.)

    Osborne, Sir Cyril (Louth)

    Vickers, Dame Joan

    Jopling, Michael

    Page, Graham (Crosby)

    Wainwright, Richard (Coins Valley)

    Joseph, Rt. Hn. Sir Keith

    Pardoe, John

    Wall, Patrick

    Kaberry, Sir Donald

    Pearson, Sir Frank (Clitheroe)

    Ward, Dame Irene

    King, Evelyn (Dorset, S.)

    Peel, John

    Weatherill, Bernard

    Kirk, Peter

    Percival, Ian

    Webster, David

    Kitson, Timothy

    Pike, Miss Mervyn

    Wells, John (Maidstone)

    Knight, Mrs. Jill

    Pink, R. Bonner

    Whitelaw, William

    Legge-Bourke, Sir Harry

    Price, David (Eastleigh)

    Wills, Sir Gerald (Bridgwater)

    Lewis, Kenneth (Rutland)

    Prior, J. M. L.

    Wilson, Geoffrey (Truro)

    Lloyd, Ian (P'tsm'th, Langstone)

    Pym, Francis

    Winstanley, Dr. M. P.

    Loveys, w. H.

    Quennell, Miss J. M.

    Wood, Rt. Hn. Richard

    McAdden, Sir Stephen

    Ramsden, Rt. Hn. James

    Worsley, Marcus

    Mackenzie, Alasdair (Ross&Crom'ty

    Rawlinson, Rt. Hon. Sir Peter

    Younger, Hn. George

    Maclean, Sir Fitzroy

    Ridsdale, Julian

    Macleod, Rt. Hn. Iain

    Rodgers, Sir John (Sevenoaks)

    TELLERS FOR THE AYES:

    Macmillan, Maurice (Farnham)

    Rossi, Hugh (Hornsey)

    Mr. More and

    Maddan, Martin

    Royle, Anthony

    Mr. David Mitchell.

    NOES

    Albu, Austen

    Dell, Edmund

    Herbison, Rt. Hn. Margaret

    Allaun, Frank (Salford, E.)

    Dewar, Donald

    Horner, John

    Alldritt, Walter

    Diamond, Rt. Hn. John

    Houghton, Rt. Hn. Douglas

    Allen, Scholefield

    Dickens, James

    Howarth, Harry (Wellingborough)

    Anderson, Donald

    Dobson, Ray

    Howarth, Robert (Bolton, E.)

    Archer, Peter

    Doig, Peter

    Hughes, Emrys (Ayrshire, S.)

    Armstrong, Ernest

    Donnelly, Desmond

    Hughes, Roy (Newport)

    Ashley, Jack

    Dunnett, Jack

    Hunter, Adam

    Atkins, Ronald (Preston, N.)

    Dunwoody, Mrs. Gwyneth (Exeter)

    Hynd, John

    Atkinson, Norman (Tottenham)

    Dunwoody, Dr. John (F'th & C'b'e)

    Jackson, Colin (B'h'se & Spenb'gh)

    Barnes, Michael

    Edelman, Maurice

    Jackson, Peter M. (High Peak)

    Baxter, William

    Edwards, Robert (Bilston)

    Janner, Sir Barnett

    Benn, Rt. Hn. Anthony Wedgwood

    Edwards, William (Merioneth)

    Jay, Rt. Hn. Douglas

    Bennett, James (G'gow, Bridgeton)

    Ellis, John

    Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)

    Bidwell, Sydney

    English, Michael

    Jenkins, Hugh (Putney)

    Binns, John

    Ennals, David

    Jenkins, Rt. Hn. Roy (Stechford)

    Blackburn, F.

    Ensor, David

    Johnson, Carol (Lewisham, S.)

    Blenkinsop, Arthur

    Evans, Ioan L. (Birm'h'm, Yardley)

    Johnson, James (K'ston-on-Hull, W.)

    Boardman, H.

    Faulds, Andrew

    Jones, Rt. Hn. SirElwyn (W. Ham, S.)

    Booth, Albert

    Finch, Harold

    Jones, J. Idwal (Wrexham)

    Boston, Terence

    Fletcher, Raymond (Ilkeston)

    Kelley, Richard

    Bottomley, Rt. Hn. Arthur

    Fletcher, Ted (Darlington)

    Kenyon, Clifford

    Bowden, Rt. Hn. Herbert

    Floud, Bernard

    Kerr, Russell (Feltham)

    Boyden, James

    Foot, Michael (Ebbw Vale)

    Lawson, George

    Braddock, Mrs. E. M.

    Ford, Ben

    Leadbitter, Ted

    Bray, Dr. Jeremy

    Forrester, John

    Ledger, Ron

    Brooks, Edwin

    Fraser, John (Norwood)

    Lee, Rt. Hn. Jennie (Cannock)

    Brown, Rt. Hn. George (Belper)

    Fraser, Rt. Hn. Tom (Hamilton)

    Lestor, Miss Joan

    Brown, Bob (N'c'tle-upon-Tyne, W)

    Freeson, Reginald

    Lever, L. M. (Ardwick)

    Butler, Herbert (Hackney, C.)

    Galpern, Sir Myer

    Lewis, Ron (Carlisle)

    Callaghan, Rt. Hn. James

    Garrett, W. E.

    Lomas, Kenneth

    Cant, R. B.

    Garrow, Alex

    Loughlin, Charles

    Carter-Jones, Lewis

    Gordon Walker, Rt. Hn. P. C.

    Luard, Evan

    Castle, Rt. Hn. Barbara

    Gourlay, Harry

    Lyon, Alexander W. (York)

    Coleman, Donald

    Greenwood, Rt. Hn. Anthony

    Lyons, Edward (Bradford, E.)

    Conlan, Bernard

    Gregory, Arnold

    Mabon, Dr. J. Dickson

    Corbet, Mrs. Freda

    Grey, Charles (Durham)

    McBride, Neil

    Crawshaw, Richard

    Griffiths, David (Rother Valley)

    McCann, John

    Crosland, Rt. Hn. Anthony

    Hamilton, William (Fife, W.)

    MacColl, James

    Crossman, Rt. Hn. Richard

    Hannan, William

    Macdonald, A. H.

    Cullen, Mrs. Alice

    Harper, Joseph

    McKay, Mrs. Margaret

    Darling, Rt. Hn. George

    Harrison, Walter (Wakefield)

    Mackie, John

    Davies, G. Elfed (Rhondda, E.)

    Hart, Mrs. Judith

    Mackintosh, John P.

    Davies, Harold (Leek)

    Haseldine, Norman

    McMillan, Tom (Glasgow, C.)

    Davies, Ifor (Gower)

    Hazell, Bert

    McNamara, J. Kevin

    de Freitas, Sir Geoffrey

    Healey, Rt. Hn. Denis

    Mallalieu, J. P. W. (Huddersneld, E.)

    Delargy, Hugh

    Heffer, Eric S.

    Manuel, Archie

    1480

    1481

    Mapp, Charles

    Prentice, Rt. Hn. R. E.

    Swingler, Stephen

    Marquand, David

    Price, Christopher (Perry Barr)

    Symonds, J. B.

    Maxwell, Robert

    Price, Thomas (Westhoughton)

    Taverne, Dick

    Mayhew, Christopher

    Probert, Arthur

    Thomas, George (Cardiff, W.)

    Mellish, Robert

    Pursey, Cmdr. Harry

    Thomas, Iorwerth (Rhondda, W.)

    Mendelson, J. J.

    Randall, Harry

    Thornton, Ernest

    Mikardo, Ian

    Redhead, Edward

    Tinn, James

    Millan, Bruce

    Rees, Merlyn

    Tomney, Frank

    Molloy, William

    Rhodes, Geoffrey

    Urwin, T. W.

    Morgan, Elystan (Cardiganshire)

    Roberts, Gwilym (Bedfordshire, S.)

    Varley, Eric G.

    Morris, Alfred (Wythenshawe)

    Robinson, Rt. Hn. Kenneth (St. P'c'as)

    Wainwright, Edwin (Dearne Valley)

    Morris, John (Aberavon)

    Rodgers, William (Stockton)

    Walker, Harold (Doncaster)

    Moyle, Roland

    Ross, Rt. Hn. William

    Watkins, David (Consett)

    Mulley, Rt. Hn. Frederick

    Rowland, Christopher (Meriden)

    Watkins, Tudor (Brecon & Radnor)

    Newens, Stan

    Rowlands, E. (Cardiff, N.)

    Weitzman, David

    Norwood, Christopher

    Ryan, John

    Wellbeloved, James

    Oakes, Cordon

    Sheldon, Robert

    Whitaker, Ben

    Ogden, Eric

    Shinwell, Rt. Hn. E.

    Whitlock, William

    O'Malley, Brian

    Shore, Peter (Stepney)

    Willey, Rt. Hn. Frederick

    Oram, Albert E.

    Silkin, John (Deptford)

    Williams, Alan Lee (Hornchurch)

    Orbach, Maurice

    Silkin, S. C. (Dulwich)

    Williams, Clifford (Abertillery)

    Orme, Stanley

    Silverman, Julius (Aston)

    Williams, Mrs. Shirley (Hitchin)

    Oswald, Thomas

    Silverman, Sydney (Nelson)

    Willis, George (Edinburgh, E.)

    Owen, Will (Morpeth)

    Skeffington, Arthur

    Wilson, Rt. Hn. Harold (Huyton)

    Page, Derek (King's Lynn)

    Slater, Joseph

    Wilson, William (Coventry, S.)

    Pannell, Rt. Hn. Charles

    Small, William

    Woodburn, Rt. Hn. A.

    Park, Trevor

    Snow, Julian

    Woof, Robert

    Pavitt, Laurence

    Spriggs, Leslie

    Wyatt, Woodrow

    Pearson, Arthur (Pontypridd)

    Steele, Thomas (Dunbartonshire, W.)

    Yates, Victor

    Peart, Rt. Hn. Fred

    Stewart, Rt. Hn. Michael

    Pentland, Norman

    Stonehouse, John

    TELLERS FOR THE NOES:

    Perry, George H. (Nottingham, S.)

    Summerskill, Hn. Dr. Shirley

    Mr. R. W. Brown and Mr. Bishop.

    Clause 4.—(PRINCIPLES TO BE APPLIED BY THE BOARD.)
    Mr. Higgins: I beg to move Amendment No. 4, in page 4, line 14, after "Act" to insert:
    "as shall be amended under subsection (2) of this section".
    The object of the Amendment is to ensure that Schedule 2 to which this Clause refers, which sets down the principles to be applied by the Prices and Incomes Board, shall be amended in accordance with the provisions and powers which are given by subsection (2) of the Clause. The reason we do this is that we are quite convinced that the Schedule as it stands is an absurdity. We hope that when we consider the Schedule it will be possible to amend it. We move this Amendment to ensure that if the Schedule itself is not amended by the House of Commons there shall be an obligation on the First Secretary to amend it before any further references are made under this Clause to the Prices and Incomes Board.
    The Clause which we seek to amend is in a very real sense the heart of the Bill, because it sets down the principles to be considered by the Board when considering any price or wage increase and therefore it is of the greatest importance. We are not at the moment clear, even following the deliberations in Committee, whether this Schedule will also be
    1482
    applicable when orders are made under the second six-months' period in which severe restraint is to be imposed by the First Secretary.
    I should be grateful if the Under-Secretary, if he is to reply to the debate, will make clear whether eventually Amendments will be made to this Clause and to the Schedule which will govern the judgments the First Secretary or the Prices and Incomes Board will make exclusively in the second period of incomes restraint. It is not clear whether these principles are to be applied only after the period of standstill and severe restraint or in the period of restraint as well.
    The trouble which we on this side of the House have felt about the whole Clause is that it refers to a Schedule which is based partly on the Declaration of Intent which the First Secretary had signed by the representatives of both sides of industry, and partly on the White Paper. We have been very worried indeed, because the Declaration of Intent and the White Paper had been regarded as sacrosanct by the First Secretary and incorporated in legislation even though it is perfectly clear that the figures set out in the Declaration which are based on the same assumptions and forecasts which were in the National Plan have proved completely invalid, and even though the First Secretary himself has had to admit that he will have to sit

    1483
    down again with his advisers and determine what alternative set of figures are relevant in the present economic crisis into which the Government have plunged us.
    7.45 p.m.
    It seems totally wrong that we should not have amended a Schedule which still embodies much which can be regarded merely as an historic myth, a series of figures which were never achieved are not achieved at present, and are not likely to be achieved in future under a Labour Government. To start with, the Clause and the Schedule attached to it based on those quite irrelevant figures is very foolish indeed. We should much have preferred to see a situation where the figures themselves were eradicated although we should be happy for the First Secretary to bring out from time to time what easily could be numerical criteria for the Prices and Incomes Board to consider.
    That is the main reason why we are suggesting that the Clause should be amended. This whole concept of putting figures into the legislation is anyway misguided, because it has been based in the past, and apparently will be in future, on the idea of the National Plan. Some confusion has arisen as to whether the National Plan is a target or a forecast. It is perfectly clear that the National Plan was based on an assumption which the First Secretary made about the growth rate we are likely to get in this country, and he then asked businessmen to fit into that overall target figure the implications that it had for their industries, but they did not agree at all with his initial assumption. Merely to have built into the legislation an hypothetical figure which the First Secretary thought up and then to ask business to prepare a plan on the lines I have mentioned in this prices and incomes legislation, is the wrong way of going about it.
    We are not in the least happy about the qualitative criteria which appear in the Schedule. These too are quite inadequate. They set out a series of platitudes in regard to economic analyses which the Prices and Incomes Board and its chairman and members must be aware of, but those so-called criteria do not give any overall guidance as to what basis the Board should consider for an
    1484
    increase in wages or prices placed before it. For this second reason we think this Amendment should be accepted. It should be quite clear that we are not to have a series of criteria which are quite irrelevant and inadequate to enable the Board to do its job properly.
    The fact that in the next six months the First Secretary himself in the freeze period may be adopting similar criteria, whether they be numerical or qualitative, as those set out in the Schedule, is quite terrifying. I should be grateful if the Under-Secretary would make it clear whether we are to have published what the criteria are to be over the next year or so; and, if so, whether it is proposed to make them explicit.
    As it stands at the moment, we think that the Clause and the Schedule must be amended. It would be unreasonable to base our future plans for the country's prices and incomes policy on a Schedule which is clearly obsolete and mythical. For this reason, I hope that my hon. Friends will agree that the Amendment should be argued and debated, but at this stage it would be wrong to divide on it, because we shall come to it later in the Bill when we can consider the matter in greater detail.
    Mr. William Rodgers: Typically, the hon Member for Worthing (Mr. Higgins) made a moderate speech, even when he was being rather perverse, because we went through this exercise fully in Committee and explained, to the satisfaction of many people, if not to his, precisely where the criteria applied and how far Schedule 2 was relevant to the present situation.
    The hon. Gentleman referred to a hypothetical figure which my right hon. Friend the First Secretary had thought up. I was not clear whether at the time he was talking about the 25 per cent. growth between 1964 and 1970 or whether he was referring to the norm. At the time that these figures were devised, they were the best which could be deduced on the evidence available. They were the subject of full discussion with both sides of industry. The White Papers we published were endorsed by the National Economic Development Council. If there is any failing, if we were all too optimistic at that time, the failing must be accepted to be not only that of my right

    1485
    hon. Friend the First Secretary and of the whole Government, but also of many informed people of great experience who worked with us in this exercise of producing a plan and trying to discover a policy which would substantially contribute to economic stability and growth.
    Mr. Higgins: Would not the Under-Secretary agree that this points out the complete folly of saying that wage increases should be granted on the basis of what one thinks increases in productivity may be rather than on the basis of what they have actually been?
    Mr. Rodgers: I do not think so. If one is trying to develop a policy for productivity, prices and incomes, some indication must be given; some criteria must be produced by which the Board can reach its judgments. We thought that there was every prospect of productivity rising at a rate which would make 3½ per cent. tolerable. As it turns out, we were wrong, but there had to be criteria. The whole burden of much of what the hon. Gentleman has said is to the effect that there is still the need for criteria, but he believes the ones which we will be applying may be the wrong ones.
    The hon. Gentleman said that he was not clear whether Schedule 2 would be applied in the second six months. The proper way of viewing this is that Schedule 2 will in effect come into operation when the present period of standstill and then the flexible period have passed. In other words, it is there for the period after the twelve months with which Part IV deals. We make clear in paragraph 25 of the White Paper that
    "During the six month period of severe restraint"—
    that is, the second six-month period in the total period of one year—
    "the criteria for consideration of new proposals for improvements in pay and hours will be much more stringent than those set out in Part I of the White Paper …".
    That is the part which is embodied in Schedule 2. So, for the second six months, the criteria will be much more stringent than those set out in the Schedule and, as we say in the White Paper, for the time being the incomes norm must be regarded as zero.
    The Amendment is unnecessary, in view of what the Clause says. The
    1486
    Amendment would add nothing, because subsection (1), which obliges the Board to have regard to the considerations set out in Schedule 2, already contains the words
    'subject to the following provisions of this section".
    "The following provisions" include subsection (2), which sets out the means by which the Secretary of State can vary the criteria by Order and after consultation. Therefore, provision is fully made already in the Clause, and in particular in subsection (2), to vary the criteria as maybe seen to be fit, depending upon the circumstances of the hour.
    For this reason, the general point which the hon. Gentleman makes is met. I am glad, for that reason, that he does not intend to press the Amendment to a division.
    Mr. Biffen: The Under-Secretary in referring to the White Paper said that there would be more stringent criteria during the second six months of the second period of excessive restraint. Which of the four criteria outlined in paragraph 15 of Schedule 2 does he think will disappear during the second six months and be disregarded by the Board?
    Mr. Rodgers: This would not be the right time for me to speculate on what the criteria may be. It would be wrong to anticipate the discussions which, as we say in paragraph 25 of the White Paper, we intend to have with the Confederation of British Industry and the trade unions about the specific question of criteria for the second six months.
    Mr. Higgins: Surely the criteria for price behaviour, as against the trends in national productivity which appear in Schedule 2, ought to have universal applicability through time. It is only the numerical criteria or trends in national productivity which will vary through time.
    Mr. Rodgers: It is probably rather dogmatic to say that it is possible to devise any criteria which represent an intelligent effort to get a standstill on prices and get reasonable settlements on incomes which will endure through all time. Until the present time, we have been discussing the criteria which shall apply on the incomes side. The criteria for prices are rather different. I would be willing to concede

    1487
    that it is more arguable here that it might be possible to devise criteria which would be more enduring than those which are designed to deal with increases in incomes.
    Amendment negatived.
    Amendment proposed: In page 4, leave out lines 32 to 35 and insert:
    Provided that in the period of six months beginning with the passing of this Act an order may be made under subsection (2) above without any prior consultation as required by the foregoing provisions of this subsection.—[Mr. William Rodgers.]
    Mr. Higgins: I hope that we shall have some explanation of the Amendment from the Under-Secretary rather than merely a formal moving.
    Mr. Deputy Speaker: The Question is——
    8.0 p.m.
    Mr. Higgins: On a point of order, Mr. Deputy Speaker. Are we to have no explanation of what Amendment No. 61 means?
    Mr. William Rodgers: I apologise for the delay. I understand that we are dealing with a group of Amendments at this stage, Mr. Deputy Speaker. Would you be kind enough to confirm whether that is so? I understood that we were taking a number together.
    Mr. Deputy Speaker: The Question is——
    Mr. Richard Sharples: On a point of order. Surely the House is entitled to an explanation of some kind. Does not the Under-Secretary of State know what he is doing?
    Mr. Deputy Speaker: This is Amendment No. 61. Is there any doubt about it?
    Mr. Rodgers: I am sorry that the hon. Member for Sutton and Cheam (Mr. Sharples) is getting angry, for it is unnecessary. I was about to consult you, Mr. Deputy Speaker, as to whether you were taking this Amendment together with a number of others. It would be helpful if this could be made clear.
    Mr. Deputy Speaker: It has not been suggested that we are dealing with any other Amendment than this one. However, this is for the convenience of the
    1488
    House and no doubt the House will consider any proposal. At the moment we are dealing with Amendment No. 61 alone.
    Mr. Cant: I understood that Amendment No. 61 would be in the provisional selection of Amendments, Mr. Deputy Speaker.
    Mr. Deputy Speaker: It is on the Order Paper under the heading of all Government Amendments.
    Mr. Higgins: On a point of order. We are in an extraordinary position. The Under-Secretary of State rises and says, "I beg to move", but it seems clear that he has no idea of what he is proposing and of which Amendments are linked with it. He has failed to give any explanation of the Amendment. One is forced to the conclusion that he has no idea what it does. I hope that he will say clearly which Amendment he is proposing that we should now consider, which he considers are linked with it and whether he thinks there are any arguments in favour of any of them.
    Mr. Deputy Speaker: That is not a point of order for the Chair. Whatever the hon. Member for Worthing (Mr. Higgins) says about the Under-Secretary of State the latter has moved the Amendment and I must put it to the House.
    The Parliamentary Secretary to the Ministry of Labour (Mrs. Shirley Williams): On a point of order, Mr. Deputy Speaker. I apologise to you for the misunderstanding. It is due to the fact that there was a mis-typing whereby Amendment No. 61 appeared in our papers as Amendment No. 16 with which it was understood we were to consider several others. I apologise to you and to the House. Have I your permission to say something about it?
    Mr. Deputy Speaker: Yes.
    Mrs. Williams: This Amendment substitutes a new proviso for the existing one to Clause 4(3). The existing proviso, which was moved and accepted in Standing Committee, provides that subsection (3) of Clause 4 shall not apply to an order made within the period of twelve months after the passing of the Act. Its effect was, firstly, to disapply during the 12-month period the requirement for the Secretary of State to consult interested

    1489
    bodies—the T.U.C. and the C.B.I.—before making an Order varying the conditions now specified in Schedule 2, to which the Board is required to have regard.
    This was considered necessary in order to enable an order to be made under Clause 4(2) varying the considerations in Schedule 2 as soon as the Bill becomes law. An order which refers to the considerations to be observed during the present temporary standstill period as set out in the White Paper, Cmnd. 3073, will be required on the passing of the Act without any delay for statutory consultation. The Government have, of course, already had consultations with the T.U.C. and the C.B.I. on the considerations to be observed and, as my hon. Friend the Under-Secretary of State has just said, these will be continuing.
    The second and accidental effect of the proviso as it stands was to disapply during the 12-month period the provisions in paragraphs (a) and (b) of Clause 4(3), which enable any such varying order itself to be varied or revoked and which make the order a statutory instrument subject to negative resolution procedure.
    In the discussion in Standing Committee, my right hon. Friend the First Secretary of State agreed that it was possible that the existing proviso went rather further than was really necessary and undertook to consider a further Amendment at Report Stage.
    The Amendment is designed to limit the maximum period during which the statutory consultation requirement may be waived to the first six months, instead of 12 months, and to ensure that any orders made under subsection (2) of Clause 4 will be subject to the provisions of paragraphs (a) and (b) in subsection (3). It is designed to meet points made in Standing Committee about the need to consult these bodies in the second six months and the Government hope that it will be acceptable to the House.
    Mr. Paget: I am not very happy about these price fixing suggestions. Price fixing is a very ancient method. It goes a long way back in history, but as far as I know it has never worked without draconian methods. Wage fixing has never worked without the direction of labour and industrial planning has never
    1490
    worked without industrial exchange control.
    The basic issue here is that one is trying to do three things without accepting the necessary conditions. Thus, what we are particularly dealing with here is price fixing which always moves to more draconian methods. Indeed, my right hon. Friend the First Secretary of State had a predecessor in the third century in the person of the Emperor Julian and I think a short passage from the book "Julian" may be of interest in explaining the Emperor's experience and that of his Senate.
    "He summoned a meeting of the chief people, and ordered them to find a remedy for the prevalent distress. During three months, however, their deliberations led to no effect. At the end of that time, Julian took the matter into his own hands, and drew up a list of prices, by which corn was to be sold at a moderate rate. This step naturally led the dealers to restrict their sales still further. … As the hoarding continued, and in all probability the wealthy citizens set themselves to buy up the stores so liberally provided, in order to sell again at the most profitable time and place, Julian had another and a stormy meeting"
    with the Senate
    "which ended in the whole body of senators, over two hundred in number, being ordered into custody."
    That is a certain signpost on the road to where one goes with this kind of policy. I have for a long time prophesied what would happen. One just cannot work price control if one is not prepared to ration. One cannot fix wages if one is not prepared to direct labour. One cannot plan one's economy if one is not prepared to control the exchange rates.
    If one does not control the exchange rates, then it is not the Government or the planners who can decide the level of production but the dealers in currency because, the moment they decide to move against one's currency, one's planned production has to be put into reverse. This seems to be the basic fallacy on which we are working, and for my part—and I have taken this opportunity to express my own position—it seems to me that the whole Bill is following entirely the wrong track.
    Mr. Sharples: I intervene very briefly in order to understand this. It seems that the hon. Lady said that the original wording went unduly far and that it is the intention of the Amendment to restrict it

    1491
    somewhat but, in fact, the new wording widens the scope considerably. Under the old wording, as I understand it, the subsection would not apply to an order made within 12 months—that has now been reduced to six months:
    "… if it is expressed to cease to have effect at a time not later than the expiration of that period"
    —that is 12 months. Under the Amendment now moved the order can be made under this Clause at any time during the first six months, which need not necessarily be within the time of expiry. This seems to widen matters. Orders can be made in the first six months of this Bill coming into operation, having an indefinite life, without any consultation, either with the trade unions or the C.B.I.
    Mrs. Shirley Williams: Since we are talking about Part I of the Bill, what we are considering here are orders which, by the nature of things, can apply for only the three months, so far as an order concerning a price or wage increase is concerned. This will not alter the length of time for which the order will apply. It will merely limit the time to six months instead of 12 months, during which the First Secretary can make an order without consultation with the bodies listed.
    Mr. Costain: The hon. and learned Member for Northampton (Mr. Paget) has given us two historical examples, one of the Hundred Years War and another relating to Emperor Julian. I was hoping that the hon. Lady, in reply, would explain to the House just how she would counteract the comments made by her hon and learned Friend. We on this side have said all along that a Socialist Government would introduce controls, and that these controls would breed more controls. Controls can work only if rationing and the control of labour is introduced. The hon. and learned Gentleman has prophesied what we have always known would happen. Would the hon. Lady explain why he is wrong, because I fully agree with him?
    Mr. Deputy Speaker: The Question is——
    Sir K. Joseph: We see no objection to this Amendment but it has been the occasion for a remarkably lucid——
    Mr. William Baxter: On a point of order, Mr. Deputy Speaker. I understood that you were putting the Amendment to the House and that you were interrupted. Is this the normal procedure?
    Mr. Deputy Speaker: The right hon. Gentleman was perfectly in order.
    Sir K. Joseph: The debate has been the occasion for a notable intervention by the hon. and learned Member for Northampton (Mr. Paget) and we should like to have some comment from the hon. Lady on what he has said. If the Government are going to invoke Part IV they are going to get into the sort of mess that the hon. and learned Gentleman prognosticates. The Government Bench have messed up the introduction of this Amendment, perhaps we could at least have an answer to the comments made on this Part of the Bill.
    Mrs. Shirley Williams: In view of the way in which the Amendment is framed it would be quite inappropriate for me to reply as the right hon. Gentleman has suggested. My hon. and learned Friend went well beyond the terms of the Amendment and he will have a further opportunity to raise this matter on a more appropriate Clause.
    Amendment agreed to.
    8.15 p.m.
    Mr. Biffen: I beg to move Amendment No. 5, in page 4, line 35, at the end to insert:
    (4) The Board shall submit to each House of Parliament in the month of November of each year a report stating its views and experience as to the suitability, relevance and appropriateness of the considerations to which by this section it is directed to have regard and may suggest in such report such additions to or variations or amendments or replacements of such considerations as it may consider necessary in the public interest.
    This is an Amendment to add a further subsection to Clause 4, allowing the Prices and Incomes Board to comment on the principles guiding it. The purpose of this non-controversial Amendment is to enable the House to benefit from an account of the activities of the Board and the effect it has upon the economic affairs of the country. We have no shortage of advice on how the economy is behaving, or how it should behave or

    1493
    might behave. The quality of such advice varies enormously. It would not be amiss if the Prices and Incomes Board, which is carrying out a limited but useful rôle, was able to comment annually on the conclusions that it had drawn from its experience during the preceding year.
    It is useful to have such a commentary in November, because that is normally the time when Parliament reassembles and when discussions are taking place on the Gracious Speech. It is a particularly apposite time to have the benefit of the Board's annual report. It is clear from the debate that we had a short while ago that Schedule 2 is in constant need of updating, as my hon. Friend the Member for Worthing (Mr. Higgins), has shown. If this is not done, one would pay regard to a norm which would be totally inconsistent with the actual performance of productivity and the gross domestic product.
    It is also true that one wants to keep a fairly careful eye on the criteria which are expected to guide the Board. There are four principles contained in the criteria concerning incomes and there are a number of principles governing prices. The sort of thing that I see the Board being able to comment on with particular value is the experience provided by its studies in judging the value of those criteria. At the end of the year the Board might feel that it had sufficient experience of productivity deals and their value or otherwise to judge whether the way in which productivity deals had been conducted might lead to a revision of some of the criteria governing incomes increases. The experience of the Board on the extent of low earnings might also lead it to comment upon the principles to which it has to pay regard concerning low earnings.
    The Ministry of Labour is unable to offer very much evidence on earnings, although it can offer a great deal of evidence on rates. A body such as the Board may be able to help us. It would be very useful to have the comments of the Board upon certain time-honoured institutions, like wage councils and various forms of statutory negotiating machinery, because again I feel that the conditions leading to the establishment of those wage councils have long since changed. I am not saying that we are in
    1494
    a position to judge whether wage councils are desirable, or whether they are relevant, but our knowledge of the conditions in which wage councils work is sadly deficient.
    Something like the Prices and Incomes Board could help illuminate this matter and very suitable method of illumination would be the annual report, as suggested in this Amendment. I very much hope that the Government spokesman will appreciate the constructive spirit in which this is brought forward and that he will feel able to accept the Amendment.
    Mr. William Rodgers: The hon. Gentleman the Member for Oswestry (Mr. Biffen) has made some interesting and helpful comments. I hate to say that I agree with much of what he has said, because he may not believe me and may imagine that this is just a courteous and rather obvious means of getting round the points that he has been making. He is quite right in saying that the work of the Board is substantially contributing, through its reports, to a clearer understanding of our economy and of how we can overcome obstacles to efficiency in industry and eventually achieve the sustained growth which we all want. He will also know that there is inevitably a dialogue between Government and the Board. It is not a dialogue which infringes the proper independence of the Board and it could not be so. We recognise the great experience and knowledge which the members of the Board have and we find it very helpful to discuss issues with them from time to time. Obviously, some of our discussions might in the natural course of events be related to the considerations of which account has to be taken in trying to get an effective policy for productivity, prices and incomes.
    Whether the hon. Member realises it or not, the Amendment would go a great deal further than simply to say that the National Board for Prices and Incomes should produce an annual report. The effect of the Amendment, if pressed to a Division and carried, would be to oblige the Board to comment on its own terms of reference in an annual report to Parliament. This would be quite without precedent. There is no case at all of a board which has been set up in this way by Parliament being allowed to come

    1495
    back to Parliament and say that it does or does not like its terms of reference.
    I do not wish to be conservative in anything, and precedent by itself is never an overwhelming argument against the course of events, but let us also consider what it means. The Government are responsible for the policy, as they are responsible for placing the Bill before the House and carrying it through. The Government are responsible in the last resort for determining the criteria. We have made it clear in the Bill and we have said often that the considerations to which the Board shall have regard will be considerations determined by the Government only after long and exhaustive discussion to make sure that they carry a large measure of consent with them.
    I return again to the Declaration of Intent of 18 months ago. Although it is inclined to produce derisive noises on the benches opposite and to excite cynicism which is not required or desirable in present circumstances, the fact is that that declaration, historic as it was, represented the coming together of both sides of industry with the Government to agree upon a policy which was in the interest of the nation as a whole.
    There was discussion then of the Declaration of Intent. There was discussion in preparation of the February White Paper, which announced our intention to set up a board. There was discussion again which resulted in the April White Paper, which determined the criteria. There was further discussion before the Early Warning White Paper, which was published in November last year. This discussion will continue. As a result, we shall, I hope, determine criteria which not only are effective for the period after August next year, when Part IV of the Bill comes to an end, but which will enable us to vary those which are set out in Schedule 2.
    When I last had the opportunity of catching your eye, Mr. Deputy Speaker, I made the point in particular that the new criteria which would apply to the second half of the current year would be discussed with both sides of industry. Our discussions have begun tentatively and we shall push them ahead as soon as possible, the proper time being when the Bill has received the assent of Parliament.
    1496
    We can then go forward to devise criteria which will apply under Part IV. I am seeking to satisfy the hon. Member for Oswestry beyond all doubt that there will be very full discussion.
    I also say to the hon. Member that all that the Government are doing in the Bill and that we discuss in the House is not done within a vacuum. We carry it on under the full spotlight of public discussion. We do it in this way because inevitably, the community at large being involved, the community at large is entitled to have a say.
    For that reason, if those who are interested in the work of the Board wish to express and publish their views, they can express them and they can be published. Again, therefore, discussion will not go on within a public vacuum, and we shall be able to collect the voices and decide what the policy should be. For all these reasons and many others that I would give were I able to detain the House longer than I have done, I think that the hon. Member will recognise that the purposes which are designed to be served by his Amendment are already met.
    It will, however, be encouraging to the hon. Member to know that we have already made arrangements by which the National Board will make a general report from time to time. We have said to the National Board that this would be in the general interest, and we hope that a report will shortly be published covering the period since the Board was set up. Hon. Members will, I think, find this a useful commentary on the Board's experience so far. In addition, it may well help the hon. Member with his problems.
    As I have mentioned on a number of occasions, we want a full and useful dialogue. Certainly, we wish to do nothing which would inhibit the Board from making its proper contribution to discussion. As I have said, a narrow point only is involved in the Amendment. Because it is concerned with only a narrow point and in the light of all that I have said, I hope that the hon. Member will withdraw his Amendment and accept the undertakings which I have given to him.
    Mr. Cant: Being a back bencher, I can offer a warmer welcome to the suggestion put forward by the hon. Member for Oswestry (Mr. Biffen). I even go so far as to say that my hon. Friend the

    1497
    Under-Secretary is being ultra-conservative. I should hate to contradict him on a point of fact, but perhaps he is wrong in saying that there are not instances of independent boards or commissions which have revolted against their terms of reference. The Local Government Boundary Commission, which published its 1947 Report, was an extremely clear example of this.
    More relevant, however, is the Monopolies Commission, which said to the Board of Trade after publishing a number of reports within its restrictive terms of reference, "Please permit us to publish a report of a general kind assessing the value of our work." It published this under the title of "Collective discrimination". I think I am right in saying that that report laid the foundations of the work of the Restrictive Practices Court. I am sure that this is what will happen eventually, but I hope that the Government will think this over and do what they can to meet the point.
    Mr. Biffen: I assure the Under-Secretary that there is never much danger that he will find himself in agreement with me. Between the hon. Gentleman and myself there is politically a great gulf and I cannot see it ever being bridged. The hon. Gentleman gave a quite agreeable answer, but I must take exception to his aside about there having been full public discussion. That is rubbish.
    The first that one ever knew about the questionnaire for the National Plan was when it was published as an appendix in John Brunner's book on the National Plan. One knows that the Stationery Office started threatening legal noises about infringement of copyright. If my hon. Friend the Member for Worthing (Mr. Higgins) had got his hands on that document, which said to industry, "If we grow at 4 per cent., what figures can you produce consistent with that", he would have played merry hell with it. It was completely contrary to any proper scientific, detached approach to getting a national plan to have all that kind of pap.
    8.30 p.m.
    I do not want to be controversial over this, but again all this business that "We are all in this together" makes one ask, what happens about the National Economic Development Council? We are never told what comes out of that Council.
    1498
    The Government say, "We have talked to industry, we have been to N.E.D.C." But the House of Commons? No; we do not come into this at all. We do not know, for example, what communications are sent from the National Economic Development Council to the Government. How many times have the Government said to us, "We are consulting industry "? This afternoon we had it again from the Parliamentary Secretary when she said, "This will be discussed with the National Economic Development Council". The Amendment is to ensure that a report shall be submitted to each House of Parliament. We want this House brought in on the act.
    That is a point which I do not think the Under-Secretary of State was fully seized of. However, he said at the end of his remarks that they were producing a report, and I do not want to take up unnecessary positions; there are people more skilled in acrimony on the benches opposite. I realise that these debates lie between them and something which is of much more substance. I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    Clause 5.—(THE BOARD'S REPORTS.)
    Mr. Higgins: I beg to move Amendment No. 6, in page 5, line 22, to leave out from "shall" to "matter" in line 23, and to insert:
    "not without the consent of the person concerned include any".
    Mr. Deputy Speaker (Mr. Sydney Irving): With this Amendment we can also take Amendment No. 7, in page 5, line 24, leave out "and" and insert "or", and Amendment No. 8, in line 26, insert:
    "or, if that person objects no report shall contain of any matter relating to that person without the certificate of a judge of the High Court that the public interest requires the publication of such matter against the wishes of that person".
    Mr. Higgins: The speed with which the whole Bill has been rushed through Committee and is now being rushed through the House itself is indeed notorious, and that is at least one very unfortunate side effect of the Bill having been prepared in an enormous hurry because of the failure of the Government to foresee at all the economic situation which has now developed, despite the

    1499
    fact that they were warned from this side of the House time and time again in the debates which took place on the Budget.
    The result is that there are in the Bill many Clauses which have still not received the scrutiny which it is right and proper they should receive. There has not been sufficient time for a number of the interests which are affected and for a number of people who have expert knowledge of the various provisions of the Bill to make representations to the Government and to the Opposition.
    None the less, in Committee, despite the speed and the urgency with which the Government found it necessary to push the Bill through, night after night, we on this side did everything we could to ensure that no real absurdities were incorporated in the Bill. In Committee we were particularly worried about Clause 5(5). This says:
    "In framing any report the Board should have regard to the need for excluding, so far as that is practicable, matter which relates to the private affairs of any person and the publication of which would or might in the opinion of the Board prejudicially affect the interests of that person".
    In Committee we put down an Amendment very similar in nature to the Amendment we are now considering. It was designed to ensure that publication of the facts which the Board obtained could not take place unless covering particular facts and figures which would anyway have been made available and might have been published.
    We did that because on this side we have very great concern that under this Bill companies or trade unions or, indeed, private individuals may be required to divulge to the Board information which they would not be required to divulge under any other legislation. As the Clause now stands it is possible for the Board then to proceed to publish this information, and this might have adverse effects on the interests of the particular company, trade union or individual. Therefore, we now propose an Amendment also designed to say that the Board shall not publish the facts or figures which it has obtained in private unless the people giving them have agreed to their being published.
    It may well be, of course, that on some future occasion—in the Government's
    1500
    projected Companies Bill—there may be a very great move towards increased information being obtained from companies, with companies being required to publish it themselves. We on this side would certainly support a very much greater extension of information which companies are required to publish than the Government provided for in their last Bill in the last Parliament, because we believe this kind of information is likely to be in the public interest. But it is a quite different matter from saying that the information which companies must publish shall be covered by a Bill specifically designed for that purpose, with all the safeguards which that Bill would then incorporate. That is quite different from bringing this matter in by the back door in a Bill which is concerned primarily with prices and incomes but which may none the less have the effect of making the private affairs of companies, trades unions and individuals public, leading to the detriment of the people giving the information.
    When we pressed the matter in Committee, the hon. Lady the Parliamentary Secretary to the Ministry of Labour gave what seemed at first sight to be an excellent reply. Our reaction was to accept what she said. She said that the position was covered completely in Schedule 1 of the Bill and that there was no need to worry about it because there were safeguards in paragraph 14 of the Schedule and even wider safeguards in paragraph 14 of the Schedule and even wider safeguards in paragraph 16. That sounded very convincing. But, as I say, in many of its aspects the Bill has not been subject to the consideration which it would normally receive. When we began to press the hon. Lady as to whether the safeguards were as comprehensive as she suggested, it became more and more apparent that they had very little effect, and, despite the various paragraphs of Schedule 1, it was quite possible still that information might be given by a private individual to the Prices and Incomes Board and then the Board, simply because it considered that it might not be practicable to exclude it, might publish it.
    The same might be true of any individual who appeared before the Board. His salary, his private affairs and the various cost data of a company that he

    1501
    was operating might be disclosed, and we feel that that could be very dangerous. If it was embodied in a separate Act and properly debated, there might be a real case for extending the information which is published, but we do not think it right that the Board should be able to obtain information far in excess of that which might normally be published, and then to publish it.
    It is for that reason that, on this side of the House, because we were not convinced on examination of the superficially attractive arguments which the hon. Lady put forward, we feel it necessary to put down this Amendment. We hope that the Government will find it possible to accept it, because they can quite easily cover the point in subsequent legislation. But we think, and I hope that they will agree, that it is wrong to do it in present legislation without adequate safeguards of the kind which I have suggested and which are covered by the Amendment.
    The Attorney-General: The Government recognise the importance of protecting persons or individuals from undesirable disclosure of their private affairs. It is for that reason that Clause 5(5) has been drafted with great care, both to protect persons and their private affairs on the one hand and to give the Board discretion to decide what it is necessary to publish on the other.
    The House will see that subsection (5) provides:
    "In framing any report the Board shall have regard to the need for excluding, so far as that is practicable, a matter which relates to the private affairs of any person".
    There is therefore a mandatory duty imposed upon the Board to have regard to the need for excluding anything relating to a person's private affairs so far as that is practicable; that is to say, so far as it does not make it impossible for the Board to produce an effective report.
    In my submission, it is right to give the Board that discretion if it is to discharge its function of acting in the public interest as against the interests of persons who would otherwise, if the Amendment that is proposed were adopted, have an effective veto on what might be quite crucial passages in the Board's reports.
    1502
    It is of some interest and relevance that a provision not in identical terms but similar in effect is to be found in Section 9 of the Monopolies and Restrictive Practices (Inquiry and Control) Act, 1948, relating to reports of the Monopolies Commission. The Commission has been in existence since 1948 and I have received no evidence of any abuse of its powers concerning publications. The members of the Prices and Incomes Board are responsible men. It is an eminently responsible body, and it is unlikely, to put it at its lowest, that it would exercise this power with any less discretion and care for avoidable disclosure than has been the case with the Monopolies Commission.
    Another factor which is of some importance, although it goes more to administrative necessity than to the merits of the matter, is that it is very important that the Board should be able to report quickly. If standstills under Part II are not to expire before reports are published by the Board it is vital that those reports should be got out expeditiously. We can imagine considerable delays being caused if the Board had to negotiate with any person over passages affecting the private affairs of that person, and the interposing of legal advisors or solicitors, and the whole machinery of delay which would frustrate the operation of standstills under Part II.
    I understand that we are also discussing Amendments No. 7 and 8, to which I believe the hon. Member did not refer. I say that without criticising him in any way; it may be that another hon. Member opposite will deal with them. But it may be convenient for me to refer to them.
    I need not comment on Amendment No. 7, which is covered by the observations that I have already made, but Amendment No. 8 proposes that if a person whose affairs are under report objects
    "no report shall contain of any matter relating to that person without the certificate of a judge of the High Court that the public interest requires the publication of such matter against the wishes of that person".
    I know of no procedure whereby a High Court judge could be called in aid for the production of such a certificate, but there is a still more substantial objection to the proposal. In effect, it transfers discretion from the Board to

    1503
    a High Court judge as to what should go into a report. In my submission the decision as to this is eminently administrative rather than judicial, and would seem to be eminently within the sphere of responsibility and consideration of the Board, which has responsibility for producing reports and acting within the letter and the spirit of a provision which requires it to have regard to the need for excluding matter which relates to the private affairs of any person, so far as is practicable, consistent with making sense of a report, which is the clear meaning of the subsection.
    Therefore, quite apart from this being misconceived machinery and inappropriate to the reports, there would be significant delay if there had to be, by some procedure of which, as I said, I have no knowledge, proceedings in the High Court and a reference to a High Court judge before a particular part of a report could be published. It would endanger the whole machinery of the standstill and accordingly I must advise the House to reject all three Amendments.
    8.45 p.m.
    Mr. Gower: I am not happy about the reply to which we have just listened. In his opening remarks, the Attorney-General said that the Clause had been carefully drawn—I think I use his exact words—to protect persons on the one hand, and then he said something else about the other aspects of the Clause. I respectfully submit to him that any protection to which he referred is completely removed by the phrase "so far as that is practicable". There can be little protection where there is a phrase like that, when the practicability is to be judged not by some impartial body but by the Board, which is a party judging its own case. How can the Attorney-General say that the Clause has been drawn carefully to protect persons, if the decision on this is to be made by a body which is essentially biased, and is bound to be?
    Secondly, he said that it is right to give the Board that discretion, for otherwise there would be an absolute veto by the persons concerned, but of course there would be no such absolute veto if Amendment No. 8 were incorporated, namely, that if a person objects there should be
    1504
    recourse to the High Court Judge procedure to which the right hon. and learned Gentleman objected. I submit that that effective veto by the person whose affairs were to be investigated and who objected could be made less than absolute if there were some machinery comparable to that suggested in Amendment No. 8. This is a very serious matter, because the Board is to enjoy absolute privilege, and can defame a person's character without his having any recourse to the courts. This is a matter of extraordinary seriousness and gravity, but this did not appear to be appreciated in the Attorney-General's reply.
    The Attorney-General said that there is a similar provision in the monopolies legislation. But permanent legislation of that character is different from a Bill of this kind which, even in the words of Government spokesmen, is designed at the most to create a standstill or a pause in earnings and prices for a limited period. I should have thought that there were grounds for distinguishing the two kinds of legislation, particularly as the monopolies legislation impinges on far fewer people than legislation of this character, which might impinge on the personal and private affairs of a large proportion of the population.
    While the wording of the Amendments may not be perfect, the principle enunciated in them is essentially sound, that if the Board wishes to interrogate individual citizens and investigate and publish their personal affairs there should be some safeguard, particularly when the Board enjoys absolute privilege on matters of a defamatory nature. I ask the right hon. Gentleman not to deal with this matter with, apparently, a good deal of complacency. It is a very serious matter about which the whole House should be deeply concerned.
    Mr. Kenneth Lewis: The right hon. and learned Gentleman waxed very lyrical. Perhaps this is the result of being made a Bard or something of the sort over the weekend. I do not know whether he was given a special name. Perhaps he will tell us what the name was when he replies further to the debate.
    What we are discussing now is not mythology. It is a practical matter. I

    1505
    am sure that right hon. and hon. Members opposite believe that they have no intention of prying or snooping and they have no intention of making available to the public private information which would be to the disadvantage of an individual or company. They believe this, but, of course, this is so often the trouble with Socialists. They believe that something will not be to the public disadvantage but when they implement it they find that it is.
    The Bill excludes a large section of industry. According to the White Paper, companies employing 100 people or fewer will not be bothered either on the wages side or on the prices side. They are completely exempt. Presumably, this is done because the Government cannot go so far into the economy in detail, but it does let off the hook a very large number of companies and people. Certain people will come before the Board while others will not, and the ones coming before the Board will have to make information available. This information may be of vital importance to them from a business point of view. Many of their competitors who do not come before the Board will not have to provide such information.
    There are two questions to be considered. First, are the Government certain that they will get the information they want if they maintain that they may have to make this information publicly available? The expression "so far as … is practicable "allows them to withhold the release of information but it also allows them to provide information to the general public. Firms coming before the Board will be afraid to provide the information which the Government need in case it is made available to their competitors.
    This state of affairs exists already in trade associations. One of the reasons why trade associations do not work particularly well in the collection of Government statistics is that member firms are afraid to give information to trade associations—quite wrongly, I think, but it is an understandable view—because they do not want it to be made available to their competitors.
    The right hon. Gentleman said that the Government needed the Clause as drafted because otherwise there might be delay.
    1506
    I cannot understand this. If information is asked for and there are discussions with the people interviewed or from whom reports have been obtained, it ought to be quite easy to reach agreement between the two parties on exactly what should be made available and what should not. If the Government really mean not to allow information to be published if that would be against the wish of those who have been interviewed or from whom reports have been secured, no difficulty should arise.
    The Clause could be improved considerably if the Government would take out the words, "so far as … is practicable". They ought to make quite clear to the House and the country that they want to make available in open report only such information as is agreed between all the parties should be made available. If they do not do that, compulsion comes into the Bill immediately, without waiting for the implementation of Part IV.
    Mr. Costain: I support the Amendment. My hon. Friend the Member for Worthing (Mr. Higgins) recalled that in the middle of the night in our deliberations in Committee upstairs the hon. Lady the Parliamentary Secretary had made some soothing noises on this subject, as a result of which he had felt rather satisfied at the time. I am sure that my hon. Friend is not the first to have been affected in that way. Indeed, the hon. and learned Member for Northampton (Mr. Paget), who has referred to historic events on an earlier Amendment, might also have referred to Antony and Cleopatra on this Amendment.
    In the modern competitive world in which we live there is more and more industrial espionage. We read about it all the time. Our industries are having to compete with those of other countries and it is, therefore, only fair that the Government should not, by this Measure, give our international competitors a greater advantage than we have over them.
    My hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) made a valid point when he said that if information which is sought is later to be made available to the public, it is likely that that information will not be

    1507
    supplied to the Board. Hon. Members who are also members of the Public Accounts Committee and Estimates Committee know that it is the custom that when witnesses are called to give evidence which is of a special kind, they have the option of having their evidence starred and not published if the Chairman of the Committee agrees.
    Since the Government obviously do not wish to hinder British industry, I trust that they will accept the principle of the Amendment so that industrialists giving information to the Board may be assured that the facts they give will not be made available to their competitors. It is not good enough to say that the Board will administer this in a responsible way. It will be the sole arbiter in these matters and the Government should have the courtesy to ensure that industrial information that should not be circulated is kept private.
    Mr. Ian Lloyd: We have had some plausible noises from the Attorney-General, who referred, in an effort to justify the Clause as it stands, to the responsible people who would be administering this provision. It is always a dangerous principle to say that a provision as important as this will be in the hands of responsible people. To give the widest possible discretion and to attempt to justify it by saying that that discretion will always be exercised by responsible people is not a satisfactory argument when one recalls that some of the most classic examples of the misuse of bureaucratic power has been the misuse of quite small powers by so-called responsible people.
    I hope I am not mistaken in arguing that, throughout the Government machine, it is the general rule, which is widely observed, that no Government Department shall publish statistics which will allow the case of the individual to be isolated from the general statistics published. Is there any good reason why the Board or any other Government Department should be exempted from such a general principle?
    The Attorney-General then argued that, as far as he was aware, there were no cases of abuse. However, only this morning in The Times is an article going at considerable length into serious complaints by Colonel Whitbread, who complains that his company has been the
    1508
    subject of Report No. 13 by the Prices and Incomes Board. After describing that report as wholly irresponsible—I do not have the text of his words and I would not like it to be thought that I am quoting what he said—he states that, as a result of that, the Company has been referred to the Monopolies Commission. I have the impression that Colonel Whitbread is also arguing that certain breaches of confidence are involved.
    That provides an instance of precisely the type of thing about which we are complaining. The Attorney-General cannot argue that this is a minor matter, that it is in the hands of responsible people and that we need not do anything about it.
    9.0 p.m.
    Mr. Emlyn Hooson: Without exaggeration, there is a potential danger in the Clause. This could have been drafted more tightly, so as to provide that the Board "shall" exclude matter which would make it mandatory, instead of its having "to have regard" to matters. What gives greatest concern is that the judges of whether there should be publication are the members of the Board themselves. The argument of the Attorney-General, that because of the standing of the people there is nothing to fear, is a dangerous one. Most matters of this kind which have been raised on the Floor of the House have concerned the inadvertent action, resulting in injustice, of a high-bred person with powers in circumstances like these. The Government could at least look at this again. Amendment No. 8 provides for reference to a High Court judge for certificate. I follow the right hon. and learned Gentleman's argument that no machinery exists for this, but the Government ought to meet the objections in some way and at least accept the spirit of the Amendments.
    Mr. Higgins: We thought that we would get a reasonable reply from the Attorney-General to put our fears at rest, but unless he can give a further assurance, I propose that we should divide in favour of the Amendment. He prayed in aid the procedure of the Monopolies Commission, but that is quite different, because the Commission investigates firms in a specific category—large firms with more than a third share of the market. Despite what he says, what is published in the Commission's final report has been

    1509
    discussed at considerable length with the firms concerned.
    Therefore, they have the opportunity to make representations to the Commission. This will clearly not be the case under this legislation. We are worried that, as a result of an investigation by the Board, information will be published which is not covered by the present Companies Act, and is not likely to be covered by the Government's future Companies Act. As to the Amendment relating to the High Court, we understood in Committee that no more information would be published than could be obtained anyway by the High Court. We felt that the Amendment might help to overcome this. Additional information should not be obtained and published which is not covered by other legislation.
    As it stands, the Clause provides no safeguards. The complicated arguments put forward by the hon. Lady the Joint Parliamentary Secretary to the Ministry of Labour in Committee were not referred to by the right hon. and learned Gentleman. Apparently, the Government's defence to the Amendment is totally different on Report from what it was in Committee. Therefore, unless the right hon. and learned Gentleman can convince us otherwise, I hope that my right hon. and hon. Friends will divide.
    The Attorney-General: I assure the House that I do not approach this matter in any mood of complacency. I must at once correct a grave misconception of the whole status of the Board's functions. It is not an instrument of the Government but a wholly impartial body. With respect to the hon. Member for Barry (Mr. Gower) I resent any imputation that it is anything other than an impartial body, holding the ring between the interests whose affairs it may have to consider with a view to giving advice in its reports about the conclusion which it thinks is in the public interest. It is wholly misconceived to regard the Board as a party to the matters or issues which it is considering. It operates in a position and from a standpoint of impartiality.
    Another of the basic errors of the criticism by the hon. Member for Barry was in seeking to distinguish between the Board and the Monopolies Commission because the former is temporary and the latter permanent. We are here dealing
    1510
    with Part I of the Bill which, in conjunction with Part III, sets up permanent machinery. It is to be part of the permanent machinery of the economy. Therefore, we are not dealing with transient individuals, unaccountable, who flit overnight from their positions of responsibility. They are, and I must repeat, very responsible public men who—and I put it in this interrogatory way—surely would not unnecessarily disclose the private affairs of any person, unless it was absolutely necessary to make sense of their report.
    The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) tempted me to enter into the realms of mythology, but, despite the temptations, I shall resist that. He asked whether the Board would get the information it needed, because the parties concerned might be affeared by this kind of provision. The House will know that paragraph 14 of Schedule 1 invests the Board with statutory power to require the attendance of persons and the production of documents in their possession or control, so I do not think that there will be any difficulty in getting the information.
    Mr. Kenneth Lewis: The Attorney-General has enunciated a very naive argument. When a board like this is dealing with industry, whether it gets papers or interviews individuals, if the firms coming before it are afraid that certain information might be disclosed which it would be to their detriment to disclose, they can seek to cloud the issues and not provide the kind of information which is wanted, because they can provide or fail to provide the kind of technical information which the Board would not be equipped to draw out of them.
    The Attorney-General: I see the point which the hon. Gentleman is making, but I invite him to consider the precise terms of the subsection which we are considering, the positive duty imposed on the Board to exclude matters which relate to the private affairs of any citizen, save within the realm of necessity of producing a coherent report.
    I revert again, without apology, to the experience of the Monopolies Commission which touches the most sensitive part of industrial and business affairs and can deal with secrets and processes for the purposes of comparison. The Act gives

    1511
    the Commission power to disclose even those matters if it is necessary to give coherence and sense to the Commission's Report. I should have thought that one would be reassured by that experience.
    I remind the House of the precise terms of paragraph 14(2) of Schedule 1 which provides protection for the private person.
    The terms of the paragraph are:
    (2) No person shall be compelled for the purposes of any such inquiry to give any evidence or produce any document which he could not be compelled to give or produce in proceedings before the High Court or, in complying with any requirement for the furnishing of information, to give any information which he could not be compelled to give in evidence in such proceedings.
    The individual will therefore enjoy the same protection as the witness in the High Court, for instance, on grounds of professional privilege, or that the evidence he was called on to give would be incriminating and that he had the right of protection against self-information. Those provisions are embodied in the machinery of this Bill.
    I cannot enter into the case mentioned by the hon. Member for Portsmouth,
    Langstone (Mr. Ian Lloyd) in regard to Whitbreads. I suppose that it is not unnatural that a report that does not please a company, whether it be a brewery or anything else, should produce a grumble, but I am informed that no suggestion was made of an actual breach of confidence, though I understand that fears were expressed about the procedure, which involves passing information. In any event, I understand that that case is related to something else that is going to the Monopolies Commission, so perhaps the less I say about it the better.
    I submit that the provisions of this Clause are not unreasonable and do not give excessive powers to this independent statutory authority which, I invite the House to take the view, will exercise these powers responsibly and reliably, and do no harm to any individual where that can possibly be prevented in the due performance of its duties. I must, therefore, advise the House to reject the Amendment.
    Question put, That the words proposed to be left out stand part of the Bill:—
    The House divided: Ayes 228, Noes 154.

    Division No. 164.]

    AYES

    [9.12 p.m.

    Albu, Austen

    Crossman, Rt. Hn. Richard

    Garrow, Alex

    Allaun, Frank (Salford, E.)

    Cullen, Mrs. Alice

    Gordon Walker, Rt. Hn. P. C.

    Alldritt, Walter

    Davies, G. Elfed (Rhondda, E.)

    Gourlay, Harry

    Allen, Scholefield

    Davies, Harold (Leek)

    Greenwood, Rt. Hn. Anthony

    Anderson, Donald

    Davies, Ifor (Gower)

    Gregory, Arnold

    Armstrong, Ernest

    de Freitas, Sir Geoffrey

    Grey, Charles (Durham)

    Ashley, Jack

    Delargy, Hugh

    Griffiths, David (Rother Valley)

    Atkins, Ronald (Preston, N.)

    Dell, Edmund

    Hamilton, William (Fife, W.)

    Atkinson, Norman (Tottenham)

    Dewar, Donald

    Hannan, William

    Barnes, Michael

    Diamond, Rt. Hn. John

    Harper, Joseph

    Baxter, William

    Dickens, James

    Harrison, Walter (Wakefield)

    Benn, Rt. Hn. Anthony Wedgwood

    Dobson, Ray

    Hart, Mrs. Judith

    Bennett, James (G'gow, Bridgeton)

    Doig, Peter

    Haseldine, Norman

    Bidwell, Sydney

    Donnelly, Desmond

    Hazell, Bert

    Binns, John

    Driberg, Tom

    Healey, Rt. Hn. Denis

    Bishop, E. S.

    Dunnett, Jack

    Heffer, Eric S.

    Blackburn, F.

    Dunwoody, Mrs. Gwyneth (Exeter)

    Henig, Stanley

    Blenkinsop, Arthur

    Dunwoody, Dr. John (F'th & C'b'e)

    Herbison, Rt. Hn. Margaret

    Boardman, H.

    Edelman, Maurice

    Horner, John

    Booth, Albert

    Edwards, Robert (Bilston)

    Houghton, Rt. Hn. Douglas

    Boston, Terence

    Edwards, William (Merioneth)

    Howarth, Harry (Wellingborough)

    Bottomley, Rt. Hn. Arthur

    Ellis, John

    Howarth, Robert (Bolton, E.)

    Bowden, Rt. Hn. Herbert

    English, Michael

    Hughes, Emrys (Ayrshire, S.)

    Boyden, James

    Ennals, David

    Hughes, Roy (Newport)

    Braddock, Mrs. E. M.

    Ensor, David

    Hunter, Adam

    Bray, Dr. Jeremy

    Faulds, Andrew

    Hynd, John

    Brooks, Edwin

    Finch, Harold

    Jackson, Peter M. (High Peak)

    Brown, Rt. Hn. George (Belper)

    Fitch, Alan (Wigan)

    Janner, Sir Barnett

    Brown, Bob (N'c'tle-upon-Tyne, W.)

    Fletcher, Raymond (Ilkeston)

    Jay, Rt. Hn. Douglas

    Brown, R. W. (Shoreditch & F'bury)

    Fletcher, Ted (Darlington)

    Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)

    Buchan, Norman

    Floud, Bernard

    Jenkins, Hugh (Putney)

    Butler, Herbert (Hackney, C.)

    Foot, Michael (Ebbw Vale)

    Johnson, Carol (Lewisham, S.)

    Cant, R. B.

    Ford, Ben

    Johnson, James (K'ston-on-Hull, W.)

    Carter-Jones, Lewis

    Forrester, John

    Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

    Castle, Rt. Hn. Barbara

    Fraser, John (Norwood)

    Jones, J. Idwal (Wrexham)

    Coleman, Donald

    Fraser, Rt. Hn. Tom (Hamilton)

    Kelley, Richard

    Conlan, Bernard

    Freeson, Reginald

    Kenyon, Clifford

    Crawshaw, Richard

    Galpern, Sir Myer

    Kerr, Russell (Feltham)

    Crosland, Rt. Hn. Anthony

    Garrett, W. E.

    Lawson, George

    Leadbitter, Ted

    Ogden, Eric

    Skeffington, Arthur

    Ledger, Ron

    O'Malley, Brian

    Slater, Joseph

    Lee, Rt. Hn. Jennie (Cannock)

    Oram, Albert E.

    Small, William

    Lestor, Mist Joan

    Orbach, Maurice

    Snow, Julian

    Lever, L. M. (Ardwick)

    Orme, Stanley

    Spriggs, Leslie

    Lewis, Ron (Carlisle)

    Oswald, Thomas

    Steele, Thomas (Dunbartonshire, W.)

    Lomas, Kenneth

    Owen, Will (Morpeth)

    Stewart, Rt. Hn. Michael

    Loughlin, Charles

    Page, Derek (King's Lynn)

    Summerskill, Hn. Dr. Shirley

    Luard, Evan

    Panned, Rt. Hn. Charles

    Symonds, J. B.

    Lyon, Alexander W. (York)

    Park, Trevor

    Taverne, Dick

    Lyons, Edward (Bradford, E.)

    Pavitt, Laurence

    Thomas, George (Cardiff, W.)

    Mabon, Dr. J. Dickson

    Pearson, Arthur (Pontypridd)

    Thomas, Iorwerth (Rhondda, W.)

    McBride, Neil

    Peart, Rt. Hn. Fred

    Thornton, Ernest

    McCann, John

    Pentland, Norman

    Tinn, James

    MacColl, James

    Perry, George H. (Nottingham, S.)

    Tomney, Frank

    Macdonald, A. H.

    Prentice, Rt. Hn. R. E.

    Urwin, T. W.

    McKay, Mrs. Margaret

    Price, Christopher (Perry Barr)

    Varley, Eric G.

    Mackie, John

    Price, Thomas (Westhoughton)

    Wainwright, Edwin (Dearne Valley)

    Mackintosh, John P.

    Probert, Arthur

    Walker, Harold (Doncaster)

    McMillan, Tom (Glasgow, C.)

    Pursey, Cmdr. Harry

    Watkins, David (Consett)

    McNamara, J. Kevin

    Randall, Harry

    Watkins, Tudor (Brecon & Radnor)

    Mallalieu, J. P. W. (Huddersfield, E.)

    Redhead, Edward

    Weitzman, David

    Manuel, Archie

    Rees, Merlyn

    Wellbeloved, James

    Mapp, Charles

    Rhodes, Geoffrey

    Whitaker, Ben

    Marquand, David

    Roberts, Gwilym (Bedfordshire, S.)

    White, Mrs. Eirene

    Mayhew, Christopher

    Robinson, Rt. Hn. Kenneth (St. P'c'as)

    Willey, Rt. Hn. Frederick

    Mendelson, J. J.

    Rodgers, William (Stockton)

    Williams, Clifford (Abertillery)

    Mikardo, Ian

    Ross, Rt. Hn. William

    Williams, Mrs. Shirley (Hitchin)

    Millan, Bruce

    Rowland, Christopher (Meriden)

    Willis, George (Edinburgh, E.)

    Molloy, William

    Rowlands, E. (Cardiff, N.)

    Wilson, Rt. Hn. Harold (Huyton)

    Morgan, Elystan (Cardiganshire)

    Ryan, John

    Wilson, William (Coventry, S.)

    Morris, Alfred (Wythenshawe)

    Sheldon, Robert

    Woodburn, Rt. Hn. A.

    Morris, John (Aberavon)

    Shinwell, Rt. Hn. E.

    Woof, Robert

    Moyle, Roland

    Shore, Peter (Stepney)

    Wyatt, Woodrow

    Mulley, Rt. Hn. Frederick

    Silkin, Rt. Hn. John (Deptford)

    Yates, Victor

    Newens, Stan

    Silkin, S. C. (Dulwich)

    TELLERS FOR THE AYES:

    Norwood, Christopher

    Silverman, Julius (Aston)

    Mr. Whitlock and

    Oakes, Gordon

    Silverman, Sydney (Nelson)

    Mr. Ioan L. Evans.

    NOES

    Alison, Michael (Barkston Ash)

    Fortescue, Tim

    Lubbock, Eric

    Allason, James (Hemel Hempstead)

    Fraser, Rt. Hn. Hugh (St'fford & Stone)

    McAdden, Sir Stephen

    Balniel, Lord

    Gibson-Watt, David

    Mackenzie, Alasdair (Ross&Crom'ty)

    Barber, Rt. Hn. Anthony

    Giles, Rear-Adm. Morgan

    Maclean, Sir Fitzroy

    Batsford, Brian

    Gilmour, Sir John (Fife, E.)

    Macleod, Rt. Hn. Iain

    Berry, Hn. Anthony

    Glover, Sir Douglas

    Macmillan, Maurice (Farnham)

    Bessell, Peter

    Glyn, Sir Richard

    Maddan, Martin

    Biffen, John

    Goodhew, Victor

    Maginnis, John E.

    Birch, Rt. Hn. Nigel

    Gower, Raymond

    Marten, Neil

    Blaker, Peter

    Gresham Cooke, R.

    Mathew, Robert

    Body, Richard

    Griffiths, Eldon (Bury St. Edmunds)

    Maude, Angus

    Boyd-Carpenter, Rt. Hn. John

    Gurden, Harold

    Maudling, Rt. Hn. Reginald

    Boyle, Rt. Hn. Sir Edward

    Hall, John (Wycombe)

    Maxwell-Hyelop, R. J.

    Brewis, John

    Hamilton, Michael (Salisbury)

    Maydon, Lt.-Cmdr. S. L. C.

    Brinton, Sir Tatton

    Harrison, Col. Sir Harwood (Eye)

    Miscampbell, Norman

    Bromley-Davenport, Lt. Col. Sir Walter

    Hawkins, Paul

    More, Jasper

    Brown, Sir Edward (Bath)

    Heald, Rt. Hn. Sir Lionel

    Morgan, W. G. (Denbigh)

    Bruce-Gardyne, J.

    Heseltine, Michael

    Munro-Lucas-Tooth, Sir Hugh

    Buck, Antony (Colchester)

    Higgins, Terence L.

    Murton, Oscar

    Bullus, Sir Eric

    Hill, J. E. B.

    Nabarro, Sir Gerald

    Carlisle, Mark

    Hobson, Rt. Hn. Sir John

    Neave, Airey

    Carr, Rt. Hn. Robert

    Hooson, Emlyn

    Noble, Rt. Hn. Michael

    Clegg, Walter

    Hordern, Peter

    Nott, John

    Costain, A. P.

    Hornby, Richard

    Orr-Ewing, Sir Ian

    Craddock, Sir Beresford (Spelthorne)

    Howell, David (Guildford)

    Page, Graham (Crosby)

    Crouch, David

    Hunt, John

    Pardoe, John

    Crowder, F. P.

    Hutchison, Michael Clark

    Pearson, Sir Frank (Clitheroe)

    Currie, G. B. H.

    Jenkin, Patrick (Woodford)

    Peel, John

    Dance, James

    Jennings, J. C. (Burton)

    Percival, Ian

    Davidson, James (Aberdeenshire, W.)

    Johnston, Russell (Inverness)

    Pike, Miss Mervyn

    d'Avigdor-Goldsmid, Sir Henry

    Jones, Arthur (Northants, S.)

    Pink, R. Bonner

    Dean, Paul (Somerset, N.)

    Jopling, Michael

    Price, David (Eastleigh)

    Deedes, Rt. Hn. W. F. (Ashford)

    Joseph, Rt. Hn. Sir Keith

    Prior, J. M. L.

    Dodds-Parker, Douglas

    Kaberry, Sir Donald

    Pym, Francis

    Doughty, Charles

    King, Evelyn (Dorset, S.)

    Ramsden, Rt. Hn. James

    Douglas-Home, Rt. Hn, Sir Alee

    Kirk, Peter

    Rawlinson, Rt. Hn, Sir Peter

    Eden, Sir John

    Kitson, Timothy

    Ridsdale, Julian

    Elliot, Capt. Walter (Carshalton)

    Knight, Mrs. Jill

    Rodgers, Sir John (Sevenoaks)

    Elliott, R. W.(N'c'tle-upon-Tyne, N.)

    Lancaster, Col. C. G.

    Rossi, Hugh (Hornsey)

    Eyre, Reginald

    Legge-Bourke, Sir Harry

    Royle, Anthony

    Farr, John

    Lewis, Kenneth (Rutland)

    Russell, Sir Ronald

    Fisher, Nigel

    Longden, Gilbert

    Sharples, Richard

    Fletcher-Cooke, Charles

    Loveys, W. H.

    Shaw, Michael (Sc'b'gh & Whitby)

    1514

    1515

    Sinclair, Sir George

    Vaughan-Morgan, Rt. Hn. Sir John

    Wilson, Geoffrey (Truro)

    Stodart, Anthony

    Vickers, Dame Joan

    Winstanley, Dr. M. P.

    Stoddart-Scott, Col. Sir M. (Ripon)

    Wainwright, Richard (Colne Valley)

    Wood, Rt. Hn. Richard

    Summers, Sir Spencer

    Wall, Patrick

    Worsley, Marcus

    Tapsell, Peter

    Ward, Dame Irene

    Younger, Hn. George

    Teeling, Sir William

    Weatherill, Bernard

    Thatcher, Mrs. Margaret

    Webster, David

    TELLERS FOR THE NOES:

    Thorpe, Jeremy

    Wells, John (Maidstone)

    Mr. David Mitchell and

    Turton, Rt. Hn. R. H.

    Whitetaw, William

    Mr. Grant.

    van Straubenzee, W. R.

    Wills, Sir Gerald (Bridgwater)

    Clause 7.—(NOTICE OF INTENTION TO INCREASE PRICES OR CHARGES.)
    Mr. Lubbock: I beg to move Amendment No. 62, in page 6, line 40, at the end to insert:
    "and charges by college authorities for board and lodging or for tuition fees".
    We are making very good progress and I do not want to delay the House too long on the Amendment, but, before I come to its terms, I must once again protest strongly on behalf of my hon. Friends at the speed with which the Bill is being pushed through, because it does not allow us enough time to prepare our case on the very important Amendments we would have sought to table had we had the opportunity.
    The Amendment is a perfect illustration of this, because I received a letter only yesterday afternoon from a student drawing my attention to one aspect of the Government's prices and incomes policy which was sufficiently important to cause me immediately to table an Amendment so as to ensure that the discussion could take place on the Floor of the House. I should be glad if the Under-Secretary would tell me if he knows of any other financial burdens which will be placed on students and against which they will have no protection under the prices and incomes policy as it is outlined in the Bill. The Amendment may be clarificatory in nature. The subsection refers to
    "… charges for the performance of services."
    Not being a lawyer I cannot say with certainty whether the charges covered by the Amendment are included in the Clause as it stands. I have looked up the proceedings of the Standing Committee but the matter was not discussed.
    The hon. Gentleman may not be aware that the colleges have been sending out notices of increased charges to their students. My correspondent has sent me a notice he has received from the Bursar of Pembroke College. It is dated 1st August, which is after the date mentioned
    1516
    in the Prices and Incomes White Paper. The notice states that increases in the college's domestic expenditure—it particularly mentions the increase in rates resulting from the loss of rating relief by the Oxford and Cambridge colleges—make it necessary to increase college charges by £5 per term with effect from Michaelmas Term, 1966, and in addition notification is given of an increase in the tuition fees for undergraduates of £2 a term resulting from the 5 per cent. national increase in academic salaries.
    I have consulted the education authority in Bromley about the incidence of these additional charges and am informed by the officer in charge of higher education that the £5 college dues will fall on my correspondent or, as the case may be, on his parents if they are assisting him to carry out his studies. The £2 tuition fee increase may be recovered from the local education authority in most circumstances except, I understand, where the student is getting only a minimum of grant from the authority, when he may have to pay the £2 extra as well. But I direct the hon. Gentleman's mind purely to the board and lodging charge I mentioned first.
    Mr. Gower: I do not quarrel with the hon. Gentleman's case but has he any reason for deeming it to be a stronger case than that of the nurses, who have to pay for board and lodging in hospital? Does his case have peculiar characteristics?
    Mr. Lubbock: The hon. Gentleman has raised an extremely good point. I wish that I had thought of it so that I could have tabled an Amendment on that subject as well, because there might be interesting discussions about whether these charges on nurses are also included in the wording of the Clause. If such charges are included—and I shall be happy if the hon. Gentleman were to tell me so—I will be prepared to withdraw my Amendment even though I think that

    1517
    it would be useful for the sake of the students who have expressed anxiety to include the Amendment for purposes of clarification. No doubt the same consideration would apply if we chose to include words which covered the case of the nurses.
    9.30 p.m.
    I have only had today to make these inquiries. I have ascertained from the Union of Liberal Students and the National Union of Students that the notice from Pembroke College is not an isolated instance and that the increases being demanded are pretty general not only to Oxford and Cambridge but to provincial universities for board and lodging in hostels under their control. It is a general phenomenon which students have found, that whenever their grants are increased, then the board and lodging charges levied on them are increased to the same extent. A survey was carried out on this by the National Union of Students and presented to the Secretary of State for Education and Science in December, 1965. This survey showed the relationship between the increase in grants received by students earlier that year and the increase in the charges levied on them, to take effect from the Michaelmas Term of 1965. I am told that in general the survey showed that the increase in grants was almost entirely swallowed up by the increase in charges made on the students. There were examples of cases when a student was worse off than before.
    Since the example relates to Oxford and Cambridge I should point out that the Oxford and Cambridge colleges were not at all helpful toward the National Union of Students when it was making its survey. The colleges seemed to have a prejudice against the Union and some of the figures supplied by them in connection with the survey were inaccurate.
    I hope that in view of what I have said I shall have the support of hon. Gentlemen on both sides of the House. This is not a party political matter but one concerning many of our constituents very closely. It is a matter affecting a section of the community which is not, by any means, well off. If we are to insulate anyone from the effects of the economic situation, I should have thought that this House would have recognised
    1518
    that the students have as deserving a case as any section of the community.
    Mr. William Rodgers: I have been very interested in what the hon. Gentleman has said. May I make it clear that we deplore any increase in prices and charges of any kind which is not covered by the tightly-drawn qualifications in paragraph 4 of the White Paper. As the hon. Gentleman knows, we make it clear that whereas we expect all those involved generally to absorb additional costs, as far as possible, we recognise that there will be some additional costs, due to action by the Government, such as increased taxation, which it will not be possible to absorb altogther. Insofar as any increase in charges proposed by Pembroke and other colleges is due to increases in rates we would regard that as coming within paragraph 4 of the White Paper.
    Having said that, I hope that all bodies, including universities and colleges, will scrutinise increases that they have in mind in the light of the policy as it now stands. We are working in a voluntary period, and we hope that those who carry responsibilities in other directions will show a proper responsibility here, to act in the spirit of the White Paper and of the legislation that we have before us.
    Mr. Lubbock: In connection with the increases in rates, which the hon. Gentleman says that the college is entitled to pass on to the students, I am sure that he will agree that on the arithmetic it is impossible for the whole of the £5 to be accounted for by this item because, assuming there were 400 students at Pembroke College, each paying £5 a term more, it would mean that the rates have increased by no less than £6,000. That must be impossible.
    Mr. Rodgers: I did not say that a body was entitled to pass on increases in rates. I said that we acknowledged the fact that in certain circumstances it might not be possible to absorb charges of this kind and they might have to be reflected in this way. I would not wish to encourage anyone in the belief that it is simply a matter of passing on a cost which is covered by the exceptions mentioned in paragraph 4. It would be wrong for me to pursue this in detail now, but if the hon. Gentleman would like to send me full details

    1519
    I shall be glad to examine them. Beyond that, it would be unreasonable for me to comment. It might be unfair to Pembroke College and other institutions, because I am not in full possession of the facts and can only rely upon the helpful information given to me this evening by the hon. Gentleman.
    The Amendment is unnecessary because lump sums charged for board and lodging and tuition fees are regarded as charges for services and, as such, are fully within the scope of the Clause. The hon. Member very fairly said that he was not a lawyer and, therefore, he was not sure whether those items were covered. I can give him the answer, and therefore, I hope, curtail further discussion, by saying that they are covered by the Clause as it stands.
    Mr. Lubbock: I am grateful to the hon. Gentleman. In view of what he has said, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. John Pardoe: I beg to move Amendment No. 80, in page 7, line 18, after "until", to insert "thirty days after".
    Mr. Speaker: With this Amendment we will discuss the similar Amendment No. 81, in Clause 15, page 16, line 26.
    Mr. Pardoe: When I first read the Bill, or its predecessor, on the train to Carmarthen, I thought that it was fairly wet. That was probably the universal feeling of most hon. Members who read it. Since then it has been hotted up somewhat, and one might say that it has been hard-boiled. I suppose that we all have a love-hate relationship with the Bill. We are not sure whether we want it strengthened, which would have the effect of making idiocies even more idiotic, or whether we want it weakened.
    Mr. Speaker: Order. This is not the Third Reading of the Bill. The hon. Member must come to the Amendment.
    Mr. Pardoe: My point, Mr. Speaker, is that the Amendment strengthens the Bill. I was trying to make the point that the Bill needs strengthening. I am sorry if that was out of order and I will come straight to the point.
    1520
    The point about the Amendment is, what happens after the freeze? My view is that nothing happens after the freeze. When we have got to the end of the six or the 12 months, there will then be what is left of an incomes policy as laid out in the early stages of the Bill. Let us suppose for a moment, however, that the Incomes Board, after its three-month sojourn in the wilderness, comes out with a report which states that a certain price or wage increase which has been referred to it is the most monstrous inflationary increase, is totally against the national interest and should in no circumstances be allowed. On the very day that that report is published, the increase will take place. At least, that is the position under the Bill as it stands. This is absolutely crazy.
    We do not envisage that the Board should have statutory powers to enforce its decisions after the 12-month period. What, I imagine, the Government are saying is that these increases will not take place if the Board condemns them, because the full panoply of public opinion will be brought into play and no monopolist or trade union leader could be quite such a dirty dog as to go ahead and do it when he had been told by the Board that it was against the national interest and that the increase would not take place because he would not dare to do it. My answer is that I believe that he would dare.
    I am asking for a period of 30 days from the publication of the report when the full implications of the Report can be assessed by Parliament, if necessary. There is no reason why we should not have an opportunity in this Chamber to discuss a decision or a report of the Board. In the 30 days, it could be weighed up by the rather mysterious forces of public opinion that form opinions all over the country. Tempers on both sides should have a chance to cool. After all, if a trade union has put in for a wage increase or an industrialist has made a bid for a price increase and he is told by the Board that he cannot have it and that it is against the national interest, naturally his temper will become a little frayed.
    I am asking for this 30-day period after publication of the report so that everything can cool down, and so that the forces of public opinion can be brought

    1521
    into play, the House can have a chance to discuss it if necessary, the newspaper editorials and letters to the newspapers can be written, and the whole burden of public opinion can have its effect. If at the end of the 30 days the trade unionists or industrialists decide that they are still going to fly in the face of public opinion and the decision of the Board, that, of course, will be up to them.
    I know that the Amendment is no very great change; it is not going to cause a revolution; it will not even make this a good Bill. I would not claim that, but I think it would improve the Bill. There may be those who think that it would toughen the Bill. I think that if we are to have an incomes policy we had better have one which will work. My view is that the moment the six months or 12 months are up, the moment we are back to the incomes policy in the early part of the Bill, we shall have no powers whatever, and the incomes policy will, from that moment on, be a dead duck. We have seen this happen before. We have had a wages freeze, and at the end the dykes went up and everybody shot through and we had inflation all over again. The Bill is asking for an incomes policy, and I happen to believe in having an incomes policy, but if we are asking for an incomes policy we must have a long-term one which will work, and this Amendment would at least go some way towards strengthening the Bill and the position after the period of the freeze.
    I hope that hon. Members on both sides of the House will support the Amendment as a fairly reasonable measure—in no way a very dramatic or revolutionary one, but a reasonable one to strengthen the Bill after the period of the freeze.
    Mr. Norman Buchan: I should like to support the points which have been put forward in support of this Amendment, and I was pleased to hear the hon. Member for Cornwall, North (Mr. Pardoe) refer to his acceptance of a prices and incomes policy and his desire to have an efficient policy. If hon. Members have noticed the immediately previous Amendment on the Paper they will have seen that that, too, as this Amendment does, tries to bring the same kind of equality, the same kind of social justice, into the same kind of balance
    1522
    and impartiality between, the attitudes which, because of the Bill, may be taken towards wages and towards prices.
    Wages are subject to a very long period of delay through negotiations, and sometimes arbitration, and may sometimes last over several months. Prices are very often put up very rapidly, and the proposal for the 30 days would, of course, go a little way towards bringing some kind of equality in the application of the time factor, as it will apply to wages. I regret that my Amendment was not called.
    Secondly, I think that it should be supported because it will subject prices to the same kind of pressures which take place when wages negotiations are going on, when people know how much is being asked, and when wages negotiations are taking place and there is discussion——
    Mr. Speaker: The hon. Member must not speak to his own Amendment, which has not been selected.
    Mr. Buchan: I am aware of that, Mr. Speaker. I was trying to explain that this particular Amendment would have certain merits in the circumstances which occur in relation to wages, and it was to the merits of this Amendment that I was referring, and not to wages themselves, except by analogy. Since, implicit in the Bill, is the question of social justice, and that equality should be seen to be impartial on both sides, it seems by analogy to be relevant. It would mean that the scrutiny of the public gaze would be brought to bear on prices, rather than the dark and sometimes sinister forces of the boardroom where decisions are taken unilaterally. During the period of 30 days, public gaze and public discussion could be brought to bear upon prices, as happens at present with regard to wages, and I would therefore ask the Government Front Bench to look at this matter sympathetically.
    9.45 p.m.
    Mr. William Rodgers: This is a virtuous Amendment, which has been moved in an admirable speech by the hon. Member for Cornwall, North (Mr. Pardoe) who, from his broad general sentiments, I took to be on our side, because he talked a great deal of good sense. In particular, he draw attention to the need for a long-term policy, and the problem

    1523
    which would arise in a year's time at the end of the present standstill period. In a year's time we shall be faced by some testing decisions, and a great deal of thought will have to be given to how to deal with the situation.
    I also agree with my hon. Friend the Member for Renfrew, West (Mr. Buchan), who said that prices should be subject to public discussion. It is now understood that prices are not determined by some sort of mystical calculus but are matters which ought to be discussed in the light of trying to absorb costs and raise productivity while holding and even trying to reduce prices. The whole spirit of all that has been said is welcome on this side of the House.
    However, there is an obstacle to acceptance of the Amendment, and I am sure that the hon. Member for Cornwall, North will feel on reflection that it is a justified and reasonable one and not one that I am putting up merely for the sake of objecting. Nothing would give me greater pleasure than to be able to accept some Amendment some time. As the hon. Gentleman knows, there have been extensive discussions with both sides of industry and we have gained a great deal by establishing an understanding which involves, in the case of prices or incomes referred to the Board, a total standstill of a maximum of four months—a month while we consider whether reference should be made, and a further three months while the Board is making its inquiries and publishing its report.
    Four months is quite a long time and, after discussions with the C.B.I. and T.U.C., we have felt that it would be unreasonable to seek to prolong the statutory
    delay beyond the four-month period. I agree entirely with the hon. Gentleman about the desirability of employers or unions who have been involved in a reference to the Board taking time, once the Board has reported, to consider fully the recommendations which have been made. We do not want any precipitate action. To be fair, our experience has shown that in most cases precipitate action is not taken.
    The interested parties are prepared to discuss the Board's reports with the Government and, on many occasions, to go as far as they can to carry out the recommendations which have been made. In practice, it has worked very well and we have not found ourselves put in difficulties by undue time for reflection not having been taken.
    In view of the fact that we have discussed it elaborately with the T.U.C. and the C.B.I. and they have agreed reasonably that a four-month standstill is something which they are prepared to accede to, and in view of the fact that those who have been referred to the Board have generally been reasonable by not acting too quickly upon the recommendations, I would suggest that it is better left as it is, especially as we are still talking of a voluntary system.
    The hon. Gentleman was trying to be helpful, and he said many things with which I agree. I hope very much that he will feel that my reasonable and, I hope, friendly remarks will provide him with a reason why he should not press this further.
    Question put, That those words be there inserted in the Bill:—
    The House divided: Ayes 9, Noes 225.

    Division No. 165.]

    AYES

    [9.50 p.m.

    Bessell, Peter

    Johnston, Russell (Inverness)

    Winstanley, Dr. M. P.

    Davidson, James (Aberdeenshire, W.)

    Mackenzie, Alasdair (Ross&Crom'ty)

    Grimond, Rt. Hn. J.

    Thorpe, Jeremy

    TELLERS FOR THE AYES:

    Hooson, Emlyn

    Wainwright, Richard (Colne Valley)

    Mr. Lubbock and Mr. Pardoe

    NOES

    Albu, Austen

    Baxter, William

    Boston, Terence

    Allian, Frank (Salford, E.)

    Benn, Rt. Hn. Anthony Wedgwood

    Bottomley, Rt. Hn. Arthur

    Alldritt, Walter

    Bennett, James (G'gow, Bridgeton)

    Bowden, Rt. Hn. Herbert

    Allen, Scholefield

    Bidwell, Sydney

    Boyden, James

    Anderson, Donald

    Binns, John

    Braddock, Mrs. E. M.

    Armstrong, Ernest

    Bishop, E. S.

    Bray, Dr. Jeremy

    Ashley, Jack

    Blackburn, F.

    Brooks, Edwin

    Atkins, Ronald (Preston, N.)

    Blenkinsop, Arthur

    Brown, Bob (N'c'tle-upon-Tyne, W)

    Atkinson, Norman (Tottenham)

    Boardman, H.

    Brown, Rt. Hn. George (Belper)

    Barnes, Michael

    Booth, Albert

    Brown, R. W. (Shored itch & F'bury)

    Buchan, Norman

    Howarth, Robert (Bolton, E.)

    Pavitt, Laurence

    Butler, Herbert (Hackney, C.)

    Hughes, Emrys (Ayrshire, S.)

    Pearson, Arthur (Pontypridd)

    Callaghan, Rt. Hn. James

    Hughes, Roy (Newport)

    Peart, Rt. Hn. Fred

    Cant, R. B.

    Hunter, Adam

    Pentland, Norman

    Carter-Jones, Lewis

    Hynd, John

    Perry, George H. (Nottingham, S.)

    Castle, Rt. Hn. Barbara

    Jackson, Peter M. (High Peak)

    Prentice, Rt. Hn. R. E.

    Coleman, Donald

    Janner, Sir Barnett

    Price, Christopher (Perry Barr)

    Conlan, Bernard

    Jay, Rt. Hn. Douglas

    Price, Thomas (Westhoughton)

    Crawshaw, Richard

    Jeger, Mrs. Lena (H'b'n&St. P' cras, S.)

    Probert, Arthur

    Crosland, Rt. Hn. Anthony

    Jenkins, Hugh (Putney)

    Pursey, Cmdr. Harry

    Crossman, Rt. Hn. Richard

    Johnson, Carol (Lewisham, S.)

    Randall, Harry

    Cullen, Mrs. Alice

    Johnson, James (K'ston-on-Hull, W.)

    Redhead, Edward

    Davies, G. Elfed (Rhondda, E.)

    Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

    Rees, Merlyn

    Davies, Harold (Leek)

    Jones, J. Idwal (Wrexham)

    Rhodes, Geoffrey

    Davies, Ifor (Gower)

    Kelley, Richard

    Roberts, Gwilym (Bedfordshire, S.)

    de Freitas, Sir Geoffrey

    Kenyon, Clifford

    Robinson, Rt. Hn. Kenneth (St. P'c'as)

    Delargy, Hugh

    Kerr, Russell (Feltham)

    Rodgers, William (Stockton)

    Dell, Edmund

    Lawson, George

    Ross, Rt. Hn. William

    Dewar, Donald

    Leadbitter, Ted

    Rowland, Christopher (Meriden)

    Diamond, Rt. Hn. John

    Ledger, Ron

    Rowlands, E. (Cardiff, N.)

    Dickens, James

    Lee, Rt. Hn. Jennie (Cannock)

    Ryan, John

    Doig, Peter

    Lestor, Miss Joan

    Sheldon, Robert

    Donnelly, Desmond

    Lever, L. M. (Ardwick)

    Shore, Peter (Stepney)

    Driberg, Tom

    Lewis, Ron (Carlisle)

    Short, Mrs. Renée (W'hampton. N. E.)

    Dunnett, Jack

    Lomas, Kenneth

    Silkin, Rt. Hn. John (Deptford)

    Dunwoody, Mrs. Gwyneth (Exeter)

    Loughlin, Charles

    Silkin, S. C. (Dulwich)

    Dunwoody, Dr. John (F'th & C'b'e)

    Luard, Evan

    Silverman, Julius (Aston)

    Edwards, Robert (Bilston)

    Lyon, Alexander W. (York)

    Silverman, Sydney (Nelson)

    Edwards, William (Merioneth)

    Lyons, Edward (Bradford, E.)

    Skeffington, Arthur

    Ellis, John

    Mabon, Dr. J. Dickson

    Slater, Joseph

    English, Michael

    McCann, John

    Small, William

    Ennals, David

    MacColl, James

    Snow, Julian

    Ensor, David

    Macdonald, A. H.

    Spriggs, Leslie

    Faulds, Andrew

    McKay, Mrs. Margaret

    Steele, Thomas (Dunbartonshire, W.)

    Fitch, Alan (Wigan)

    Mackie, John

    Stewart, Rt. Hn. Michael

    Fletcher, Raymond (Ilkeston)

    Mackintosh, John P.

    Summerskill, Hn. Dr. Shirley

    Fletcher, Ted (Darlington)

    Maclennan, Robert

    Symonds, J. B.

    Floud, Bernard

    McMillan, Tom (Glasgow, C.)

    Taverne, Dick

    Foot, Michael (Ebbw Vale)

    McNamara, J. Kevin

    Thomas, George (Cardiff, W.)

    Ford, Ben

    Mallalieu, J. P. W.(Hudderefield, E.)

    Thomas, Iorwerth (Rhondda, W.)

    Forrester, John

    Manuel, Archie

    Thornton, Ernest

    Fraser, John (Norwood)

    Mapp, Charles

    Tinn, James

    Fraser, Rt. Hn. Tom (Hamilton)

    Marquand, David

    Tomney, Frank

    Freeson, Reginald

    Mayhew, Christopher

    Urwin, T. W.

    Galpern, Sir Myer

    Mendelson, J. J.

    Varley, Eric G.

    Garrett, W. E.

    Mikardo, Ian

    Wainwright, Edwin (Dearne Valley)

    Garrow, Alex

    Millan, Bruce

    Walker, Harold (Doncaster)

    Gordon Walker, Rt. Hn. P. C.

    Molloy, William

    Watkins, David (Consett)

    Gourlay, Harry

    Morgan, Elystan (Cardiganshire)

    Watkins, Tudor (Brecon & Radnor)

    Greenwood, Rt. Hn. Anthony

    Morris, Alfred (Wythenshawe)

    Weitzman, David

    Gregory, Arnold

    Morris, John (Aberavon)

    Wellbeloved, James

    Grey, Charles (Durham)

    Moyle, Roland

    Whitaker, Ben

    Griffiths, David (Pother Valley)

    Mulley, Rt. Hn. Frederick

    White, Mrs. Eirene

    Hamilton, William (Fife, W.)

    Newens, Stan

    Whitlock, William

    Hannan, William

    Norwood, Christopher

    Willey, Rt. Hn. Frederick

    Harper, Joseph

    Oakes, Gordon

    Williams, Clifford (Abertillery)

    Harrison, Walter (Wakefield)

    Ogden, Eric

    Williams, Mrs. Shirley (Hitchin)

    Hart, Mrs. Judith

    O'Malley, Brian

    Willis, George (Edinburgh, E.)

    Haseldine, Norman

    Oram, Albert E.

    Wilson, William (Coventry, S.)

    Hazell, Bert

    Orbach, Maurice

    Woodburn, Rt. Hn. A.

    Heffer, Eric S.

    Orme, Stanley

    Woof, Robert

    Henig, Stanley

    Oswald, Thomas

    Wyatt, Woodrow

    Herbison, Rt. Hn. Margaret

    Owen, Will (Morpeth)

    Yates, Victor

    Horner, John

    Page, Derek (King's Lynn)

    Houghton, Rt. Hn. Douglas

    Panned, Rt. Hn. Charles

    TELLERS FOR THE NOES:

    Howarth, Harry (Wellingborough)

    Park, Trevor

    Mr. Ioan L. Evans and

    Mr. McBride

    It being after Ten o'clock, further consideration of the Bill, as amended, stood adjourned.
    Ordered, That the Proceedings on the Prices and Incomes Bill may be entered upon and proceeded with at this day's sitting at any hour, though opposed.—[The Prime Minister.]

    Clause 11.—(PRICES AND CHARGES ENFORCEMENT.)
    Mr. Speaker: The next Amendment selected is No. 13, and I suggest that with it we discuss the following five
    1526
    Amendments: Amendment No. 14, in page 10, line 1, to leave out subsection (2).
    Amendment No. 15, in page 10, line 27, to leave out subsection (4).
    Amendment No. 16, in page 10, line 39, to leave out subsection (5).
    Amendment No. 31, in Clause 26, page 24, line 21, to leave out subsection (7).
    Amendment No. 35, in Clause 27, page 25, line 26, to leave out subsection (8).
    Sir K. Joseph: I beg to move, in page 9, line 35, to leave out subsection (1).
    This group of Amendments has as its common theme the elimination of the penalties for the breaking of the price obligations under Parts II and IV of the Bill. In case it might be thought that the Opposition are moving only on prices, I point out now that we have another group of Amendments to eliminate the penalties for breaches of the pay provisions. As the Government know by now, we are against all the compulsory measures in the Bill, and we hope that even at this stage we may persuade them to abate, in part if not entirely, some of the idiocies at least of the provisions on prices.
    The consumer needs protection against irresponsible price increases, but the proper way for the Government to protect the consumer is to see to it that the level of demand is such as to ensure that the producers of goods and suppliers of services have to compete for the custom of the public. That is how we would like to see the Government treating the economy. Now, the Government having introduced a package of deflation far more severe than would have been necessary if they had acted earlier, the economy will produce the competition which is the best protection of the consumer, and this is why we feel absolutely clear in our consciences that it would be right to strike out of the Bill all the compulsory provisions and a great deal of the others as well in connection with prices.
    There could be an occasion, for instance in war, when some sort of compulsory price control was legitimate, but, generally, if it is legitimate it will go with a scarcity of goods which requires rationing to accompany price control. This is not such an occasion. The hon. Member for Renfrew, West (Mr. Buchan) and his hon. Friends may be tempted to equate price control with social justice, but this is a very naive view. Price control is far more likely to produce poverty, to lead to a creaking economy, and, in due course, if continued long enough, to lead inevitably to what the hon. and learned Member for Northampton (Mr. Paget) has already prophesied, the return of rationing. [An HON. MEMBER: "Why?"] Does someone want to waste time asking such a simple question as "Why?". I shall not take up time on it. I should enjoy
    1528
    a disquisition on "Why?", but we must try to make some progress for our own sake if not for the Government's.
    Now that deflation is coming imminently upon the economy, we believe that these compulsory provisions for price control are completely unnecessary even for the Government's own purposes. But not only are they unnecessary; they produce several dangers. First, from the experience we have already had of the Government's voluntary system for trying to abate price and pay increases, it has been noted that the Government have been marginally less unsuccessful on prices than they have been on pay increases. Economists who have measured the changes believe that it is a very small success, about ½ per cent. in a year, in abating price increases and a nil success in abating wage increases. But to the extent that the Government are marginally successful in abating increases of prices, to the same extent they increase the danger of inflation because they release the equivalent amount of purchasing power to be spent on other goods, which generally means exports. Consequently we believe that any attempt to control prices is likely to be inflationary, and that is the first condemnation we have, in addition to the unnecessary nature of this provision.
    Secondly, we believe—and in Committee my hon. Friends gave dozens of examples—that it is completely impracticable to control prices. The right hon. Gentleman the First Secretary admitted that evasions would be impossible to stop. I am not talking about people who deliberately seek to evade, and, of course, they will be able to evade price control unless an enormous bureaucracy is established. I am referring to the normal daily evasions that will be almost necessary for the ordinary trader who is trying to carry out his duty of supplying the public and surviving as an economic unit.
    We believe that when one takes into account the infinite variety of changes of weight, content, type, packing, colour and a score of others which hon. Members could illustrate, it is absolutely impossible for any bureaucracy that is thinkable, even by this Government, to have a fair and effective control of prices.
    I will not spend the time of the House elaborating this point because I believe that it is common ground. The First

    1529
    Secretary admitted that bringing the price control section of Part IV into operation would be an abominable headache, and I will, therefore, mention only a few of the matters which the right hon. Gentleman will have to contemplate if he decided to take this step. He would have to consider whether restaurant, cafe, shop, laundry prices and the prices of an infinite number of services provided by people for people to a different measure in each case could possibly come under this sort of price control.
    Apart from the unnecessary inflationary nature of this provision, we believe that it will seriously damage investment, remembering that every time prices are controlled, profits are squeezed. It is out of profits that investments are built up. A lengthy control of prices would be bitterly damaging to investment which, as hon. Members know, is essential for the well being of the country.
    We hope, therefore, that the House will approve the Amendment. If that were the happy outcome of this debate the economy would not suffer great torrents of price increases because of the deflationary package introduced a few weeks ago by the Prime Minister. It is because, in this context, we regard price control as nothing less than dotty and, therefore, the criminal sanctions written into Parts II and IV of the Bill as evil, that my hon. Friends and I seek the support of the House for the Amendment.
    Mrs. Jill Knight: This part of the Bill is utterly unfair because it refers virtually completely to the private sector as opposed to the public sector. We cannot take the mote out of the eye of private enterprise while ignoring the beam in the eye of State enterprise.
    One of my hon. Friends spoke earlier about social justice being outraged. It is in this context that it seems that social justice is being outraged, since costs will be forced up in the private sector by Government action—including S.E.T., petrol increases and so on—while, at the same time, State Departments are apparently being allowed to fix their prices at whatever level they choose.
    1530
    I had a very angry letter from a constituent yesterday saying that Ordnance Survey maps had gone up in price by an enormous amount—from 8s. 6d. to 16s. My constituent was told that it was in order to pay for maps which would be available in 1980. It is the height of "topsy-turvyism" to permit a State Department to put up costs by this much for something which will not be available for 14 years. Why is that permissible, yet these subsections will remain? To carry public opinion with us, we must appear to provide social justice.
    Sir Edward Brown: I have a different reason from that of my right hon. Friend for supporting the Amendments. We tried in Committee to get some sense into the Bill. I should like to ask the Chancellor, who is present, what would be the situation under this subsection if a person were taken to court. Could he rely on the Chancellor's statement during debates on the Finance Act, that, with S.E.T., hotels should raise their prices? Which is right, the Finance Act or this subsection? We need clarity, so I repeat the question.
    Perhaps the Parliamentary Secretary will check with the Chancellor. If someone is to be pursued in the courts, will he rely on the Chancellor's statement or the entirely different statement of the First Secretary. The Government are "mixed-up kids"; they will take no advice. This is a typical example which will make them a laughing stock in the country and will be joy and paradise for lawyers. I want a clear answer, so that the hoteliers in Bath will know what to do.
    Mrs. Shirley Williams: The Amendments would remove the sanctions with regard both to early warning orders over prices and charges and, if it were brought into force, to any orders made under Part IV, freezing prices. Hon. Gentlemen opposite have been expressing disappointment with us from time to time, so I will now express disappointment with them. It is obvious that, a Bill of this type must carry sanctions. It would be impossible and ludicrous for the Government to bring in a system of early warning for prices which carried no sanctions for those who failed to co-operate, as it would, in those circumstances, be even

    1531
    more ludicrous to bring in Part IV, should it be necessary.
    As we made clear in Committee and have made clear today, it is the Government's earnest wish and hope that it will not be necessary to bring in Part IV, but, if it is, there would be no point in trying to enforce a standstill on prices, through which anyone who wished not to co-operate or to act in a non-patriotic manner could drive a coach and horses. This would be very unfair to the majority of firms and industries which attempted to uphold the Government's standstill and the Government's early warning system. Quite simply, as is the case in almost every other type of legislation brought before the House, there must be sanction of some kind.
    10.15 p.m.
    These sanctions are very closely controlled, amounting to a fine of a maximum of £100 on summary conviction in a magistrate's court, or £500 maximum for non corporate bodies in a higher court and leaving to the discretion of the court any greater fine, which is normal under similar types of legislation, should they be brought before a higher court. I repeat that in addition to this there are a number of important safeguards. The first of these is that with Parts I, II and III of the Bill, we are talking purely about the early warning system and not as the right hon. Gentleman said, about a system of price control. Parts I, 11 and III do not involve a system of price control, but merely involve an attempt to get firms and industries to comply with an early warning system carrying an absolute maximum of four months' delay in an increase in prices. That has been made clear time and time again in Committee.
    There are other safeguards in Part IV. As my right hon. Friend has pointed out, at most Part IV can last a year and it cannot be extended. It is subject to affirmative Resolution by the House. It cannot involve any action against anybody without the prior permission of the Attorney-General. That also applies to any sanctions under the early warning system. So there are substantial safeguards to which right hon. and hon. Gentlemen opposite have not referred.
    I come very briefly to comment on one or two of the points which have been
    1532
    made in the debate. The reply to the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) is that paragraphs 32 and 33 of the White Paper make it clear that the standstill applies equally to nationalised industries' prices and action is being taken to make certain that the standstill is so regarded—I am talking now about the voluntary standstill. The hon. Lady referred to a particular instance and I would be grateful if she would send us information about it so that we may look into it.
    I refer the hon. Member for Bath (Sir E. Brown) to paragraph 4 of the White Paper which makes it clear that where a rise in price takes place as a result of Government action, in so far as it cannot be absorbed, it escapes the terms and conditions of the standstill. I repeat "in so far as it cannot be absorbed", but if it could not be absorbed in full under the standstill, then paragraph 4 would make the position fairly clear.
    I was mildy surprised by one thing said by the right hon. Member for Leeds, North-East (Sir K. Joseph). He said that the Government ought to be able to control the whole of the situation of rising prices and incomes, in other words, inflation, by control over the level of demand. I recognise that that is the position which he and many of his hon. Friends accept. But I must say that this was not the case under his own Government. The pay pause, the guiding light and the Three Wise Men were all a recognition of the inability of that Government to run the economy simply by reference to the level of demand.
    Exactly the same thing arises in economies such as those of the United States, Sweden, France and Germany. None of them has been able effectively to control its economy purely by the use of control over the level of demand. Why? There is one simple reason and it is that in a modern economy inflation cannot be controlled purely by working on the level of demand. In situations as highly organised as both sides of industry in these economies are today, it means dropping that level of demand to a much lower level than was borne in mind by people believing in terms entirely of a free market system in which nothing was organised on either the prices or incomes side.

    1533
    It is clear that virtually no economy in the free world has been able to operate purely on the level of demand. Right hon. and hon. Gentleman opposite should think very carefully before committing themselves to a course which might well mean a level of demand which would be far too low to encourage investment in
    future and on which their own Party when in office clearly did not entirely depend, I therefore urge that the Amendment be rejected.
    Question put, That the words proposed to be left out stand part of the Bill:—
    The House divided: Ayes 216, Noes 142.

    Division No. 166.]

    AYES

    [10.20 p.m.

    Albu, Austin

    Floud, Bernard

    Marquand, David

    Allaun, Frank (Salford, E.)

    Foot, Michael (Ebbw Vale)

    Mayhew, Christopher

    Alldritt, Walter

    Ford, Ben

    Mendelson, J. J.

    Allen, Scholefield

    Fraser, John (Norwood)

    Mikardo, Ian

    Anderson, Donald

    Fraser, Rt. Hn. Tom (Hamilton)

    Millan, Bruce

    Armstrong, Ernest

    Freeson, Reginald

    Molloy, William

    Ashley, Jack

    Galpern, Sir Myer

    Morgan, Elystan (Cardiganshire)

    Atkins, Ronald (Preston, N.)

    Gardner, A. J.

    Morris, Alfred (Wythenshawe)

    Atkinson, Norman (Tottenham)

    Garrett, W. E.

    Morris, John (Aberavon)

    Barnes, Michael

    Garrow, Alex

    Moyle, Roland

    Baxter, William

    Gordon Walker, Rt. Hn. P. C.

    Mulley, Rt. Hn. Frederick

    Benn, Rt. Hn. Anthony Wedgwood

    Gourlay, Harry

    Newens, Stan

    Bennett, James (G'gow, Bridgeton)

    Greenwood, Rt. Hn. Anthony

    Norwood, Christopher

    Bidwell, Sydney

    Gregory, Arnold

    Oakes, Gordon

    Binne, John

    Griffiths, David (Rother Valley)

    Ogden, Eric

    Bishop, E. S.

    Hamilton, William (Fife, W.)

    O'Malley, Brian

    Blackburn, F.

    Hannan, William

    Orme, Stanley

    Blenkinsop, Arthur

    Harper, Joseph

    Oswald, Thomas

    Boardman, H.

    Harrison, Walter (Wakefield)

    Page, Derek (King's Lynn)

    Booth, Albert

    Hart, Mrs. Judith

    Pannell, Rt. Hn. Charles

    Boston, Terence

    Haseldine, Norman

    Park, Trevor

    Bottomley, Rt. Hn. Arthur

    Heffer, Eric S.

    Pavitt, Laurence

    Bowden, Rt. Hn. Herbert

    Henig, Stanley

    Peart, Rt. Hn. Fred

    Boyden, James

    Harbison, Rt. Hn. Margaret

    Pentland, Norman

    Braddock, Mrs. E. M.

    Horner, John

    Perry, George H. (Nottingham, S.)

    Bray, Dr. Jeremy

    Houghton, Rt. Hn. Douglas

    Prentice, Rt. Hn. R. E.

    Brown, Rt. Hn. George (Belper)

    Howarth, Robert (Bolton, C.)

    Price, Christopher (Perry Barr)

    Brown, Bob (N'c'tle-upon-Tyne, W)

    Hughes, Emrys (Ayrshire, S.)

    Price, Thomas (Westhoughton)

    Brown, R. W. (Shoreditch & F'bury)

    Hughes, Roy (Newport)

    Probert, Arthur

    Buchan, Norman

    Hunter, Adam

    Pursey, Cmdr. Harry

    Butler, Mrs. Joyce (Wood Green)

    Hynd, John

    Randall, Harry

    Callaghan, Rt. Hn. James

    Jackson, Peter M. (High Peak)

    Redhead, Edward

    Cant, R. B.

    Janner Sir Barnett

    Rees, Merlyn

    Carter-Jones, Lewis

    Jeger, Mrs. Lena (M'b'&St. P'cras, S.)

    Rhodes, Geoffrey

    Castle, Rt. Hn. Barbara

    Jenkins, Hugh (Putney)

    Roberts, Cwilym (Bedfordshire, S.)

    Coleman, Donald

    Jenkins, Rt. Hn. Roy (Stechford)

    Robinson, Rt. Hn. Kenneth (St. P'c'as)

    Conlan, Bernard

    Johnson, Carol (Lewisham, S.)

    Rodgers, William (Stockton)

    Crawshaw, Richard

    Johnson, James (K'ston-on-Hull, W)

    Ross, Rt. Hn. William

    Crosland, Rt. Hn. Anthony

    Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

    Rowland, Christopher (Meriden)

    Crossman, Rt. Hn. Richard

    Jones, J. Idwal (Wrexham)

    Rowlands, E. (Cardiff, N.)

    Cullen, Mrs. Alice

    Kelley, Richard

    Ryan, John

    Davies, G. Elfed (Rhondda, E.)

    Kenyon, Clifford

    Sheldon, Robert

    Davies, Harold (Leek)

    Kerr, Russell (Feltham)

    Shore, Peter (Stepney)

    Davies, Ifor (Gower)

    Lawrson, George

    Silkin, Rt. Hn. John (Deptford)

    de Freitas, Sir Geoffrey

    Leadbitter, Ted

    Silkin, S. C. (Dulwich)

    Delargy, Hugh

    Ledger, Ron

    Silverman, Julius (Aston)

    Dell, Edmund

    Lee, Rt. Hn. Jennie (Cannock)

    Silverman, Sydney (Nelson)

    Dewar, Donald

    Lestor, Miss Joan

    Skeffington, Arthur

    Diamond, Rt. Hn. John

    Lever, L. M. (Ardwick)

    Slater, Joseph

    Dickens, James

    Lewis, Ron (Carlisle)

    Small, William

    Dobson, Ray

    Lomas, Kenneth

    Snow, Julian

    Doig, Peter

    Loughlin, Charles

    Spriggs, Leslie

    Donnelly, Desmond

    Luard, Evan

    Steele, Thomas (Dunbartonshire, W.)

    Driberg, Tom

    Lyon, Alexander W. (York)

    Summerskill, Hn. Dr. Shirley

    Dunnett, Jack

    Lyons, Edward (Bradford, E.)

    Taverne, Dick

    Dunwoody, Mrs. Gwyneth (Exeter)

    Mabon, Dr. J. Dickson

    Thomas, George (Cardiff, W.)

    Dunwoody, Dr. John (F'th A C'b'e)

    McCann, John

    Thomas, Iorwerth (Rhondda, W.)

    Edelman, Maurice

    MacColl, James

    Thornton, Ernest

    Edwards, Robert (Bilston)

    Macdonald, A. H.

    Tinn, James

    Edwards, William (Merioneth)

    McKay, Mrs. Margaret

    Tomney, Frank

    Eills, John

    Mackie, John

    Urwin, T. W.

    English, Michael

    Mackintosh, John p.

    Varley, Eric G.

    Ennals, David

    Maclennan, Robert

    Walker, Harold (Doncaster)

    Ensor, David

    McMillan, Tom (Glasgow, C.)

    Watkins, David (Consett)

    Faulds, Andrew

    McNamara, J. Kevin

    Watkins, Tudor (Brecon & Radnor)

    Fitch, Alan (Wigan)

    Mallalieu, J. P. W.(Huddersfield, E.)

    Weitzman, David

    Fletcher, Raymond (Ilkeston)

    Manuel, Archie

    Wellbeloved, James

    Fletcher, Ted (Darlington)

    Mapp, Charles

    Whitaker, Ben

    White, Mrs. Eirene

    Willis, George (Edinburgh, E.)

    Wyatt, Woodrow

    Whitlock, William

    Wilson, Rt. Hn. Harold (Huyton)

    Yates, Victor

    Willey, Rt. Hn. Frederick

    Wilson, William (Coventry, S.)

    Williams, Clifford (Abertillery)

    Woodburn, Rt. Hn. A.

    TELLERS FOR THE AYES:

    Williams, Mrs. Shirley (Hitchin)

    Woof, Robert

    Mr. McBride and Mr. Ioan L. Evans.

    NOES

    Alison, Michael (Barkston Ash)

    Griffiths, Eldon (Bury St. Edmunds)

    Noble, Rt. Hn. Michael

    Allason, James (Hemel Hempstead)

    Grimond, Rt. Hn. J.

    Nott, John

    Balniel, Lord

    Gurden, Harold

    Onslow, Cranley

    Batsford, Brian

    Hall, John (Wycombe)

    Orr-Ewing, Sir Ian

    Berry, Hn. Anthony

    Hamilton, Michael (Salisbury)

    Osborne, Sir Cyril (Louth)

    Bessell, Peter

    Harrison, Col. Sir Harwood (Eye)

    Page, Graham (Crosby)

    Biffen, John

    Hawkins, Paul

    Pardoe, John

    Birch, Rt. Hn. Nigel

    Heseltine, Michael

    Pearson, Sir Frank (Clitheroe)

    Blaker, Peter

    Higgins, Terence L.

    Peel, John

    Body, Richard

    Hill, J. E. B.

    Percival, Ian

    Boyd-Carpenter, Rt. Hn. John

    Hobson, Rt. Hn. Sir John

    Pike, Miss Mervyn

    Boyle, Rt. Hn. Sir Edward

    Hooson, Emlyn

    Pink, R. Bonner

    Brewis, John

    Hordern, Peter

    Price, David (Eastleigh)

    Brinton, Sir Tatton

    Hornby, Richard

    Prior, J. M. L.

    Bromley-Davenport, Lt. Col. Sir Walter

    Howell, David (Guildford)

    Pym, Francis

    Brown, Sir Edward (Bath)

    Hunt, John

    Ramsden, Rt. Hn. James

    Bruce-Gardyne, J.

    Hutchison, Michael Clark

    Rawlinson, Rt. Hn. Sir Peter

    Buck, Antony (Colchester)

    Jenkin, Patrick (Woodford)

    Rodgers, Sir John (Sevenoaks)

    Bullus, Sir Eric

    Johnston, Russell (Inverness)

    Rossi, Hugh (Hornsey)

    Carlisle, Mark

    Jones, Arthur (Northants, S.)

    Royle, Anthony

    Clegg, Walter

    Jopling, Michael

    Russell, Sir Ronald

    Crouch, David

    Joseph, Rt. Hn. Sir Keith

    Sharples, Richard

    Crowder, F. P.

    King, Evelyn (Dorset, S.)

    Shaw, Michael (Sc'b'gh & Whitby)

    Currie, G. B. H.

    Kirk, Peter

    Sinclair, Sir George

    Dance, James

    Kitson, Timothy

    Stodart, Anthony

    Davidson, James (Aberdeenshire, W.)

    Knight, Mrs. Jill

    Summers, Sir Spencer

    d'Avigdor-Goldsmid, Sir Henry

    Lancaster, Col. C. G.

    Tapsell, Peter

    Dean, Paul (Somerset, N.)

    Legge-Bourke, Sir Harry

    Thatcher, Mrs. Margaret

    Deedes, Rt. Hn. W. F. (Ashford)

    Lewis, Kenneth (Rutland)

    Thorpe, Jeremy

    Doughty, Charles

    Longden, Gilbert

    Tilney, John

    Douglas-Home, Rt. Hn. Sir Alec

    Loveys, W. H.

    Turton, Rt. Hn. R. H.

    Eden, Sir John

    Lubbock, Erie

    van Straubenzee, W. R.

    Elliott, R. W. (N'c'tle-upon-Tyne, N.)

    Mackenzie, Alasdair (Ross&Crom'ty)

    Vaughan-Morgan, Rt. Hn. Sir John

    Eyre, Reginald

    Maclean, Sir Fitzroy

    Victors, Dame Joan

    Farr, John

    Macleod, Rt. Hn. Iain

    Wainwright, Richard (Colne Valley)

    Fisher, Nigel

    Macmillan, Maurice (Farnham)

    Walker, Peter (Worcester)

    Fletcher-Cooke, Charles

    Maddan, Martin

    Wall, Patrick

    Fortescue, Tim

    Marten, Neil

    Ward, Dame Irene

    Fraser, Rt. Hn. Hugh (St'fford & Stone)

    Maude, Angus

    Weathrill, Bernard

    Gibson-Watt, David

    Maxwell-Hyslop, R. J.

    Webster, David

    Giles, Rear-Adm. Morgan

    Maydon, Lt.-Cmdr, S. L. C.

    Wells, John (Maidstone)

    Gilmour, Sir John (Fife, E.)

    Miscampbell, Norman

    Whitelaw, William

    Glover, Sir Douglas

    Mitchell, David (Basingstoke)

    Wilson, Geoffrey (Truro)

    Glyn, Sir Richard

    More, Jasper

    Winstanley, Dr. M. P.

    Goodhart, Philip

    Morgan, W. G. (Denbigh)

    Wood, Rt. Hn. Richard

    Goodhew, Victor

    Munro-Lucas-Tooth, Sir Hugh

    Worsley, Marcus

    Gower, Raymond

    Murton, Oscar

    Gresham Cooke, R.

    Neave, Airey

    TELLERS FOR THE NOES:

    Mr. Younger and Mr. Grant.

    Clause 12.—(NOTICE OF INCREASE IN COMPANY DISTRIBUTIONS.)
    Mr. Peter Hordern: I beg to move Amendment No. 17, in page 11, line 20, to leave out from "to" to end of line 29 and to insert:
    "the previous year or the average of the previous five years whichever is the higher".
    The purpose of this Amendment is to give some form to the Government's Bill in its relation to dividend increases. As it stands the Government have perfect power to compare an increase in dividends for the current year with any previous year. We are saying in this Amendment that the increase, if there be any, in the current year shall be compared either with the previous year or with the average of the dividends over the five previous years, whichever is the higher. If the Government—[Interruption].
    Mr. Speaker: Order. There is a background of conversation. It is not fair to the hon. Member who is addressing the House.
    10.30 p.m.
    Mr. Hordern: I cannot hear the force of my own argument, Mr. Speaker.
    If the Clause were to stand as it is at the moment, it is as if the hon. Member for Ebbw Vale (Mr. Michael Foot) were to find himself comparing the level of wages in the past year with the level of wages which his constituents were earning in, say, 1948. At the moment the Government have power to nominate any base year they please in which to make a comparison of dividend increases. We on this side of the House, at any rate, are quite convinced that this power should not remain with the Government. It is purely arbitrary and quite indefensible.
    The Government made no attempt whatever in Committee to produce any good evidence for this power. They attempted to say that the ways of company reports were mysterious and not always easily understood. When it was pointed out to them that so far from that being true, when a dividend was declared it had to be made public on the day of its declaration, they refused
    1538
    to take this as an argument. In fact, whenever dividends are declared, the Financial Times has the earnings worked out to the nearest decimal point, probably on the same day and certainly on the following day. A whole range of services is available to the Government, comparing earnings for one year with the previous 10 years. They are available at once. It is unnecessary to include any reference to dividend increases in this Bill. If such a reference is in the Bill, we must insist that it should be related to some reasonable base year, and this the Government are refusing to do.
    I should like to mention one or two anomalies which will occur as a result of the definition which the Government have put in this Clause which we are trying to correct by our Amendment. According to the Government in Committee, the rights issue counts as a distribution. I cannot conceive how this can be so. A rights issue by definition must mean that a company is asking for money in return for which it will issue shares. What the company is trying to do is to rake the money in—not to give it away. Yet the Government say that this constitutes a distribution. We should like to know whether the dividends on the rights issues will be classed as dividends within the terms of this Clause. I would be grateful to have the attention of the hon. Lady the Parliamentary Secretary to the Ministry of Labour, and I hope that she will address herself to that point when she replies.
    Then there is the other question of distribution, whether shares which are issued in exchange for the acquisition of companies also come within the definition of a distribution. If this is so, it will prevent many desirable mergers from occurring in this coming year. That is a point on which I should like to be enlightened.
    Then there is the case of companies which have in the past, when they became public companies, issued a prospectus stating what they hoped to be able to achieve either in the forthcoming year or the year after that. This is precisely on a level with the position as far as wage earnings were concerned, which we discussed earlier this afternoon. If a wage contract is engaged in, a worker

    1539
    gives his labour for a certain price which he is led to believe is fixed for a certain period of time. So it is with a company which issues its shares on the market. It issues a prospectus and the shares of the company are bought on the basis of a regular and certain increase in dividends over a period of years. Now we are led to believe that it is this carrying out of the prospectus which is in jeopardy.
    A company is not now allowed to carry out the terms of its original prospectus. Therefore, not only is the effect of the Government's actions in this respect very bad for capital raising, but it can easily bring into jeopardy the status of the company which is forced to remain on its prospectus guarantees. If the Government's intentions are carried out and rights issues are regarded as distribution, the Government must be aware of the effect that this will have on their ability to raise capital in the market. It will be a very considerable effect.
    I urge the Government even at this late hour to think again about this and to accept our very reasonable Amendment, which tries to provide a base date by which they can make a valid comparison as between one year and another. We are, after all, concerned only with supplying dividend information to the First Secretary which he has at his finger tips if only he cares to pick up the Financial Times. If he will not do that, let him at least consider what the effect of the Clause will be. There is no doubt that it will result in very considerable diminution of the power of the Government to raise capital.
    Sir Douglas Glover: Today the Government said that they were appointing a shipping board to try to bring about amalgamations of the companies in the shipping industry. Will not these amalgamations rank as distribution?
    Mr. Hordern: I am grateful to my hon. Friend. I would hope to receive elucidation from the Government as to whether the distribution of shares to acquire another company counts as distribution for this purpose. If it does it will slow up the process which the Government say is desirable.
    1540
    There is no question that the economy may well be slowed up by this absurd Clause concerning dividend distribution. It is really only a question of informing the First Secretary what the information is. But let him take into account not just the level of dividend increases but the level of decreases. This is absolutely relevant to the level of increases which will, on the Government's own argument, find their way eventually into the pockets of shareholders. These things must be borne in mind in relation to the criteria on which the Government base their decision whether or not to refer matters to the Prices and Incomes Board.
    I ask the Government again to provide some real reasons for the absurd inclusion of provision for allowing a base date to be chosen on some criterion of which the House has no knowledge. The Parliamentary Secretary must give some reasons and some criteria for it. That is the least we expect.
    Mr. Gower: The House assumes that the Government want to achieve at least two things—justice and the appearance of justice. As the Bill stands, I do not think they achieve either.
    My hon. Friend the Member for Horsham (Mr. Hordern) has presented the Amendment in studied and moderate terms. I do not see how the Government can possibly justify the present wording of this part of the Clause. On reading the reply the Government made in Committee one can only attribute to them a desire to be less than fair or an entire ignorance of the system of company law and accounting. Although I would be inclined to assume that there is a great deal of ignorance on the part of the Government, I cannot believe that their advisers are equally ignorant of some of the matters to which my hon. Friend has referred.
    At present, the Government are entitled to do almost as they like in arriving at an assessment. The Amendment is reasonable. It would give the Government a fairly wide range in which to find their base year. I hope that the hon. Lady will accept the Amendment.
    Mrs. Shirley Williams: Hon. Members opposite have put a very fair case. Despite my brief sojourn on a newspaper for which they obviously have the greatest

    1541
    respect, I cannot claim to be, even in the smallest sense, the experts that they are on this matter. Perhaps I can assist them a little. It is important to make clear that what we are concerned with is a matter concerning notification of dividends. That is what the Clause is all about. Some of the more frightening consequences which the hon. Member for Horsham (Mr. Hordern) pointed to will not occur, because we are concerned simply with the one question of what has to be notified and what does not have to be notified.
    I will tell the hon. Gentleman what is the thinking behind the original subsection. The hon. Gentleman will then see that some of his fears are perhaps misplaced, although I agree they are genuinely felt. The Government have phrased, it in this way because they are concerned with the following position. Generally speaking, an increase in dividends will have to be notified if it is an increase in dividends over the previous year. But there are certain companies for which the dividend position is one which fluctuates possibly very markedly over a period of years.
    Under the Amendment, it would be possible in certain circumstances—I can give the hon. Gentleman instances if he wants me to, but since they are mathematical he will forgive me if I do not bother the House with them; I know that he will know them for himself—to have a situation in which the dividend in, say, year 6 was higher than the dividend in year 1, which might be the year in which the Bill was passed—1966. It might be also higher than that in the immediately preceding year—the fifth year, but it might be lower than the dividends paid in the five years taken together, had there been a string of fairly high dividends in years 2, 3 and 4.
    In consequence, there would be no notification of the increase in dividend in year 6, although it was in fact higher than that paid in year 5 and higher than that in the normal base year in which the Bill was passed. This would give rise to the difficulty that people less highly sophisticated in matters of finance than the hon. Members for Horsham (Mr. Hordern) and Barry (Mr. Gower) would immediately get an impression of extreme unfairness: it would be an increase in dividend over and against the previous
    1542
    year and over and against what the Government would advance as the normal base year, and yet it would not be notified. It might be difficult to explain why this was so.
    I can reassure the hon. Gentleman to this extent. It is not the Government's intention, as the hon. Gentleman feared—if one assumed the greatest possible malevolence on the part of the Government it would be reasonable to hold this fear—that one would take a base year in which it was possible to give the worst possible impression of the increase in dividend. That would be contrary to the Government's intention. It is the Government's intention to be able so to frame a demand for notification that, whereas in general the base year would be the year in which the Bill was passed or the year immediately prior to the one in which the dividend was increased—this was the one which the hon. Gentleman himself referred to as reasonable—there might be certain cases where, owing to sharp fluctuations, this was no longer sensible. There might also be certain cases where, because a company was steadily growing, or its yields were steadily growing, or, alternatively, its yields were steadily declining, it would be quite unfair to maintain the same base year and to regard that as being the base year as applied appropriately to that company.
    10.45 p.m.
    Mr. Gower: I am not unsympathetic to the point the hon. Lady is putting, which is in some ways better than what was said earlier by the Government. She says that in the sixth year there would be a difficulty particularly as regards public opinion—and I recognise the validity of that argument—about an apparently sharp uprise in dividends in that year, although prior to that year the average increase was not so considerable. But surely, by her own argument these increases in the intermediate years would have been notified to the Board.
    Mrs. Williams: My reading of the Amendment is that it is the case of whichever is the higher. This means that if the five year average were higher this would apply rather than the previous year's percentage. Consequently, in the situation I have described, an impression of unfairness would remain.

    1543
    I want to deal with two other points. The first concerns rights issues. They are included, but I refer the hon. Member for Horsham to the phrasing of the Clause, which would make it possible to rephrase notification where the scope of the company is basically changed with the rights issue. The same thing applies with regard to the point about a new issue. Again he will see the references to the scale of the business as well as to its nature. This, of course, could be taken care of in a situation in which an amalgamation took place.
    We are talking about notifications. The aim of the Government is not only to be fair but to be seen to be fair. I think it is right that there should be power, where dividend increases are made, to submit a company to the Prices and Incomes Board, as in the case of price increases or increases in fees and charges. That is the Government's view and we are not likely to budge from it. In view of what I have said, I ask the hon. Member to withdraw the Amendment, which is directed against an intent the Government do not have.
    Mr. Hordern: I regret that I must disappoint the hon. Lady by requesting my right hon. and hon. Friends to divide for the Amendment. The gist of her argument was that if, by chance, the dividend of a company should be increased in the forthcoming year over the level of last year, the appearance of this would be unsatisfactory to the public as a whole because it may not understand the sophisticated reason behind it—that there may have been good reasons for difficulties in the current year which kept the dividend below the level of the previous five years and good reason why it should be restored to its former level in the forthcoming year just to restore the level.
    If it is her argument that the Government will be unable to persuade the country as to the justice of this, that is no excuse whatever. She is saying that the public relations aspect is too difficult but that is no concern of ours. We could not possibly accept her argument. She did not refer to the effect on issues of shares for acquisition and a bigger and rising capacity. But these are points which will be well known to her. Nor
    1544
    did she mention one or two of the more technical matters which will undoubtedly occur—for example, in conversion of unsecured loan stocks into ordinary shares. Will dividend on these conversions count? Will they count as depreciation or not?
    These anomalies will obviously occur, but generally speaking the point we made in Committee and again tonight is that we have had no assurance from the Government about what criteria there are to be in assessing the best year nor any assurance that they will take into account not just the level of dividend increases but the general level of dividends throughout the economy. In view of this, I hope my right hon. and hon. Friends will divide.
    Sir Spencer Summers: There are one or two points that the hon. Lady did not deal with. As one who did not serve on the Standing Committee and who comes relatively new to the Bill at this stage, it seems to me to be quite feasible for the Government to enforce notification by one criterion for one firm or industry and a totally different criterion for another firm or industry and to delay the decisions in regard to dividends of individual companies by whatever rules seem to them to be expedient at the time.
    When those rules are made, they have to be considered by the Board. In seeking to affect the decisions of companies, admittedly there might be a voluntary period but, at least, the Minister can bring to bear a degree of discrimination as between one company and another. This would be highly dangerous. It might be part of the First Secretary's attempt to manage the economy, but it is something which it would be dangerous for this House to pass and to allow to go unchallenged.
    Mr. Lubbock: Will the hon. Member answer a question which has puzzled me? Why does he think that the criteria will be different from one firm or industry to another? Having listened to the Parliamentary Secretary's speech, I was under the impression that the order would be framed in purely financial terms to take into account circumstances like rights issues and other kinds of changes in the financial structure of a company and not the exact nature of the company or the industry to which it belonged.
    Sir S. Summers: I am sure that the Parliamentary Secretary will not misunderstand me when I say that it is not the slightest use our being offered assurances by a Government who will voluntarily limit themselves in the use of the powers conferred by this House. This is a totally unsatisfactory way for us to deal with the matter. This particular
    Minister and Government may have certain ideas, but the powers which are being put into the hands of the Government are capable of gross abuse, and I hope that the House will challenge this.
    Question put, That the words proposed to be left out stand part of the Bill:—
    The House divided: Ayes 203, Noes 140.

    Division No. 167.]

    AYES

    [10.52 p.m.

    Albu, Austen

    Garrow, Alex

    Ogden, Eric

    Allaun, Frank (Salford, E.)

    Gordon Walker, Rt. Hn. P. C.

    O'Malley, Brian

    Alldritt, Walter

    Greenwood, Rt. Hn. Anthony

    Orme, Stanley

    Anderson, Donald

    Gregory, Arnold

    Oswald, Thomas

    Armstrong, Ernest

    Hamilton, William (Fife, W.)

    Page, Derek (King's Lynn)

    Ashley, Jack

    Hannan, William

    Park, Trevor

    Atkins, Ronald (Preston, N.)

    Harrison, Walter (Wakefield)

    Pavitt, Laurence

    Atkinson, Norman (Tottenham)

    Hart, Mrs. Judith

    Peart, Rt. Hn. Fred

    Barnes, Michael

    Haseldine, Norman

    Pentland, Norman

    Baxter, William

    Heffer, Eric S.

    Perry, George H. (Nottingham S.)

    Benn, Rt. Hn. Anthony Wedgwood

    Henig, Stanley

    Prentice, Rt. Hn. R. E.

    Bennett, James (G'gow, Bridgeton)

    Herbison, Rt. Hn. Margaret

    Price, Christopher (Perry Barr)

    Bidwell, Sydney

    Horner, John

    Price, Thomas (Westhoughton)

    Binns, John

    Houghton, Rt. Hn. Douglas

    Probert, Arthur

    Bishop, E. S.

    Howarth, Robert (Bolton, E.)

    Randall, Harry

    Blackburn, F.

    Hughes, Emrys (Ayrshire, S.)

    Redhead, Edward

    Blenkinsop, Arthur

    Hughes, Roy (Newport)

    Rees, Merlyn

    Boardman, H.

    Hunter, Adam

    Rhodes, Geoffrey

    Booth, Albert

    Hynd, John

    Roberts, Gwilym (Bedfordshire, S.)

    Boston, Terence

    Jackson, Peter M. (High Peak)

    Robinson, Rt. Hn. Kenneth, (St. P'c'as)

    Bowden, Rt. Hn. Herbert

    Janner, Sir Barnett

    Rodgers, William (Stockton)

    Boyden, James

    Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)

    Ross, Rt. Hn. William

    Braddock, Mrs. E. M.

    Jenkins, Hugh (Putney)

    Rowland, Christopher (Meriden)

    Bray, Dr. Jeremy

    Jenkins, Rt. Hn. Roy (Stechford)

    Rowlands, E. (Cardiff, N.)

    Brown, Rt. Hn. George (Belper)

    Johnson, Carol (Lewisham, S.)

    Ryan, John

    Brown, Bob (N'c'tle-upon-Tyne. W)

    Johnson, James (K'ston-on-Hull, W.)

    Sheldon, Robert

    Buchan, Norman

    Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

    Shore, Peter (Stepney)

    Butler, Mrs. Joyce (Wood Green)

    Jones, J. Idwal (Wrexham)

    Short, Mrs. Renée (W'hampton, N. E.)

    Callaghan, Rt. Hn. James

    Kelley, Richard

    Silkin, Rt. Hn. John (Deptford)

    Cant, R. B.

    Kerr, Russell (Feitham)

    Silkin, S. C. (Dulwich)

    Carter-Jones, Lewis

    Lawson, George

    Silverman, Julius (Aston)

    Coleman, Donald

    Leadbitter, Ted

    Silverman, Sydney (Nelson)

    Conlan, Bernard

    Ledger, Ron

    Skeffington, Arthur

    Crawshaw, Richard

    Lee, Rt. Hn. Jennie (Cannock)

    Slater, Joseph

    Crossman, Rt. Hn. Richard

    Lever, L. M. (Ardwick)

    Small, William

    Cullen, Mrs. Alice

    Lewis, Ron (Carlisle)

    Snow, Julian

    Davies, G. Elfed (Rhondda, E.)

    Lomas, Kenneth

    Spriggs, Leslie

    Davies, Harold (Leek)

    Loughlin, Charles

    Steele, Thomas (Dunbartonshire, W.)

    de Freitas, Sir Geoffrey

    Luard, Evan

    Summerskill, Hn. Dr. Shirley

    Delargy, Hugh

    Lyon, Alexander W. (York)

    Taverne, Dick

    Dell, Edmund

    Lyons, Edward (Bradford, E.)

    Thomas, Georke (Cardiff, W.)

    Dewar, Donald

    Mabon, Dr. J. Dickson

    Thomas, Iorwerth (Rhondda, W.)

    Diamond, Rt. Hn. John

    McBride, Neil

    Thornton, Ernest

    Dickens, James

    MeCann, John

    Tinn, James

    Dobson, Ray

    MacColl, James

    Tomney, Frank

    Doig, Peter

    Macdonald, A. H.

    Urwin, T. W.

    Donnelly, Desmond

    McKay, Mrs. Margaret

    Varley, Eric G.

    Driberg, Tom

    Mackie, John

    Walker, Harold (Doncaster)

    Dunnett, Jack

    Mackintosh, John P.

    Watkins, David (Consett)

    Dunwoody, Mrs. Gwyneth (Exeter)

    Maclennan, Robert

    Watkins, Tudor (Brecon & Radnor)

    Dunwoody, Dr. John (F'th & C'b'e)

    McMillan, Tom (Glasgow, C.)

    Weitzman, David

    Edelman, Maurice

    Wellbeloved, James

    Edwards, Robert (Bilston)

    McNamara, J. Kevin

    Whitaker, Ben

    Edwards, William (Merioneth)

    Mallalieu, J. P. W. (Huddersfield, E.)

    White, Mrs. Eirene

    Ellis, John

    Manuel, Archie

    Willey, Rt. Hn. Frederick

    English, Michael

    Mapp, Charles

    Williams, Clifford (Abertillery)

    Ennals, David

    Marquand, David

    Williams, Mrs. Shirley (Hitchin)

    Ensor, David

    Mayhew, Christopher

    Willis, George (Edinburgh, E.)

    Evans, Ioan L. (Birm'h'm, Yardley)

    Mendelson, J. J.

    Wilson, Rt. Hn. Harold (Huyton)

    Faulds, Andrew

    Mikardo, Ian

    Wilson, William (Coventry, S.)

    Fletcher, Raymond (Ilkeston)

    Millan, Bruce

    Woodburn, Rt. Hn. A.

    Fletcher, Ted (Darlington)

    Molloy, William

    Woof, Robert

    Floud, Bernard

    Morgan, Elystan (Cardiganshire)

    Wyatt, Woodrow

    Foot, Michael (Ebbw Vale)

    Morris, Alfred (Wythenshawe)

    Yates, Victor

    Ford, Ben

    Morris, John (Aberavon)

    Fraser, John (Norwood)

    Moyle, Roland

    Fraser, Rt. Hn. Tom (Hamilton)

    Mulley, Rt. Hn. Frederick

    TELLERS FOR THE AYES:

    Freeson, Reginald

    Newens, Stan

    Mr. Harry Gourlay and

    Galpern, Sir Myer

    Norwood, Christopher

    Mr. Alan Fitch.

    Gardner, A. J.

    Oakes, Gordon

    Alison, Michael (Barktton Ash)

    Gurden, Harold

    Nott, John

    Allason, James (Hemel Hempstead)

    Hall, John (Wycombe)

    Onslow, Cranley

    Balniel, Lord

    Hamilton, Michael (Salisbury)

    Orr-Ewing, Sir Ian

    Batsford, Brian

    Harrison, Col. Sir Harwood (Eye)

    Page, Graham (Crosby)

    Berry, Hn. Anthony

    Hawkins, Paul

    Pardoe, John

    Bessell, Peter

    Heseltine, Michael

    Pearson, Sir Frank (Clitheroe)

    Biffen, John

    Higgins, Terence L.

    Peel, John

    Birch, Rt. Hn. Nigel

    Hill, J. E. B.

    Percival, Ian

    Blaker, Peter

    Hobson, Rt. Hn. Sir John

    Pike, Miss Mervyn

    Body, Richard

    Hogg, Rt. Hn. Quintin

    Pink, R. Bonner

    Boyd-Carpenter, Rt. Hn. John

    Hooson, Emlyn

    Price, David (Eastleigh)

    Boyle, Rt. Hn. Sir Edward

    Hordern, Peter

    Prior, J. M. L.

    Brewis, John

    Hornby, Richard

    Pym, Francis

    Brinton, Sir Tatton

    Howell, David (Guildford)

    Ramsden, Rt. Hn. James

    Bromley-Davenport. Lt. Col. Sir Walter

    Hunt, John

    Rawlinson, Rt. Hn. Sir Peter

    Brown, Sir Edward (Bath)

    Hutchison, Michael Clark

    Rodgers, Sir John (Sevenoaks)

    Bruce-Gardyne, J.

    Jenkin, Patrick (Woodford)

    Rossi, Hugh (Hornsey)

    Buck, Antony (Colchester)

    Johnston, Russell (Inverness)

    Royle, Anthony

    Bullus, Sir Eric

    Jones, Arthur (Northants, S.)

    Russell, Sir Ronald

    Carlisle, Mark

    Jopling, Michael

    Sharples, Richard

    Clegg, Walter

    Joseph, Rt. Hn. Sir Keith

    Shaw, Michael (Sc'b'gh & Whitby)

    Crouch, David

    Kaberry, Sir Donald

    Sinclair, Sir George

    Crowder, F. P.

    King, Evelyn (Dorset, S.)

    Stodart, Anthony

    Currie, G. B. H.

    Kirk, Peter

    Summers, Sir Spencer

    Dance, James

    Kitson, Timothy

    Tapsell, Peter

    Davidson, James (Aberdeenshire, W.)

    Knight, Mrs. Jill

    Thorpe, Jeremy

    d'Avigdor-Goldsmid, Sir Henry

    Lancaster, Col. C. G.

    Tilney, John

    Dean, Paul (Somerset, N.)

    Legge-Bourke, Sir Harry

    Turton, Rt. Hn. R. H.

    Deedes, Rt. Hn. W. F. (Ashford)

    Lewis, Kenneth (Rutland)

    van Straubenzee, W. R.

    Doughty, Charles

    Longden, Gilbert

    Vaughan-Morgan, Rt. Hn. Sir John

    Eden, Sir John

    Loveys, W. H.

    Vickers, Dame Joan

    Farr, John

    Lubbock, Eric

    Wainwright, Richard (Colne Valley)

    Fisher, Nigel

    Mackenzie, Alasdair (Ross&Crom'ty)

    Walker, Peter (Worcester)

    Fletcher-Cooke, Charles

    Maclean, Sir Fitzroy

    Wall, Patrick

    Forrescue, Tim

    Macleod, Rt. Hn. Iain

    Ward, Dame Irene

    Fraser, Rt. Hn. Hugh (St'fford & Stone)

    Macmillan, Maurice (Farnham)

    Weatherill, Bernard

    Gibson-Watt, David

    Maddan, Martin

    Webster, David

    Giles, Rear-Adm. Morgan

    Marten Neil

    Wells, John (Maidstone)

    Gilmour, Sir John (Fife, E.)

    Maxwell-Hyslop, R. J.

    Whitelaw, William

    Glover, Sir Douglas

    Maydon, Lt.-Cmdr. S. L. C.

    Wilson, Geoffrey (Truro)

    Glyn, Sir Richard

    Miscampbell, Norman

    Winstanley, Dr. M. P.

    Goodhart, Philip

    Mitchell, David (Basingstoke)

    Wood, Rt. Hn. Richard

    Goodhew, Victor

    More, Jasper

    Worsley, Marcus

    Gower, Raymond

    Morgan, W. G. (Denbigh)

    Younger, Hn. George

    Grant, Anthony

    Munro-Lucas-Tooth, Sir Hugh

    Gresham Cooke, R.

    Murton, Oscar

    TELLERS FOR THE NOES:

    Griffiths, Eldon (Bury St. Edmunds)

    Neave, Airey

    Mr. R. W. Elliott and

    Grimond, Rt. Hn. J.

    Noble, Rt. Hn. Michael

    Mr. Reginald Eyre.

    Clause 16.—(TERMS AND CONDITIONS OF EMPLOYMENT: ENFORCEMENT.)
    Mr. Ian Mikardo: I beg to move Amendment No. 69, in page 16, line 36, to leave out Clause 16.
    The Chairman: I think it will be for the convenience of the Committee if there are discussed with this Amendment Amendments No. 19, in page 16, line 36, leave out subsection (1).
    No. 20, in line 40, leave out from beginning to "unlawful" and insert "It shall not be".
    No. 21, in page 17, line 1, leave out subsection (3).
    No. 22, in line 8, leave out subsection (4), and No. 23, in line 38, leave out" (4)".
    There can be a separate division on Amendment No. 22 if desired.
    Mr. Mikardo: Yes, Sir Eric. The rubric to Clause 16 describes it as being about terms and conditions of employment, and enforcement, and it is clear from the short description that the Clause raises two questions which, although linked in some measure, are nevertheless in some degree separate. It raises the question of the incomes policy which the Government are seeking to impose on the country and the merits of it, and the question of the methods to be used under the Bill to enforce that policy.
    The two things are linked in the sense that those who believe that the policy is right and support it with whatever degree of enthusiasm they can muster would possibly be prepared to swallow some doubts and reservations about the enforcement methods which are being proposed. They may think that although the means are dubious the end is worth

    1549
    while. But if one believes, as I do, that the policy which the Government seek to enforce is wrong, and in any event impracticable—and if, in addition, methods are proposed for enforcing it which are repugnant—the two things taken together surely make an overwhelming case for seeking to have the Clause deleted and for asking the Government to accept the Amendment which deletes the Clause. I wish to say something about each of these two topics—the policy and the method of enforcement.
    It is more than 20 years since I publicly advocated a national wages policy, when the idea of planning wages was not even a gleam in the eye of some of my right hon. Friends who have now adopted the idea so enthusiastically. Of course, if one is a Socialist, as I am, one believes in a planned economy, and if one is logical one realises that one cannot have a planned economy with an unplanned wages sector. Those who, on the one hand, demand planning of the economy and, on the other hand, demand a free-for-all in wages get and deserve the sort of criticisms which some of my right hon. Friends have been pushing at them.
    However, if it is true that one cannot seriously conceive a planned economy with an unplanned wages sector, the other side of the coin is equally true, which is that we cannot have a planned wages sector in an economy which, in all other respects, or virtually all other respects, is totally, or nearly totally, unplanned. That is the situation which the Government are trying to create. In an economy such as ours is today in which economic decision making is spread over a large number of separate entities, each seeking its own separate welfare, with little or no co-ordination between them, there is no means of ensuring by this Bill or any other Bill that a policy of wage restraint serves the purpose which the Government intend, such as the purpose of warding off inflation.
    In the sort of conditions which we have today, me only effect of holding back earned incomes may be to create an almost automatic rise in unearned incomes, or to accelerate the natural rise in unearned incomes.
    There is one red-letter day which sticks in my memory—8th January this year,
    1550
    the day on which my right hon. Friend the Minister of Labour delivered a tremendous, thundering homily as only he can about wage claims and had the ill fortune that 35 minutes later a number of the joint stock banks simultaneously announced 50 per cent. increases in profits and dividends.
    Even within the earned income sector, in an unplanned economy—I repeat, in an economy in which economic decisions are taken by a large number of separate entities each seeking its own welfare—the only effect of holding back low wages may be, notwithstanding this Bill, to accelerate the rise in higher earnings which can sometimes come about without any rise nominally in wage rates.
    The fact that the norm—3½ per cent. as it was, nil as it now is—still applies, with only marginal exceptions, to all incomes points to a feature of the Government's policy which I find quite unacceptable and which, I should think, any Socialist and any occupant of these benches would find unacceptable, because it is based, even if for only a short period, on the assumption that the present distribution of income, highly egalitarian as it is, is something which we should accept as a feature of our society, something which is broadly right, and something which should continue.
    I said that I find that proposition unacceptable, but I go further. I find it offensive when we are reliably informed that about a seventh of our population is living below the income levels laid down by the National Assistance Board as the minimum for decent living, when we are told on the authority of the Government themselves that because of wage stop and other factors about half a million British children are not getting enough to keep themselves in decent health, while at the other end of the scale there is an increasing degree—increasing almost every day—of ostentatious, luxurious spending, a lot of it out of capital accretion which goes scotfree under the Bill and virtually scotfree under any other of the Government's measures.
    In that situation, I do not see how anybody can accept, even for a limited period, the proposition that the present balance of purchasing power within the community as between any one sector and another should be frozen in a totally unequal, unjust and repellent mould. The

    1551
    failure of the Government to take that factor into account is only one facet of their failure, as my right hon. Friend the Member for Nuneaton (Mr. Cousins) has pointed out more than once, to realise that the key to competitiveness in export markets, which, I understand, it is one of the prime objectives of the Bill, and an objective we all support, is not so much wages as productivity.
    I cannot accept, on the published figures that it is the wage element in our economy which threatens inflation. In 1965 there were only four countries in which the percentage of the national product represented by wages plus salaries was lower than it had been in the previous year. Those four countries were the Republic of Ireland, the Republic of Hungary, the Republic of South Korea and the United Kingdom of Great Britain and Northern Ireland. That is a company in which I am not thrilled to find myself.
    The fact is that when we talk about competitiveness in export markets we are talking about America, France, Western Germany, Sweden, Switzerland and so on. In every one of those countries the percentage of the national income which goes into wages plus salaries went up in 1965, compared with 1964, and they were competitive. Our percentage, with the percentages of the other three countries I have mentioned, went down in 1965 compared with 1964, and we were not competitive. In the face of that, how on earth can anybody bringing an unprejudiced mind to the question possibly maintain that it was wage rises which threatened the competitiveness of British exports?
    Another important factor is that if investment policy is not planned with, and is not related to, wages policy, the only effect of holding back wages may be to delay modernisation because low wages create a disincentive to investment in modern, labour-saving appliances.
    11.15 p.m.
    If I may say so without immodesty, I think that the analysis which I have made, if anyone accepts it, gives some indication of the preconditions which would make broadly acceptable and, therefore, practicable the sort of wages
    1552
    policy which the Government have been trying to sell to the House and the country. There are five such preconditions. First, there must be effective central control of the economy, and there are some who think that that would involve some extension of the public sector. Second, there must be a continuous move towards a more egalitarian distribution of both incomes and wealth. Third, there must be effective control over essential prices. Fourth, there must be controls on unearned incomes at least as strong as those on earned incomes. Fifth, there must be some other measures of social justice, which have been screaming out for implementation for a long time, such as the application of the principle of the rate for the job.
    My objection to the Government's incomes and prices policy is that the elements of it are not being kept in step. It seems to me that to carry out such a policy we need to phase together three pairs of factors, as it were, driving together three pairs of horses, each pair being teamed together. First, we must move along together at the same time, and with the same assiduity, investment planning and incomes and prices planning. Second, within incomes and prices planning we must keep phased together prices planning and incomes planning. Third, within incomes planning we must keep phased together the planning of earned and the planning of unearned incomes. If we do not do all those three, then, whatever Bills are passed and whatever speeches are made, we shall not achieve as universal a measure of public acceptance of a wages policy, as would make it possible to implement it.
    Those three pairs of factors are not being kept in phase at present. The planning of investment is not being kept in step with the planning of incomes and prices but is lagging a long way behind. There has been a great deal of pushfulness and hard work put into the operations of the Prices and Incomes Board on the wages policy generally, but it is still broadly true that, outside a bit of special attention for certain regions, the only instruments being used for investment planning and control are the ones which were used by the previous Conservative Government, whom my right hon. Friends criticised for relying upon them exclusively, the instruments of

    1553
    cajolery and bribery—the weekend speech and the subsidy.
    In fact, there is no selectivity in the work the Government are doing in encouraging, directing or phasing investment. Quite rightly, the whole of our criticism of the economic policies of the previous Conservative Government was that the instruments they used were blunt and unselective. Nobody more than my right hon. Friend the Prime Minister drew attention so forcefully and so convincingly—he certainly convinced me— to the need to ensure discriminatory planning of investment so as to advantage the essential as against the inessential, the exporting as against the non-exporting, the import-saving as against the import-consuming. We have got nothing of that. We have a broad discrimination in the Selective Employment Tax as between services and manufacturing, so that inessential manufacturing is advantaged at the expense of essential services. That is not selectivity as it was advocated over the years before 1964. That is not selectivity as it was advocated——
    Mr. George Brown: On a point of order. I shall need to know, Mr. Deputy Speaker, how wide I may be allowed to go when I come to reply. Clause 16 deals with terms and conditions of employment and the enforcement thereof. My hon. Friend the Member for Poplar (Mr. Mikardo) has for sometime now been engaged upon a very interesting discussion of economic policy. I would like to know whether I shall be allowed to go as wide when I reply?
    Mr. Deputy Speaker: I have been thinking that the hon. Member was travelling very wide of the permissible debate on this Clause. I hope that he will endeavour to confine his remarks to the proposition that the Clause should be left out. I hope that subsequent speakers will also try to confine their remarks, as far as possible, to the ambit of the Clause.
    Mr. Mikardo: With the utmost respect, Mr. Deputy Speaker, I had hoped that you were going to reply to my right hon. Friend that of course it would be open to him—and I for one would welcome it—to reply to the observations which I am making. I put it to you that I have
    1554
    not said a single word that is irrelevant to or wide of the Amendment I am moving. The Clause lays down the way that a certain policy is to be imposed. Is it seriously being argued by my right hon. Friend that the question of whether the policy is one which one approves of or not is not germane to the question of whether one should or should not support the means of enforcement? Are we really saying that we are not going to discuss the way a man should use a brick, whether to build a house or smash a window. Is that the proposition before us?
    Mr. Brown: With great respect, we must know where we are. If it is your ruling, Mr. Deputy Speaker, that on the Clause which deals with terms and conditions of employment and the enforcement thereof we are entitled to have a wide ranging economic debate, then of course I am very willing to take part in it. But I find it surprising, if that is your ruling, to see how it can possibly be within the terms of this Clause to do that. I am therefore asking you if you are so ruling.
    Mr. Deputy Speaker: I am ruling that this Clause admits a fairly wide discussion but it obviously does not admit a general economic debate. I hope that the hon. Member who is moving this Amendment will try to confine his subsequent remarks to the content of the Clause.
    Mr. Mikardo: I was intending to go on for only two or three more minutes discussing the first of the things in the rubric. I put it to you, Mr. Deputy Speaker, that the rubric reads: "Terms and conditions of employment: enforcement" and that therefore one is surely entitled to discuss that. I intended to go on for only two or three minutes more in the hope that I might manage to convince those who up to that point I had not managed to convince of the general validity of my argument. I think that my job has been done for me by the intervention of my right hon. Friend.
    I will leave the point altogether and turn to the second part of the rubric, which is the matter of enforcement. The key word in this Clause is contained in Subsection 4, and it is the word "strike", which has been made in the discussions which have gone on about incomes and prices a dirty word. What is a strike, whether it is a strike of one man or of

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    1,000 men, whether it is organised officially by a trade union, organised unofficially by a group, or not organised at all? It is the refusal of a worker or workers to sell their labour because they think hat the price being offered for it is not the right price and not the price they are able to get.
    I am not one of those who believe in the commodity theory of labour. I wish to see an economic situation and an order of society in which any such theory is unthinkable. But since, for all practical purposes, we have a free-for-all economy, this is the simple question I ask: If I walk into a tobacconist's shop and point to a packet of cigarettes marked 5s. 5d. and say to the tobacconist, "I will buy those from you for 5s. 3d.", he will no doubt reply, "Get the hell out of here. I am not willing to sell those cigarettes for less than 5s. 5d." Is he or is he not conducting a strike? He is refusing to sell me his assets, his stock in trade, at a price below what he thinks they are worth. What is the difference between that and the refusal of a worker to sell his assets, which are only his brain and his hands, at a price below what he thinks they are worth and what they will fetch?
    It must be remembered that under the Clause, even if an employer says, "I know you are worth ten bob more Bill and I want to pay you that extra ten bob "—indicating that there is agreement that the commodity is being under valued; that there is an attempt to buy it for below its proper value—then, even though there is agreement, they both become criminals under the terms of the Bill. How on earth can one logically sustain an argument on that basis? [Interruption.] My right hon. Friend the First Secretary really must consider this matter, particularly since
    "There is more joy in Heaven over one sinner that repenteth".
    What sort of trade union movement do we want? Do we want the movement to become one of the arms of the State? For the time that the Clause is in operation, long or short, the trade unions will be an arm of the State, and we are treading the path first blazed by that engaging character, Benito Mussolini. Or do we want trade unions which are a free element in a free society?
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    What will happen as the ultimate sanction for the penalties under the Clause are imposed and people refuse to pay the fines? I gather that there was some talk about there being some arrangements by which the fines would be deducted from wages but that we have moved on from there—for a reason I will not go into tonight—and that now we are getting a different penalty. I am not a lawyer, and I hope that I shall be corrected if I am wrong in believing that when the Measure becomes law, if workers refuse to pay the fines, they will be liable to be imprisoned. How many of them will be imprisoned? How many spare beds are there in Her Majesty's prisons? Will two or three of the so-called ringleaders be picked out while the rest will get away with it? There is too great a sense of solidarity among railway workers, miners and dockers for that to be possible.
    11.30 p.m.
    What will be the ultimate sanction? My right hon. Friend understands better than most the more sophisticated problems of labour relations, and I would give him this example. One industry about which I know a good deal, because there my constituency is full of it, is the docks. I invite him to consider what has been happening in the last two or three months and what will happen as soon as the Bill becomes law, if it ever does. The power of the unofficial group based on the Royal Group and one or two places in Liverpool has waned immensely because of stronger work by the officials of the union, including its lay officials and partly because of the promise of public ownership in the next few years. Whatever the reason, the influence of Mr. Dash and people like him, who are anti-everything, whether it is good, bad or indifferent, has waned considerably. The implementation of the Clause in any dock in Great Britain will make Jack Dash "king of dockland" all over again. Is that what the Government want? Do they want to put a premium on the unofficial movement to the detriment of the serious, responsible leaders of the trade union movement? If not, they must think out some of the practical implications of the Clause.
    This is one of the key points in the Bill. As we have been getting along so

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    well up to now, I hope that I may be forgiven for having spoken for so long.
    Mr. Eric S. Heffer: The House has listened carefully to the speech of my hon. Friend the Member for Poplar (Mr. Mikardo). I am sure that members of the trade union movement will understand his point.
    I am not against a wages policy. I am sure that no hon. Member accepts the concept that if we have a planned economy we can have a free-for-all in wages. Some hon. Members opposite are against planning in any case, and they especially do not want planning of incomes. But that is not our position. I believe that a planned incomes policy is absolutely vital. The Clause is designed to introduce a new dimension into our legislation. I have been considering past legislation against workers combining in their trade unions or going on strike. What do I find? I find that we had the anti-combination Acts a long time ago. Ultimately, after great agitation, those Acts were repealed, I understand by the Tories at that time but as a result of our pressure in the Labour movement, and this meant that the right to strike was there for all time.
    Then we had two other periods, both during wartime, and even then the trade union movement accepted these restrictions reluctantly and insisted on their removal at the earliest possible moment. We had the great agitation after the Second World War. We had martyrs after the Second World War. We had martyrs in the docks in London, Liverpool and Hull, and elsewhere, such as Salford, where lads were prepared to go to prison in order to destroy Order 1305. We shall have martyrs again if this Clause is put into operation.
    Mrs. Lena Jeger: Tolpuddle martyrs.
    Mr. Heffer: If I were on the shop floor and not on the Floor of this House, if J wanted to make myself a local leader in the trade union movement and to get a big name nationally, I would make certain that I burked this Measure and organised the lads against the Clause, and if there were an Order put into operation affecting my factory or my industry I would get myself imprisoned. My right hon. Friend the Member for Easington (Mr. Shinwell) is not in the Chamber at the moment, but
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    he knows about going to prison and making one's name in the trade union movement. So do many other hon. Members of this House who have experienced this sort of thing.
    If we want to bring the trade union movement to a position of chaos, industrial conflict and unofficial action, I suggest that we carry this Clause into operation. But if we want to make certain that we continue with the right sort of intelligent approach to our industrial problems that we have had during the years, we should reject the Clause. We should have nothing to do with this type of legislation. This adds a new dimension in our movement.
    I am told that there is no need to worry because action cannot be taken without the decision of the Attorney-General. I know that the Attorney-General is a benevolent as well as a learned right hon. Member of this House. Everybody likes the Attorney-General. But even in the present Government he may not be the Attorney-General for ever. [HON. MEMBERS: "Oh."] I am not the Prime Minister, so I cannot say. The point is that Attorney-Generals come and go. But are they all benevolent? I can think of a few past Attorney-Generals who were not so benevolent. Thus, we might leave it to the Attorney-General but find that we were filling our prisons with people going to gaol on the basis of this Clause.
    I ask the House to reject the Clause. I seriously put it to my right hon. Friends on the Government Front Bench that they should withdraw it. If we want a wages policy to be successful, we should do it through the trade union movement. I do not deny for a moment that there is a great task to be donene in the trade union movement, but I believe that it can be done on the basis of the voluntary principle and by strengthening the powers of the General Council of the Trades Union Congress. I believe that the trade union movement will have to reorganise itself on the basis of industrial unions. That is a long way off, it is true, but we have to do this. The trade unions must do it. None of us can do it for them, and legislation does not affect them in the slightest. I appeal to the Government to withdraw the Clause, let the voluntary principle continue and let the T.U.C. itself get to grips

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    with the question of strengthening the powers of its General Council.
    With regard to claims, I accept the argument—it is a legitimate one—that the small group at the point of production can get a great deal more out of it than someone who is not in that strategic position. That is a logical and reasonable argument, and I accept it. I accept that the nurse or the firefighter is not in the same position as the worker in a car factory at a strategic point of production. That is a logical and acceptable argument to me.
    I want to see this system work on the basis of the voluntary principle, accepted by the trade unions through their own organisation, and not on the basis of introducing legislation of this kind that will put up the backs of the entire trade union movement against the Government and the whole principle of a wages policy. That is my plea on this Clause.
    I could say a great deal more on this question. I suppose we all could. I conclude by making one more point. I have been in the trade union movement since I was 16 years of age. I have been involved in many industrial disputes; I have led quite a few. My experience teaches me the following. We have never been able to gain any advance for the chap in the factory unless he has been organised and prepared to fight and press for what he wants. Hon. Members opposite may not like this, but I have yet to meet an employer who has said, "We shall ask you, as shop steward, to come round the table next week. We are offering you 10s. an hour more." What I have experienced is continual discussion and argument and then an agreement reached after that lengthy process. This is the way our movement operates. That is our experience of industrial life.
    Agreements are not reached overnight. It takes months of serious negotiation to reach an agreement. No employer says to his workpeople, "From next week you can have an extra 6d. an hour". Local productivity agreements within a factory, based upon incentive schemes, also take weeks to finalise. It can take us four or five months of negotiations to reach an agreement, with possibly a strike situation boiling up, but ultimately
    1560
    we reach agreement with the employer. At that stage we are told, "No, you cannot let this happen. There must be a period of standstill for 12 months".
    I can see what can happen in a factory. At this stage the situation can boil up. There can be an industrial dispute or a strike. At that stage people can go to gaol. This is well understood by the men in the factories. That is why I say that this ought to be, from the point of view of a Labour Government, a non-starter. I ask the Front Bench to make it so by withdrawing the Clause.
    11.45 p.m.
    Mr. Cousins: Those of us who were members of Standing Committee B will have listened with interest to the speeches of my hon. Friends the Members for Poplar (Mr. Mikardo) and Liverpool, Walton (Mr. Heffer). My hon. Friends covered much of the ground we dealt with in great detail in Committee. At least one part of the House will have been pleased to hear an endorsement of many of the arguments which were put forward in Committee. I do not want to rehearse those, because it would be improper to repeat them here or to repeat what was said in Committee. I understand why my right hon. Friend the First Secretary felt that there was an intention to broaden this discussion over a whole field of economic affairs, because this was the kind of argument which came up in Committee. There was repeated inquiry as to whether we were going over the whole broad field of every subject and every Clause.
    There is a fairly simple reason why this is so. The Bill is badly drawn up, because it is drawn up on the basis of expediency, addition and alteration from time to time to try to overcome a particular aspect of the problem which has been brought to the attention of the Government or the draftsmen. The Bill has been supplemented at the end by an over-riding Clause which makes it almost impossible to deal with the substance of a Clause without recognising the nature of the reliance of the Clause on everything else in the Bill. I can understand my right hon. Friend the First Secretary recognising that he has to talk in a much broader sense in replying to a Clause than he might more properly have done had the Bill been drafted differently.

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    I do not think that the discussion needs to centre around the question of the right to strike. I should like to keep for a few moments to the Clause. It is relevant that at some stage of the night we shall no doubt have a discussion about economic aspects. I want to stay with subsection (4) for a few moments. I think that the Bill is quite offensive, but I feel that this provision is probably the most offensive of all, because it suggests that an offence is being committed by a
    "trade union or other person"
    who
    "'takes, or threatens to take, any action … by way of … persuading others to take part in a strike".
    In the course of a detailed examination of the Bill, in Committee and elsewhere, I have tried to work out what is meant by this.
    The Clause should be struck out because it is illogical and unenforceable and we might, with service to ourselves, spend a little time trying to interpret what it really means. Am I taking action at this moment which may encourage others to strike? I hope I am if the things that I believe they are entitled to receive are not paid to them. I know that it is difficult to interpret what is a strike, when and where it is a legal strike at times, or whether some actions taken are legal. But the Clause refers to "influencing" any employer.
    I suggest that almost every paid official of every trade union, irrespective of his views about the Bill, will in the next six months, as he did in the last six months, try to do exactly that. He will try to influence employers in order to get done the things that he believes should be done. Let us consider what we are authorising. On an earlier Clause members of the legal profession in this House tried to get down to a glorious assessment of what it meant. Indeed, the interpretation of the words
    "… takes … any action … to … influence any employer …"
    will be of great value to the legal profession.
    I do not know whether even the speeches I hope to make and which many of us will have a chance to make at the Labour Party conference and at the T.U.C. will be regarded by that time as bringing us within the provisions of the
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    penalty arrangements of the Clause. I know that if my right hon. Friend wants to defeat this kind of argument his simple comment will be that it will not occur unless a settlement of a claim is forbidden. Again there is an illogicality. If it is a settlement, then it should be paid. It should not be forbidden. If we get to the stage that I can be made to have committed a legal offence by someone forbidding a settlement I have just negotiated, then again some lawyers will have a field day in an argument about what is voluntary, what is compulsory, what is influencing people and so on.
    However much we try to disguise it, the Bill destroys the whole basis of our industrial relations. Whether we are ready to accept that or not, it is taking away from us the ordinary processes of the activities of the trade unions towards the employers and of the employers towards the trade unions, because they occasionally ask the unions to take steps they think will be of benefit to them in their industry. The great tragedy is that the Bill puts nothing in its place. It simply leaves us with a hiatus of some six months or twelve months whilst we settle down to examine what really ought to be done.
    I ask those on both sides of the House who give their allegiance to the idea that, in a free society, trade unions and employers' associations or individual employers are entitled to negotiate and settle their problems—and that does not mean the running away of the economy—to ask themselves whether they can endorse the theory that we are committing an offence by doing the thing we accept is the right and proper thing to do.
    How can we accept that unions whose rules prescribe that they shall take certain action in the interests of their members are committing an offence by following those rules, which have been endorsed by the Registrar and have stood the test of time? How can we then slip straight out of them because a Minister decides, because that is what we are being asked to endorse, that a Minister—I am not talking of my right hon. Friend the First Secretary; I am talking of a Minister—has the right to determine that at some stage in the ordinary processes in which, in the capacity of an official of a trade union, I would normally be conducting negotiations freely and properly by the laws of

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    the country, I can be told that I am committing an offence?
    I suggest that the Bill was ill conceived. It has subsequently been pushed through to do a job for which it was never designed. It is not getting the support that it will need if it is ever to be made effective, because if there is one thing that we in our country have learned it is that relationships about wages and conditions of employment and understandings between employers and trade unions, if they are ever to work, have to be worked on a voluntary basis. When there was legislation to control, we fought against it.
    I have heard it said that the T.U.C. leaned over backwards to endorse and support the Clause. I do not know whether that is a phrase that members of the T.U.C. would use. I understand that quite a number of them have said that they reluctantly endorse it, and they support it more reluctantly each time they get nearer to the compulsory stage. One thing that I can say, however, is that I have heard the present General Secretary of the T.U.C. say over and over again, "We were created outside the law. Do not drive us further outside the law than is necessary." That is the very action that will come.
    I hope that at a later stage we will discuss a further Clause in the Bill. I hope at that time to try to illustrate a point about which I am very much grieved and disturbed. If we pass the Clause as it is—and pass it we seem determined to do—thousands and thousands of decent, straightforward, honest people will not know what offence they are committing, why they are committing an offence or whether they are committing an offence.
    I have tried repeatedly, in discussions directly with my colleagues, in Standing Committee, once in the House, in the open discussion and now again tonight, to suggest that it is still not too late to take away the Clause and remove all the consequences of taking it away and do the job that was the original intention of those who made the Declaration of Intent, because I also believe in a planned economy and a planned growth of wages. I therefore again add my voice to that of my hon. Friends in saying that there is still time for the Government to take
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    the view that the Clause is not necessary, is not helpful and ought to be discarded.
    Mr. Albert Booth: Clause 16, which the Amendment proposes to delete from the Bill, contains subsection (4), which has been the hinge-pin of the debate. Subsection (4), however, applies not only to Part II of the Bill but also to Part IV. Therefore subsection (4), which was intended originally to prescribe a penalty for taking certain action during a period when the Prices and Incomes Board was examining a claim to determine whether it was in the public interest, is now, in the present terms of the Bill, to be applied when it has already been prejudged that the claim is not in the public interest. It is to be applied in a period when wages are to be frozen, for a great many workers, for 12 months. This is a very different sort of application of this subsection.
    12 m.
    This subsection is already becoming infamously known as the penal clause. It will take from the trade unionists the right to strike or to threaten to strike to induce an employer to implement an award or settlement. This is a fundamental right of a free trade union, and a right which was won by industrial and political action which welded the Labour Party and the trade union movement together. It is indeed a tragic indictment of the course which the Labour Government are following that they are seeking to establish legislation which trade unionists feared would come from hon. Members on the Opposition benches.
    It will be argued, of course, that this loss of right will apply only for a short time. To me, as a convinced trade unionist, this is a very strange argument. If a magistrate or a judge on sentencing a man to three months or a year in gaol said: "It is only a very short time", one would not then say to the man, "The fact that you are being deprived of your liberty is not very important". It is a principle which I believe, and which many other trade unionists believe, is at stake in this, and we are not prepared to concede that this is merely a matter of judgment, depending on economic circumstances as they exist now, whether or not trade unionists should have the right to exercise what we believe is their rightful function.

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    It was put to us as trade unionists only a short while ago that four months would be the maximum period during which the Clause would be operative. Tonight, we know it can be 12, if this Bill goes through without this Amendment. This Clause, as I said, was originally intended for a purpose fundamentally different from that for which it is now being used. Therefore, this House should very carefully consider against whom it is the Clause can apply, and to whom it is likely to apply.
    I would suggest that among those who would be most likely to offend against the provisions of the Bill would be the very low-paid workers. In social justice, they have the greatest right to kick. When one freezes wages, one freezes; the injustices which are inherent in the present wages set-up, and we are doing this at a time when there are 10 national joint councils' wages rates for male adult workers below £9 a week. What hon. Member of this House would be happy to apply against a man who is earning less than £9 a week a fine of the order written into the Bill,
    "on summary conviction … not exceeding one hundred pounds "?
    Or what sort of funds has his trade union got to pay
    "on indictment … a fine which, if the offender is not a body corporate, shall not exceed five hundred pounds"?
    Even if it could come to his assistance, it is not feasible in the order of things that these lower-paid workers can happily accept that they were intended to be included within the provisions of such a Bill. If the Bill sought to exclude them, to set a limit below which its provisions would not apply, I would not be standing to defend it, but at least I could not use this argument, which I believe to be important.
    I suggest that the provisions of the Bill may also apply against people who have agreements which they believe to be legitimate agreements, which they believe to be agreements in the national interest, which they believe to be agreements in their own interests, and which they believe their employers have accepted as being in the employers' interests.
    I have such an agreement here—the National Joint Industrial Council 1966–69 Industrial Agreement. I want
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    to read from it two clauses, especially for the benefit of the First Secretary. One provides for measuring output to ensure increased productivity, and for making corresponding benefits to employees, and another provides for regulating and controlling overtime and for eliminating all unorganised stoppages at work. Surely this is the sort of progress that we want to make. In a period of voluntary restraint such an agreement has come about. I have talked to individual employers in my constituency who want this agreement to go through, and to trade unionists who want it to go through, yet I predict that it cannot and will not go through if the wages provisions of the agreement cannot work.
    The workers and their families—45 million of them in all—who rely upon the trade union movement for their wages and conditions, own only 20 per cent. of the national wealth, the other 80 per cent. being in the hands of a small minority. When the Government intervene to redress that balance we shall take a very different view of the wages policy. I do not believe that a rapid growth of productivity and the technological revolution that our country requires will be brought about by men who are deprived of their trade union rights, and men who have their wages frozen. For this reason I ask the House to delete the Clause from the Bill.
    Sir K. Joseph: In the select series of notable Parliamentary occasions when men have pleaded with passion for what they believed to be right, this debate will find its place. I know that hon. Members below the Gangway opposite will not want any commendation from me, but I hope that they will accept that we regard their speeches as sincere, although we must establish that we regard the speech made by the hon. Member for Poplar (Mr. Mikardo) as sincere, yes, but singularly wrong-headed. We believe it is wrong-headed because what he wants would not achieve social justice or be compatible with either a prosperous or a free society.
    But there is some common ground between those who have spoken and hon. Members on this side of the House. We agree that it is wrong to freeze earnings; we agree that the target should be unit costs and not wages; we agree that the

    1567
    way in which the Government propose to proceed will make the trade unions an adjunct of Government and we agree that Part IV will manufacture militants and, possibly, martyrs in a way that no sensible Government could possibly desire. It may be—I say this cautiously, because we have not heard the reply of the Government—that we will end up in the same Lobby as some of the hon. Members who have spoken.
    But we wish to record, however briefly, our own views on Clause 16 which in a series of Amendments we, too, are trying to eliminate from the Bill. We think it intolerable to punish an employer for carrying out his moral or legal contract. We think it intolerable to impose upon employers and employees strains and dilemmas, implicit in Part IV, to which they should not, as individuals, be subjected by their Government. We think it intolerable even to conceive of subsection (4). We have made our views on Part IV, and on the Bill as a whole, except for Part I—and our opposition to all but Part I—crystal plain to the Government time and again. I can summarise our objections to the Clause as an indefensible by-product of an indefensible Part IV which has been embarked upon only as a result of an indefensible economic mismanagement by the Government. That is why, for some though not all of the same reasons, we shall welcome an opportunity, unless the First Secretary tells us something more surprising than we can expect, to vote against this iniquitous Clause.
    Mr. Stanley Orme: First, I want to deal with this issue as it has been dealt with inside the labour movement and the Parliamentary Labour Party during the last 18 months. It is time to speak openly and frankly, because many of us have been involved in quite genuine and sincere discussions with the First Secretary. I pay credit to him here: while we have not reached agreement, at least we have discussed and argued. We have made the point to him from the beginning that the stumbling block in the Bill for some of us, both in the House and in the trade union movement and Labour Party as a whole, is the punitive Clauses.
    We feel strongly about this matter, because it is a reversal of the trend of
    1568
    history of free negotiation and free association. We ask the right hon. Gentleman what his attitude would have been if the Conservative Party had introduced such a Bill and such a Clause. We know what the answer is: he and his right hon. Friends, and the whole of the Labour Party, would have opposed them. We have to analyse the reasons why the Clause has been introduced.
    The Clause is an admission of failure. It is an admission by the First Secretary that he cannot make a voluntary wages policy work. When he, along with the Prime Minister, went to the trade union movement and the Labour Party before the 1964 General Election for a wages policy, they seized on a statement of my right hon. Friend the Member for Nuneaton (Mr. Cousins) at the Labour Party conference that he was in favour of a planned growth of incomes. On the basis of the acceptance of a planned growth of incomes, the Labour Party, by an overwhelming vote—about 6 million to a few hundred thousand votes—accepted a prices and incomes policy.
    We have gone a long way from the planned growth of incomes. We will not go into Part IV; we have not got there yet. We are dealing with Part II of the original Bill. We have moved completely away from the basis on which the labour movement and the party accepted a prices and incomes policy. I should like to see the movement—we shall probably do so shortly—asked to pass judgment on the Government's latest actions on this policy.
    When the First Secretary went to the T.U.C. and had those hurried consultations and then obtained its acceptance in 1964 to the voluntary basis, he said, "If you accept the voluntary basis, I think that we can make it work". Only a short while after that he said that it was necessary to take further powers, and the punitive Clauses were then discussed all round.
    12.15 a.m.
    When the Bill was being formulated, all types of people were consulted unofficially—such as the C.B.I. and the T.U.C.—but never this House, and the members of my party were not consulted until it had been finally decided that such Clauses would be put in. I raise very

    1569
    strong objection to this as a member of the House.
    When my right hon. Friend finally decided that the Bill would go forward on this basis, we were told, "Well, you know, Clause 16 is really quite mild. It will not affect a great number of workers. The number of people committing a crime in between the making of a settlement and pressing for its implementation will not be great, and in effect it will not be a serious Clause".
    Well, then, why do we want the Clause at all? What concerns me and many of my hon. Friends is that having taken the first step into legislation one then starts taking further steps if that legislation is not satisfactory. I say very seriously to the right hon. Member for Leeds, North-East (Sir K. Joseph) and his party, "You are opposing this Clause and many others in the Bill which have punitive provisions, and yet you as a party advocate far worse measures against the trade union movement to try to bring it into line". We do not like those proposals either, and we shall oppose them.
    But at the moment we are dealing with this particular Clause, introduced by the Labour Government. The position would be different if, when all has been said and done, we could have even the hope that this might be successful and achieve the objectives that the First Secretary seeks. I think that there is no division on this side of the House on those final objectives; it is the short-term measures that are creating the crisis amongst ourselves at present.
    In trying to achieve those objectives, we shall reach a new economic situation, and even these proposals will be superseded. Hon. Members on this side of the House are concerned about the whole question of how one obtains a prices and incomes policy, and many of my hon. Friends and I feel that one will not achieve the policy that the Government are outlining by these sort of measures. One will not coerce and intimidate the working people of this country. One will achieve the policy only by their cooperation. The concern among hon. Members on this side of the House is not only among those of us who are vocal but among my hon. Friends who have supported the Government in the
    1570
    Division Lobby on this with hearts as heavy as mine and some of my hon. Friends.
    Nobody is going round advocating this type of policy. The First Secretary who, with his zest, zeal and vigour, is fighting to try to implement it will not, at the end of the day, convince the trade union movement that it is right. We shall finish up with a Bill that is worthless, with no policy, and with none of the other basic measures that should have been taken in the meantime to implement such a policy. This is what concerns us. Many of the economic aspects of this problem have been dealt with by other hon. Members, and we shall be able to discuss them further when we come to the broader provisions of Part IV.
    If the Government would turn away from inward-looking self-critical examination and turn outwards towards trying to achieve their policy, they could still achieve it on a voluntary basis. If it is accepted, on the other hand, that it cannot be achieved, if we say, in effect, that we live in a mixed economy and that that economy cannot be run with full employment without a Bill which has punitive provisions directed against the trade union movement, then we must look again at the basic tenets on which we are trying to make progress in this country.
    I suggest to my right hon. Friend that, in the interests of all he is trying to achieve, he should withdraw this Clause and allow the voluntary system at least to work itself out. It has not had a chance to work. It has not even been properly tried, and many people are prepared to try it. Retain this Clause, and the policy is deemed to failure.
    Mr. George H. Perry: Like my right hon. Friend the Member for Nuneaton (Mr. Cousins), my collaborator upstairs last week, I have no wish to repeat what I said in Committee, but I wish to put again, in the course of a few brief but sincere remarks, a question which I put to the First Secretary of State but which was then ruled out of order so that I had no answer.
    I come from the Midlands town of Derby, which has been designated by many as the most non-militant industrial

    1571
    town in Britain. But Derby has a wonderful heritage from the earliest days of organised labour because it was in Derby in 1834 that the first withdrawal of labour took place in this country. It is known as the Derby turn-out, when hundreds of workers from the Derby silk mill starved for three, four, five or six months, and some even died. To use a Goldwynism, if those silk mill workers were alive today, they would turn in their graves. It is no wonder I am against the Bill.
    In the Queen's Speech given on 21st April, 1966, there appear these words:
    "My Government will continue to develop, in consultation with management and unions, the agreed policy for productivity, prices and incomes. Proposals for legislation to reinforce this policy, while preserving the voluntary principle on which it is based, will be laid before you".
    What kind of a voluntary principle is it when there is a £500 fine if someone does not agree? It reminds me of the sergeant-major who told his squad that he wanted three volunteers—" You, you and you". This is what sickens me about the Bill.
    I agree with my hon. Friend the Member for Salford, West (Mr. Orme) that we all want an incomes policy and a planned economy. But I want to see us turning towards a planned economy, and in what is taking place now under the policies of the present Government following the policies of the previous Tory Government in their 13 years, there is no sign of our turning towards a planned economy. We cannot have an incomes policy unless we plan the economy at the same time.
    What about our strike record in this country? This is what I asked my right hon. Friend about last week, when he gave it as his opinion that there were people in this country who sought to hold the nation up to ransom through the industrial power they had to break the economy. Who are they? The strongest group of workers are those in the electricity generating industry and the water supply industry. If the workers in the electricity generating industry were to withdraw their labour, they would cripple the country within 24 hours. If the workers in the water supply industry were to withdraw their
    1572
    labour, they would cripple the country within a few days.
    For many years I was on the employers side of the National Joint Industrial Council for the Water Supply industry which employs 35,000 workers. If the wages of sin are death, then the wages in this industry are slow starvation. Throughout the years the wages in this industry have been the lowest in the public utilities. The water supply industry is the lifeblood of the country and the workers could cut off the supply to industry and domestic dwellings. The same is true of the electricity generating industry, whose workers could stop industry.
    What is the record of other European countries and America in comparison with ours? The fact is the British trade unions have the best record in the world in settling disputes. The International Labour Office records the figures of days lost by strikes per thousand workers. In 1964, 170 days per thousand workers were lost here compared with Italy, where the figure was 1,270, the United States, where the figure was 850, France, where it was 280, Belgium, where it was 260, and Japan, where it was 190. Every unofficial strike in Britain is headlined but good industrial peace is not reported. Trade unionists do not make excessive wage demands. On the contrary——
    Mr. Deputy Speaker: I must ask the hon. Member to relate his remarks to Clause 16.
    Mr. Perry: The indications in Clause 16(4) are that the trade unions are crippling the economy with excessive wage demands. On the contrary, countries with which we compete for exports have had bigger increases in wages. The hourly wage rates in manufacturing industry in 1965 in this country were 6·1 per cent. higher than in 1964 and 36 per cent. higher than in 1958. The comparable figures in Germany are 9·7 per cent. and 81 per cent., and for the Netherlands 8·9 per cent. and 73 per cent. This is the answer to those who point the finger of accusation at the trade unions movement. As one who has dedicated most of his life to the interests of the trade union movement, I rise in protest against subsection (4), which is a diabolical, vicious, fiendish

    1573
    attack on the trade unions of this country, and I ask my hon. Friends to support, the Amendment and throw out the subsection.
    Mr. Arthur Blenkinsop: I think that another view should be expressed. I have listened respectfully to others who support this Amendment, and I hope that they will regard my views as being sincere if I do not fully accept the point which they are making.
    I thought that the hon. Member for Poplar (Mr. Mikardo) made the case for the Government, because he was not objecting in principle to a wages policy. He made that clear on a number of occasions, and, indeed, rather implied that he would accept it if certain preconditions were accepted and clearly proved to be in operation. The Government are trying to achieve the very preconditions which my hon. Friend laid down and which are essential for the proper development of our economy. That is why many hon. Gentlemen opposite have been attacking the policy of the Government during the last 18 months.
    12.30 a.m.
    My hon. Friend the Member for Poplar spoke of the need for a wider measure of central control. We have been urging this and have been gradually developing a more effective system of positive intervention in industry which will be valuable for the economy. My hon. Friend also pointed out that we need more effective control of prices, but that is already agreed and that is the precise matter we are discussing in the Bill. He went on to argue for more control over unearned income, but he glossed over the measures, which have been vigorously attacked by hon. Gentlemen opposite, in regard to Capital Gains Tax and Surtax. One cannot delete from one's mind the whole range of measures introduced by the Government in the last 18 months. That being so, the Government are entitled to at least ask for some effective control over the way in which wages are rising.
    The Government are entitled to say to our trade union colleagues that they have proved, by their measures since taking office, that the pre-conditions mentioned
    1574
    by my hon. Friend the Member for Poplar are in the course of being carried out. We do not pretend that they have been achieved. But sufficient action has been taken by the Government to prove their sincerity in this matter.
    It was curious that my hon. Friend the Member for Poplar found it necessary to refer to the need to get rid of some inequalities in our society, since this has been the main purpose of the whole range of Government actions in the last 18 months. I naturally share the deep anxieties felt by some of my hon. Friends about certain of the detailed measures proposed in the Bill. However, I have not yet heard any arguments suggesting alternative courses. While I respect the sincerity of the views of my hon. Friends in this matter, particularly those expressed by my right hon. Friend the Member for Nuneaton (Mr. Cousins) concerning subsection (4), I suggest that the Government are entitled to take into account the other major measures they have introduced since taking office.
    Mr. Emrys Hughes: I represent a constituency which has long historical connections with the political and trade union movement of this country. From the town in which I come—indeed, from the house in which I live—Keir Hardie came to Parliament to hoist the standard of independent labour and to form a new political party. The Labour movement has grown over the years until we now have a Labour Government. Old miners in my constituency still remember the political and industrial struggles led by Keir Hardie. When they ask me to explain why a Labour Government put in these provisions which may result in £100 fines or imprisonment for miners, I cannot.
    The Scottish miners are strongly opposed to the Clause. How will it work? We have heard that the Attorney General is benevolent and will apply this provision gently in England but we have not heard about Scotland. There was one Scottish hon. Member in the Standing Committee of 25—[An HON. MEMBER: "He never spoke."] He was the Parliamentary Private Secretary to the Minister, and he said nothing in the debate. Who will prosecute the miners? Will it be the Lord Advocate?

    1575
    Will the Secretary of State defend the prosecution of trade unionists if the penal Clause is applied?
    I do not know how to explain to the mining areas or the militant trade union movement on the Clyde how this will work, or why the Government are bringing in this Clause instead of relying on the co-operation and loyalty of the movement. The miners are intensely loyal to the Labour Government and want it to succeed. If the prosecutions will not come and are not likely to come, and the Lord Advocate and the Solicitor General will not go into action, why are these provisions in the Bill?
    The Scottish miners want to increase output and are doing so. But if an industrial dispute affects lower-paid workers in the collieries, industrial trouble is possible. There may be strikes. What will happen if the Lord Advocate or the Solicitor-General gets a conviction which results in some of the miners' leaders going to prison? The pits will close down and strikes will spread. There will be no more productivity and less coal. We need more coal and more miners at present——
    Mr. John Horner: Does my hon. Friend recall that a strike of this kind took place in Beteshanger in 1942, under the Compulsory Arbitration Order? It was resolved only when the then Minister of Mines, with the general secretary of the National Federation of Mineworkers, went to Canterbury Jail and negotiated with the prisoners the return to works terms. That was at the behest of the War Cabinet.
    Mr. Hughes: This is something which might happen again—[Laughter.] I have negotiated in jail before, and I am prepared to do it again. What I am saying is that we shall get the danger of a coal shortage in this country. In order to get the mines going in another five years time, or less, we shall need more miners, and we shall need to give them more pay. So we cannot have a wage freeze policy.
    There are in my constituency other workers in whom we are interested. There are the bus workers. They now face the possibility of a wage dispute. What will happen to them? If there is a strike or a threatened strike in that
    1576
    area and one section of the buses stop or the leader of a strike movement is put into gaol or threatened with prosecution, the whole lot will stop.
    How will the agricultural workers be affected? The farmers already want to produce more food, and they will have to face the demand for increased wages by the agricultural workers. I cannot explain to the agricultural workers in my constituency the necessity for or the economics of a wage freeze policy, if we want to increase productivity.
    Why are these penal provisions in this Bill? We have been told that they are tough because it was necessary to give a good impression to the financiers of the United States of America, that it was necessary to appease foreign financiers. I think it was the Attorney-General who talked about patriotism. The time will come when we shall have to take a stand in this country to protect the standard of life of the British workers against the financiers of the United States of America.
    For all these reasons, although I am a strong supporter of a Labour Government, I want the present Government to think twice before embarking upon a course which they will find impracticable and for which they will have to find a different alternative.
    Mrs. Lena Jeger: I rise to ask for some light in my darkness. I have read this Clause very carefully and there is one question to which I hope the Government spokesman will reply, because there may be others who share my state of confusion, for which I am quite prepared to apologise.
    I want to know what happens if those responsible for achieving a wage increase in defiance of this Clause then pay their fines. What happens to the wage increase? Does that persist, or is it withdrawn. If it is withdrawn, where is the authority in this Bill for its withdrawal? I can foresee a situation in which the payment of a fine of £100 or £500 may be peanuts in relation to increased wages negotiated for thousands of workers all over the country.
    There may be circumstances in which those fines are paid. What happens to the wage increases? There may be circumstances in which the fines are not

    1577
    paid, and in which those responsible under this Clause are sent to prison. While they sit unloved in gaol, do the workers on whose behalf they are suffering imprisonment enjoy the benefit of the wage increase in respect of which the negotiators have been sent to prison?
    I assure my right hon. Friends that I do not put these questions mischievously. I put them seriously. They are questions that I am being asked. They are the sort of questions that all of us will have to answer in our constituencies, at our trade union branch meetings and at our local political meetings. They are perfectly fair questions, and I hope they will be treated as such, and I very much hope that the answers will be helpful to all of us.
    12.45 a.m.
    Mr. J. J. Mendelson: I want to make a very brief reference to the speech of my hon. Friend the Member for South Shields (Mr. Blenkinsop) and then put a couple of points to the Government.
    My hon. Friend said that he agreed with our hon. Friend the Member for Poplar (Mr. Mikardo) in laying down a number of pre-conditions which are absolutely essential if a wages policy is to be accepted and made workable. Then my hon. Friend proceeded to say that we must all admit that, while the Government have done a good deal of work in moving towards the implementation of these pre-conditions, they have got nowhere near implementing them.
    This is the whole point. It is the decision on timing that is the real difficulty. What I would argue in reply to my hon. Friend is precisely that unless and until more progress has been made by the Government in bringing about the implementation of some of the preconditions, the difficulties that my right hon. Friend the First Secretary has experienced will remain with us.
    I very much regret that my right hon. Friend the Chancellor of the Exchequer is not on the Front Bench tonight to share the responsibility for the policy with the First Secretary. I have never been one of those who have held—I think that events have proved me right—that there is any peculiar personal responsibility on the shoulders of the First Secretary for the Government's policy in this field. It
    1578
    is true that it was the First Secretary who went to see the General Council of the T.U.C. before the last annual congress and engaged in the long negotiations in which the possibilities of future legislation were discussed in detail, but I understand that, naturally, he went to Brighton for those discussions on the instructions of the Cabinet. Equally, there is a good deal of evidence that in the course of those discussions the policy of the Chancellor and the commitments that he had entered into in various negotiations abroad played a very large and important part.
    The policy involved in Clause 16 is one that changes the whole aspect of the Government's policy, and it is precisely on that point that I want first to ask the Government how they would like to defend the change of attitude that has occurred. A point not yet made in the debate concerns one of the aspects of the Government's policy which I am sure the First Secretary will advance when he replies, that we are dealing here, not as in Part IV, with delaying actions, and that all that the Government are advancing in that part of the Bill is the enforcement of delay before negotiations can advance.
    When this matter was discussed with the General Council of the T.U.C. that is how the position was. Then the First Secretary had those very long discussions with it. It was not prepared to put before the congress a policy of statutory enforcement of such delaying action. Instead, it asked the General Secretary, Mr. George Woodcock, to work out an alternative policy, and it was as a result of that alternative policy that the resolution from the General Council, embodied in a supplementary economic report, was first carried. It substituted for the Cabinet's desire at the time to have some provision which was lodged with the National Board for Prices and Incomes and die Government a committee of the General Council of the Trades Union Congress which would then invite affiliated organisations to submit their wage claims so that the General Council could look at them.
    Now we have a complete reversal of policy and the replacement of that substantially by what is embodied in Clause 16. If the conditions were not ripe during the intervening 12 months for the

    1579
    voluntary acceptance of this policy, partly through the agency of the Trades Union Congress, partly through the National Board, what hope is there that the introduction of this compulsion will change the minds of any group of workmen or of any trade union when there is no willingness to accept it on a voluntary basis, because of the absence of the right conditions, as my hon. Friend the Member for Poplar has said.
    Does not my right hon. Friend the First Secretary recall that it has always been the argument of Mr. George Woodcock, the General Secretary of the T.U.C., who knows at least as much about these matters as anybody in the House or anybody in industry, that industrial relations are essentially like a marriage contract; they have to be based upon voluntary co-operation? Once recourse must be had to law, the marriage has already foundered. Is it not quite clear that, if the big guns of the Clause are brought to bear upon a delicate industrial situation which requires co-operation as the basis for success, the reverse of what it is desired to achieve will be achieved?
    I conclude by asking my right hon. Friend whether in all these circumstances he will not consider it wise, particularly as some of the original assumptions under which his proposals to the T.U.C. were debated have now been out-paced by other events, to reconsider the policy for this more limited purpose embodied in the Clause? Would not it be better to make a new approach?
    It is because I, together with some of my hon. Friends, am anxious that this should be properly considered that I regard this as a very useful debate and, as the result of this debate, I hope that many people in the trade union movement will know that there is more than one point of view on this. I invite my right hon. Friend to answer this debate in the spirit of considering the possibility of a changed course on the Clause, even at this late hour.
    Mr. George Brown: As the right hon. Member for Leeds, North-East (Sir K. Joseph) said a long time ago, this has been a moving and sometimes for some of us a sad debate. It is a debate that goes to the heart of things which many of us hold very dear. I imagine that nobody
    1580
    who has spoken critically will challenge my own right to speak as a trade unionist with a lot of experience behind me and a lot of deep feeling.
    I have never taken the view, and I do not now take the view, that some of my right hon. Friends seem to be claiming, that our business in the trade union movement is simply to fight for our people's wages and not to be part of the process by which society is governed. I have heard the phrase used many times—I heard it used in Committee; I have heard it used tonight—scornfully about the trade union movement becoming an unjunct of government.
    I heard the late Ernest Bevin a long time ago, when I was a very young man, say that if all we were concerned with was earning fodder for our people there were others not nearly as good as we who could do that. The trade union movement grew up from more than earning fodder for our people. It grew up so that people could play their part in developing a new society, to help them manage that new society and to help to plan it. As we have come to responsibility and power in this House, so duties have come to rest upon us.
    This is where I part company with so many right hon. and hon. Members who have spoken tonight, because I recognise that we are now in a managed economy. My hon. Friend the Member for Poplar (Mr. Mikardo), in opening the debate, made a speech which I well understood, although I did not agree with much of it. He seemed to rest his case on the fact that we were not in a planned society. I do not think that anybody but he really could persist in that view, and I doubt whether he does.
    We are planning a society; indeed, we were doing it before this Government came to power. As my hon. Friend the Member for South Shields (Mr. Blenkin-sop) said, we have certainly been doing it for the 20 months or so we have been in office. We have been interfering, intervening, planning, controlling—and I know that right hon. and hon. Members opposite do not like it; of course they do not. But tonight we have heard the corollary of their view on this side of the House.
    Right hon. and hon. Members opposite do not like the fact that we are

    1581
    interfering and intervening with profits, prices and the free run of the market as they think it should happen where their interests are concerned. I must say to my right hon. and hon Friends that they are taking the view that they do not like the fact that we are interfering with the free run of the market where our own vested interests are concerned. I do not see any case that we can develop to our own people or to the nation as a whole on those lines.
    Obviously, I think of our own people, for I myself am a trade unionist and have been a trade union official. But I also happen to be here because the nation as a whole put us in office. I do not, therefore, see how we can develop a case, either to our own people or to the nation as a whole, in saying, "It is all right for prices, it is all right for profits and it is all right for dividends, and we do not mind the Government having compulsory fall-back powers for them, but we are not going to have anything which looks like a fall-back position for wages". We could not defend such a case to our own people, and I am certain that we could not defend it to the nation.
    We are now dealing with Part II of the Bill, dealing with the prices and incomes policy which, as far as I know, everybody accepts as an absolutely sine qua non of expansion and growth. If this nation is to expand, to produce more, to be more competitive and to grow, a prices and incomes policy is inescapable. We can argue about how we get it, but a prices and incomes policy we have to have.
    When I went to the T.U.C. General Council a year ago, I said, as I say to the House tonight, that we have had a fair period now of trying to do this thing voluntarily, and it is not working well enough.
    1.0 a.m.
    Wages and earnings are going up by far more than we can possibly support, even if we were having the productivity which we set out to get. We are not even getting the productivity. I said that this must end. If it goes on, the possibility of getting the growth and the expansion that we need means that this degree of inflation cannot possibly be tolerated or supported. For a variety of reasons, the
    1582
    Bill which I discussed with them a little later has not come before the House until now. Therefore, we now have all that much more experience and all that way back to look.
    I do not believe that the trade unionists are so blind. They can see what has happened. The inflation has gone on and on, and the voluntary system has worked less and less well.
    The Government still want the voluntary system to work. We still depend upon it. In my view, it is in the end the only way. That does not mean, however, that one should not say to people that if it goes on like this, there is only one alternative: that is, that the Government must govern and that we must try to halt the inflation, because no free society can stand what is happening.
    Therefore, this is what we are doing in the Bill. We are saying let us go on with the voluntary system and try to make it work. We have got to have it. At same stage it must happen. The T.U.C., the C.B.I and all the other organisations in the country, as well as this House, must at some stage come together and make a productivity, prices and incomes policy work. When we do, we can go ahead with growth and expansion. Until they do, this nation, especially limited as we are by our international obligations and especially vulnerable as we are for reasons many of which have nothing to do with us, will be cribbed, cabined and confined, as we have seen recently.
    Therefore, all that I am asked really to do is to defend to my right hon. and hon. Friends why I say in the Bill that we will take fall-back powers on prices and on incomes if the voluntary system does not work. My right hon. and hon. Friends are quite right: if one says to an employer or manufacturer, "You must not put up your prices", it involves saying to a trade unionist, "And you must not use your power to force that employer or manufacturer to do what we are telling him he must not do."
    There are trade unionists, trade union leaders and trade unions who, in a free society—and a free society here means operating in a free market—are big enough and powerful enough not only to look after themselves, but to win for themselves and their members a great

    1583
    deal. There are others who cannot. And there are others who are in those big unions who cannot. And the pensioners, and the people on fixed incomes, cannot.
    I am prepared to say to any trade union in this country, including my own: "O.K. You think you are so big. You think you can win in a free for all. Think, for heaven's sake, of the people who are bound to lose in a free for all—for whom we are also responsible." This is what this is all about.
    Of course we must accept, in the society we are now managing, some limitations upon ourselves. Of course it is the duty upon the Government to operate it with fairness, justice and understanding. Of course the duty upon us is to consult, and move in closest contact, with both sides of industry. Of course the ultimate is to get it done by agreement; and there must be no use of compulsory powers unless we cannot get it done by agreement.
    I heard my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), for whom I have a great affection, talk about how Keir Hardie came here and the standards he came here to raise. I came here in the same tradition. We having raised that standard, my business is not to do what Keir Hardie came to do. My business is to do what Keir Hardie would do if he were here now this night. My business now, I submit to the House, and especially to my right hon. and hon. Friends—and hon. and
    right hon. Gentlemen opposite will not mind if I specially address myself to my hon. and right hon. Friends, because this has been, in a way, an internal debate, and I agree with the right hon. Gentleman that to take part in this is one of the great, moving occasions in our life—I say to my hon and right hon. Friends, we have gone far, far beyond what Keir Hardie or any of our predecessors thought we would have gone, and our business now is to carry that advance forward. To carry it forward means getting the unlimited though controlled and sustained growth and expansion we need.
    For the moment, we can be torpedoed by groups, by individuals, who, in all parts of our society, will put their vested interests above those of the community as a whole. I feel, therefore, that we are entitled to take these powers, whether against the price fixers, whether against the employers, whether against those trade unionists, who do not observe the common weal. I trust we shall never have to use them. I think we shall consult all our own people's wishes best by accepting the Clause, by accepting this Bill, and saying to unions and to everybody else: Now, let us get down to making it work on a voluntary basis.
    Question put, That the words proposed to be left out, to the end of line 7 in page 17, stand part of the Bill:—
    The House divided: Ayes 162, Noes 123.

    Division No. 168.]

    AYES

    [1.9 a.m.

    Albu, Austen

    Cullen, Mrs. Alice

    Garrett, W. E.

    Alldritt, Walter

    Davies, Harold (Leek)

    Garrow, Alex

    Anderson, Donald

    de Freitas, Sir Geoffrey

    Gordon Walker, Rt. Hn. P. C.

    Atkins, Ronald (Preston, N.)

    Dell, Edmund

    Gourlay, Harry

    Barnes, Michael

    Dewar, Donald

    Greenwood, Rt. Hn. Anthony

    Baxter, William

    Diamond, Rt. Hn. John

    Gregory, Arnold

    Benn, Rt. Hn. Anthony Wedgwood

    Dobson, Ray

    Hamilton, William (Fife, W.)

    Bennett, James (G'gow, Bridgeton)

    Doig, Peter

    Hannan, William

    Bidwell, Sydney

    Donnelly, Desmond

    Harrison, Walter (Wakefield)

    Binns, John

    Dunnett, Jack

    Haseldine, Norman

    Blackburn, F.

    Dunwoody, Mrs. Gwyneth (Exeter)

    Henig, Stanley

    Blenkinsop, Arthur

    Dunwoody, Dr. John (F'th & C'b'e)

    Herbison, Rt. Hn. Margaret

    Boardman, H.

    Edelman, Maurice

    Houghton, Rt. Hn. Douglas

    Boston, Terence

    Edwards, Robert (Bilston)

    Howarth, Robert (Bolton, E.)

    Bowden, Rt. Hn. Herbert

    Edwards, William (Merioneth)

    Hughes, Roy (Newport)

    Boyden, James

    Ellis, John

    Hunter, Adam

    Bray, Dr. Jeremy

    English, Michael

    Hynd, John

    Brown, Rt. Hn. George (Belper)

    Ennals, David

    Janner, Sir Barnett

    Brown, Bob (N'c'tle-upon-Tyne, W.)

    Ensor, David

    Johnson, Carol (Lewisham, S.)

    Buchan, Norman

    Evans, loan L. (Birm'h'm, Yardley)

    Johnson, James (K'ston-on-Hull, W.)

    Butler Mrs. Joyce (Wood Green)

    Fletcher, Raymond (Ilkeston)

    Jones. Rt. Hn. Sir Elwyn (W. Ham, S.)

    Cant, R. B.

    Floud, Bernard

    Jones, J. Idwal (Wrexham)

    Carter-Jones, Lewis

    Ford, Ben

    Kelley, Richard

    Conlan, Bernard

    Fraser, John (Norwood)

    Lawson, George

    Crawshaw, Richard

    Fraser, Rt. Hn. Tom (Hamilton)

    Leadbitter, Ted

    Crosland, Rt. Hn. Anthony

    Freeson, Reginald

    Ledger, Ron

    Crossman, Rt. Hn. Richard

    Gardner, Tony

    Lee, Rt. Hn. Jennie (Cannock)

    Lever, L. M. (Ardwick)

    Norwood, Christopher

    Skeffington, Arthur

    Lewis, Ron (Carlisle)

    Oakes, Gordon

    Slater, Joseph

    Lomas, Kenneth

    Ogden, Eric

    Small, William

    Loughlin, Charles

    O'Malley, Brian

    Snow, Julian

    Luard, Evan

    Oswald, Thomas

    Steele, Thomas (Dunbartonshire, W.)

    Lyon, Alexander W. (York)

    Page, Derek (King's Lynn)

    Stonehouse, John

    Lyons, Edward (Bradford, E.)

    Pavitt, Laurence

    Summerskill, Hn. Dr. Shirley

    Mabon, Dr. J. Dickson

    Peart, Rt. Hn. Fred

    Taverne, Dick

    McBride, Neil

    Pentland, Norman

    Thomas, George (Cardiff, W.)

    McCann, John

    Prentice, Rt. Hn. R. E.

    Tinn, James

    MacColl, James

    Price, Christopher (Perry Barr)

    Varley, Eric G.

    Macdonald, A. H.

    Price, Thomas (Westhoughton)

    Walker, Harold (Doncaster)

    McKay, Mrs. Margaret

    Probert, Arthur

    Watkins, David (Consett)

    Mackie, John

    Randall, Harry

    Weitzman, David

    Mackintosh, John P.

    Redhead, Edward

    Wellbeloved, James

    Maclennan, Robert

    Rees, Merlyn

    Whitaker, Ben

    McMillan, Tom (Glasgow, C.)

    Rhodes, Geoffrey

    Willey, Rt. Hn. Frederick

    Mallalieu J. P. W.(Huddersfield, E.)

    Richard, Ivor

    Williams, Clifford (Abertillery)

    Manuel, Archie

    Roberts, Gwilym (Bedfordshire, S.)

    Williams, Mrs. Shirley (Hitchin)

    Marquand, David

    Rodgers, William (Stockton)

    Willis, George (Edinburgh, E.)

    Mayhew, Christopher

    Ross, Rt. Hn. William

    Wilson, William (Coventry, S.)

    Millan, Bruce

    Rowland, Christopher (Meriden)

    Woodburn, Rt. Hn. A.

    Molloy, William

    Rowlands, E. (Cardiff, N.)

    Woof, Robert

    Morgan Elystan (Cardiganshire)

    Ryan, John

    Wyatt, Woodrow

    Morris, Alfred (Wythenshawe)

    Sheldon, Robert

    Yates, Victor

    Morris, Join (Aberavon)

    Shore, Peter (Stepney)

    TELLERS FOR THE AYES:

    Moyle, Roland

    Silkin, Rt. Hn. John (Deptford)

    Mr. Alan Fitch and

    Mulley, Rt. Hn. Frederick

    Silkin, S. C. (Dulwich)

    Mr. Edward Bishop.

    NOES

    Alison, Michael (Barkston Ash)

    Gower, Raymond

    Noble, Rt. Hn. Michael

    Allason, James (Hemel Hempstead)

    Gresham Cooke, R.

    Nott, John

    Batsford, Brian

    Griffiths, Eldon (Bury St. Edmunds)

    Onslow, Cranley

    Berry, Hn. Anthony

    Grimond, Rt. Hn. J.

    Orr-Ewing, Sir Ian

    Biffen, John

    Gurden, Harold

    Page, Graham (Crosby)

    Birch, Rt. Hn. Nigel

    Hall, John (Wycombe)

    Peel, John

    Blaker, Peter

    Harrison, Col. Sir Harwood (Eye)

    Percival, Ian

    Body, Richard

    Hawkins, Paul

    Pike, Miss Mervyn

    Boyle, Rt. Hn. Sir Edward

    Heath, Rt. Hn. Edward

    Pink, R. Bonner

    Brewis, John

    Heseltine, Michael

    Price, David (Eastleigh)

    Brinton, Sir Tatton

    Higgins, Terence L.

    Pym, Francis

    Bromley-Davenport, Lt. Col. Sir Walter

    Hill, J. E. B.

    Ramsden, Rt. Hn. James

    Brown, Sir Edward (Bath)

    Hobson, Rt. Hn. Sir John

    Rawlinson, Rt. Hn. Sir Peter

    Brown, Rt. Hn. George (Belper)

    Hooson, Emlyn

    Rossi, Hugh (Hornsey)

    Bruce-Gardyne, J.

    Hordern, Peter

    Royle, Anthony

    Bullus, Sir Eric

    Hornby, Richard

    Russell, Sir Ronald

    Carlisle, Mark

    Howell, Denis (Small Heath)

    Sharples, Richard

    Carr, Rt. Hn. Robert

    Hunt, John

    Shaw, Michael (Sc'b'gh & Whitby)

    Clegg, Walter

    Hutchison, Michael Clark

    Sinclair, Sir George

    Crouch, David

    Jerrkin, Patrick (Woodford)

    Smith, John

    Crowder, F. P.

    Johnston, Russell (Inverness)

    Stodart, Anthony

    Dance, James

    Jones, Arthur (Northants, S.)

    Summers, Sir Spencer

    Davidson, James (Aberdeenshire, W.)

    Jopling, Michael

    Tapsell, Peter

    d'Avigdor-Goldsmid, Sir Henry

    Joseph, Rt. Hn. Sir Keith

    Thorpe, Jeremy

    Dean, Paul (Somerset, N.)

    Kaberry, Sir Donald

    Tilney, John

    Deedes, Rt. Hn. W. F. (Ashford)

    King, Evelyn (Dorset, S.)

    Turton, Rt. Hn. R. H.

    Doughty, Charles

    Kirk, Peter

    van Straubenzee, W. R.

    Eden, Sir John

    Kitson, Timothy

    Vickers, Dame Joan

    Elliott, R. W.(N'c'tle-upon-Tyne, N.)

    Knight, Mrs. Jill

    Wainwright, Richard (Colne Valley)

    Eyre, Reginald

    Loveys, W. H.

    Walker, Peter (Worcester)

    Farr, John

    Lubbock, Eric

    Ward, Dame Irene

    Fisher, Nigel

    Mackenzie, Alasdair (Ross&Crom'ty)

    Webster, David

    Fletcher-Cooke, Charles

    Maclean, Sir Fitzroy

    Wells, John (Maidstone)

    Fortetcue, Tim

    Macmillan, Maurice (Farnham)

    Whitelaw, William

    Foster, Sir John

    Maddan, Martin

    Wilson, Geoffrey (Truro)

    Fraser, Rt. Hn. Hugh (St'fford A Stone)

    Marten, Neil

    Wood, Rt. Hn. Richard

    Gibson-Watt, David

    Maxwell-Hyslop, R. J.

    Worsley, Marcus

    Giles, Rear-Adm. Morgan

    Maydon, Lt.-Cmdr, S. L. C.

    Younger, Hn. George

    Gilmour, Sir John (Fife, E.)

    Miscampbell, Norman

    Glover, Sir Douglas

    Mitchell, David (Basingstoke)

    TELLERS FOR THE NOES:

    Glyn, Sir Richard

    Morgan, W. G. (Denbigh)

    Mr. Jasper More and

    Goodhart, Philip

    Munro-Lucas-Tooth, Sir Hugh

    Mr. Anthony Grant.

    Goodhew, Victor

    Neave, Airey

    Clause 24.—(EXCLUSION FROM RESTRICTIVE TRADE PRACTICES ACT 1956 OF APPROVED AGREEMENTS AND RECOMMENDATIONS WITH RESPECT TO PRICES.)
    1.15 a.m.
    Mr. Terence L. Higgins: I beg to move Amendment No. 24, in page 20, line 36, after "State" to insert:
    "shall ensure that any agreements made on prices following a recommendation in a Report of the Board, or action taken by the Secretary of State, are registered with the Registrar of Restrictive Trade Practices who shall decide whether or not to refer them to the Restrictive Trade Practices Court".
    I had the pleasure of running a quarter-mile race immediately after the race in which Roger Bannister ran the first four-minute mile. I have much the same feeling now as I had then. Moreover, I shall try to do what I did then, namely, to get the thing over as rapidly as possible.
    However, this is a very important Amendment, because it is concerned with the relationship between the Prices and Incomes Board and the Restrictive Trade Practices Court. A great deal of confusion has arisen because the Government appear, as the Bill stands, to be following two conflicting policies, and it is by no means clear whether, on a particular issue, the Board would have the authority effectively to override a matter which the Restrictive Trade Practices Court would otherwise regard as contrary to the public interest.
    We raised this matter in Committee, and we received a reasonably favourable reply from the Government. It is for this reason that we tabled the Amendment, which is designed to ensure that any arrangement made as a result of a recommendation by the Board should be registered with the Registrar of Restrictive Trade Practices. This does not mean that he would necessarily refer it to the court for consideration, but it ensures that if an arrangement is made as a result of the Government's prices and incomes policy the public interest will be considered. Might such an arrangement lead to a situation which, in terms of the Restrictive Trade Practices Act, 1956 was deemed to be against the public interest?
    That Act was debated at great length, and a great deal of time was spent on
    1588
    the criteria which the court should take into account in deciding whether or not a particular restrictive practice fell within some very closely defined gateways. It would be very inadvisable if the House decided on this Measure, which has had nowhere near the same detailed consideration, to eliminate from the province of the Restrictive Practices Court those procedures which are brought about by recommendation of the Board.
    We therefore move this Amendment, and I hope that the Government will accept it, given that it provides only for reference of a matter to the Registrar, who would then have discretion as to whether or not it should properly be considered by the Restrictive Trade Practices Court.
    Mr. William Rodgers: The hon. Member for Worthing (Mr. Higgins) said that when this question was raised in Committee he received a reasonably favourable reply from the Government. Therefore, I do not know why he has sought to tempt providence by raising it again this evening. If he was satisfied, I would have hoped that he would accept the assurance he was then given that the Clause which he now seeks to amend is necessary if the recommendations of the National Board for Prices and Incomes are to be faithfully carried out.
    The purpose of Clause 24 is to ensure that the collective adoption by traders of the price recommendations of the Board does not give rise to any obligations to register under the Restrictive Trade Practices Act, 1956, or to obtain the consent of the Restrictive Practices Court. This is a very important point, because the purposes of a recommendation by the Board would be largely frustrated if it were not possible for the parties affected collectively to decide to respond to the injunction of the Board and to hold or reduce their prices accordingly.
    Without the Clause, they would find themselves in a very difficult position under the 1956 Act if they responded to the requirements of the Board and attempted, in the public interest, to hold down prices. It is true that when the 1956 Act was devised its purpose was to serve the public interest, but at that time I do not think that anybody could foresee the steps which we are now

    1589
    taking and the day when firms and associations would voluntarily be prepared to agree to hold down prices in response to the recommendations of a body set up by the Government, with the agreement of both sides of industry.
    In other words, in 1966 we are dealing with a situation which was not foreseen 10 years ago and we must recognise that without Clause 24 there would be a conflict of public interest. In these circumstances we should find that much of what we are trying to do on the prices side, with the general approval of the House, would be frustrated.
    Mr. Higgins: The dilemma which the hon. Gentleman poses would arise only if two Government bodies were to adopt two quite different interpretations of what the public interest was. The Amendment provides merely that an agreement should be registered. Obviously, it would be referred only if there seemed to be some inconsistency. In the circumstances, is it not right that such inconsistency should be resolved by the Restrictive Practices Court?
    Mr. Rodgers: The Amendment goes further than that. Not only does it restore the position to what it would be if there were no Clause 24 but it puts an obligation on Ministers to ensure that a price recommendation is registered. In the other situation, this is not so. If the Amendment were accepted we would go a stage further than the status quo, so to speak, requiring the parties concerned in a collective agreement adopting a recommendation of the Board to register that agreement and, in addition, putting an obligation on two Ministers to ensure that this is done.
    I am happy to give again the assurance that, of course, we shall do nothing which is not within the spirit of the 1956 Act. I hope that the hon. Gentleman will accept the undertaking which I gave in Committee, and will not press the Amendment to a Division.
    Amendment negatived.

    Clause 25.—(GENERAL PROVISIONS AS TO OPERATION OF PART IV.)
    Sir K. Joseph: I beg to move Amendment No. 25, in page 21, line 35, to leave out Clause 25.
    Mr. Speaker: I suggest that with this Amendment we take the following ten further Amendments: Government Amendment No. 26, in page 22, line 33, after "order" to insert "or direction".
    Government Amendment No. 27, in page 22, line 38, after "order" to insert "or direction".
    Amendment No. 70, in page 21, line 35, to leave out subsection (1).
    Amendment No. 71, in page 21, line 44, to leave out subsection (2).
    Amendment No. 72, in page 22, line 4, to leave out subsection (3).
    Amendment No. 73, in page 22, line 6, to leave out subsection (4).
    Amendment No. 74, in page 22, line 12, to leave out subsection (5).
    Amendment No. 75, in page 22, line 22, to leave out subsection (6).
    Amendment No. 76, in page 22, line 29, to leave out subsection (7).
    Amendment No. 77, in page 22, line 42, to leave out subsection (8).
    The right hon. Member for Leeds, North-East (Sir K. Joseph) asked me about the scope of the debate on Amendment No. 25. It seems to me that what he said was quite sound, that we should have a broad debate on that Amendment dealing with Clause 25. After that, there will be two much narrower debates, one affecting the next two Clauses on prices and one affecting the two Clauses after that on pay. I hope that is clear.
    Sir K. Joseph: Thank you, Mr. Speaker, for that very helpful Ruling.
    Clause 25 is, as the First Secretary of State called it in Committee, the master Clause of Part IV, and it is time now for us to register once again our view, and, I think, the view of all hon. and right hon. Members on this side of the House, that the Government behaved very scurvily to Parliament in failing to give Parliament proper time at a Second Reading stage to discuss the principles of Part IV. But now, after a notable debate trenching on the issues on Part IV, we come to the notorious Part itself. First, I shall state, as objectively as I can, where I think the Government have gone completely wrong in finding it necessary to introduce Part IV at all. We are continually told by Government spokesmen that the voluntary prices and

    1591
    incomes system has failed, and they go on to say that because, in their view, it has failed, it is necessary to move straight to the Draconic compulsions in Part IV.
    We believe that that reasoning conceals an error of diagnosis which has been, and, perhaps, will be under this Government, fatal to the progress of the country. What they have failed to realise is that no prices and incomes policy born of man or woman could possibly have had any success in the climate of raging inflation which the Government allowed during their first 21 months of office. It is quite wrong for them to conclude that a prices and incomes policy is necessarily a failure because it failed during their first 21 months.
    1.30 a.m.
    We believe that a prices and incomes policy has a relatively small part to play in the totality of Government economic strategy, and we have always pressed the Government to recognise that that small part to be played, on a voluntary basis, could only be realised within the context of better control of demand than this Government have achieved. That means that the Government side can charge the Opposition with wishing to introduce deflation so as to reduce the state of inflation which existed in the economy and which nullified the prices and incomes policy. That was all very well a few weeks ago, but now the Government have introduced belatedly, and because belatedly, an excessively severe package of deflation. Now we have deflation and a compulsory prices and incomes policy, whereas up to now they were presented as alternatives.
    We believe that the right level of demand did involve a measure of deflation, but we believe that the Prime Minister's package is far more than would have been necessary with any Government which carried more credibility. We do not accept the views of the Parliamentary Secretary to the Ministry of Labour, who accuses us of wanting still more deflation now. We accept her opinion, and it is ours, that however justly the Government regulates the level of demand, it is an extremely difficult task to do, and that there is still sense in having, as an ally, a voluntary prices and incomes policy.
    1592
    We do not regard it as proper in any way to deflate so that there is no enterprise in the economy, but we regard the pursuit of the right level of demand in conjunction with a modest productivity, prices and incomes policy as the right strategy for the Government.
    I apologise for having spelt this out, but we have been charged on the one hand with having no alternative and on the other that our alternative is excessive deflation. We believe that the Government's measure of deflation goes further than would have been necessary had we been in Government.
    Having briefly set the scene, I come to Part IV. We have, of course, dealt with it at some length in Committee, but it has not been within our capacities to exhaust fully the lunacy of Part IV if it were ever activated. Even the right hon. Member for Nuneaton (Mr. Cousins) has been unable to quarry all the absurdities which would be the result of trying to enforce wages, and we can imagine the trouble that the Government would get in if they tried to regulate all prices. We believe that this part is largely unworkable and to the extent which it is workable it will damage the economy. The only possible comfort for any patriot, if that overworked word can be used, is that the Government would bring these powers into operation only for a brief time.
    The Government talk of six months for the freeze and they hope, and we hope with them, that they will never have to operate Part IV or, if they do, only after several weeks or months. The shorter the time the less will be the damage to the economy by way of distortion. But the damage to morale, working relationships, mutual confidence and accumulated good will built up in many parts of the economy will be damaged just because the Bill is on the Statute Book although it is never activated.
    Part IV includes infamous Clauses which allow the Government to call back pay and price increases already made; a Clause to allow employers to break a moral or legal contract into which they have entered and protection from workers if they do; and a Clause to nullify wage council and agricultural council awards. This part includes so many infamous Clauses that I only need to mention them to invoke the fury of this side and most of the House against them.
    At this hour my main task is to set the scene and allow the debate to follow. I repeat that a large section of Part IV is unworkable. I say again that to the extent that the Government try to work it, it will discredit the law, the instrument of Government and will thoroughly debase the relationship between worker and employer, with consequences reaching far into the future. My hon. Friends and I will oppose it as hard as we can, but we can only hope that the Government will not think fit to use it.
    We naturally hope that the Government's deflation will operate with the minimum necessary results to take the heat out of the economy. We hope that that deflation, which we fear may have been, and may prove to be, excessive, will be such that this provision will not be used. We remain unutterably opposed to it, and I hope that all hon. Members will succeed in persuading the Government at all costs not to use it, even if it is on the Statute Book.
    Mr. Michael Foot: I believe in Parliament, even at this late hour. Hon. Members who listened to the earlier debate on the so-called penal Clauses will agree that that discussion was to the great credit of the institution of Parliament. One of my reasons for objecting to Part IV is because I believe it to be offensive to Parliamentary institutions.
    Some of my hon. Friends with whom I have had arguments on these matters have, in my view, been occasionally contemptuous of Parliamentary procedures, and on many matters they have a strong case. There are, of course, many features of our Parliamentary procedure which ought to be radically reformed, but there are some which we must jealously preserve—and I am sure that some of my hon. Friends who may have disagreed with me have come to witness, particularly tonight, that there are great advantages in an institution which compels the Government to listen to minority points of view. The procedures of the House which I wish to protect above all are those which ensure that minority opinions, however small—although I am not suggesting that on this occasion our minority is very small—always have the right to be heard.
    That is one reason why I object to Part IV and the way in which it has been
    1594
    presented to the House, for it has been presented in a manner which has deprived us of some of the forms of debate. I may be told, "You may debate it now, so what are you complaining about"? At the beginning of this discussion you said, Mr. Speaker, that we could have a wide-ranging debate, and I am sure that my hon. Friends will extend it to the outermost frontiers. However, there are many matters I would wish to raise about Part IV which would be out of order.
    My objection to Part IV and the White Paper on the subject stems from the fact that what is considered to be the sort of prices and incomes policy we need to deal with the nation's economic disease has got that disease out of perspective and out of proportion. It suggests that this is the principle remedy for the country's economis disease. It is only a minor remedy: there may be a case for it, but it is a side issue. Other measures could have a much bigger and more immediate effect on the Government's problems. Our most inflationary expenditure is on defence. If that were cut away, we would deal with the economic situation much more radically and swiftly than with these proposals.
    I should like to list several other measures, but therein lies one of my criticisms of the fact that the Government denied us a Second Reading, to put the Measure into the wider context of the economic policy. We are not entitled to do that in this debate, unfortunately, and I therefore hope that the Government will never again resort to this procedure of putting a measure of this kind into another Bill which has already passed Second Reading. This deprives us of certain essential rights.
    I hope that the Government will seriously consider our proposal. For reasons very different from ours, hon. Gentlemen opposite wish to remove Part IV, partly for Parliamentary reasons, but partly for economic reasons which are laissez-faire and doctrinaire and which we do not, of course, accept. The Government could remove Part IV from the Bill and find no difficulties for their policies. They could accept the proposal and still carry forward their own proposals. I hope that the Government will not treat these debates as if everything were cut and dried in advance, because that makes a mockery of Parliament.

    1595
    My right hon. Friend made a powerful speech in our last debate. It was one of the best which I have ever heard him make, and that is high praise. But he could have made exactly the same speech in accepting the Amendment. It would have underlined what he said about the voluntary system. So powerful was his speech that we all expected him to say at the end, "I have convinced myself or have become convinced that the penal Clauses should be removed, and we will all be united." That would have been helpful to the country and to Parliament. People would have understood that the right argument had carried the debate.
    But the same applies to our proposal on Part IV. If the Government accepted it, what would be the consequence? The Government say that they will carry out Part IV entirely by voluntary means, and do not wish to resort to the powers there. There is one way to ensure that, and that is to remove it from the Bill. If they found later on that the voluntary method was not working, they could introduce Part IV as a separate Bill, with a proper Second Reading incidentally.
    What would be wrong with that? They would not even lose much time, because according to their own protestations, the Government would lose only 28 days under the Bill. If they wished to use the compulsory powers they would have to make the order to call Parliament together in 28 days when the law was varied.
    1.45 a.m.
    If the Government accepted the proposal that many of us are making on this side of the House, all they would be surrendering would be the possibility of resorting to these compulsory powers which they have said they do not want to resort to in any case for a matter of 28 days. Therefore, I say that our Amendment should be considered seriously. That is why some of us for several days past have been urging upon the Government that they should not come to these debates with cut-and-dried proposals but that they should listen to the arguments and should be prepared to accept Amendments. Certainly, if the Government accepted some of the Amendments, they could have done so without any inquiry to the other parts
    1596
    of the Bill, or if they were to accept this Amendment it would certainly have a great influence on what I should do on the Third Reading, for instance.
    I think this is what Parliament is for. We should be able to discuss these Amendments on their merits. That is what we are here for. I hope the Government will be prepared to consider our proposal on that basis. If they were to remove the whole of Part IV they would still be able to proceed exactly on the lines on which the First Secretary says he wishes to proceed in the next six months; that is, to achieve his standstill on a voluntary basis.
    Unfortunately, it may be that one of the reasons why the Government will reject my proposal is not a reason which they like to state. I do not suggest that it is a reason of dishonesty or anything of that sort. But I believe that there is a double meaning in the way that the Government are presenting Part IV. I have read most of the proceedings in the Committee stage and the First Secretary said—if he said it once he said it 100 times—" I wish to ensure that the whole of this standstill shall be operated on a voluntary basis." I heard the First Secretary say it when we discussed the new Clause this afternoon.
    He says that these powers are mild and reasonable. He roars as gently as a sucking dove. He says that everything is to be done on a voluntary basis as far as possible. But on the other side, in other places and in other contexts, these measures are described as extremely tough. In the United States when the Prime Minister talked about these measures he said, "We are taking sterner measures than any democratic Government have taken in peacetime." The Leader of the House said last week that these are extremely tough measures. Which do they want the world to believe? I think they want one story to be believed here and the other story to be believed elsewhere. They have to tell us an intelligent story here, but they tell an unintelligent story to the central bankers. Believing what I believe about central bankers, I am not surprised that they have got it that way round. I am not saying anything against bankers. I am in favour of borrowing from them. In fact, that is the only function that bankers perform, so far as I know. I cannot think

    1597
    of any other useful service that they perform.
    I have no objection to the way in which the Government have arranged it, but they really should make up their minds to tell the same story. It is, unfortunately, the fact in my opinion that this standstill on wages and incomes has been introduced not primarily because of the economic effects in this country but because of the supposed psychological effects that it will have upon other people outside the country. I do not think that that is a very good reason for proceeding with economic measures.
    I come to another reason why I think it so foolish for the Government, in their own interest, to proceed by pushing Part IV into the Bill and being determined to press forward despite our offer to assist them if they remove it. Although I disagree with many aspects of the Government's incomes policy, I agree with my hon. Friends that some form of incomes policy is required. It should be an incomes policy that carries out the promise that the Labour Party made at the General Election, that what we wished to secure was a planned growth of wages. That is not merely official party policy; it is also good sense. But I should have thought that if the Government wanted planned growth of wages they would have gone to extreme lengths to ensure that their long-term policy for planned growth of wages would not be mixed up with an immediate short-term policy of a standstill on wages. The two things are contradictory, and to get them muddled up together is to injure both.
    Parts I, II and III of the Bill are for long-term purposes, parts of permanent legislation, but Part IV is to be temporary, to be finished within 12 months. That was a further reason why, in their own interest, the Government should have kept the things entirely separate. It is not too late for them to do that now if they take out Part IV and follow my advice. I have shown that they would not be surrendering any of the situation that they wish to sustain in the country in the months ahead. All they would have to do if they wanted compulsory powers later in the autumn would be to introduce a separate Bill. If they did that, I believe that they would strengthen acceptance in the country of
    1598
    this Bill. This is the advice that some of us have given them throughout the controversy, and we think that they should have listened to it. Maybe they will discover in the end that it was good advice.
    But there is a further reason, a most important reason, why I am opposed to Part IV. It involves flagrant breaches of contract. It involves bargains being broken, the bargains of several millions of wage earners, some of whose claims are especially powerful. In particular, I would refer—hon. Members may have other cases that they wish to cite—to the railwaymen. What is being done to the railwaymen is outrageous. It was absolutely agreed that they should have their increase. It was on the basis of that that a strike was called off. Now they are told that the bargain is to be made null, is not to be carried out till later on. The railwaymen have to pay under all the other measures introduced by the Government, but over and above that they take a capital cut that they will never regain. It is serious when employers break bargains, but this is a bargain broken on the responsibility of this Parliament. It is a very serious matter indeed. One of the troubles about breaking bargains is that it makes it much more difficult to conclude fresh bargains in the future. The whole of our society and particularly the ameliorations for lower paid workers, about whom we have heard a great deal today, are based on many of these bargains. I was taught about the history of the Labour movement by T. D. H. Cole and others and about how collective bargaining had been one of the main processes by which we had introduced some civilised standards into our society. If bargains are broken, how are bargains to be made in the future?
    Supposing some 12 months hence there is another threat of a rail strike, supposing railwaymen again go to Downing Street to make an arrangement at the eleventh hour, and supposing an agreement is on the point of being signed, will not the leaders of the railwaymen say, "We must have a special clause in this bargain to the effect that it will not be upset by some six-months wages standstill "? If the railwaymen demand that, all the others will demand it, too. Or they may say, "We are not prepared to accept what we might otherwise be prepared to accept. We demand more now."

    1599
    Therefore, I believe that at the end of the six months or the twelve months, partly because of the breach of bargains, the demands from different trade unions to ensure that they recover what they have lost, if they possibly can, and to guard themselves against similar injuries in the future, will be overwhelming.
    I wonder whether the Government have fully considered this. It is not the first time we have had a wage freeze or a pay pause. I want to quote some of the words which were used in the debate on the pay pause imposed by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd). I do not quote these words of the Prime Minister's in order to gloat over them. I quote them from the debate which took place on 23rd October, 1961, because I think that those of us who are critical of the Government's policy on these matters have the right to ask the Government who is being consistent in these matters. I do not say that consistency is the greatest of all virtues, but I do not think it should be dismissed. Consistency, like keeping bargains, is one of the ways in which the health of politics is sustained. When people change their minds, for whatever good reasons, they should explain themselves.
    I will read what the Prime Minister said. I could read many other passages from his speech. In a debate on a Motion proposed by him, in which he attacked the Conservative Government, not merely for the pay pause, but for the breach of bargains which was involved in the pay pause, my right hon. Friend the Prime Minister said this:
    "We have said time and time again that in the long run we cannot afford increases in any personal incomes, wages, salaries, dividends and rents greater than the national increase in productivity."
    He was consistent about that.
    "That is precisely why we say that the first priority is to increase productivity. There are two ways of doing it."
    This sounds almost like a speech by my right hon. Friend the Member for Nuneaton (Mr. Cousins).
    "The Government's approach is to hold production down, cripple productivity, and then try to tailor the wages system to fit it, using every instrument—deflation, high Bank Rate, broken agreements, short-time working, and even the threat of unemployment—to achieve their end."
    1600
    Later, speaking about the dangers of breaches of bargains, which is what we are talking about, my right hon. Friend said this:
    "We warn the Government with all the emphasis at our command, while there is yet time, that if the Chancellor's policies and pressures lead to intensified strife, with all the damage it would entail to this country and its export orders, the responsibility will be his. Do not let him blame the trade unions. Do not let him look for Communist plots; he will not need them. The Chancellor's policy plays right into the hands of trouble makers and fomenters of unofficial strikes. This is the Lloyd-Gollan axis"—
    what is now the Gunter-Gollan axis, maybe.
    "They are not allies, but they are certainly co-belligerents in an assault on industrial peace and the established machinery for negotiation and arbitration in British industry."—[OFFICIAL REPORT, 23rd October, 1961; Vol. 646, c. 618–19.]
    2 a.m.
    I quote those words, not out of mockery, but because at some point there has been a suggestion that when my right hon. Friend the Member for Nuneaton (Mr. Cousins) defended so strongly the right of negotiation and objected to the interference with the proper processes of negotiation, he was taking an old-fashioned view as though he were defending some kind of jungle law. But it was my right hon. Friend the Prime Minister who, when we were discussing the previous pay pause, objected so strongly, quite rightly, to the interference with the processes of negotiation and pointed out the hazards which would follow from it.
    So some of us take the view that we should adopt the same attitude to the breach of these bargains today that he adopted and which was adopted by the whole Labour Party when bargains were breached in 1961. In my opinion, lasting injury to the process of collective bargaining will be done by what is proposed and therefore lasting injury to the trade union movement. That is a further reason why I ask the Government to consider seriously the withdrawal of Part IV, partly on the ground that I have stated—that if their predictions are correct they can execute all they want through voluntary appeal—and partly because it is an extremely serious matter that, when agreements have been reached and expectations aroused on the basis of undertakings given by the Government and approved by Parliament, all these matters can eventually

    1601
    be changed and that it should be thought that, by a Clause in a Bill, such bargains can be abandoned.
    That is what has happened in the case of the railwaymen, the doctors and millions of other workers whose cases are not so prominent but who would have been entitled to increases under bargains already sealed and signed many months or years ago. I do not wish to be a party to this Parliament accepting a breach of those bargains. I was opposed to it in 1961 and I am still opposed to it in 1966.
    Sir Harry Legge-Bourke: I was not a member of Standing Committee B and this is the first time I have said anything in connection with this Bill in the House. Having listened to the debate on Clause 16, I feel that it is becoming more and more embarrassing for some of us on this side of the House to remain in the Chamber while a grand debate on party philosophy goes on opposite.
    If I had ever thought of being a Socialist, I think that I would have favoured the Socialism propounded by the right hon. Gentleman the Member for Nuneaton (Mr. Cousins) rather than the form coming from the Government, because Socialism surely must depend upon logic for its success—and the logic of Socialism is, I fear, that eventually there is complete control of everything, certainly the Government taking unto themselves the right to control everything.
    The men I feel most sorry for, having listened to that debate, are those who still fail to see that this is the logic of Socialism, because Socialism is based on the assumption that there is something wrong about profits, to start with. Yet if this country is to be financed in administering itself it has to have profits from which to do it. I believe that the true trade unionist is better championed by what the right hon. Member for Nuneaton said than by what the First Secretary said.
    There ought to be a great difference between a trade unionist and a Socialist. The leader of a trade union has a duty rather different to that of the First Secretary. The leader of a trade union has a duty to his members to get the best conditions he can get for them and to increase the stature of his members in the
    1602
    community at large. That is his principal duty. The First Secretary seems to be getting him more and more closely linked with some governmental duty. In my conception of what a free trade union movement should stand for, I do not accept—and I do not believe that the right hon. Member for Nuneaton and some of the other hon. Members who are trade unionists really accept—the argument propounded tonight by the First Secretary.
    We see in the Bill the awful consequence of getting these two things mixed up. Socialism leads, I believe, if it is to work effectively, to the full logic of State control in all its aspects. The First Secretary and his colleagues in the Government are taking these powers through Clause 4 to the Bill in the full logic of Socialism. I do not deny that having got themselves into this position, and believing in Socialism, it is inevitable that they start to take powers of this sort.
    In reply to the hon. Member for Ebbw Vale (Mr. Michael Foot), who made an extremely appropriate speech on this occasion—I say that with great humility to him—it is not only the trade unionist, not only members of the Socialist Party, who should be castigating the Government for breach of faith. It is the electorate at large who put them into power.
    The things which the First Secretary and his colleagues now have to say because of the folly of their policies, because of the incompetence of their Administration, are not what they were saying at the last General Election. They condemned stop-go. They said "Let's go with Labour" in 1964 with the thumbs-up sign and all that. That is not the policy contained in Part IV of the Bill.
    It may be that all of us have to ask ourselves when Governments find themselves in this jam,
    "Am I my brother's keeper?"
    The Christian answer to that always has to be "Yes". That is why I abstained in the vote on Clause 16. But I shall vote on this Clause, because if any of the arguments which the First Secretary propounded in favour of Clause 16 were correct, this Clause must be wrong.
    The right hon. Gentleman had a part to play in sustaining morale during the

    1603
    war, but surely he must know by now that the way to get co-operation from Englishmen is not to say, "Let us all do it like this together, but because you may be so difficult I shall keep a sword of Damocles over your head should you not so operate". That is what this Clause of the Bill does. I do not believe that any decent trade unionist, any decent English man or woman, is going to co-operate on that basis. That is why, were I a trade unionist, I would say straight away I am with the right hon. Gentleman the Member for Nuneaton (Mr. Cousins). What undermines his case is that in almost the same breath he propounds the doctrine of Socialism, which leads him into the position in which the Government find themselves. This is the consequence of Socialism.
    I say, therefore, that whilst I am quite prepared to try to follow what I believe to be the honourable doctrine which the Government themselves are trying, and that is to arouse the honourable voluntary effort of the nation—and that is why I did not vote against Clause 16—I cannot possibly bring myself to do other than vote against this Clause, because it is un-English, it is un-British; because it is giving the Government power which this Government have already shown themselves quite incapable of manipulating. I am afraid it is power of which this Government have shown themselves to be utterly unworthy, ever since they came into office.
    Mr. Cousins: May I first advise the hon. Gentleman the Member for the Isle of Ely (Sir H. Legge-Bourke) that, whatever else he thought it, it certainly is not Socialism. This Bill is certainly not that. That it is is an argument which can no more be sustained than can the comparison between my right hon. Friend and Keir Hardie. I do not believe that Keir Hardie had any idea that Socialism was setting out to perpetuate the imbalances between people—to leave the under-privileged in the position of under-privilege, and to leave those with power in the position of power. This Bill cannot, therefore, be regarded as Socialism, not can my right hon. Friend's approaches to it be regarded as Keir Hardiean.
    The reason why I have Amendments, which are brought into this discussion, to
    1604
    leave out various subsections of Clause 25, appears to me to be a fairly simple reason. Of a series of very damaging Clauses, this is probably the most destructive of the lot. It is destructive because, as I said a little earlier, it destroys the whole basis of labour relations built up over a long time. It gives dictator rights to a Minister. Not only that, but we are now getting to a part of the Bill which embraces all the enabling rights in the other part of the Bill. It allows the Minister to be the determiner of remuneration, the assessor of comparisons, the judge of what is right and what is wrong. And it gives no right of appeal. I not only think that this, as the hon. Gentleman the Member for the Isle of Ely said, is un-English and un-British, but that it is also unworthy of the kind of consideration which this House ought to be giving to the idea of measures of control of labour relations.
    It also brings up every one of the things to which many of us have been pressing for answers. I would at this point say to my right hon. Friend, he made a very good speech; it had nothing to do with the subject, but it was a very good speech; but one of the things we are constantly finding is, that answers are not given, and the reasons behind the decision to introduce the Bill are not portrayed. To those who are responsible for bringing it in, it is, I suppose, justified. I always find it a little difficult to accept that my right hon. Friend is sincere in this, because I know how strongly he feels about the idea of compulsion and how strongly he has fought and struggled in many places to ensure that the rights of a free trade union movement in a social democratic system should be retained. He has put his views on this matter as forcibly as he could. Therefore, I find it a little embarrassing to hear him talking of the powers he wants.
    2.15 a.m.
    It has been said, too many times for comfort, "I need this power". I do not know who needs the power, but we had better ask some questions again. It has been said that if all that the trade union movement is about, is to get fodder for its members, it has failed in its purpose. It has never simply set out to get fodder for its members. It has always

    1605
    recognised that to be a very important part of its function, but besides having had to fight British industry to get fodder it has also had to fight Governments for certain rights. It has had to fight for a much broader group of people than its own members.
    It is all too easy to adopt the attitude that all that the trade unions are concerned about are the interests of their own people. It is easy to forget that there was a period when these benches of Labour supporters were not strong enough to fight the Conservative Government, and when we, with the trade unions, had to bear the brunt of the struggle. I hope that this will not be forgotten.
    I ask my right hon. and hon. Friends who feel that the Bill should go through to remember that there has never been a period when Governments did not tell trade unions that this was a quid pro quo for what was done in respect of the price system. How unreal are we becoming? If a man who is seeking a wage adjustment has his claim rejected by his employer it is difficult enough; if he is told that the Government are taking action to prevent his getting his claim and it brings him to a full stop, that is the end of the scheme.
    Sir D. Glover: That is Socialism.
    Mr. Cousins: That is not Socialism. It is far from it. It may be Fascism, but it is not Socialism. But if the man stops there he is told that the quid pro quo is that prices do not rise. Many large firms boast that their prices have not risen for a long time. Their efficiency has been improved and their investment has kept pace with what has had to be done, and their profits have risen tremendously. I am not against profits—they can be a stimulus in the society in which we are living—but I have said many times that there are alternatives to this system. I am not advocating that we should have Communism, but if we are to have a system that takes out by profits we cannot at the same time say that we have not got a free-for-all society. I cannot see why we should have restraints placed upon us by a Labour Government which cannot be placed upon us by a Conservative Government.
    When my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) was speaking about what happened in 1961,
    1606
    it went through my mind that I was not then in the House. I was sitting in other offices talking with the representatives of the Conservative Government. I am one who, like the Prime Minister, used the same kind of argument. I still use the same kind of argument. I remember with a feeling of shame that I was violent towards the Chancellor of the Exchequer of that day in his attempt to introduce a wage freeze. I did not know that anything worse could be applied. There were no penal Clauses in his proposals. So if I could be at that time accused of being anything, it was of being over-aware that we had a struggle on our hands.
    The change proposed in this Clause and the subsequent actions is that if I have the same feelings I should not portray them. I have to accept that, while it was done out of evil motives at that time, it is done out of good motives now. I have to accept that the way to stop me doing it is to make it an offence for me to oppose it. I cannot accept this sort of thing. Why should I?
    The First Secretary made it clear that we have got into an inflationary situation; we have got to the stage of having inflationary price rises. I am sure that the Government feel that if they keep saying it often enough we shall believe it, despite the fact that information can be given to them as frequently as is required that in the competitive parts where we have to get our export trade going we are not in an inflationary situation. We are not getting the production we need. We are not getting the unit cost down as we could. But we are certainly not in an inflationary wage demand situation. If we talk of the only thing which measures whether we are in a real inflationary situation—that is, whether we are able to purchase more with the money we are earning—we find that that is not so.
    There has been a great attempt on the part of the present Administration to bring deflationary measures into being. We cannot forget that the Chancellor of the Exchequer and the Prime Minister spoke in the House of what would be the effects of some of their proposals. I am very concerned, probably more than most people, that we cannot do as has been suggested in the last few years—turn the tap of inflation on and off. I argued

    1607
    this with a Conservative Prime Minister six or seven years ago. I repeated the same argument four years later. The assumption is that we have enough control to turn the tap of inflation on and off: we have the regulators, Purchase Tax, everything that does this. But it does not work in that way.
    I have had to try to say in the past that the one thing which governs inflationary tendencies or production drives is confidence. If we take away confidence, we leave people in the position that they do not know what they can do properly to encourage growth. It takes more than exhortation to get it back again. The right hon. Member for Leeds, North-East (Sir K. Joseph) said that it has been emphasised that this is only for a short period, that Part IV is of limited duration. I suggest openly that we cannot introduce something like this for a short period. We cannot step back and say, "We have decided that we will not have the compulsory powers". If we do, we are simply saying that if we all stand still for 12 months we can bash the economy as hard as we like afterwards. Surely this is not what we are saying.
    There is only one way to get out of any compulsory power, and that is to break it. I say this with a great deal of respect for the fact that my right hon. Friend appeals time and again for the voluntary system. If he wants a voluntary system, he does not need Part IV. He does not need the right to say, "If you do not, I will do something", if he really thinks we can get out of it by a voluntary system, because that is not voluntary at all.
    What has been said to us over the past short period of time? It has been said that this has another purpose, that it gives us a breathing space, that it gives us time. My right hon. Friend said, in answer to a question I put to him in Committee, that of course this is not the solution, that of course this will not solve the problems, but it will give us time. Time to do what? Time to get a new system which compels people to accept the Government's decisions?
    I have a great deal of respect for my right hon. Friend. He had a lot of experience in the trade union movement, although it was in a different period from
    1608
    now. He left active officering in the movement in 1945, and there were different situations in front of him. One thing he should recognise is that one cannot say to the British trade union movement, "The Government will tell you how much you ought to demand, how much you ought to get, or whether you ought to get anything at all".
    I ask the House to realise the sort of situation normally faced by trade unionists and employers. You cannot put in an application for a 3½ per cent. increase and say, "Please give us 3½ per cent. That is what we shall be satisfied with". You would not get 3½ per cent. I can give examples of that. My union asked the bus companies to apply the 3½ per cent. increase that the Prices and Incomes Board said we should have. They said that they would talk about it, but that the amount should be less. Are we to talk about productivity to buy an even smaller amount? This is the first result of the kind of thing that comes from this Government approach.
    We are creating here a background of confusion, probably irreparably. We are damaging the idea of productivity drives. I happen to believe very sincerely that if we are to get out of the problems that now face us it must be on the basis of improving our productivity. There has been a great improvement in productivity, and whoever says that there has not is being misleading.
    There has not been a great growth in production, but some of the production has suffered because of Government action, some of it because of things over which the unions have no control. The trade unions did not close the mines; they appealed against that. They did not stop construction work; they appealed for it to go on. There has been a very marked increase in productivity. But when we asked whether we should continue to seek productivity agreements we were told, "No," that if they had to be bought by extra pay at this period it was not worth it. I do not know what sort of world we think that we are living in. If we are to get productivity increases, they must be on the basis of efficiency and incentive payments.
    I did not create the system. It was here when I came. But I know that on both sides of industry in a mixed economy an incentive is needed, and this has been

    1609
    the basis of discussions over the past few months—to try to improve real productivity and to get paid for it.
    Sir T. Brinton: When the right hon. Gentleman says that productivity has increased, is he talking about productivity per man-year or per man-hour? There is a very big difference between the two.
    2.30 a.m.
    Mr. Cousins: In many ways it has improved in both. This is bound to be so. The use of new equipment has increased productivity per man-year beyond the conception of a few years ago, and will continue to do so. To take one example, electricity generation, one can see how output per man-year has increased. The Clause now before us provides that somebody else, not the trade unions and not the employers, should be the determiner of whether the change has taken place.
    There are references in this Part of the Bill to people not having greater remuneration and not having it for the "same kind of work". Both in the House and in Committee I have put the inevitable question: Who is to determine what such meaningless phrases mean? Our society can be divided not quite down the middle but fairly broadly into separate groups, and certainly in the fairly high income bracket no one can determine what the remuneration is. What about payments in kind given to many people? What about the attractions of gifts at the end of the year? What about the provision of accommodation and domestic facilities? What about participation in schemes created by the employer in order to give incentives? What about the provision of cars? How are these things measured? If I am given a bigger car, is that a better incentive? These things cannot be measured.
    What does "the same kind of work" mean? Is it the same kind of work if an employer moves a man from one job to another? Is it the same kind of work if he does it deliberately? Is he trying to breach the agreement? These are just examples of the difficulties which phrases like this create for us. When I have asked questions about it, my right hon. Friend has said, "I am not asking to use Part IV. I am asking for the voluntary system to be worked". But,
    1610
    if we work the voluntary system not to the satisfaction of those who are to bring in Part IV, questions of this kind must be answered because they are there in the Bill itself. I have said that we shall not get out of our problems unless we give a great deal of thought and decision—my right hon. Friend and his colleagues must give some answers—to these questions. Only then will it be possible for us to go ahead with what is needed if we are to improve the country's economy.
    It has been said that this standstill is more rigid than any other ever imposed in the world. Certainly, it is much more rigid than anything I know of anywhere except in Fascist or Communist countries. In the United States there is an example to which we should have regard. There have been some stringent measures there. A stage has now been reached when the trade unions have openly defied the President, and the employers are defying the President. Do we want to create such an atmosphere that the only solution left for the two sides of industry is to defy the law?
    I was brought up to believe that a law which had to be defeated was a bad law. It does not mean that the people are bad. It is a bad law. We ought not to reach a stage when it is assumed that I am non-patriotic if I set out to ignore a law which I regard as bad. I have a greater responsibility than to accept that somebody has come with a heaven-sent idea on how to resolve our economic problems in this way. I do not believe—I am back where we started—that these provisions touch our economic problems.
    Our economic problems are not related to a wage movement. It has an effect if we drive the economy to a point at which it is overheated. But we can overheat it with things which we ought not to be doing, by unnecessary defence spending, by illusions of grandeur which we cannot sustain, by things which we all know are wrong. If we would rather control wages than imports, then we are heading for a further balance of payments crisis. It is up to us to choose. There is nothing which says that the employer or agent cannot continue to import materials, and, in fact, he can get away with price changes for these. If we do not develop a readiness to realise what our rôle is, what part the unions and employers can play in making Government policies

    1611
    work, if we say to them both that they are irresponsible, and if we threaten them, then we are heading for a very serious setback.
    I hope that the First Secretary does not assume, if I say that this is a bad Bill, that I stand for a free, untrammelled approach of beating the economy as hard as I can to a state which suits me or my organisation. There are substantial steps which can be taken to improve output, to make a better society, to make our real standard of living increase, and to make our economy thrive. I do not accept that the only alternatives are unemployment or devaluation.
    Mr. F. P. Crowder: I propose to detain the House only for a few minutes, and I do not propose to make a Second Reading speech. We have had the advantage of hearing some quite excellent Second Reading speeches from the other side, to which I have listened with great attention. Those who made them were entitled to make them, because the House has been denied a proper Second Reading of the Bill. I wish merely to take up a point made by the hon. Member for Ebbw Vale (Mr. Michael Foot) about the breaking of bargains.
    I would have thought that the word "bargain" was a kind word and the word" contract" nearer the truth. Where a contract is made and broken damages must always go to the aggrieved party. Certainly in equity thousands and millions of pounds are due in damages because of the Government's broken contracts in respect of the bargains to which he referred.
    The First Secretary is a very humane person, and I want to give him one illustration of how the breaking of these contracts is affecting an individual. A young doctor came to me the other day and said that a fortnight ago he signed a contract with a third person which, he said, was to cost him £600 a year which he could not afford. He asked me if the First Secretary meant to break his contract with him because it meant that he would go bankrupt.
    What is he to do? Because he has signed a contract, is he to be liable for damages if he breaks it, and should not the Government be liable because
    1612
    they have broken their contract with him?
    Mr. James Dickens: I want to speak on three main themes. I am one of the hon. Members whose name is down, with several of my colleagues, to Amendments to Part IV. I want to make it clear, because Mr. Speaker said that this would be a wide ranging debate, that the three points I am speaking on have a direct connection with Part IV.
    I begin by speaking about the impact of Part IV on Parliament as an institution and the Government's handling of this Part. I hope also to respond to the challenge that the First Secretary throws out from time to time that there is no alternative to the programme that he has set out in the Bill.
    Serious damage was done to Parliament because of the way in which the Government introduced Part IV. On Second Reading we passed a totally different Measure and the Government should not have amended the Bill qualitatively in Committee but should have reintroduced a new Bill and brought it forward in the usual way for Second Reading so that the principles of it could have been discussed. It is deplorable that a Labour Government should undermine Parliamentary democracy in this way at a time when the institution of Parliament is under attack in Asia, Africa and elsewhere. We should ensure that this House is beyond reproach in these matters.
    When we debate an issue as important as this we should place on record the fact that many of my hon. Friends were gravely disturbed by the way in which the Government introduced Part IV last week. It was partly for this reason that I and a number of my hon. Friends abstained from voting, which, for many of us, is a matter of deep seriousness. It tears the heart out of us because we do not want to abstain. We want to see this Labour Government succeed, by fully implementing their election programme because we feel we still have a chance, starting now, to build a new type of democratic socialist society which could be the envy and admiration of the world.
    I abstained basically because the Government are moving away from these

    1613
    paths and are moving in wrong directions. It is, therefore, reprehensible that the Government should have introduced Part IV in the way they did last week. Tonight we have taken the opportunity to not merely make this point, but to discuss the whole function of Government policy as seen against the background of the Bill.
    It is a tribute to my hon. Friends that the debate we had earlier, and this one, has reached such a high standard of good natured, well reasoned argument. A number of solutions to the nation's problems exist and there is, perhaps, no one right answer. It is only by having a fair, open and free dialogue that we can reach a conclusion and press forward with a policy on that basis.
    I contested the last election and won Lewisham, West with the help of the First Secretary, who made an excellent speech on my behalf to a large audience of people who had travelled from all over South London to hear him. He advocated a programme very different——
    2.45 a.m.
    Mr. George Brown: No.
    Mr. Dickens:—from that outlined in Part IV. We both advocated planned economic expansion. It was on that policy that the people of West Lewisham sent me here, and not to advocate the deflation of which the Bill is a part. The Government's attitude towards procedure and their riding roughshod over Parliament is not designed to meet the clamant needs of the British people. We have not had postbags of letters asking for a Prices and Incomes Bill: on the contrary.
    We know that the unseemly haste in Committee last week was to appease influential financial interests in Central Europe and North America. That, more than anything else, undermines Parliamentary democracy. If I were a professor of political theory at a Communist university, I would not have to seek far for subjects for students' essays on the limitations of Western liberal Parliamentary democracy. I am sure that these professors are rubbing home the lesson.
    I have always supported the conception of a prices and incomes policy and the establishment of the Prices and Incomes Board is our greatest single step
    1614
    forward in economic policy since the war. However, it will be significant only if we change the Government's attitude towards the Board and make it a vehicle of social change. One can support a prices and incomes standstill in a certain climate, in which there is a battery of Socialist measures designed to change society and deal with our economic problems. However, Part IV will inhibit wage and salary negotiations——
    Sir D. Glover: The hon. Gentleman says that he would support it if there were a whole battery of Socialist measures. What are they?
    Mr. Dickens: If the hon. Gentleman will bide his time, I hope to outline them in general terms later in the debate——
    Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Gentleman must realise that he cannot have a general economic debate on the Amendment. Mr. Speaker ruled that the debate could go widely, but on Part IV only.
    Mr. Dickens: Part IV will inhibit trade unionists' activities in wages and salary negotiations. It is worth remembering that only 40 per cent. of incomes in the country are negotiated by trade unions and that only one wage-earner in three belongs to a trade union. Therefore, we have to be assured by the First Secretary that the Bill was designed to cope with the 60 per cent. of incomes that are not negotiated by unions and, for that matter, with the 15 million or 16 million wage earners in this country whose incomes are decided in that way.
    I feel that the whole emphasis of Part IV will be placed on the comparatively narrow area of wage and salary negotiation in certain large industries in the private and public sectors. I think that pre-eminently employees in the public sector will suffer as a consequence of this.
    I believe that there is a policy that one could adopt to meet this country's basic economic difficulties, which is altogether different from that which is contained in this Bill. I think that Part IV could be withdrawn and the Government's whole attitude to this changed if the emphasis were on a number of other measures. I am not putting forward these measures in any dogmatic or doctrinaire way. I am putting them

    1615
    forward as a constructive alternative to the Government's present policy. I will not elaborate them in detail because if I were to do so I am sure that I would fall outside the confines of order.
    I would have thought that the things to look at are, first, the very low level of capital investment in this country, because this is the key to low productivity. I do not think that one can really deal with the problem of capital investment in Britain unless one is prepared to set out something in the nature of a Treasury criterion for large-scale capital projects. We really have to get away from the conception that people can——
    Mr. Deputy Speaker: Order. I think the hon. Gentleman is getting away from the Amendment. He can speak of his broad objections to Part IV of the Bill, but he is going too wide of the Amendment. Will he please come back to it?
    Mr. Dickens: Yes, indeed, Mr. Deputy Speaker. I am sorry that I was traversing rather wider than this Part permits me. Part of the background to the introduction of this Bill and of Part IV is the misconception that we in this country are living in a high wage economy. I do not think that the facts bear this out. Between 1960 and 1965 productivity in this country increased by only 14 per cent. Industrial output increased by only 17 per cent., the cost of living by 19 per cent., national wages and salaries by 37 per cent.——
    Mr. George Brown: Hear, hear.
    Mr. Dickens:—and dividend distribution and unearned incomes by 59 per cent. over the same period. The First Secretary said "Hear, hear". I wonder if he has compared these figures with the figures for other advanced industrial countries in Western Europe. I recently asked the research section of the Library to prepare for me a paper setting out movements in incomes and productivity in these countries. Without wishing to weary the House with a long succession of statistics, the facts as they relate to Sweden, Austria, Belgium, Denmark, France, Holland and Norway are as follows: In the four years from 1960 to 1964 this country had the lowest increase in national wages and salaries, the lowest increase in the cost of living, the lowest
    1616
    increase in industrial production, the lowest increase in productivity and the highest increase in dividend distribution or in unearned income. This is the essential economic background against which the Bill must be considered. Is there in this country such a basic economic weakness to justify this when one compares our situation with that of other West European countries? I think not. As I have explained, the basic problem in this country is the very low level of capital investment. The level of capital formation in this country between 1960 and 1964 compared with Germany——
    Mr. Deputy Speaker: Order. The hon. Gentleman must not persist in going as wide of the Amendment as he is. He must come back to Part IV or I must ask him to resume his seat.
    Mr. Dickens: I shall try to conclude briefly, Mr. Deputy Speaker, by indicating that I think that these are some of the basic problems that the Government should be tackling.
    I have not had the opportunity, as I had hoped, to set out an alternative policy to Part IV of the Bill as a whole. The Bill is part of a general deflationary package. It can be justified only as part of an overall socialist package. It was wrong to introduce it on its own. Because of that, it becomes utterly indefensible and something that I and many of my hon. Friends cannot possibly support. It means, for example, if we support it that we are supporting a piece of legislation brought in directly to appease foreign financial interests and that we are ignoring the alternatives that confront the Government.
    To sum up, on the one hand, the Government could face up to a head-on clash with the financial establishment in this country and with international financial interests. On the other, they could face up to a head-on clash with the British trade union movement. They have chosen, I am sorry to say, the latter course. Thus, I feel that the Bill, and especially Part IV can only bring about in the next few months a succession of avoidable industrial disputes. I very much hope that even at this late stage the Government will reconsider their attitude and withdraw Part IV.
    Mr. Biffen: I shall not trade on the good nature of the House by speaking for more than a few moments. I have four points that I want briefly to draw to the attention of the Government.
    First, by Clause 25 one is employing a master Clause to bring into action all the legislative requirements to put the freeze into effect. Many of us think that a freeze is not a sensible economic policy anyway. We argue this because the Government have already deflated by some £500 million through their recent measures on top of a number of other measures over the last 12–18 months. In the words of the Prime Minister, this is supposed to bring about a redeployment. The Chancellor of the Exchequer, when on the continent, talked about the freeze as being a bonus, as though it was something in addition to the deflation. But it is likely to prove the contrary. By attempting a freeze at a time when one has pursued a policy designed to bring about redeployment, one may hold back that redeployment. It is the balanced view of a number of economists that the freeze is likely to be mildly inflationary and, therefore, counter-productive. Therefor, it is tenable to hold this opinion and on that basis alone to seek to reject Clause 25 and Part IV.
    3.0 a.m.
    Secondly, the argument has been that the voluntary system has failed. The First Secretary told us that earlier today. Certainly by the measurement of the settlements it has failed. No one has doubted that. As a matter of fact, hon. Members on this side have spent a great deal of time during the last twelve to eighteen months pointing out the failure of the settlements to conform with the voluntary policy. What the Secretary of State has not informed the House, and what the House is entitled to know is: has the voluntary system of notification failed? Has the T.U.C. vetting committee under Mr. O'Hagan of the blastfurnace-men's union been unsuccessful or inadequate in fulfilling the task of vetting and notifying the Department of Economic Affairs of wage claims? Unless that point can be answered, part of the First Secretary's charge that the voluntary system has failed does not stand examination.
    Thirdly, under Part IV, which the First Secretary tells us he wants to work voluntarily,
    1618
    invoking his powers in the 6-month freeze only as a last resort, when will he know that it has failed so that he must invoke the powers? It cannot be by virtue of the volume of information which will come to him from the private sector, because the information he will have from the private sector will be testimony that it has succeeded. All the information he will be getting from the private sector, I imagine, will be to the effect, "We would like to put up our prices. May we do so?" As long as they are notifying him and he is then able to advise them, the system is succeeding.
    The First Secretary will be able to judge that it has failed only by the lack of information or from the statistics internally available to the Government. We all have our opinion about the statistics internally available to the Government. On the wages front, will it be done on wage rates published by the Ministry of Labour? How long after the end of the month do they come out? Wage rates tell only part of the story. What one would like to know about, is earnings which take into account drift, which is terribly important. Only one study will be done during the 6-month period. That will be done in October. How many months after October will we know the answer to that? Certainly it will not be until the new year, after the end of the statutory standstill period and in the period of excessive restraint.
    What about salaries? There will be no information about salaries available to Government Departments until long after the whole period of standstill has ended. Therefore, the whole thing is bogus and nonsense. The First Secretary has no reliable information by which he can say, "Gentlemen, the voluntary system has failed. I must invoke the powers". Whatever it is that will persuade the First Secretary to invoke the final sanctions, it will not be on account of evidence that is placed before him.
    My fourth point touches on the point which was made with such eloquence by the right hon. Member for Nuneaton (Mr. Cousins) and the hon. Member for Ebbw Vale (Mr. Michael Foot) about the constitutional aspects. The hon. Member for Ebbw Vale rightly objected to the way in which Part IV was inserted into the Bill. I think that there are even more serious implications in this Part of

    1619
    the Bill, and, indeed, in the whole way in which the incomes policy has been pursued. That is the trend of government by suggestion or government by invitation. This is something of which we should be very well aware. To my mind, it seeks to give to the Government an immense power without the responsibility of having to come and argue in the House for the law itself. We know what Mr. Stanley Baldwin once said about power without responsibility. I think that the message is as relevant and valid today as it was when he spoke of the Press battle. The power of the Government is undoubtedly immense, and it is acceptable only if it is harnessed to the law. It is certainly not acceptable if it aspires or presumes to rise above that.
    Mr. Kenneth Lomas: I am grateful for the opportunity to intervene in what appears to be a three-cornered fight between the Official Opposition on the benches opposite, the unofficial opposition on this side of the House and the Government. It is time something was said in support of the Government and of the policies they are seeking to pursue. I reluctantly accept the necessity—and it is with a heavy heart that I do so—for the measures they are introducing, because their aims are in the long-term interests of the country, the trade union movement, the Labour Party and the people who support the party in the country.
    If I were to stale my qualifications for intervening on this subject, I would say that for 30 years I have been a member of the trade union movement and for over 20 years a member of the Labour Party. My roots are deep in the working-class movement and the trade union movement. Those roots are a lot deeper than those of hon. Members opposite and, with respect, a lot deeper than those of some of my hon. Friends who signed these wrecking Amendments.
    I have, because of these things, an in-built sense of loyalty to ordinary people in the trade union movement and the Labour Party. I have at the same time an in-built sense of loyalty to the Labour Party. I helped, as all of us on these benches helped, this party to become the Government that would govern in the interests of the people as a whole.
    1620
    Many times have I been critical of the leadership and of the party's attitudes both at home and abroad, but I have tried to confine my criticism to within the ranks of the party and not take them outside. My criticisms have been muted. But there comes a moment—and this is such—when I am not prepared to remain silent and allow some of my hon. Friends to exercise their consciences at my expense, for that is what it comes to.
    It is all very well, with a majority of 90-odd, for some people to abstain while the loyalists go through the Lobbies with heavy hearts, as my hon. Friend the Member for Lewisham, West (Mr. Dickens) mentioned while he abstained. But I go through the Lobbies because, above all, I want the Government to survive and those who stay seated on these benches and adopt postures as though they are the guardian angels and protectors of the party conscience should realise that we also have a conscience and are also concerned for the party and the nation. We are as concerned as anyone else.
    I am reminded of the story told of Oscar Wilde when he presented himself at the New York customs. He was asked if he had anything to declare and replied, "I have nothing to declare but my genius." There are hon. Members on this side of the House who have nothing to declare but their martyrdom, but I am not prepared to assist them to become martyrs because we are in this party to keep the Government in power, for all its faults, and see that they govern in the interests of all and get on with the job they have been seeking to do over the last 20 months.
    Why do we need Part IV and Clause 25? Because, in the short-term, we are in a desperate financial position. Whether we like it or not, there is a convulsive spasm in the world capitalist system. It is something which happens and we are a vulnerable nation. We are susceptible to the to-ing and fro-ing of international finance, and in the very short-term something has to be done in order to put the balance right and rectify what has gone wrong before. Under the Conservatives we drifted for far too long off course. Now, after 20 months in office, with all the lurching of international finance, we have to take immediate steps to put the ship of state back on course.

    1621
    These provisions, however, have been written into the Bill, and Clause 25, which it has been agreed is a key Clause, states categorically that the provisions can only last at most for 12 months and then they will lapse automatically. It states that if it is decided to bring these provisions into operation, within 28 days of the making of an order the House of Commons must meet, when it will debate and argue. The arguments can be thrashed out then if the voluntary system fails. That will be the time to start talking of exercising conscience. All that we are doing at present is writing into the Bill a possible provision for the future in case something should go wrong.
    It should be recognised that we had the firm promise last Thursday from my right hon. Friend the Leader of the House that if it is necessary to invoke Part IV of the Bill, the House will be recalled during the Recess so that this issue can be debated. There is, therefore, full scope for debate. No provision is made in the Bill to extend the operation of Part IV beyond the 12 months. Indeed, the Government could not do it. They would have to bring in an entirely fresh Bill to do that. It is, therefore, wholly logical to suggest that the Clause would be invoked only if all else failed.
    When the Conservative Party link up with this side of the House, I begin to wonder what has gone wrong. When they want to get rid of a Clause and some of those on this side have the same intention, we must look at the matter a little more closely. The Conservative Party seem to be convinced that our prices and incomes policy will fail. [Hon. Members: "No."] Hon. Members opposite are concerned with the Bill and its effect upon prices; they are more concerned, perhaps, with prices than with wages. We on this side take the reverse approach. [Interruption.] Do not hon. Members opposite want this policy to succeed? Do they echo the words of one of their Front Bench spokesmen that it is "a nonsense?—a dangerous nonsense".
    Are my hon. Friends in the trade union movement saying that they cannot control their own numbers and that they cannot make them see that there has been a change of government and that there is a world of difference between a Tory Government and a Labour Government?
    1622
    Hon. Members opposite can ask any of the pensioners or anyone else what is the difference between the two parties. The pensioners and others have benefited from what the Government have done. When the trade union movement wakes up to the fact that there has been a change and that we have made great progress since 1964—[An HON. MEMBER: "Progress backwards."] It is no use hon. Members opposite saying "Backwards" when one has only to look at the tremendous social reforms which we have already forced through in the teeth of opposition from hon. Members opposite. We spent long nights doing it to make it possible to build the foundations of some kind of social justice for the future.
    All that we ask from the trade union movement in return is co-operation, understanding and tolerance. We are one and the same. The Labour movement came from the trade unions. They cannot opt out like separate units. One is part of the other. We are asking for that understanding, co-operation and tolerance so that we can work together. We have proved since October, 1964, that we are concerned with establishing social justice.
    If we can obtain the voluntary cooperation that my right hon. Friend the First Secretary and many others have been seeking to obtain, Clause 25 will be snuffed out because both industry and the trade union movement will have recognised that it is the only way out of the terrible economic crisis in which we find ourselves. It is not a crisis of our making but was forced upon us by circumstances entirely outside our control. If we can get that co-operation between the two, Clause 25 flies out of the window, and we can then begin to have this planned growth in the economy, this planned growth of wages. This is what we really want to get down to—to be able to plan our economy in the fullest sense.
    3.15 a.m.
    Of course, I have reservations. My own trade union is the National Union of Public Employees, and if I honestly thought that the measures envisaged by the Government would in the long term make worse the position of, for instance, nurses, or porters, and ancillary staffs

    1623
    with take home pay of £9 or £10 a week, I would not support the Government. It is because I believe that this is the way to extricate ourselves from the terrible chaos in which we find ourselves that I go along with the Government in the long term. We want to see the lower-paid workers' pay raised, and there is no point in merely treading water and making no progress towards the shore, and so we have got to get it clear that this is not a measure of attack either upon the trade union movement or the workers of this country. There is no power of retrospection in Clause 25. It does not say one can take back what has already been given when the Bill comes into force. If we remember that these are merely reserve powers, in case they are needed, I think we shall probably be able to see the matter in a better way than we do at the moment.
    The point has been made, and very rightly made, and I agree with my hon. Friends, about the long-term aims, and the things we want to do. Of course we want to do those things, and I am 100 per cent. with my hon. Friends in that, but this is not a long-term Measure, and I am concerned essentially at the moment with the short term. When my right hon. Friend the Member for Nuneaton (Mr. Cousins) talks about productivity, I wonder whether it would not be a good idea to begin with the liner trains and do what he can about that as General Secretary of a leading trade union. Again, on the defence expenditure argument, for twenty years I have argued that the defence expenditure of this country should be cut and that we ought to put a limit to the vast sums of money we pour out on weapons of war, and use that money in other ways. But as I said, and I repeat and urge upon the House, this is purely a short-term Measure for 12 months so that we can get on an even keel again.
    We want the voluntary method to succeed. Of course we do, and we want the Government to allow it to run its course, but if, from selfishness or all kinds of reasons, that method begins to fold up, then, if we really mean what we say and want to put this country on its feet again, we must have available means to make certain that the country is put on the right course. I would prefer to drag the 1966 child screaming and
    1624
    Kicking into the 'seventies, whether it likes it or not, than leave it as it is, because it will turn round at later date and thank us—for the work we did in Parliament in 1966 really to put things right. We would then deserve the thanks, and not the kicks from the people of this country.
    It should be remembered—and this is a point which has been overlooked in much of these debates—that Clause 25 is concerned as much with prices as it is with incomes. That is important. We cannot divide the two; the one is part of the other, if we try to have any planned system at all; the two must be related if we are to work out any prices and incomes policy. We want to plan our economic life; we want planned growth; and I believe the system of this Clause is the answer if the voluntary system fails. It is like the lifeboat carried in a ship; it is not there necessarily to be used, unless it is absolutely essential in an emergency; but it must be there to make sure we have the means we need if necessary.
    I passionately want this Government to succeed. No one on this side of the House wants to see this Government fail. We passionately want them to succeed. We know in our hearts this Government of the people are working for their betterment. I passionately want to see a planned economy, and I passionately want to see a society which is based on social justice and equal opportunity, and the people getting the benefits long denied them by the party opposite.
    I say to my friends in the trade union movement, and I say to my hon. Friends here, let us trust this Government; let us give them the opportunity to get on with the job; let us back them in the country; let us try to unite the whole of the trade union movement behind them. If we do that, and work together, I believe we can build a better Britain, and be able to play our part in building a better world.
    Mr. Marcus Worsley: I make no apology for intervening in this debate, though it is late and the debate has gone on long. Nor do I criticise hon. Gentlemen opposite who have spoken sometime at inordinate length, because this is one of the most important—perhaps, the most important—issues debated in my time in this House. The proposition is to give to

    1625
    the Government powers more striking and dramatic than those given to any Government, certainly in my time in the House. I wish merely to say this about the speeches which have been delivered by hon. Gentlemen opposite, that there has been a curious theological air about them. It seems to me quite extraordinary, as an outsider to the internal argument in the Labour Party, that they should have devoted quite so much time to the proposition what Keir Hardie would or would not have done in present circumstances and so little to the economic situation which we are facing. It shows the fundamental aridity of the party opposite when confronted with the present situation.
    What I want to say can be said quite shortly. This Clause gives enormous powers to the Government. It makes not a jot of difference to say that the intention is not to use these powers; the powers are there to be taken, and the fact that they are there makes all the difference in all that the Government do. The Government are involving the country in a situation like that in which the drug taker finds himself. He starts off on soft drugs, and then goes on to hard drugs. I put this point as strongly as I can and I hope the Government will bear it in mind. They are taking hard drugs in the Bill—very hard drugs—and they will find it difficult to get off the hook and give these powers up.
    The right hon. Member for Nuneaton (Mr. Cousins) was right when he referred to the difficulty of doing this. That is why I thought it important to intervene even at this late stage in the debate. These powers are very strong drugs indeed, and it will be very difficult for the Government to give them up in the years ahead. What we need is not these increased powers of the Government but a radical and dynamic policy such as that put forward by my hon. and right hon. Friends.
    Mr. Hugh Jenkins: The hon. Member for Chelsea (Mr. Worsley) described hon. Members on this side of the House as arid. That is the last thing we are. Aridity is not characteristic of what goes on on this side of the House. The reality of the discussion in the debate has taken place on this side of the House, whereas the Opposition have been going through the traditional motions of opposition.
    Mr. George Brown: Do not provoke the Opposition.
    Mr. Jenkins: My right hon. Friend tells me not to provoke the Opposition. I was merely saying that they were acting as an Opposition. I should have thought that that was a compliment rather than provoking them. My right hon. Friend does not want the debate to go on much longer, and I share that view. There are, however, one or two points I should like to make. I shall endeavour to emulate the brevity of the hon. Member for Oswestry (Mr. Biffen), but not in any other way.
    One document in this matter which has received too little attention is the report of the T.U.C. I detect in the wording of the report and its comments on this Clause the hand of the Research Department of the T.U.C. When my right hon. Friend the First Secretary ceased to be a full-time trade union official in 1945, the loss to the trade union movement was so great that I thought I had better fill the gap in a very small degree, so in 1946 I became a full-time trade union official.
    Mr. George Brown: I have never yet ceased to be a full-time trade union official. Like my right hon. Friend the Member for Nuneaton (Mr. Cousins), I am a full-time trade union official on leave of absence from the same trade union.
    Mr. Jenkins: Possibly by "full-time" we do not mean precisely the same thing.
    I worked for a trade union from 1946, first with the National Union of Bank Employees and then as Assistant General Secretary of Equity, a post which I relinquished on becoming a Member of the House. Therefore, my experience has been in the non-manual side; but if anybody imagines that the struggles on that side are not as real, vital or vigorous as the struggles on the manual side, he does not have much experience of the non-manual trade union movement.
    I should like, as the Americans say, to write a part of what the T.U.C. statement says into the record. It reads:
    "The General Council regret that the Government felt compelled to announce publicly, without prior consultation with those who had signed the Joint Statement of Intent on Productivity, Prices and Incomes, so violent

    1627
    a departure from the principles on which the Joint Statement was based."
    That "violent departure" is the Clause we are discussing. It is this which the T.U.C. felt bound in this statement to regret.
    The statement also says:
    "It was apparent to the General Council that one defect of the approach adopted by the Government is that a complete standstill will give rise to situations where it is patently obvious that injustice would result from its rigid application."
    The T.U.C. goes on to say that the alternative is even more difficult. It adds:
    "A further consideration that was in the General Council's mind was that the imposition of a standstill would make it exceedingly difficult to resume thereafter an agreed incomes policy of the type that is being currently attempted."
    The T.U.C. believed that this freeze, so far from being the pad from which we are to launch out after it is over, will make the prices and incomes policy even more difficult.
    The final quotation which I want to make from the statement is this:
    "When the General Council discussed the issues with Ministers they were assured that the standstill was regarded not only by the Government but by foreign Governments as an integral part of the measures. They were also left in no doubt that if the T.U.C. opposed the standstill it would leave the Government no option but to take other measures to enforce it …".
    The T.U.C. was, therefore, in the position that it felt that it had no alternative but to "acquiesce", as it says. In these circumstances, we are entitled to ask: what is the Government's position?
    3.30 a.m.
    I think that the secret is this: as the Government told the T.U.C. the standstill is regarded not only by the Government but by foreign Governments as an integral part of the measures. I think that the words, "by foreign Governments" are the key to the situation. They are the reason why the Government have felt it necessary to add these powers.
    My right hon. Friend the First Secretary has said that it is not his intention to utilise them, and I believe him. The T.U.C. has acquiesced, but there is a fairly clear indication in the T.U.C. document that it feels that the powers should not be invoked at all. I very much hope that
    1628
    my right hon. Friend's intention and the T.U.C.'s views will prevail, and that the powers will not be invoked.
    If, therefore, this is the position, and it is not the intention to invoke the powers, what action will my right hon. Friend take if the standstill is not effective? I was not among those who felt that the procedures of this House made it necessary to bring Part IV before the House on Second Reading. Some of my hon. Friends did feel that, and I respect their views, but on that occasion it was my view that the Government were entitled to get their business done in an emergency fashion if they could, and I supported them in the Division Lobby then. I greatly fear that I shall not be able to do so this time. I wish that I could.
    I put the following point, which is very important, to my right hon. Friend. If a situation arises in which he contemplates the use of these powers, will he not consider, before taking that step, which is so much feared by the trade union movement and by many hon. Members on this side of the House, the possibility of contracting out of this country's traditional financial position in the world, even if that contracting out and this country's ceasing to operate a reserve currency were to involve—I come to this extremely reluctantly—the act of devaluation?
    I hope that we shall never arrive at that choice. But if we did would not the right choice be to accept devaluation rather than to introduce a measure which would go so much against the whole tradition of the trade union movement in this free society of ours?
    Mr. John Horner: A number of hon. Members, and my right hon. Friend the First Secretary himself, have expressed sorrow during the debate at the steps the Government have felt obliged to take. I share in the sadness which has been expressed from these benches. I am sad that the Government were unwise enough to tack Part IV on to the original Bill. The arguments have already been stated, and I shall not repeat them at this time of the morning. But in consideration of the whole question of mounting some sort of prices and incomes policy in this mixed economy that the Government are trying to manage I have sought

    1629
    to indicate, both inside this Chamber and outside, that I do not share some of the views that have been expressed by my hon. Friends below the gangway tonight.
    I have sought to indicate that I am a "Woodcock man", that I believe that if an incomes policy is to work it must be on a voluntary basis. What really saddens me tonight is that I believe that Part IV has slit the throat of that infant child which was born a weakling some 12 months ago. The infant voluntary system undertaken by the Trade Union Congress has, I think, been murdered by Part IV. There will be little hope of going through the exercise once again. I promise that I shall not mix my metaphors any more.
    The First Secretary of State is sad and shares my sorrow that he has been obliged to present to the House a Measure which sets aside trade union agreements and settlements which are arrived at through the processes of collective bargaining. Some of my hon. Friends have said that their roots are deep and they have had long experience of these matters. I can only say that for about 25 years now I have, with others, been responsible for training the up-and-coming generation of trade union officials. One basic tenet upon which we have rested the whole fabric of collective bargaining in this country is that, when an agreement has been arrived at, it is honoured. No matter how distasteful it may be in some of its consequences, until it is revised that agreement is honoured. I have been engaged, as other hon. Members have, in bitter battles, but I am proud that, when I entered the House, I could say that any agreement reached with me was honoured.
    Part IV, this blunt instrument, will not be put into effect, we are told by my right hon. Friend, unless it is necessary. But it has had an immediate effect in the public services. In the sectors of employment in which the Government are directly responsible, local government employ and central Government employ, there is a wage freeze. It does not require Part IV. There are adequate powers already to impose a wage freeze.
    To illustrate one of the saddest aspects of the problem facing us, I take the example of my own union. Five years
    1630
    ago, in 1961, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) imposed a pay pause. All public servants were at once affected. Some hon. Members have talked about the nurses, and one was kind enough to link the fire fighters with the nurses. Immediately, these public servants were embroiled in the pay pause. Along with my right hon. Friend the First Secretary—I acknowledge the help I received from him at that time—we were able to break the pay pause for fire fighters, so unjust did we feel it that a commitment entered into was not being honoured. We wished that we could have broken it earlier for the nurses.
    Over the past ten months, the wage and salary structure in this important public service—which can never take strike action, so one does not talk about striking—has been the subject of renegotiation, after being fixed five years ago. These negotiations would have been concluded at 11 o'clock on 21st July. It would have been a mere formality by the Joint Whitley Council. But at 20 minutes to five on the Tuesday afternoon the Prime Minister sat down and at half-past five my successor in this union was seeing the Home Secretary. It had not needed Part IV. The pronouncement had been made and the negotiations were at an end. The whole issue, after ten months, is to be referred to the Prices and Incomes Board, and what finally emerges will emerge under the new criteria in operation for the next six to nine months.
    The firemen would not complain if they were in the queue for six months. They would not like it, but if all public servants were in the queue the firemen would join it. But because of 18 hours the firemen are not in the queue because there was no settlement, and under the terms of Part IV no settlement can now be reached. This would be bad enough, but some of these men were anticipating retiring. They joined the London Fire Brigade with me 30 years ago and they are reaching the age of 55, as I am in a few months, which is the compulsory age for retirement. Because of the action of the Government these men are to be required to forgo for the rest of their lives, unless other extraordinary measures are taken, pension increases which they were anticipating of up to £180 a year. These firemen have put it to me that this is not a pay pause, it is confiscation.

    1631
    I speak with some feeling because we have expressed our emotions. Five years ago we would have been able to deal with this problem, but today I can talk economics to my colleagues in the fire service until the statistics come out of my ears and they will ask why, because of 18 hours, an agreement which would have been reached and which would affect some of them for the rest of their lives was snatched from in front of their eyes. They will ask how this can be just. They say to me that I was their general secretary for 25 years and, with the First Secretary, we were able to overcome a situation not dissimilar from the one they are presented with now. If my successor were to do half what we did in 1961 in order to express displeasure at what was being done to the public sector and if he allowed himself to engage in the activities of that kind, he might find himself in danger under this legislation to which I am expected to subscribe.
    I hope that the House and the Government will understand some of the difficulties which are immersed in trade union activity. When we talk about loyalties and the need to sustain the Government in this difficult period by our loyalties, it must be realised that there are other deep-rooted loyalties built up through comradeship which cannot be shrugged off by saying that there are problems and we must give the Government support. I hope that I have shown some of the residual issues which arise through Part IV which we are being asked to accept.
    3.45 a.m.
    Mr. Mendelson: When replying to an earlier discussion, my right hon. Friend the First Secretary expressed his concern for lower paid workers. I invite him, when he replies to this debate, to comment on the position of lower paid workers in a number of industries in which some sections of workers have received higher pay and in which, particularly recently, applications for higher pay for lower paid workers had either been granted or were about to be granted.
    One such case is pending in the steel industry. Another case involves members of the National Union of Railway-men. These are concrete examples on which my right hon. Friend should comment, although at this late hour I will
    1632
    not argue the general principles again but will merely comment on the principle involved in the cases to which I have referred.
    We are about to go through a period during which those who are able to live on capital and very large incomes will feel no effect whatever from the powers to be taken under Part IV while those whom we accept my right hon. Friend wishes to help and protect will bear the full brunt of this policy. This cannot be reasonable.
    The powers being assumed by the Government under Part IV will absolve any employer from paying increases already negotiated by the process of collective bargaining. Why is it not possible, in such cases, for that money which the employer will save to be set aside in a special fund so that the workers will not for ever forgo the operative increases that they would otherwise have had?
    I need not, particularly at this hour, reiterate what has happened in the industrial areas. Consider, for example, the area of South Yorkshire, of which I represent a part. Many people, at the end of their working lives, have no savings—because they have lived through a number of freezes or have been unemployed—with which to supplement the pensions which they receive. Is it not unjust that the Government should do nothing to try to ameliorate their position?
    I must comment on the change that occurred from the time when the original announcement was made by my right hon. Friend the Prime Minister about the application of this policy by voluntary means and the time when, a few days later, that policy became compulsion. Although many of my hon. Friends and I have put questions to the Government—these questions have been repeated several times in the last few days—we have not yet been given a detailed explanation of why this change has come about. I again invite my right hon. Friend to provide the House with that explanation.
    The Government are now assuming some of the powers which were originally to have gone to the Prices and Incomes Board. Does the First Secretary consider it wise, at a time when he is trying to build up a prices and incomes policy, that he should become

    1633
    so directly involved? When I refer to my right hon. Friend in this connection, I am referring to powers being assumed by the Government and not by the First Secretary as a particular Minister. Is this uncertainty about what will happen in the second six months right and wise? New criteria will have to be worked out; there is equal uncertainty about the end of the 12 months. Should we give these substantial powers to a Minister and Government without a clear indication of those criteria? Might not some of the effects of the Bill be hostile to the general policy of expanding production again after the 12 months? In the absence of clear answers to these questions, it is difficult to see where this policy will lead us.
    Mr. George Brown: I have listened to the debate for a long time and I was anxious not to rise until everyone had had a chance to speak. The introduction of Part IV was an extension of the discussion and the considerations which we took into account earlier. I said in the earlier debate and must import into this one that, given that things have not gone as we wanted and that inflation has gone higher than we could support, we have to face the fact as a nation and not merely as a Government that steps must now be taken—immediately. They can be taken by agreement, because we all understand the immediate gravity of the situation.
    I hope and believe that, having brought it home to the country, steps will be taken by agreement. I am very encouraged by the messages which we receive from very important bodies with every reason to be cautious and think twice, who are committing a good deal on the altar, but who are nevertheless supporting us in holding the situation. If we can encourage this trend, the position will be held by voluntary agreement. I am certain that if we can get a breathing space, a pause, by voluntary agreement we can then work out the steps to be taken from there on. This is what Part IV is about.
    Those of my hon. Friends who have expressed doubts and worries—I share them all—can help to overcome those doubts and worries if they help to ensure that this is done by voluntary understanding and agreement. I said in Standing Committee and repeat now that there are moments in all this when our people understand better than we give them
    1634
    credit for understanding and our business is to give them leadership and encouragement.
    None of us can have any doubt but that we need a pause. In the last 20 months—the period for which we were responsible—we have cashed more than we earned. We therefore need a period for our productivity to catch up with what we have already encashed. This is indisputable, and this is the period for which we have to provide.
    What Part IV of the Bill does is to provide that if we can get it by voluntary understanding and voluntary co-operation, O.K. We think we need six months for catching up with what we have encashed already. If we cannot get it by voluntary co-operation or, to put it even worse, if a small group, any group, go and break what other people want to do, then we must have powers by which we can pull them up and prevent the small group taking advantage of the majority who want to co-operate. Part IV is really about all that. I do not think this House really would be doing justice to itself or to the people whom we represent if we were content simply to exhort people to do the right thing and were not willing to take powers to deal with a minority who cheat on those who listen to us.
    There are two periods envisaged in Part IV, to which my hon. Friend the Member for Huddersfield, West (Mr. Lomas) referred. If he will not mind my saying so, he made a speech right after my own heart. I loved every word and minute of it. I made speeches for a number of hon. Members during the election. I heard some of those hon. Members tonight, and I am bound to say that I wondered why I went. When I heard my hon. Friend, I knew exactly why I went. The night when I spoke for him I had a croak like nobody's business. I could hardly get a word out. I was so delighted tonight that I went, croak and all, up to Huddersfield for him.
    As my hon. Friend the Member for Huddersfield. West said so very clearly, we have got to ensure that during the six months where we stand still, the period where we catch up with what we have already encashed, we have got to work out the criteria against which we can judge the claims that ought to go through in the second six months. It is

    1635
    in that second six months that the claims of social justice for the lower-paid workers, all those who can really show that they are earning their increased earnings from productivity, can get through.
    We have six months to catch up with what we have already had. We have six months to work out a set of criteria by which we can judge the claims of social justice and productivity. This I believe we can do. This the Government, the C.B.I. and the T.U.C. are already sitting down to. If we can do it, as I believe we can by agreement, none of these powers will ever be brought into account. But I would be much less a man than I would like to be thought to be if I did not say that if we cannot do it by agreement, I think we shall have to call the powers into being and see that it is done. I think it is the Government's business to see to that. But I do not believe that we will need them. I believe that so long as people are told the situation, so long as they know that we are resolute, people will themselves be resolute, and I believe trade union officials will be resolute.
    So I ask for this Clause. I ask for the powers under it in order that we can get it done in that way—I repeat myself, but nevertheless the House might forgive me, so I put it straight on the record—so that we can move from a period of six months during which we are catching up with ourselves, to a period of six months in which we are testing all the claims that go through against very severe criteria, and then at the end of the second six months we can get out into the open country again and deal with things, expansion and growth, in a proper sense of criteria.
    Hon. Friends of mine have wondered whether dividends, unearned incomes and other things were caught by this. Yes, indeed they are, and caught just as severely as anything else, and, indeed, rather more severely. My business now must be to see that unearned incomes, dividends and prices are tested as severely as anything else could be tested against the standstill and the new criteria.
    4.0 a.m.
    Mr. Horner: Might I remind my right hon. Friend of public service pensions?
    1636
    I am sure that he has them in mind. I said that they would be confiscated unless some measure to protect them was introduced.
    Mr. Brown: I have them very much in mind. Arising out of having to do such an operation—I much regret that we have to do it; had things gone differently in the last year we should not have had to do it—there will be a number of complications, and one of them concerns people coming up to retirement. By affecting their last six months of earning, one affects their continuing income. This is being looked at at the moment. We shall do our best to see whether we can help in that situation. There are a number of complications of that kind. Nobody would pretend that this is an operation that one can do without difficulties. On the other hand, it is not the business of the Government to make those difficulties any worse than they need be. We shall look at this.
    I was asked by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot), whom, unhappily, I did not hear—he was so kind to me the other night; I regret I did not hear him—how I reconciled the voluntary system with Part IV. I think that I have really answered that. I believe that it is our business to provide the powers to show the country that we think that this is necessary and that we shall, if need be, do it, but I believe that if we make that clear the country will do it.
    The hon. and learned Member for Ruislip-Northwood (Mr. Crowder) asked an important question about a doctor who might go bankrupt. The answer was given by my right hon. Friend in the House on Monday when he said that expenses of this kind are being allowed for under the new arrangements that we are making. There will not be, therefore, any risk of the doctor going bankrupt or being improperly treated.
    Like the previous one, this has been an important debate. All my right hon. Friends and I thought that it was important to let it go the full run and not seek to interfere. I cannot promise, of course, to carry everybody with me. I only say that, given that we believe that this is the right thing now to do, that this is the right way now to organise the country to pull itself up sharp, I think that the powers that we are asking for

    1637
    under Part IV and, in particular, in Clause 25, which is the master Clause in this Part, are the right ones to ask for, and I hope that the House will now give them to us.
    Question put, That the words proposed to be left out, to "under" in line 33 in page 22, stand part of the Bill:—
    The House divided: Ayes 157, Noes 115.

    Division No. 169.]

    AYES

    [4.4 a.m.

    Albu, Austen

    Hamilton, William (Fife, W.)

    Page, Derek (King's Lynn)

    Anderson, Donald

    Hannan, William

    Pavitt, Laurence

    Atkins, Ronald (Preston, N.)

    Harrison, Waiter (Wakefield)

    Peart, Rt. Hn. Fred

    Barnes, Michael

    Haseldine, Norman

    Pentland, Norman

    Baxter, William

    Henig, Stanley

    Prentice, Rt. Hn. R. E.

    Benn, Rt. Hn. Anthony Wedgwood

    Herbison, Rt. Hn. Margaret

    Price, Christopher (Perry Barr)

    Bennett, James (G'gow, Bridgeton)

    Houghton, Rt. Hn. Douglas

    Price, Thomas (Westhoughton)

    Binns, John

    Howarth, Robert (Bolton, E.)

    Probert, Arthur

    Blackburn F.

    Hughes, Roy (Newport)

    Randall, Harry

    Blenkinsop, Arthur

    Hunter, Adam

    Redhead, Edward

    Boardman, H.

    Hynd, John

    Roes, Merlyn

    Boston, Terence

    Janner, Sir Barnett

    Rhodes, Geoffrey

    Bowden Rt. Hn. Herbert

    Johnson, Carol (Lewisham, S.)

    Richard, Ivor

    Boyden, James

    Johnson, James (K'ston-on-Hull, W.)

    Roberts, Gwilym (Bedfordshire, s.)

    Bray, Dr. Jeremy

    Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)

    Rodgers, William (Stockton)

    Brown, Rt. Hn. George (Belper)

    Jones, J. Idwal (Wrexham)

    Ross, Rt. Hn. William

    Brown, Bob (N'c'tle-upon-Tyne, W.)

    Kelley, Richard

    Rowland, Christopher (Meriden)

    Buchan, Norman

    Kenyon, Clifford

    Rowlands, E. (Cardiff, N.)

    Butler, Mrs. Joyce (Wood Green)

    Lawson, George

    Ryan, John

    Cant, R. B.

    Leadbitter, Ted

    Sheldon, Robert

    Carter-Jones, Lewis

    Ledger, Ron

    Shore, Peter (Stepney)

    Conlan, Bernard

    Lever, L. M. (Ardwick)

    Short, Mrs. Renée (W'hampton, N. E.)

    Crawshaw, Richard

    Lewis, Ron (Carlisle)

    Silkin, Rt. Hn. John (Deptford)

    Crossman, Rt. Hn. Richard

    Lomas, Kenneth

    Silkin, S. C. (Dulwich)

    Cullen, Mrs. Alice

    Loughlin, Charles

    Silverman, Julius (Aston)

    Davies, Harold (Leek)

    Luard, Evan

    Skeffington, Arthur

    Dell, Edmund

    Lyon, Alexander W. (York)

    Slater, Joseph

    Dewar, Donald

    Lyons, Edward (Bradford, E.)

    Small, William

    Diamond, Rt. Hon. John

    Mabon, Dr. J. Dickson

    Snow, Julian

    Dobson, Ray

    McBride, Neil

    Steele, Thomas (Dunbartonshire, W.)

    Donnelly, Desmond

    McCann, John

    Summerskill, Hn. Dr. Shirley

    Dunnett, Jack

    MacColl, James

    Taverne, Dick

    Dunwoody, Dr. John (F'th & C'b'e)

    Macdonald, A. H.

    Thomas, George (Cardiff, W.)

    Edelman, Maurice

    McKay, Mrs. Margaret

    Tinn, James

    Edwards, Robert (Bilston)

    Mackintosh, John P.

    Varley, Eric C.

    Edwards, William (Merioneth)

    Maclennan, Robert

    Walker, Harold (Doncaster)

    Ellis, John

    McMillan, Tom (Glasgow, C.)

    Watkins, David (Consett)

    English, Michael

    McNamara, J. Kevin

    Weitzman, David

    Ennals, David

    Mallalieu, J. P. W.(Huddersfield, E.)

    Wellbeloved, James

    Ensor, David

    Manuel, Archie

    Whitaker, Ben

    Evans, Ioan L. (Birm'h'm, Yardley)

    Marquand, David

    Willey, Rt. Hn. Frederick

    Fletcher, Raymond (Ilkeston)

    Mayhew, Christopher

    Williams, Clifford (Abertillery)

    Floud, Bernard

    Millan, Bruce

    Williams, Mrs. Shirley (Hitchin)

    Ford, Ben

    Molloy, William

    Willis, George (Edinburgh, E.)

    Fraser, John (Norwood)

    Morgan, Elystan (Cardiganshire)

    Wilson, William (Coventry, S.)

    Fraser, Rt. Hn. Tom (Hamilton)

    Morris, Alfred (Wythenshawe)

    Woodbum, Rt. Hn. A.

    Freeson, Reginald

    Morris, John (Aberavon)

    Woof, Robert

    Gardner, Tony

    Moyle, Roland

    Wyatt, Woodrow

    Garrett, W. E.

    Mulley, Rt. Hn. Frederick

    Yates, Victor

    Garrow, Alex

    Norwood, Christopher

    Gordon Walker, Rt. Hn. P. C.

    Oakes, Gordon

    TELLERS FOR THE AYES:

    Gourlay, Harry

    Ogrlen, Eric

    Mr. Alan Fitch and

    Greenwood, Rt. Hn. Anthony

    O'Malley, Brian

    Mr. Edward Bishop.

    Gregory, Arnold

    Oswald, Thomas

    NOES

    Alison, Michael (Barkston Ash)

    Clegg, Walter

    Giles, Rear-Adm. Morgan

    Allason, James (Hemel Hempstead)

    Crouch, David

    Gilmour, Sir John (Fife, E.)

    Batsford, Brian

    Crowder, F. P.

    Glover, Sir Douglas

    Berry, Hn. Anthony

    Dance, James

    Glyn, Sir Richard

    Biffen, John

    Davidson, James (Aberdeenshire, W.)

    Goodhart, Philip

    Birch, Rt. Hn. Nigel

    Dean, Paul (Somerset, N.)

    Coodhew, Victor

    Blaker, Peter

    Deedes, Rt. Hon. W. F. (Ashford)

    Gower, Raymond

    Body, Richard

    Doughty, Charles

    Gresham Cooke, R.

    Boyle, Rt. Hn. Sir Edward

    Eden, Sir John

    Griffiths, Eldon (Bury St. Edmunds)

    Brewis, John

    Elliott, R. W.(N'c'tle-upon-Tyne, N.)

    Grimond, Rt. Hn. J.

    Brinton, Sir Tatton

    Farr, John

    Hall, John (Wycombe)

    Brown, Sir Edward (Bath)

    Fisher, Nigel

    Harrison, Col. Sir Harwood (Eye)

    Bruce-Gardyne, J.

    Fletcher-Cooke, Charles

    Hastings, Stephen

    Bullus, Sir Eric

    Fortescue, Tim

    Hawkins, Paul

    Carlisle, Mark

    Foster, Sir John

    Heseltine, Michael

    Carr, Rt. Hn. Robert

    Fraser, Rt. Hn. Hugh (St'fford & Stone)

    Higgins, Terence L.

    Hill, J. E. B.

    Maxwell-Hyslop, R. J.

    Royle, Anthony

    Hobson, Rt. Hn. Sir John

    Maydon, Lt.-Cmdr. S. L. C.

    Russell, Sir Ronald

    Hooson, Emlyn

    Miscampbell, Norman

    Sharples, Richard

    Hordern, Peter

    Mitchell, David (Basingstoke)

    Shaw, Michael (Sc'b'gh & Whitby)

    Hornby, Richard

    More, Jasper

    Sinclair, Sir George

    Howell, David (Guildford)

    Morgan, W. G. (Denbigh)

    Smith, John

    Hunt John

    Munro-Lucas-Tooth, Sir Hugh

    Summers, Sir Spencer

    Hutchison, Michael Clark

    Neave, Airey

    Tapsell, Peter

    Jenkin, Patrick (Woodford)

    Noble, Rt. Hn. Michael

    Turton, Rt. Hn. R. H.

    Johnston, Russell (Inverness)

    Nott, John

    Vickers, Dame Joan

    Jones, Arthur (Northants, S.)

    Onslow, Cranley

    Wainwright, Richard (Colne Valley)

    Jopling, Michael

    Orr-Ewing, Sir Ian

    Ward, Dame Irene

    Joseph, Rt. Hn. Sir Keith

    Page, Graham (Crosby)

    Webster, David

    Kaberry, Sir Donald

    Pardoe, John

    Wells, John (Maidstone)

    King, Evelyn (Dorset, S.)

    Peel, John

    Whitelaw, William

    Kitson, Timothy

    Percival, Ian

    Wilson, Geoffrey (Truro)

    Legge-Bourke, Sir Harry

    Pike, Miss Mervyn

    Wood, Rt. Hn. Richard

    Loveys, w. H.

    Pink, R. Bonner

    Worsley, Marcus

    Lubbock, Eric

    Price, David (Eastleigh)

    Younger, Hn. George

    Mackenzie, Alasdair (Ross&Cromarty)

    Prior, J. M. L.

    Maclean, Sir Fitzroy

    Pym, Francis

    TELLERS FOR THE NOES:

    Macmillan, Maurice (Farnham)

    Ramsden, Rt. Hn. James

    Mr. Reginald Eyre and

    Maddan, Martin

    Rawlinson, Rt. Hn. Sir Peter

    Mr. Anthony Grant.

    Marten, Neil

    Rossi, Hugh (Hornsey)

    Mrs. Shirley Williams: I beg to move Amendment No. 26, in page 22, line 33, after "order", to insert "or direction".
    This is a purely drafting Amendment. It has the force of bringing in the words "or direction", and this means that the two terms which apply at the present time to orders under Clause 26 shall also apply to terms under Clause 27—namely, that the recent price in the period specified shall be that taken and, secondly, that the latest price shall be that which is chosen as the basis of comparison. The Amendment therefore brings the directions under Clause 27, applying to application figures on 20th July, under the same arrangements as at present apply to Clause 26.
    Amendment agreed to.
    Further Amendment made: In page 22, line 38 after "order", insert "or direction".—[Mrs. Shirley Williams.]
    Mr. Richard Wainwright: I beg to move Amendment No. 57, in page 23, line 8 at end to insert:
    (9) In cases where an order refers to the same kind of work being paid for before and after a specified date, work at an ascertained rate of output higher after the specified date than before it, shall not be regarded as the same kind of work.
    This comes to the rescue of unfortunate but key words in the Bill, namely, "the same kind of work" and provides that work at a higher ascertained rate of output shall not be regarded as "the same kind of work".
    The precision of the words was challenged in Committee, but no satisfactory answer was given. One purpose served by the Amendment is to extract from the
    1640
    Government an explanation of what these words mean. Any answer they provide may help deal with what would otherwise be the constant riddle of the mill or the jest of the canteen.
    4.15 a.m.
    The words show an extraordinary remoteness from conditions of modern factory life, giving the idea that work ambles on from month to month in the same pattern. In a modern, well-run factory, the pattern of work is continually changing and it is a most important job of union negotiators to keep up with the changing pattern of work. We hope, therefore, that as a result of our discussion, these less imprecise words will appear in the Bill.
    The other purpose of our Amendment is to bring the Bill a little more into line with the White Paper on the Prices and Incomes Standstill, on which it is supposed to be based. The White Paper states that
    "The country needs a breathing space of 12 months in which productivity can catch up with excessive increases in incomes which have been taking place."
    The use of the words "the same kind of work", which would exclude any outcome of productivity bargaining during the period of the freeze, suggests that the object of letting productivity catch up with incomes can be attained simply by freezing incomes and hoping that productivity will come trotting along to catch up.
    It is extremely unlikely, however, that in the two years that now face us of deflation, unemployment and a growing feeling of insecurity, productivity will catch up unless the most vigorous and,

    1641
    indeed, adventurous measures are taken to encourage it to do so. But instead of vigorous and adventurous measures to encourage productivity bargaining, we have this curious form of words which will slap down all productivity bargaining during the period of the freeze. If the wording is not changed, the clear danger is that productivity will stagnate.
    In Committee upstairs, the Government made it clear that they regard productivity bargaining of a genuine kind as thoroughly desirable, and they admitted that the standstill would be greatly to its disadvantage. Hon. Members will be aware that there are many bargains which masquerade under the title of productivity bargaining which are not truly so, but I doubt whether there would be any serious dispute that genuine productivity bargaining has at last begun to make advances. We on this bench are very concerned that this process should not be brought to an untimely stop.
    In addition to the well-adduced arguments that were used upstairs in Committee about the threat to productivity bargaining, union leaders have been eloquent in recent weeks about this threat. Perhaps it will suffice if I quote an article by Mr. Bugler from the Sunday Times of 31st July, stating:
    "Jack Jones, number three in the Transport and General Workers' Union, veteran of the International Brigade in Spain and a man with a good record in developing piecework bargaining, told me with unequivocal bluntness that in a total standstill 'It's not going to be possible to continue productivity bargaining.' Neither he nor Frank Chapple"—
    of the Electrical Trades Union——
    "hold any hope for suggestions that productivity pacts could be enacted now and the rewards settled later. …"
    Furthermore, it has been made clear from the Government side that one of the results for which they earnestly hope, and for which we must all hope, from the present measures is a good deal of positive and constructive redeployment of labour, but how is this redeployment to take effect unless the concerns which, in the national interest, should have much more labour are enabled to beckon labour from declining industries by offering modern, genuine productivity bargains and, in effect, to welcome people with the slogan that if they come to their works they will have to work jolly hard, to take a good deal of responsibility and prove
    1642
    themselves adaptable but that at the end of the day they will be very well paid for doing so. That is the way to achieve redeployment. Instead, if we are landed with this slackening down form of words, insisting that there is no escape from this formula, "the same kind of work", there will be no hope of further redeployment or increase of productivity bargaining.
    I hope that the Government will accept this Amendment in order that the fetters may be at least prised open.
    Mr. William Rodgers: The hon. Gentleman the Member for Colne Valley (Mr. Richard Wainwright) made it clear that the problem is not one of understanding. I think he does understand the meaning of "the same kind of work", and any attempt on my part to expand upon or to clarify a very simple phrase would only lead to a confusion which I do not believe exists. If it exists in his mind, I am sure it does not exist in the minds of most hon. Members, or will exist in the minds of those outside.
    In a very clear and very proper way he tried to hang a further argument about productivity upon this Amendment, and of course the temptation even at this hour is to cover the ground again which we covered very well not only in Committee but also earlier today. He did, however, misrepresent, albeit unintentionally, what was said by the Government in Committee.
    We did not admit that the standstill would work to great disadvantage as far as produtivity bargaining is concerned. On the contrary, we said in Committee, and we said only a short while ago in this House, that, partly because productivity bargains take such a very long time to negotiate, and partly because, I regret to say, there have been so few genuine productivity bargains in the past, we consider that the period of standstill is one in which productivity bargaining will go on. In fact, we would hope that one of the results of the short-term steps we have found to be necessary will be to give incentive to more productivity bargaining in the belief that in the second half of this year, and more particularly after July, 1967, those who have genuine productivity bargains are more likely to get something rather better than the zero norm which is mentioned in the standstill White Paper. So we think that bargaining

    1643
    will go on, and we think this will be to our advantage.
    Mr. Richard Wainwright: Does not the hon. Gentleman recall that in Committee on 4th August he said that the Government elected to have an absolute standstill, which ruled out productivity bargains?
    Mr. Rodgers: Indeed. There is no misunderstanding about this. There are two different matters to be considered. One is the question whether productivity bargaining can go on in the standstill period. The answer is "Yes". We want it to go on. One of the ironies of this legislation may be that the standstill will create an incentive for more productivity bargaining, which would be to the general advantage.
    The second matter concerns the extent to which we have felt it necessary to enforce the standstill on the payment of remuneration which is the outcome of productivity bargains. Our view there, as expressed in Committee and on an earlier Clause this evening, is that if we had made the standstill period less than absolute we would have opened the flood gates and it would have been impossible to make our policy effective, on a voluntary basis. We have said that productivity agreements cannot be honoured during the standstill period. The standstill arrangements must apply to them as to all other kinds of agreement.
    I think that our decision is right, and I hope that it will be accepted by those who honestly think that our attempt to get a standstill is right. We had to be firm and determined about this.
    Sir D. Glover: Does the hon. Member mean that unions and employers would be able to work out productivity bargains for payment in 12 months' time? After what has happened in the case of the doctors and the railwaymen, when agreements have been solemnly broken, how can they negotiate productivity agreements which will not come into operation for 12 months, especially when the freeze may be continued by the Government?
    Mr. Rodgers: I hope that hon. Members are considering the Bill in an intelligent, thoughtful and constructive way, and that on reflection they will see that we are trying to ensure that if people continue
    1644
    to try to negotiate and reach genuine productivity agreements they are more likely to get them in the second half of the standstill period. We have taken these measures with the greatest reluctance, and generally, with all their disadvantages, I think that they are supported in the country.
    Amendment negatived.

    Clause 26.—(RESTRICTIONS ON INCREASES OF PRICES OR CHARGES.)
    Mr. Biffen: I beg to move Amendment 28, in page 23, line 17, to leave out Clause 26.
    Mr. Speaker: With this Amendment we are taking Amendment No. 32, in page 24, line 30, leave out Clause 27.
    Mr. Biffen: Yes, Mr. Speaker. The purpose of the Amendment is to leave out Clause 26, which would have the effect of eliminating the provisions of Part IV as they relate to prices. The reasons which have impelled my right hon. and hon. Friends and myself to make this move are that there is a danger that the policy of the Government may work more effectively on prices than on incomes. That was the experience of the prices and incomes policy operated several months ago, when there was evidence that the exhortations of the First Secretary and the work of the Prices and Incomes Board had had a marginal effect upon prices, whereas it had had no effect upon incomes, so that the inflationary situation was to some extent worsened.
    The danger of that situation developing now is greatly increased, because some price rises are undoubtedly necessary to maintain profit margins in order to enable future provision for manufacturing investment. This is not idle speculation on my part; the Board of Trade, in its latest survey, suggests that there is a downturn in manufacturing investment, and in the circumstances any further pressure on the profit margins of industry at the expense of manufacturing investment must be contrary to the longer-term aims of the Government.
    Secondly, some price rises must have been necessary to reduce home consumption, because it was the burden of the Prime Minister's argument on 20th July that home consumption would have to be restrained in order to provide capacity

    1645
    for export. This argument used to be ridiculed when it was advanced by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), but I recall listening in rapt attention as the Prime Minister deployed that argument on 20th July. In substance this is borne out by the argument deployed in the editorial in yesterday's Financial Times, and that, also, might recommend the Amendment to the Government.
    4.30 a.m.
    The other point which I would argue as being in favour of the Amendment is that the elimination of the prices Clause would considerably reduce the load on Government Departments. It is not widely realised that it is the Government's proposition that no price or wage increase shall take place within the economy unless it has received written permission from a Government Department. The proposition is a nonsense, and it is, to some extent, rendered slightly less nonsensical if the Government will eliminate from their ambition the Clause relating to prices.
    One could quote endless instances of manufacturers one has contacted, saying, "How do you imagine working this policy?". The immediate reaction has been that of a company which said, "We are in some difficulty because we put up the price of our product a short while ago, but some very large customers argued furiously with us and in the end we compromised. Whereas everybody else's price went up on 1st June, we compromised for our very large customers and put our price up as from 1st August." What happens now? If the Parliamentary Secretary could answer, how much easier it would be, because the company would then know what was Government policy. It would reduce the post-bag for Government Departments. Even if the Government cannot accept the Amendment, they might answer this point and give an interpretation which would be to the advantage of industry and those who are concerned to carry out in the voluntary spirit what the Government seek to do under Part IV.
    It may not be fully realised, perhaps not even by the Government, that price increases are going ahead, certainly in the public sector. I have here a letter from the South West Gas Board dated
    1646
    29th July, addressed to a firm of E. E. Lane & Sons Ltd. of Cheddar, which states:
    "I regret to have to inform you that owing to increases in the prices of coal and other costs the Board has been reluctantly compelled to increase prices to you of packaged Gloco and Gloco nuts".
    This is a letter from a nationalised industry giving notification of a price increase to run from 1st August—none of this nonsense about these being summer prices and the Board reverting to a winter scale of charges. This is a straightforward price increase. What is the answer? If this is good for a nationalised industry—I am not arguing that there should not be a price increase—then there is a good case for price increases in the private sector.
    These are arguments of economic prudence and administrative capability. Therefore, I hope that the Government will accept the Amendment.
    Mr. J. Bruce-Gardyne: I agree with everything that my hon. Friend the Member for Oswestry (Mr. Biffen) has said; the validity of it is beyond dispute, particularly what he said about reducing the appalling administrative complications which will result if the Government do not accept the Amendment.
    Clause 26 empowers the Secretary of State by order to
    "apply this section to any prices for the sale of goods and to any charges for the performance of services …"
    There was considerable discussion in Committee on local authority council house rents, but this was exclusively in terms of the situation in England. It was pointed out earlier this evening that only one hon. Member from Scotland, the hon. Member for Glasgow, Maryhill (Mr. Hannan), was on the Committee. Although I have the greatest respect for the hon. Gentleman, his contribution in Committee was, for understandable reasons, a silent one. Therefore there was no vocal representation of the Scottish position.
    Paragraph 12 of the White Paper said:
    "In the period of the prices standstill until the end of 1966 the Government expect local authorities to take such practical steps as are possible to prevent or postpone rent increases including those already announced."

    1647
    This recommendation is already being acted upon. The Minister of Housing has appealed to Birmingham Corporation, where it looks as if his appeal will be unsuccessful, and to the Greater London Council, with greater success, and the Secretary of State for Scotland has been in touch with Glasgow and other local authorities in Scotland.
    The Secretary of State told me last week, in answer to a Written Question, that he is advising local authorities in Scotland that he expects them to consult him if they think that a rent increase is unavoidable. Presumably, if a local authority refused to bow to this arm twisting the Secretary of State could assume the powers in Clause 26.
    There is a particular problem in the case of the Scottish local authorities. The Allen Committee pointed out two years ago that the prime reason why rates were substantially higher in Scotland than in England was the low level of council rents and the degree of subsidisation of them. The Chamberlain of Perth recently calculated that about 17 per cent. of Scottish rates went on subsidised council housing, whereas the comparable figure for England was only 2·4 per cent. On top of this, several local authorities in Scotland, particularly those that are Labour-controlled, receive a reduced equalisation grant because of low rent income.
    One local authority very near my constituency, Dundee, has received an equalisation grant reduced by £21,571 this year. Last month Dundee Corporation decided to raise council house rents to 90 per cent. of gross annual value. This increase has not yet come into effect, and it is presumably subject to the circular the Secretary of State addressed to local authorities in Scotland last week.
    The effect of the increase which the Corporation has proposed would be to take 8d. off the rates, and this has been allowed for in calculating the city's rate, which has gone up by 3s. 3d. and will presumably have to go up by 4s. 1d. Even if this increase were rescinded, the 3s. 3d. rise this year will mean an increase for one particular firm, Jute Industries, which has been stated to amount to £55,000, an increase of no less than 80 per cent. This is a charge
    1648
    which the industry already faces, yet, according to this Clause, it may be quite unable to pass the unavoidable increase on. If the Secretary of State successfully intervenes to prevent the council from raising council rents, the increase for firms like Jute Industries and ratepayers generally in Dundee will be much more severe.
    What are councils supposed to do if they postpone rent increases at the instance of the Secretary of State, the Minister of Housing and Local Government or, subsequently, in response to an Order under the Clause? Are they to raise the rates? Apparently, that is not what the Secretary of State expects them to do. In Circular SDD24/1966, the Scottish Office wrote to local authorities telling them that, in the Secretary of State's view, increases in the amount of money to be raised by rates this year should be made only where they are clearly unavoidable. The reasons for approving rate increases are set out, and they do not include any reduction in rent income in response to the Government's arm-twisting to discourage rent increases by Scottish local authorities.
    The only guidance one can find for local authorities is to be found in an extraordinary answer which I received from the Minister of Housing and Local Government last week. I asked what local authorities were expected to do if they did postpone council house rent increases in response to the standstill, and specifically whether the Minister would advise them to increase rate poundages to compensate for loss of income or to cut back on housing and school programmes. The right hon. Gentleman's answer was:
    "The first requirement is that local authorities should set an example in price restraint during the next critical six months. Whether they subsequently make good losses of rent income due to postponement of rent increases from rent or rates is for them to decide. The Government have made it clear that they do not want housing and school programmes reduced."—[OFFICIAL REPORT, 4th August, 1966; Vol. 733, c. 176.]
    With that, the right hon. Gentleman washes his hands of the problem. But it is open neither to him nor to the Government to do that. Less essential expenditure has already, very sensibly, been axed by councils, so there cannot be any more economies there. They are

    1649
    not supposed to increase rents or rates. Plainly, they are driven to cut back on housing and school programmes, which the Government have all along claimed are exempt from the latest measures.
    This is one instance of the confusion created by the Clause. The effect of a successful attempt by the Government to prevent rent increases in many local authority areas in Scotland will be to impose, probably, a double burden on ratepayers, not only the burden of deferred rent increases on the rates directly but also loss of equalisation grant because of the low rent income which will be maintained at a low level because of the Government's own actions. The right hand goes in one direction and the left hand in another. This is the sort of conduct we have come to expect from this Government, but it is one more example of Socialist injustice in action perpetrated on the ratepayers and industries of Scotland
    4.45 a.m.
    Mr. J. E. B. Hill: In dealing with the standstill on a voluntary basis it is difficult for individual firms to interpret the White Paper as it affects the particular circumstances of their own business. They are apt to write to their Member of Parliament and say that they wish to co-operate with the standstill but at the same time they do not wish to be in an invidious position vis-à-vis their competitors. I should like to ask whether it is the desire of the Government that a thousand or more individual inquiries should be passed to the First Secretary for some detailed ruling which one hopes might lead to a uniform pattern.
    I should like to cite a question put to me by a firm in my constituency dealing with the prices side of the standstill. Its letter says:
    "As you will have noted, the White Paper applies a rigorous restriction to manufacturers prices, but for some reason lets off wholesalers and retailers with a curiously woolly exhortation not to increase their margins (Paragraph 7). As it happens the furniture retailers already had a move on foot before July 20th to get margins on furniture increased from 50 per cent. to 55 per cent. (which they justified at least in part by reference to SET). Now in the cases where manufacturers (including ourselves) publish recommended retail prices, in effect these operate as maximum prices, although retailers are of course now free to take reduced margins and undercut them. Therefore the retailers cannot have
    1650
    their increase to 55 per cent. unless they persuade us to publish an increased retail price list for them. Naturally we are under considerable commercial pressure to do so, as the retailers of course claim that they will direct their buying only to firms who do comply with this request. In terms of the White Paper, if we do publish such a price list, who is putting the prices up us or the retailers? We of course should still be getting the same price for our goods, although they would cost more to the public."
    That shows one of the difficulties of a firm wishing to co-operate but which does not want to worsen its position as compared with its competitors. Yet how am I to give guidance unless I get a clear explanation from the Government?
    Mr. William Rodgers: The speech of the hon. Member for Oswestry (Mr. Biffen) was all the more gallant because he made it in the knowledge that his plea was unlikely to succeed. I do not think that at this stage right hon. and hon. Members opposite will expect us to accept this Amendment. The hon. Member made an interesting point on the question of holding prices down which might curtail profit margins, which would result in turn in the falling off of investment. Of course there is a genuine theoretical problem here. We recognise that if the holding of prices is not paralleled by sensible demands on the productivity side, there is the possibility of that consequence. As I have said on many occasions, and the Government have said throughout the Committee stage, we do not assume that this policy is without problems. Nor do we assume that there will not be some consequences which we would wish to avoid were that possible.
    The hon. Gentleman then referred to the load on Government Departments. I remember when, last November, we were discussing the early-warning system, there were those who said that the system we were devising at that time would throw an overwhelming burden on Government Departments, but in practice that did not turn out to be so. We are now contemplating a new, more extensive, early-warning system and will be discussing it with the C.B.I. and the T.U.C. We will take into account not only their views on what they believe to be practicable but also our assumptions of how far administrative arrangements can digest the items of which we might require early warning.

    1651
    Meanwhile, if there are firms which honestly want to work the policy and which have doubts, having studied the White Paper and having obtained the best advice available to them—from hon. Members and other sources—we will give further advice so that they may follow the policy, and the relevant Government Departments will be only too glad to help. Perhaps I should say in self defence that those inquiries should be directed to the sponsoring Departments, which were listed in Committee, and not to the Department of Economic Affairs. The sponsoring Departments will do their best to deal with any genuine inquiries, because we recognise that problems will arise and we want the policy to work.
    The case for the Clause is a simple one. It would not be possible to operate this policy successfully merely on incomes. It would not appear just to do so unless, at the same time, we made strenuous efforts to hold prices, too. It would be unrealistic, whatever economic arguments there may be, to expect that we could hold wages in a period of standstill and have settlements afterwards which are consistent with a zero norm if, at the same time, no effort was made to hold prices.
    That is why we have felt it necessary to try to hold rents. My right hon. Friend the Minister of Housing and Local Government made the position clear, and it is set out in the White Paper. The letter which he addressed to the hon. Member for South Angus (Mr. Bruce-Gardyne) was, I thought, an adequate reply although, of course, there will be consequences arising from the holding of rents. However, we are dealing with a standstill period to the end of the year and we must operate in whatever way is possible, even if some of the consequences are those which we would wish to avoid. We must hold them firmly. Indeed, remembering that I said that we were doing the same with productivity agreements, it must be realised that if we are being tough in one respect, we must demonstrate that we are being tough in the other respect, in relation to price increases of every kind, including not only rents but the prices of the nationalised industries as well.
    1652
    The hon. Member for Oswestry (Mr. Biffen) referred to a letter dated 29th July. If he will give me the full details I will gladly look into the matter. As my hon. Friend the Parliamentary Secretary to the Ministry of Labour said earlier, we are anxious to hold the prices of the nationalised industries, and those industries have been given a clear indication of our views. If there are occasions when the standstill appears to have been infringed, we will gladly look into such matters and try to deal with them.
    Mr. Bruce-Gardyne: The hon. Gentleman has not dealt with the position of local authorities, which are being penalised for not putting up their rents and which are having their equalisation grants reduced. Now they are being asked not to put up their rents. Is there not a complete contradiction here?
    Mr. Rodgers: It is not a complete contradiction. The hon. Gentleman's intervention indicates that there is a real problem in that local authorities will be confronted with difficult decisions. Discussions will have to take place with the Ministry of Housing and Local Government about the consequences. However, there is no conflict of policy here. We have explained what should be done and we recognise that some consequences will have to be taken into account. We must operate on prices if we are to operate on incomes. One consequence of doing so will be an incentive to overcome obstacles to efficiency so that, by raising productivity, we will be able to maintain stable prices for a longer period than that of the standstill.
    Mr. Biffen: The long nights of the Committee stage convinced me that the Under-Secretary of State and the Parliamentary Secretary to the Ministry of Labour would have distinguished careers in the Fabian Society. Nothing could be more typical than the Under-Secretary's dismissing as theoretical the concern over the levels of manufacturing investment. I have heard from some industrialists that they fear that their investment programme and those of their trading partners will be affected by the freeze.
    The hon. Gentleman was not fair in quoting the analogy of the other early-warning system: it is totally different from Part IV. All increases, except those of firms with fewer than 100 employees

    1653
    and of certain foodstuffs, must be notified to the Government, whereas, with the earlier system not all the limited range of commodities listed were notified. For example, only one kind of soft drink was notified. The hon. Gentleman was not comparing like with like.
    I thank the hon. Gentleman for his promise to consider my point about the charges of the South Western Gas Board: I will certainly send him details. I regret that he did not answer my question about the company which had raised prices to some of its customers from one date and was seeking to charge a higher price from a date after 20th July. I presume that they will have to go through the bureaucratic rigmarole of writing to them because the hon. Gentleman has not answered that question.
    Mr. J. T. Price: On a point of order. Have you relaxed the rules of order, Sir Eric? Is it in order for an hon. Gentleman to make two speeches on Report?
    Mr. Deputy Speaker (Sir Eric Fletcher): It is in order. An hon. Member proposing an Amendment on Report has the right to reply.
    Amendment negatived.

    Clause 26.—(RESTRICTIONS ON INCREASES OF PRICES OR CHARGES.)
    Sir K. Joseph: I beg to move Amendment No. 29, in page 23, line 20, at the end to insert:
    "but excluding any charges whether by way of interest or otherwise for the service of lending money on mortgage",
    Perhaps it would be convenient to discuss with it Amendment No. 52, in page 23, line 20, at the end to insert:
    "but excluding any charges whether by way of interest or otherwise for the loan of money".
    We want to know some more about the applicability of different parts of the Bill to interest charges, and in particular to mortgage charges. The relevant Clauses are Clauses 2, 7 and 26. I would ask the Parliamentary Secretary to tell us not only what Clause 26 means but whether powers exist in the previous Clause in connection with interest charges.
    5.0 a.m.
    We are interested above all in mortgage charges. We have been told by the
    1654
    Government that they have power under Clauses 2 and 7 to refer mortgage charges for report to the National Board for Prices and Incomes and that Clause 7 would attract to such a reference the standstill provisions of Part II. We are told equally categorically by the honourable Chairman of Standing Committee B, corroborated by the Government, that Clause 26 does not cover mortgage charges. What we do not understand is the magic distinction between the words used in Clauses 7 and 26,
    "any charges for the performance of services"
    and in Clause 2,
    "charges or other sums payable under transactions of any description … or to services of any description …"
    How do the Government distinguish between these apparently similar phrases and say that Clauses 2 and 7 do and Clause 26 does not apply to mortgage interest?
    When the Government have answered this question—we hope the Attorney-General may be willing to help them to make it plain—we should like to know to what extent lending money at interest, be it by a pawnbroker or by a bank, or indeed from one friend to another, is a charge for the performance of services. We should like to know whether hire purchase comes within Part IV or Part II, or neither.
    I hope that if the Government are unable to give us the answer in detail now, they will undertake to write clearly to us for publication in the papers the answer to these most important questions. I reserve the right, with the leave of the House, to return to the subject if the answer is not adequate.
    Mr. William Rodgers: There was an extensive and somewhat confused discussion of the position of mortgage charges in Committee at a very late hour one day last week. I am glad to have this opportunity to restate how they are affected by the Bill.
    The right hon. Gentleman will be aware of the statement in the House this afternoon by my right hon. Friend the Minister of Housing and Local Government. I think his words on that occasion made the position quite clear. He said in his statement that we did not intend to use compulsory powers as far as mortgage rates were concerned. He also

    1655
    said that this emphasised the need for voluntary action. [Interruption.] If the right hon. Gentleman will be a little less impatient I will return to the Bill which I think ought to be seen against the context of what my right hon. Friend said.
    I should have thought that if the right hon. Gentleman considers the purposes of the different parts of the Bill he can find answers to his questions in the context of what my right hon. Friend said. Under Clause 2 we possess the power to refer mortgage charges to the National Board for Prices and Incomes. As he knows, this is precisely what we have done. It is equally clear, because Clauses 7 and 26 involve the use of statutory powers, that these Clauses do not apply to mortgage charges.
    Mr. Higgins: We are trying to clarify the situation. The hon. Gentleman says that it is clear that the Government will possess the powers under Clause 2 and that they do not possess the powers under Clause 26. The whole purpose of the Amendment is to clarify the situation. What particular expression in Clause 2 covers mortgage rates and what expression in Clause 26 excludes mortgage rates? Will he also say whether mortgage rates and the lending of money at interest are regarded as a service or not?
    Mr. Rodgers: The late hour seems to have confused the hon. Gentleman more than it has confused me. I thought I made abundantly clear in answering questions asked by the right hon. Gentleman what the position is, that under Clause 2, which is concerned merely with references to the National Board for Prices and Incomes, we can make a reference on mortgage charges, but under Clauses 7 and 26, which are concerned with statutory powers for standstill, we cannot deal with mortgage charges.
    Sir John Hobson: I know that the hon. Gentleman said that the Government do not intend it, but what we are concerned with is the words in the Bill and not the intentions of the Government. Why is not the lending of money a service, whether secured on a mortgage or unsecured? If it is not a service, what else is not a service? If it is a service, is it said or is it not said that interest is not a charge? Can the
    1656
    hon. Gentleman explain how it is excluded?
    Mr. Rodgers: The question now raised is one of definition. If at this stage I am being asked to enter a semantic argument about the meaning of certain phrases, I am prepared to do so, but I think that it would meet the wishes of the House to know the position as we see it. A question about the interpretation of the Bill is a later stage. I have been asked how we intend to use the Bill. Clause 2 refers to
    "prices, charges or other sums payable under transactions of any description relating to any form of property or rights or to services of any description or to returns on capital invested in any form of property, including company dividends".
    This phraseology in Clause 2 is absent from Clauses 7 and 26, where there is a reference to charges for services.
    Sir J. Hobson: Is the hon. Gentleman really telling the House that because one phrase is used to describe something in one Clause and a different phrase is used in another Clause, they cannot refer to the same thing?
    Mr. Rodgers: I do not know what meaning language has unless it means that if one uses a different form of words one sometimes means a different proposition. That is precisely what I am saying. The right hon. and learned Gentleman asked a specific question: What form of words made a distinction between Clause 2 and Clauses 7 and 26? I have indicated what form of words involves this distinction, and I hope that I have satisfied him.
    Mr. Higgins: I am sure that the House is anxious to clarify the appalling confusion into which the Government have got themselves. First, all that the hon. Gentleman has done about Clause 2 is to read out the whole provision. He has not told us which specific words cover mortgages in Clause 2. Secondly, does he regard the lending of money at interest as a service or not?
    Mr. Rodgers: The second point is something that is not properly related to the Bill. If the hon. Gentleman asks whether I regard the lending of money as a service, it is not relevant except in so far as I may say what the Bill means when it refers to services. What I am saying, and I hope this is clear—

    1657
    and I hope that the hon. Gentleman will not cause confusion where confusion does not exist—is that the references to services in Clauses 7 and 26 do not involve a reference to the lending of money. As to Clause 2, I do not know whether the hon. Gentleman wants me to read out the phrase again. I think that it would serve the purpose of the House much better if he would look at it himself. However, I repeat that it says
    "prices charges or other sums payable under transactions of any description relating to any form of property or rights or to services of any description or to returns on capital invested in any form of property".
    I should have thought that "property" there was a very clear indication, taken with the other form of words, that we can bring in mortgages here where mortgages are not eligible for consideration under the rest of the Bill.
    We are considering Clause 26 at the moment. I have dealt with the point. I have said again what was made clear the other evening in Committee, though at the end of a long and complicated argument. I can quite understand it if the Opposition were a little doubtful. I have made it clear that the Clause does not include mortgage interest, and it is not our intention, as it would not be within our power, to use that Clause for the purposes of mortgage interest.
    Sir J. Hobson: I am sorry that the Attorney-General has left. Is the lending of money or hire purchase a service? Is the lending of money by a bank a service? Is the ordinary lending of money by a moneylender a service? I have always understood that such were services. In the view of the Under-Secretary, after the legal advice he has received, are those, or are they not, services within Clauses 26 and 7, which deal with charges for services, whereas Clause 2 deals with incomes?
    Mr. Rodgers: As I am advised, the lending of money is not a service within the meaning of these Clauses.
    Sir K. Joseph: Is the Under-Secretary telling us that he has no power under Clause 26 to deal with hire purchase in any way under Part IV?
    Mr. Rodgers: As I understand it, under Clause 26 it would not be possible to involve hire-purchase charges, which are,
    1658
    after all, charges made for the lending of money.
    Sir K. Joseph: So that the whole range of goods covered by the hire purchase and the offer of them to the public is not covered under Part IV and, therefore, by the freeze arrangements and the power given to the Minister under Part IV? From our point of view, this is not the most important thing in life. What we want to know is what the Government regard as their powers. This is what the Under-Secretary is telling us?
    Amendment negatived.

    Clause 28.—(RESTRICTIONS ON PAY INCREASES.)
    Sir T. Brinton: I beg to move Amendment No. 37, in page 25, line 35, to leave out Clause 28.
    I understand that the arrangement is that Amendment No. 41, in page 26, line 38, to leave out Clause 29, is to be discussed at this time.
    Clauses 28 and 29 deal with the power to restrict payments for wages and salaries either to their present level or, in the case of Clause 29, to reduce them to the levels of 20th July if the Minister should see fit. These powers are quite exceptional. They go far beyond anything which was granted even to the Government in the last war.
    It is about 5.15 a.m. These two Clauses were last discussed in Committee, having been given no Second Reading in the House, at much the same time. If I remember rightly, Clause 28 was discussed in Committee between 4 and 5.30 in the morning. This is a Clause which confers colossal powers on the Government of the day. There could be no clearer indication of the disdain, even contempt, with which this House and the institutions of Parliament have been treated in relation to the Bill.
    5.15 a.m.
    I shall not spend much time on this because we spent a substantial amount on the Clause in Committee but I wish to make two points, both of which were raised in Committee. The first concerns productivity. Here was have another example of the Government's policies inevitably fighting against one another. Government policy throughout over this matter is dichotomous, ambivalent and

    1659
    counter-productive—to use the jargon that is popular these days. Employers must not pay anyone any more money even to raise productivity. That is nonsense in itself and I need say no more about it now.
    In Committee there was a question about poaching of employees but there was no satisfactory answer. Nor was there a satisfactory answer about productivity. The Under-Secretary of State said that it was sad that productivity agreements could not be covered but the wage freeze was sacred. There will thus be the absurd position under this Clause that a man's existing employer cannot pay him any more money whereas another employer is at liberty to offer him more to go elsewhere.
    I have no doubt that hon. Members present are feeling exhausted and have probably read the HANSARD report of the Standing Committee debate, when the Clause was fully discussed.
    Mr. Biffen: One point discussed in Committee is of sufficient importance to mention again so that the Under-Secretary of State has the chance to answer it—which is something he did not do in Committee. There is a growing number of skills for which there is an international market and many American companies come to this country hoping to recruit these people, and do.
    When the party opposite was in opposition, it used to work itself into a lather over the brain drain. But there is nothing extraordinary about it. It has continued and will continue. But are British manufacturers to sit back and refuse to match any bid for such skills as geologists, computer programmers, doctors, airline pilots and many others whose jobs can be followed just as well in North America, where their qualifications count as much as they do here?
    Is it the desire of the Government that, whenever an American company makes a bid for the service of people such as these, the British company should ask the Government for written permission before it can match the offer? This proposition is not far-fetched. An American organisation is in London specifically to recruit geologists and we know that success in developing the North Sea bed
    1660
    could well depend upon the skills of such people.
    These people may not be very many in number but they are of particular significance for the health and dynamism of the economy and I hope that, on this occasion, the hon. Gentleman will be able to say whether or not he requires the full bureaucracy to be observed before American efforts can be matched during the freeze period.
    Mr. J. E. B. Hill: There is much one can say about these two Clauses but I shall confine myself to asking the Under-Secretary of State to confirm something explicit in the White Paper but about which there may still be some doubt outside. That is, that the prohibition on extra remuneration for the same kind of work each side of a certain date, whether it be a date chosen by the Minister or 20th July, does not affect the ordinary annual increments of a subsisting contract of employment, whether for a local government officer, a teacher or under any other private contract which may have a scale of annual increments fixed for a time ahead.
    Paragraph 17(iv) of the White Paper, Cmnd. 3073, states that
    "it is not intended that the standstill should interfere with the normal arrangements for increasing pay either with age, as with apprentices or juveniles, or by means of regular increments of specified amounts within a predetermined range or scale."
    That is clearly stated in the White Paper, but it is not part of the Bill. Many people will not have read the White Paper in detail, and I would be glad if the Under-Secretary would confirm this.
    Mr. William Rodgers: We do not need a long Second Reading debate on the Clause at this hour. It has been discussed thoroughly and, as hon. Members will know, it is impossible for us to give way upon it at this stage. This is the Clause which confers upon the Government, assuming that Part IV has been brought into force by Order in Council, power to require by order that classes of specified remuneration paid under a contract of employment should not be increased without the Government's agreement. This is a key Clause which has been fully discussed and which we have to keep in the Bill.

    1661
    We have also discussed fully tonight the question of productivity, which was raised by the hon. Member for Kidderminster (Sir T. Brinton). I have explained why we hope that, on the one hand, negotiations will continue but why, on the other hand, we felt that we should exclude productivity agreements and bring them within the standstill.
    There are, of course, problems of poaching, whether in this country of the kind mentioned by the hon. Member or from abroad of the kind mentioned by the hon. Member for Oswestry (Mr. Biffen). All I would say of the internal problem is that we hope very much that all employers will act within the spirit of the policy in the way in which the hon. Member for Kidderminster himself has acted. This will be one factor at least which will tend to reduce the amount of poaching which might take place which would result in infringement of the policy by the movement of labour and by the payment of higher remuneration.
    Of course, there are, and there always have been, problems in matching international rates. I do not believe that a six-month standstill period and whatever may happen after that would make a radical difference to the choice with which many people may be faced about remaining in this country and doing a job here, and going abroad. Factors other than pay have to be taken into account.
    The hon. Member for Norfolk, South (Mr. J. E. B. Hill) drew attention to paragraph 18(iv) of the White Paper, where the position is clearly stated. If it helps the hon. Member, I will say that the policy stated in the White Paper remains the policy of the Government concerning increments.
    Amendment negatived.

    Clause 31.—(WAGES REGULATION ORDERS UNDER WAGES COUNCILS ACT 1959.)
    Sir E. Brown: I beg to move Amendment No. 47, in page 28, line 11, to leave out Clause 31.
    Mr. Deputy Speaker: I think that it will be for the convenience of the House to discuss at the same time Amendment No. 48, in page 29, line 26, leave out Clause 32.
    Sir E. Brown: At this early hour of the morning I will be brief. We had a discussion in Committee, and the hon.
    1662
    Lady the Parliamentary Secretary gave us the answers, but after examining HANSARD we are a bit concerned still, because quite clearly here are 3½ million workers covered by these wages councils, and the hon. Lady said:
    "The position of delay applies in a voluntary situation. As the criteria in the second six months' period are still to be discussed, I cautiously did not give an assurance that at the end of six months there would be any question of any further delays, but said that it might be possible to look more sympathetically at this group."—[OFFICIAL REPORT, Standing Committee B, 4th August, 1966; c. 764.]
    I wonder if the Parliamentary Secretary has any further answer to give us by way of assurance, because these are a very lowly-paid group and I rather fancy that they would be in difficulty. If they come under Part IV there would be a longer delay than a year, and it might be two years before they could get any consideration. I wonder whether the hon. Lady could give an assurance that they will come early into the pipeline and get sympathetic treatment at the earliest possible opportunity.
    Mrs. Shirley Williams: In view of the way in which the Amendment was moved I think it would be beside the point for me to rehearse the argument already made in Committee. I need only say in answer to the hon. Gentleman the Member for Bath (Sir E. Brown) that both my right hon. Friend in Committee and my hon. Friend earlier today indicated that consideration would be given as far as possible to the lower-paid workers in the second six months after the first six months of absolute standstill. I think I ought to repeat what I said in Committee, so that the position is absolutely clear, and that is that this lower-paid group cannot be considered only as those under wages councils, because, as the hon. Gentleman will appreciate, there are a good many groups of workers who are outside the wages councils and who are no more highly paid.
    Amendment negatived.

    Clause 32.—(ORDERS UNDER AGRICULTURAL WAGES ACT 1948.)
    Mr. William Rodgers: I beg to move, Amendment No. 59, in page 29, line 32, to leave out from "section" to the end of line 39 and to insert:
    "but so that an order under this subsection shall not affect provisions which have taken effect before the making of the order".
    The Amendment is really self-explanatory, and at this late hour I am sure the House would not wish me to detain them.
    Sir K. Joseph: I gather that this is intended to do more efficiently what our Amendments, No. 49 and No. 50, are meant to do. On that assumption we are delighted to accept this very small morsel.
    Amendment agreed to.

    Schedule 2.—(GENERAL CONSIDERATIONS RELATING TO PRICES AND INCOMES.)
    5.30 a.m.
    Mr. Biffen: I beg to move Amendment 54, in page 40, to leave out lines 7 to 29.
    Mr. Speaker: I think it would be convenient to the House if Amendment No. 55, in line 30, leave out paragraph 10, and No. 56, in page 41, line 4, leave out from "prices" to end of line 10, were discussed at the same time.
    Mr. Biffen: Yes, Mr. Speaker. The purpose of the Amendment is to delete the criteria governing the behaviour of prices contained in the Schedule, and the purpose of Amendment No. 56 is to delete the actual figures taken from the National Plan which have also guided the Prices and Incomes Board in its past examinations of those incomes or prices which have been referred to it. The case for moving the Amendment is that the criteria are almost meaningless. That has been acknowledged by the Government, who have disowned the contents of the Schedule, although they have promised at some unspecified date that we shall get another edition. This debate will give the Government a chance to share with us at least some inkling of their thinking.
    We should like to know whether they will suggest tighter criteria for price increases as they promised there would be tighter criteria for income increases. As far as we can judge from the criteria set out in the Schedule originally they amounted to not much more than a halfhearted attempt to suspend the laws of supply and demand. We should like to see the policy designed to reinforce the workings of the market economy, to support the primacy of consumer choice, and also to see the Government so arrange their business that industry and commerce can obtain the best rewards from
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    identifying and specifying home and overseas consumer requirements. None of those considerations would appear to be implicit in the criteria laid down in the Schedule.
    Should the Government concur with our judgment they now have a chance to make it clear that, after all, the consumer and not the gentlemen in Whitehall may have some voice in the matter. This view is well founded, in view of the nature of some reports coming from the Prices and Incomes Board—reports which have tut-tutted in unison with the First Secretary about the varieties of beer available, and which have expressed concern about plastic flowers offered with detergents and about varieties of bread. These are all pettifogging conclusions of the Prices and Incomes Board. If the Board had a better and more robust set of criteria, which was determined to place the consumer at the very centre of our thinking, we should have a rather more satisfactory answer.
    The other point concerns the figure of 3 per cent. and 3½ per cent. Here is the opportunity for generous action, even at 5.34 a.m., on the part of the First Secretary. He could at least let us have some idea of his thoughts about the kind of figure which will ultimately replace the present one. It is no use his thinking that he can go off and have communion with Mr. Catherwood, of N.E.D.C., and then come along at the end and tell Parliament, "This is what we have decided. Here it is. The tablet has been tossed down from the mountain, and you can take it or leave it." The initiation of the policy and of the new philosophy which will govern the Schedule must be inspired by the Government. They must accept final responsibility. They should start here and now with a brief outline statement, and not give it to us after it has been kicked around N.E.D.C. the C.B.I. and the T.U.C. Parliament still has some aspiration to share in this process, and the First Secretary can delight us all, and we can end in a very happy spirit, if he accepts my invitation.
    Mr. William Rodgers: We end, as we began very many hours ago, by discussing Schedule 2 and the question raised very persistently by the hon. Member for Oswestry (Mr. Biffen) who on many occasions has returned to the problem

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    of price criteria and has cast doubt on whether it was right to include Schedule 2 in the Bill and particularly on whether the norm mentioned therein remains realistic. Schedule 2 remains that part of the White Paper of a year or more ago discussed very fully with both sides of industry and endorsed by the N.E.D.C.
    On the final point which the hon. Member made about the norm, I draw his attention to the final sentence in paragraph 11 on page 41 of the White Paper in which we say that the norm would be
    "subject to re-examination by the Government in the light of reviews conducted from time to time by the N.E.D.C."
    The answer to the question about what the norm may be at any time is that we shall discuss it with the C.B.I. and the T.U.C. We shall reflect on it in the light of what the N.E.D.C. can tell us and determine whatever norm may be realistic. We have said that there must be a standstill and that on incomes there will be a nil norm for the second half of the period. Beyond that it would be wrong for us to go.
    On the hon. Gentleman's first point, we return to Clause 4(2) under which the Secretary of State has power to vary the criteria; and in adding to or varying the criteria he is dealing not only with incomes but with prices. The White Paper is the point of reference for the next 12 months. There will be a standstill for six months and a period of severe restraint to follow. Beyond that we cannot see.
    We have had a very good discussion of this excellent Bill, and I am sure that it goes from this House a better Bill than it was when it came and a Bill which will win very widespread approval from the public as a major step in a determined effort by the Government to deal with the long-standing problems of the economy and to have a successful period of planning in a free society.
    Amendment negatived.
    Bill to be read the Third time this day.

  HOSPITALS (REDDITCH)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Fitch.]
  5.38 a.m.
  Mr. James Dance: I am extremely grateful to have this chance to raise the whole question of the problems of hospital accommodation in Redditch. Even at this very late hour, there are two aspects which we must look at: first, the ordinary general hospital accommodation in the Smallwood Hospital; and, then, the question of providing maternity accommodation in this greatly expanding new town of Redditch.
  Our problem is not new. It has been with us for some years, but the urgency for more beds, in particular maternity beds, gets more and more acute every year. Ten years ago, on another Adjournment debate, I made a speech explaining the urgent need for maternity accommodation. Then the population of the town of Redditch was 25,470. Last June, it was 36,680. During those past nine years, therefore, we have seen an increase of 11,210, and the increase is continuing at an even greater rate at present.
  I should like to deal with the ordinary beds at the efficiently run Smallwood Hospital. Here we have accommodation of merely 32 beds for a town with a population of 36,680. That was a year ago, and the population is higher now. It must be quite clear to everybody that the accommodation is completely inadequate.
  We must also bear in mind that the town is growing rapidly year by year and we are told that the population will be something like 80,000 in about 10 years' time. At the moment we have no resident doctor at the Smallwood Hospital, and we feel that it is essential that we should have one, because Redditch is growing rapidly not only as a town for peopb to live in, but also as an industrial town, with new industries coming in ever, day. Therefore, it is not surprising that we have quite a high proportion of industrial injuries.
  I agree that serious illnesses and bad accidents are better dealt with in a large hospital with all the modern facilities,

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  such as the Queen Elizabeth Hospital in Birmingham, but many of these injuries are not very serious, provided they are dealt with on the spot, and that is what the people of Redditch demand—adequate facilities for dealing with illness and accidents on the spot.
  Land is available, and I have discussed the problem with matron and her staff. Whilst they would naturally prefer permanent building to be started immediately, they are quite prepared to accept some form of temporary accommodation until the new hospital is available. What worries the people of Redditch so much is that they understand that under the present proposals it will be 12 to 15 years before the new hospital is available. Although we understand that within 10 years the population will be about 80,000, we shall still be left with one hospital with just 32 beds and no maternity accommodation.
  This is a young town with a lot of young married couples. More and more are coming to the area every month, because one of the chief reasons for expanding the town was to cope with Birmingham's overspill. The birth rate is high, and yet we have no maternity accommodation in the town of Redditch itself, and expectant mothers must go to Bromsgrove or Evesham. These hospitals may not seem so very far away on the map, but I firmly believe that if a young mother has to have her baby in hospital it should be at a local hospital, really close to where she lives. One of the main arguments for this is that it is only natural that a husband should wish to visit his wife and baby as often as possible, but that is almost impossible under existing conditions. The husband's lunch break would be a most convenient time for a visit, but if he has to travel long distances, go home, change and smarten himself up, by the time he arrives at the hospital in Bromsgrove, Evesham or where-ever it may be it is too late for visiting. This is an intolerable situation.
  Feelings run very high in Redditch on this matter, as the Minister well knows, and I thank him for the courtesy with which he received a small deputation I brought to see him. In a very short space of time 4,000 signatures were obtained on a petition calling for improved hospital services which I presented to him. I sincerely
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  hope that the Minister will not brush this aside, as Ministers are apt to do.
  This is a serious human problem, which must be tackled now—not in 15 years' time. I hope that the Minister will give me and my constituents a positive assurance that work will start on the new hospital right now, and if he cannot give me that assurance because there is lack of finance to build the main new permanent hospital, will he give me an assurance that he will provide more temporary buildings until the new hospital is built?
  I know that he disagrees with me on this matter, but I suggest in all sincerity that it would be much wiser to restore prescription charges to those who can afford to pay them, but not, I stress, to those elderly people or those on the margin who cannot afford them. Would it not be wiser to restore those prescription charges and raise about £50 million a year, and spend that money on providing urgently needed hospital accommodation in towns such as Redditch, where we do have industrial injuries and where immediate treatment can prevent a minor injury from becoming a major one? Above all, this money could be used to provide the maternity accommodation which the town of Redditch rightly demands so that young Redditch wives can have their babies near home and their husbands can visit them during normal visiting hours.
  I want the Minister to give this matter more than sympathetic consideration. I want him to give a categorical assurance that this urgent problem is to be tackled at once.
  5.45 a.m.
  The Parliamentary Secretary to the Ministry of Health (Mr. Charles Loughlin): The hour is late, but I can quite understand the hon. Gentleman the Member for Bromsgrove (Mr. Dance) wishing to raise the subject of hospital facilities in Redditch even if the hour were later still for, as he has rightly said, there is much local disquiet about it.
  The hon. Gentleman recalled that in May he brought a deputation to see me to present a petition bearing 7,000 signatures about local hospital facilities, and my Department is at the moment making arrangements to see a deputation from the Redditch Urban District Council. The present population of Redditch is about

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  30,000. The hon. Gentleman said that it was about 36,000——
  Mr. Dance: I got the figures from the Library. Last year it was 36,000, and it is over 40,000 now.
  Mr. Loughlin: There is a discrepancy in the figures, and our information is that the population is about 30,000. But I shall not argue with the hon. Gentleman on that. Redditch has only one small hospital, the Smallwood Hospital, staffed by general practitioners and with consultant out-patient facilities. It has, as the hon. Gentleman said, 32 beds. Over the years, there have been many improvements, especially in the X-ray department, the out-patient department and the physiotherapy department. The people of the town and neighbouring districts look also for the full range of normal hospital services chiefly to hospitals at Bromsgrove, about six miles from Red-ditch, where there is a general hospital with just over 300 staffed beds, including a maternity unit. They look also to the hospitals of the adjacent Worcester district and, to a lesser extent, to the hospitals, particularly the specialist hospitals, of the Birmingham conurbation.
  The hospital service of the future is planned on a network of district general hospitals providing a wide range of treatment and diagnostic facilities for inpatients and out-patients, including units for active psychiatric and geriatric treatment. In this way the most economical use will be made of the limited resources available, including the rare skills which are so necessary to ensure that the patient gets the maximum degree of care and attention.
  This concept of the district general hospital implies a hospital of about 600 to 800 beds serving a population of 100,000 to 150,000. In closely knit urban communities such as the Birmingham conurbation it would be possible to have a larger hospital serving a population of up to 200,000. The new hospital planned for Redditch would serve that town and a district including Bromsgrove. I know that there is particular concern in Redditch about maternity services and the hon. Member made reference to it. At the present time there is a consultant maternity unit of about 36 beds at Bromsgrove General Hospital and one of
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  about the same size at Evesham dealing with general practitioner cases.
  Here it is necessary to spend a few moments explaining the policy on hospital maternity services, but I should not like the House to think that I am unsympathetic to the difficulties with which people are faced and to which the hon. Member made reference, such as those of husbands who want to visit their wives who are in hospital for maternity purposes. We recognise this but obviously—and I think that the hon. Member will accept this—it is inevitable that with a major maternity unit there will sometimes be inconvenience for visitors.
  A maternity unit will normally be part of a district general hospital where full and continuous consultant cover will be on hand for all beds including those available for general practitioners for the care of their own patients undergoing normal confinements. In this way it will be possible to have all necessary resources immediately available for any emergency. There will be not only resident doctors, but also facilities for premature babies and specialist teams for infant resuscitation. In pursuance of this policy, designed for the maximum care for the mother and her child, additional maternity beds will normally be provided only at or close to general hospitals with consultant staff, provided that the access is reasonable.
  The population of Redditch and neighbourhood at present would not justify a viable maternity unit in addition to the unit at Bromsgrove, even if financial provision could be made. However, arrangements are being made to increase the number of maternity beds at the Bromsgrove hospital. Proper maternity facilities do not just mean hospital beds. There is also the domiciliary service and here the local authority has an important part to play, and so has the general practitioner. The need to achieve the utmost co-operation between all three has always been recognised and in all areas the authorities engaged in maternity services have set up local maternity liaison committees.
  The Worcestershire County Council's revised 10-year programme includes the provision at Redditch of maternity and child welfare clinics, and I am glad to say that the Redditch Development Corporation is collaborating closely with the

  1671
  County Council in planning domiciliary maternity services. Sites have actually been acquired for housing additional domiciliary midwives.
  Another matter which is worrying the peple of Redditch and to which the hon. Member referred, is that of accident facilities. In particular they have asked for the appointment of resident medical staff at the Smallwood Hospital to deal with accident cases. I think that the hon. Member recognises that in recent years there has been a trend towards greater interdependence of the various branches of medicine and an increase in the number of accidents which produce multiple injuries, particularly road accidents. Frequently accidents occur where the skills of consultants in plastic surgery, neurosurgery, thoracic surgery and other specialties may be required.
  It is, therefore, important that all injured patients requiring hospital treatment should be taken direct to accident and emergency units under the control of a consultant and staffed and equipped to deal immediately with major injuries and other emergency cases at any hour of the day or night. To achieve this it is necessary to concentrate the service in a pattern of units serving populations of at least 150,000, with supporting services in other specialties and with smaller hospitals receiving less serious cases.
  Two major accident centres are planned for the Birmingham conurbation with a population of about 2 million, and designated accident and emergency units are proposed at the district general hospitals in the conurbation. It will be readily appreciated that the appointment of resident medical staff for accident cases would be impracticable for a hospital the size of Smallwood. In replying to the debate it has been necessary for me to pinpoint to some extent the concepts we have in relation to the types of services we will require in future, and the kind of hospitals we must establish if we are to get the services right. This is the only way to get the matter in its correct perspective when dealing with the problems facing Redditch and other small units of population.
  It is intended that the hospital building programme shall remain flexible. Regional hospital boards are expected to keep their programmes under continuous review and
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  to adapt them to changes in need. Each board will plan its programme from year to year in terms of an allocation of capital, and will be required to match its capital expenditure with its allocation and to adjust its plans as necessary. In this way it is hoped to achieve the maximum degree of flexibility. If it becomes necessary, the degree of priority given to, for example, the scheme for a new district general hospital at Redditch, can be changed.
  Mr. Dance: Does that mean that if, as I indicated, the population of Redditch was likely to rise very rapidly in the near future, the period of 12 to 15 years would be shortened?
  Mr. Loughlin: We must take changes in population into account. Where, in a region, a project was envisaged to start X number of years ahead, but, by virtue of the changed circumstances of the district the board thought that it was justified in changing its plan—proceeding with the project at X-Y years—that should, and, in fact will, be done in many regions. So the answer to the hon. Gentleman's question is that it would be quite possible, bearing in mind the comparative needs of the region as a whole.
  In considering the distribution of financial resources between the regions, we have paid regard to the state of the services at present provided for patients in each region, to the condition of the hospitals and to the rate and distribution of population growth now forecast, including that of new towns. The building programme of the Birmingham region is the largest of any in the country but it is impossible, even so, to do all that the board would like. A scheme for a new general district hospital at Redditch is in place of the former proposal for a new hospital at Bromsgrove and takes into account the proposed expansion of Redditch. In determining the priority for this scheme, the board have had to weigh it against the other pressing social needs of the region.
  The Birmingham conurbation, including Redditch, has been treated as a whole for the planning of the services. The new hospital to be built at Redditch will eventually provide services not only for the people who live there but for those in neighbouring districts, including Bromsgrove. The hospital building programme

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  includes the new hospital at Redditch, which is among the list of schemes expected to start after 1969–70. Discussions are taking place between the board and the development corporation about a site for the new hospital and one has been provisionally selected.
  My right hon. Friend is glad to see that the Development Corporation is fully cooperating with the board. Until the new hospital can be built, the people of Red-ditch will continue to look for the full range of normal services to the hospitals which serve them at present—chiefly those at Redditch and Bromsgrove, supported by those in adjacent districts. The board is considering whether existing hospital services can be augmented. It is proposed to increase the number of beds at Smallwood Hospital, though this depends on whether the Development Corporation in redeveloping Redditch town centre will encroach on the hospital site.
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  Steps are being taken to recruit more midwives and to increase the number of staffed maternity beds at Bromsgrove where, at present, 14 are closed because of the lack of staff. This underlines the point that it is no use having buildings without the staff.
  I know that the hon. Gentleman will be slightly disappointed with my reply. The hospital services are personal and there is naturally much concern in Redditch about the effect of population growth. The board is conscious of the need to watch the position carefully. My right hon. Friend agrees with it on the priority accorded the new hospital at Redditch. I can assure him that the matter will be kept continually under review and that the existing services will be improved in the meantime.
  Question put and agreed to.
  Adjourned accordingly at four minutes past Six o'clock a.m.