PRICES AND INCOMES BILL

HC Deb 10 August 1966 vol 733 cc1718-838

Order for Third Reading read.

Mr. Michael English (Nottingham, West) rose——

Mr. Speaker

Order. Perhaps I can anticipate the hon. Gentleman. I wish to inform the House that I have not selected the Amendment in the name of the hon Member for Nottingham, West (Mr. English).

4.0 p.m.

The Under Secretary of State for Economic Affairs (Mr. William Rodgers)

I beg to move, That the Bill be now read the Third time.

The origins of the Bill, which we are discussing this afternoon, go back a good deal further than October, 1964, when the present Government took office. There has been a growing awareness over the past decade or more—not merely in this country but in most parts of the world—that some positive policy is required if a proper relationship is to be secured between movements of incomes and movements of national productivity and if inflation is to be avoided.

This is not to suggest that there is no longer any need, by the proper use of fiscal and monetary weapons, to regulate the level of demand in the economy. The important point is that this alone is not enough. A policy bearing more directly on negotiated increases in pay and on movements in prices is now widely accepted to be necessary in partnership with a fiscal and monetary policy.

I shall not recall in detail the various stages with which we have developed this policy over the past two years or so. The House does not need reminding that we started with a joint Declaration of Intent—a document which, like any other statement of broad principles, was necessarily phrased in general terms. Perhaps for that reason right hon. and hon. Gentlemen on the other side of the House have sometimes seemed to treat the Declaration, as they appear to be doing now, as a subject for amusement. All that I can say is that all those who signed it—representing both sides of industry and the Government—did so in all seriousness, and I think that the country as a whole believed at that time that it was an historic step forward.

One thing that has become increasingly clear over the years is that it is not enough in this field—and I willingly concede this, not for the first time—to reach agreement simply on statements of principle, however important these are and however great an advance they represent. It is also necessary to create the procedures and machinery necessary to secure their application.

For that reason, we allotted the general task of keeping an oversight of the policy to the National Economic Development Council. For the independent consideration of particular cases, we set up, as the House well knows, the National Board for Prices and Incomes. The Board was appointed last summer, and I think that in all our discussions, both on the Floor of the House and in Committee upstairs, it is agreed that the Board has since made its mark upon the economic field with a series of reports which have made a major contribution to the understanding of many economic problems.

The only argument that we have had is how far the Board's sphere of operations might be extended and how far, for example, as the hon. Member for Oswestry (Mr. Biffen) suggested last night, we might call upon it to fulfil functions which are not at present encompassed by its responsibilities.

It might have been suggested, in these circumstances, that there was no need to change the Board's status. We took the view, however, that since it is clear that the Board can be regarded as part of the established economic machinery of the country, it would be preferable to reconstitute it on a statutory basis. That does not mean, though I am sure that this is clear in the House, that the Board's findings or recommendations would have the force of law. That is certainly not our intention. The intention is to give the Board the status of a body appointed on the authority of Parliament with statutory power to secure the information which it requires in order to carry out its work. This is the thought lying behind Part I and the First Schedule to the Bill.

The new status which we are giving the Board under the Bill does not mean any substantial changes in its method of working. The initiative for referring cases to the Board will continue to lie where it has hitherto, with the Government, although, naturally, we shall keep in close touch with the chairman of the Board in considering its programme of work. In this, as in so many other fields, the more consultation and the more dialogue we have, the better.

Similarly, the responsibility continues to lie with the Government, working, as we have throughout, in consultation with industry, to lay down from time to time the appropriate criteria to guide the Board in its work. We thought it right, despite all our debates on the Bill, to reproduce in the Second Schedule the original criteria set out in the White Paper of April, 1965, since there is much in that White Paper which is of lasting validity.

On the other hand, in the circumstances of the prices and incomes standstill, we shall need to give the Board new criteria to govern its work in the year ahead. We explain in paragraph 25 of the standstill White Paper that we shall be discussing with the T.U.C., the C.B.I. and other organisations concerned, the form which the criteria should take in order to secure the exceptional measure of restraint for which we have called next year.

As my right hon. Friend the First Secretary explained earlier in our debates, having said that we would undertake these consultations, it would not be right if we were to try to anticipate them by suggesting what the outcome might be. On the other hand, there are two particular points of interest which have been the object of concern to hon. Members on both sides throughout our discussions, and it may be helpful if I just take a moment to say a word about them.

The first point is the position of the lower-paid workers. I hope that the House will remember that general recognition that existing wage and salary levels too low to obtain a reasonable standard of living represented one of the circumstances which it was admitted in the White Paper of April, 1965, might justify an exceptional pay increase. That was one of the exceptions set out in paragraph 15 of that White Paper.

I cannot conceive that either side of industry, or, for that matter, either side of the House, would wish that revised and more stringent criteria should fail to recognise the validity of that consideration. But, having said that we recognise the special position of the lower-paid workers, one must also recognise that it is not always easy to identify the lowest-paid groups of workers or to know where to draw the line. Moreover—and this is very important—there is a natural tendency for any special treatment in these circumstances to spread to other groups whose case may be less well founded. Whatever view we may take, particularly on this side of the House, about where social justice lies, we must acknowledge that through a large part of industry the same view is not taken about what the proper differentials ought to be.

Mr. David Winnick (Croydon, South)

My hon. Friend has argued that it is very difficult to define certain groups of lowly-paid workers. Would he not agree, however, that there is one type which is very easy to recognise, and that is the person who, if he was out of work and on National Assistance for his family, would be subject to what is known as the wage-stop? Would not my hon. Friend agree that this type of worker should certainly be exempted from the freeze?

Mr. Rodgers

I have a great deal of sympathy with what my hon. Friend said, but I do not think that he has quite solved the problem of definition. We have been involved both in Committee and in other ways in distinguishing between the problem relating to wage rates and that relating to earnings. We have seen that, however much we feel that we can identify groups of this kind, identification in practice to make the policy effective is a good deal more difficult than my hon. Friend suggests.

Dame Irene Ward (Tynemouth) rose——

Mr. Rodgers

I will not give way.

Dame Irene Ward rose——

Mr. Speaker

Order. The hon. Lady knows that if the Minister does not give way, she must resume her seat.

Mr. Rodgers

I hope to make quite a short speech so that hon. Members on both sides of the House may take part in the debate. I am sure that every hon. Member will have an equal opportunity to catch your eye, Mr. Speaker, if he is in the Chamber at the time.

Another point which has been made many times in our debates is that of the rôle within the prices and incomes policy and under the Bill of productivity improvements or productivity bargaining. Here again, the White Paper which we agreed with industry in April last year was clear in accepting that genuine productivity bargains represent valid candidates for special treatment.

But we must be realistic. If those workers who happen to be in a position to increase their productivity claim the whole fruits of that increase, there will be nothing to spare for other groups of workers, many in the public services, who have little or no such opportunity. Moreover, experience so far has shown all too clearly how great are the pressures to extend improvements in pay or conditions, which may have been negotiated in return for increased productivity, into other areas of employment where the same scope for productivity improvement does not exist. That is why we feel that a simple-minded approach to this question of productivity, as also to the question of lower-paid workers, is bound to be misleading.

Unless we can find a way of distinguishing those productivity bargains which are genuine—and I think that there was a large measure of agreement in our debates about how often so-called productivity agreements are bogus—and unless we can find a way of securing that the community, as well as the parties primarily concerned, receive some share of the benefits, the whole policy could be quickly undermined. That is why, in the special circumstances of the standstill, though again with reluctance, we have felt bound to resist suggestions, however superficially attractive they may sound, that a general exception should be made in favour of productivity bargains.

We hope that all those who are involved in a reference to the Board will reflect carefully on its recommendations and seek to carry them out. The hon. Member for Cornwall, North (Mr. Pardoe) had down an Amendment in the early hours of this morning, and I had a great deal of sympathy with the spirit of that Amendment. His proposal was that there should be a further standstill period of a month after the Board has reported so that the parties involved could reflect upon its recommendations and reach wise decisions. For reasons which I then gave, it was not possible for us to accept that Amendment. Nevertheless, I hope very much that when the Board reports the parties involved will reflect carefully and will seek to carry out its recommendations.

Obviously, in the circumstances in which references are made, public attention is bound to focus at first on the immediate consequences of a report, whether it be on prices or on incomes. But the Board will be very much involved in productivity. I repeat this because at one stage, apparently, it was not wholly clear to the right hon. Member for Leeds, North-East (Sir K. Joseph). The Board's success in the long run may be best judged by the extent to which it helps to overcome obstacles to efficiency in industry of all kinds.

The second major development of the policy, which is reflected in Parts II and III of the Bill, was the institution last autumn of the early warning system. The origins of this are quite simple. It became clear at an early stage in the policy that, however well conceived it might be and however well devised the machinery set up for its implementation, it could never be successful if all the various parties concerned continued to keep their intentions strictly to themselves. This is, of course, particularly true in respect of references to the National Board for Prices and Incomes.

The selection of cases for reference has been and remains the responsibility of the Government, and it is a responsibility which needs to be undertaken, as I think it has been undertaken, with discrimination and after due thought. But if the Government know nothing about an increase in pay or an increase in prices until it has taken place, they can do no more than chase after events. All our experience now shows that the best hope of influencing these decisions and of ensuring that they conform with policy requirements lies in catching them at a very early stage indeed, and it is for this purpose that the Government need advance warning of what is in mind in respect of both pay and prices.

That is why we called on both sides of industry almost a year ago to co-operate in instituting an early warning system for prices and incomes. At that time we called for co-operation in these early warning arrangements on a voluntary basis. I would make it quite clear that we appreciate greatly the response of the T.U.C. and of the C.B.I. to our request at that time. The T.U.C. responded in a quite remarkable way by instituting a vetting system of their own, which, though still in its early stages, represents an important base for the further development of central leadership and influence in the trade union movement.

This is one of the benefits peripheral to the policy itself, which, looking back over the events of the last year, we can see. On the management side, individual companies and their representative organisations, their trade associations, have shown themselves generally understanding of the Government's needs and intentions and have co-operated in making these arrangements work.

But we were faced with a decision whether to let these arrangements remain indefinitely on a purely voluntary basis or to fortify them with statutory powers which could be used if need arose. This was not an easy decision. This has been made clear throughout our discussions. At no stage has it been an easy policy to develop. There have always been difficulties to be overcome and a balance of advantages to be weighed.

The point has often been made—it has been made by some of my hon. and right hon. Friends—that if you ask someone to do something on a voluntary basis, you run the risk of losing his support if subsequently you take compulsory powers. It is a fair point which we did not lightly dismiss. But our conclusion was that in the circumstances, given the importance to our economic life of making this policy effective, it would be right to seek and to hold in reserve limited statutory powers to fortify the voluntary co-operation which we were already receiving.

Mr. Sydney Silverman (Nelson and Colne) rose——

Mr. J. J. Mendelson (Penistone) rose——

Mr. Speaker

Order. The Minister must decide to whom he is giving way.

Mr. Sydney Silverman

In considering the difficulties which are expected in this part of the Bill when enacted, was the Attorney-General consulted as to the probability of being able to make sanctions under the criminal law actually workable in practice, having regard to the experiences of the hon. Gentleman's Department in comparatively recent years in comparable legislation?

Mr. Rodgers

We did consult the Attorney-General at every stage, particularly when we decided that it would be desirable to take statutory powers to back up the voluntary system. I assure my hon. Friend that there has been full consultation and that we are fully aware of the implications of the Bill as it stands. We have had a number of opportunities, during our long nights of discussion, to consider the separate Clauses which are mainly involved.

We did not seek, and do not seek today, to be given permanent powers to control movements in pay or prices. All that we; sought in Parts II and III of the Bill was a strictly limited group of powers which would do two things and only two things: first, enable the Government to require advance notification—early warning—of intended movements in pay or prices, and, secondly, to impose a standstill of no more than one month in which the Government could have time to consider whether any particular pay settlement or proposed price increase should be referred to the Board—that is, a month in which to make up our mind in the light of the best evidence available to us—and a standstill of up to a further three months in those cases where a reference to the Board was made.

I thought at the time, in February this year, and I think today, that the controversy to which the publication of Part II of the Bill gave rise on both sides of the House was greatly exaggerated. Of course, I am aware of the extent to which it represented a departure from our unwritten conventions about collective bargaining. But this change and an effective policy for productivity, prices and incomes is now as important to the average trade unionist as conventions established in a different era.

Sir Harry Legge-Bourke (Isle of Ely) rose——

Mr. Rodgers

I cannot give way, not at his point.

Many of my hon. Friends have, of course, been particularly concerned at the prospect of imposing penalties on trade unionists and we have had considerable discussion about that topic. If there were any question of making it a criminal offence for a trade union leader to do his job, the whole House would, naturally, share this concern; but what we are talking about in Part II is not that at all. It is simply a requirement, if the powers in question are ever used: treating unions and employers alike, first, to provide certain information, and, secondly, to defer action for at most a few months while that information is being studied. Naturally, since it is concerned with statutory powers, the Bill has to make provision for penalties.

I have been speaking so far about the Bill in the form in which it was presented to the House for Second Reading at the beginning of July. I recognise that the powers are novel and, for that reason, it is not surprising that they should have given concern to many hon. Members on both sides of the House. But now that there has been greater opportunity to consider their purpose and scope, I feel confident that the House will recognise the Government's justification for seeking them.

I come to Part IV of the Bill, that is, the temporary provisions—and I emphasise "temporary provisions"—which were added to the Bill in Committee. I confess that I find it difficult to add much of substance to what has been said in the debates on this subject. The House is familiar with the statement which my right hon. Friend the Prime Minister made on 20th July. That statement included a call for a six-month standstill in prices and incomes. No one pretends that it is a palatable proposal. But most people recognise that it was necessary to take it, and this is reflected in the wide measure of voluntary support which the standstill is already receiving.

The same question arose here as we had already faced in connection with the earlier warning arrangement: would the Government be justified, when calling for a voluntary standstill, to seek temporary powers to enforce it? Again, it is possible to argue that it must be wholly one thing or the other—either a wholly voluntary standstill with no powers of enforcement, or a wholly statutory standstill without any voluntary co-operation.

We came to the conclusion that an attempt to deal with it only in terms of black and white did not make sense. In so far as a standstill inevitably involves some measure of sacrifice, it seemed to us obvious that the effectiveness of the standstill would depend on its being generally observed. We should have been running a serious risk if we had made no attempt to secure powers to enforce the standstill in those cases—which, we hope, will be very few indeed—where co-operation was not forthcoming.

The right course seemed to be to seek powers which, though wide in scope, met three requirements: first, that they should be capable of being used selectively, secondly, that they should lapse entirely not later than 12 months after the Royal Assent; and, thirdly, that if they were brought into operation, they should not remain in operation for more than 28 days without confirmation of each House of Parliament.

Incidentally, my right hon. and learned Friend the Attorney-General has asked me to apologise to the House for a slip made yesterday afternoon, when he inadvertently implied that the affirmative Resolution of each House would necessarily precede the bringing into operation of these powers. I think that the procedure is very well understood on both sides of the House, for which provision is made in Clause 25.

Although by now we have had a good deal of discussion on Part IV, both in the House and upstairs, I confess that I am still not very clear where the Opposition stand on the matter.

Mr. Ray Mawby (Totnes)

We are "agin it."

Mr. Rodgers

I hope that hon. Gentlemen opposite will have an opportunity to explain whether that comment by the hon. Member for Totnes (Mr. Mawby), that the Opposition are "agin it", really reflects their views. As I understand, they do not deny that, in the situation with which we were faced, it was right to call for a voluntary standstill. Nor do I gather that they are necessarily opposed to the temporary provisions in Part IV.

Two lines of comment have tended to run through the speeches of hon. Gentlemen opposite. The first is that whatever may be stated in Clause 25 they have no confidence that these temporary powers will, in fact, lapse after 12 months. On this, it must be said again that the wording of Clause 25 does make it technically impossible for the Government to continue these powers beyond the end of a year without fresh legislation passed by both Houses of Parliament.

The second is that the Government may be justified in seeking these powers, but that the House of Commons has been given inadequate opportunity to discuss them. I would not wish to pursue this point at the moment. I can only say that those of us who sat through the debates upstairs, and who have become familiar with each other's arguments, must now feel that it is palpably absurd to suggest that there has not been very full discussion indeed of all the provisions in this legislation.

When we first set out to formulate the policy, in co-operation with industry, 20 months ago, we did not anticipate that the Bill would be required. When we first published the Bill in February this year we had no expectation that anything like Part IV would become necessary. We have taken each step with reluctance, however convinced we have been that we had no alternative compatible with our responsibilities as a Government. Anyone who is not prepared to support the Bill now must still, at this late stage, put to the House what alternative he would put in its place or state the respects in which the contents of the Bill represent something to which an alternative exists——

Mr. Mendelson

Will the hon. Gentleman give way——

Mr. Rodgers

I am sorry——

Mr. Mendelson

This really is too bad. The Under-Secretary must give way. He has just thrown out a challenge to those who are not prepared to support the Bill that they should state alternative policies. Is he aware that that can be done only on Second Reading? Why did he support the Government position in the light of this challenge, and deny the House a Second Reading debate?

Mr. Sydney Silverman

On a point of order, Mr. Deputy Speaker. Further to the point raised by my hon. Friend the Member for Penistone (Mr. Mendelson), a challenge has been made to Members who are still not able to support this Measure to justify their failure to support it by indicating what alternative proposals they would make. Am I not right in saying that to advance alternative proposals on Third Reading would be out of order?

Mr. Mendelson

That is what I said.

Mr. Deputy Speaker (Sir Eric Fletcher)

The hon. Member for Nelson and Colne (Mr. Sydney Silverman) is perfectly right. It is well known that debate on the Third Reading; of a Bill is confined to the contents of the Bill itself. Extraneous matters and alternative proposals would be out of order.

Mr. Kenneth Lewis (Rutland and Stamford)

Further to that point of order, Mr. Deputy Speaker. As we did not have a Second Reading on the Bill after Part IV was added to it, and in view of what the Under-Secretary has just said, would you permit a little licence in Third Reading speeches?

Mr. Deputy Speaker

I am bound, like all hon. Members, by the rules of order. The rules of order lay down perfectly clearly that on the Third Reading of a Bill debate is confined to the contents of the Bill itself.

Mr. John Rankin (Glasgow, Govan)

Further to that point of order, Mr. Deputy Speaker. In view of your Ruling, of the advice which the Minister has just tendered to the House, and of the fact that that advice is wrong, ought not the Minister to withdraw the advice he has given?

Mr. Deputy Speaker

The Minister is as much bound by the rules of order as any other hon. Member. It is quite clear that on Third Reading we are confined to debating the merits of the Bill.

Mr. Rodgers

I regret anything I may have said that was out of order. The point I was trying to make was that opportunities were available earlier to advance alternatives—[HON. MEMBERS: "No."] In my view, no alternatives were then advanced that presented us with any other course but to continue with this legislation——

Sir H. Legge-Bourke rose——

Mr. Rodgers

This really is my final sentence——

Hon. Members

Give way.

Mr. Mawby

On a point of order, Mr. Deputy Speaker. The hon. Gentleman has now said that every hon. Member had an opportunity of making his views known earlier in our proceedings. As Part IV of the Bill was introduced only when we were in Committee, only 25 of us were privileged enough to make points on it—a privilege denied to any other hon. Member on either side.

Mr. Deputy Speaker

At this stage, I am not concerned with what took place at earlier stages. That may be a legitimate matter for comment, but at this stage the debate must be confined to the contents of the Bill itself.

Sir H. Legge-Bourke

I am glad that the Minister has given way to me. I am still a little mystified as to why he did not give way earlier to my hon. Friend the Member for Tynemouth (Dame Irene Ward).

The Minister has said that all the matters in the Bill have been very fully discussed, either last night or in Committee. I was not a member of the Committee, but I was here last night. The First Secretary has said that he hopes to get a voluntary response, but that if a voluntary response is not achieved the compulsory powers set out in the Bill will be sought. We have never yet been told how long into the six months the Government expect that the voluntary effort will have to be tried before the Government seek the additional powers. Will the hon. Gentleman now tell us that?

Mr. Rodgers

The hon. Gentleman has raised a very large issue which, I think, has been fully discussed. However, if he is not satisfied, I am sure that my right hon. Friend the First Secretary will try, when winding up the debate, to meet his wishes in this respect.

Mr. R. T. Paget (Northampton)

On a point of order, Mr. Deputy Speaker. If the Government want alternative suggestions, it is within their power to enable us to make them. They merely have to move the Adjournment now. That would enable the debate to be open for an hour, or two hours, or until they withdrew that Motion, and we then proceeded with the Third Reading. It is very much open to the Government to widen the debate.

Mr. Rodgers

I have been saying that we have taken these measures at each stage with reluctance, although we are quite prepared to defend them, as we have done in our debates. I still believe that we can extract positive benefits of an enduring kind from this legislation. Operated wisely, and with the good will of both sides of industry—and I believe that we shall have it—it can make a constructive contribution to industrial efficiency and a better-ordered and more just economic system. This is surely the aim which all of us, whatever our differing points of view, fully share.

4.35 p.m.

Sir Keith Joseph (Leeds, North-East)

We do not blame the Under-Secretary of State for his dogged tiptoeing through this minefield, but we very much regret that, while he gave way so quickly to his own hon. Friends, he refused discourteously to give way to my hon. Friend the Member for Tynemouth (Dame Irene Ward), and tried to refuse to give way to my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke).

Mr. John Hynd (Sheffield, Attercliffe)

On a point of order, Mr. Deputy Speaker. We have had this over and over again. My hon. Friend gave way to a large number of hon. Members, but was he not tempted to refuse by the right hon. Gentleman the Leader of the Opposition who the other day would not give way for a single intervention?

Mr. Deputy Speaker

That is not a point of order. Whether or not a Minister gives way is a question of fact.

Sir K. Joseph

The political map of this country has changed in front of our eyes in the last few weeks. The old certitudes have gone, the old delusions have gone, that the Labour Party could do no wrong, and this Bill is one of the permanent pieces of evidence of these shattering last few weeks. The Labour Government have got the country into a fearful mess and, for a solution, they seek to slide furtively through Parliament a new instrument of tyranny—this Bill. No one would have believed it possible a few months ago that this Government could, let alone would, produce a Bill like this. It would have outraged any party.

The essential paradox is that it is the right hon. Gentleman the First Secretary who is its begetter. The right hon. Gentleman's many biographers—and there will be many—will have a great deal of explaining to do about the sequence of events over the past few years and, in particular over the past few months.

I only need to mention the shocking display of tacking this Government have shown, the contempt for Parliament they have shown; and to remind the House of the almost universal resentment of hon. Members on both sides at the way in which the Government have behaved, and, in particular, about the way in which the right hon. Gentleman the Leader of the House has behaved. We have not had fair treatment, and it is no good the Under-Secretary saying that we have had ample opportunity, in the right way, to put forward our views. Here we have in the Prices and Incomes Bill a law more fierce against individual liberty than that in any free country, and within its own notorious Part IV there is not even any right of appeal.

I only ask my hon. Friends to contemplate for a moment what would have happened had it been a Conservative Government which had brought in the Bill. There would have been hysteria, right hon. and hon. Members opposite would, no doubt in honest paroxysms, have gone berserk. We would have been accused of tearing up the hard-won rights of the people. The T.U.C., if it had been necessary, would have been excited. Legislation would have been filibustered. I do not think there could be any doubt about that. Clause 30, which obliges employers to steal their employees' money and keep it, would have appeared on a forest of banners and been the subject of a national crusade. Yet now it is the governing party which would rightly have found such a Bill from us monstrous which is now by the majority of its members passively allowing it to pass.

The alibi which some of them are allowing themselves by saying that my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) did something like this five years ago, is utterly wrong. My right hon and learned Friend introduced no penal Clauses against either employers or employees. My right hon. and learned Friend took no powers to roll back price and pay increases which had already been granted. My right hon. and learned Friend never contemplated that bargains already entered into should be broken. In fact, he expressly provided to the contrary. My right hon. and learned Friend's pause was very mild and very effective. It quickly recovered world confidence.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown)

Would not the right hon. Member agree, using his own language, that his right hon. and learned Friend stole the money from the nurses?

Sir K. Joseph

We shall see what happens if this Government are approached, as my right hon. and learned Friend was, with a request from the nurses for a pay increase varying from 20 per cent. to 70 per cent. immediately after the pause. We shall see what they do. My right hon. and learned Friend secured for those nurses retrospectively a 7½ per cent. increase just after the pause was over. Let the right hon. Gentleman be judged by what they do when public servants approach them during the standstill.

It is world confidence that this Government have lost which is causing the agony of the £, the agony of the Government, and the agony of the country. Today we have the 25th instalment of the so far unsuccessful measures to reinstate sterling. We believe that this Bill has the wrong emphasis on a prices and incomes policy. I was delighted to hear that the Under-Secretary, although only in a passing reference, acknowledged this. We believe that it is the first duty of a Government to get the level of demand right. This is difficult for any Government. We are glad to hear that this Government now see that policy as their duty, but this Government from the start have concentrated more on prices and incomes policy than on getting the level of the demand right.

When they started concentrating on prices and incomes, demand was far too high to give such a policy any chance of success. Orders were so plentiful and vacancies so far outnumbered the number of fit and available men to fill them that voluntary restraint was not on. The Government now admit that their prices and incomes policy has so far been a failure. We agree about that, but we claim that this Bill is evidence that the Government have drawn the wrong conclusions.

They believe that because so far the policy has been a failure it must now be made statutory. We believe that it is wrong and that this Bill is wrong. We believe that it was necessary only to reduce demand—by far less an amount than the Prime Minister has now belatedly inflicted on the country—to make both prosperity and growth possible and a success of the prices and incomes policy on a voluntary basis.

Mr. Mendelson

The right hon. Member is on a very important point. Throughout these discussions the Leader of the Opposition has kept talking about overfull employment. What he and the Official Opposition have never told us is whether that means that they want a larger dose of deflation than is now being proposed.

Sir K. Joseph

No. My right hon. Friend has consistently for some months said that the relationship between vacancies and fit unemployed was out of proportion. He has, therefore, urged that the vacancies should be reduced by reducing demand, but, in the event, the amount by which this Government have reduced demand and, therefore, have increased unemployment is far more than we would have found necessary because we would have acted sooner, as speeches of my right hon. Friend give witness.

We see a place—and that is why we welcome Part I of the Bill—albeit a modest one, for a prices and incomes policy. What we do not agree about is giving the policy pride of place, the sole place, that this Government have so far given to it. We believe that the first result of the undue emphasis given by the Government to the prices and incomes policy in a period of inflation was to precipitate the very pay and price increases which they were committed to reduce.

Now we come to the prices and incomes policy within this Bill. We believe that one of the further damaging results of this Government's continued adherence to far too great a concentration on prices and incomes will be to frighten foreigners when there is some apparent breach of the prices and income policy when in fact, due to the deflation the Government have introduced, our basic economic health is being restored. We believe that once again the Government are giving a hostage to fortune in their prices and incomes policy.

We accept that the Government may well achieve a slowing-down in pay and price increases for a few months and on a limited front, but it will be due far more to deflation than to this Bill or to the campaign of the First Secretary of State and Secretary of State for Economic Affairs. Although we agree that they may get some limited success, we also believe that erosion of that success will start almost from now.

The Government are beginning to make a habit of saying that they think public opinion is with them on this Bill. We on this side of the House should recognise that the country may well think that they like an interfering and meddling Government, but they will soon realise their error. People may find entertainment in the spectacle—the honest and sincere spectacle—of the First Secretary of State and his non-stop arm-twisting in what he regards as the national interest, but there are several snags to the popularity of this performance.

First, people will expect more of the Government than the First Secretary can possibly achieve. Every rise and every grievance will be regarded as a failure of the Government. People will complain that although they have not had that to which they felt they were entitled, someone round the corner has received a rise or put up a price and the Government have failed to stop it. Disillusion and disenchantment will come.

Mr. Winnick rose——

Hon. Members

Sit down.

Mr. Winnick

The right hon. Member who is speaking decides whether to give way, not other hon. Members. Does the right hon. Member consider it wrong for the Government to intervene on matters affecting prices? Does he think the Government, for instance, should intervene with reference to the building societies and other organisations?

Sir K. Joseph

This Government are not intervening on the building societies question. Of course we regard it as vital that the Government should have very strong laws against monopoly and for the protection of the public when possible, but we believe that they should get the demand right and let competition rip.

Mr. Winnick

That is telling us.

Sir K. Joseph

Of course, we have always stood for competition.

The second snag to the First Secretary's policy is that we believe that it is just not right for the Government to bully people into not acting as the law allows them, as their own interests dictate, and as the market permits. No doubt people do not mind a certain amount of bullying by the Government when it is only the chairmen of great public companies who are on the receiving end.

However, under the Bill, under the voluntary policy of the Government behind the Bill, and under Part IV if it is activated, it is to be everyone who is to be on the receiving end of the bullying, be it voluntary at the beginning or statutory if Part IV is activated.

We on this side want to draw attention to a very improper use of the word "patriotic" which is creeping into Government habits. Even so sensible a Minister as the Parliamentary Secretary to the Ministry of Labour has begun to use the word "patriotic" in a thoroughly wrong sense, we think. Which is patriotic—to break a moral or legal contract, or to carry it out? Which is patriotic—to hold prices down and to cut quality or investment, or to let prices rise to their proper level and continue with investment? I find it very hard to choose. It is certainly wrong for the Government, because they have chosen one horn of this dilemma, to call the other horn of the dilemma unpatriotic.

The third damaging feature of the First Secretary's policy is that the consequence of interfering with the economy will soon begin to be visible. Prices may or may not be held; but taxes, rates, and the deficits of nationalised industries will steadily rise under this policy. More and more, as time passes, if the First Secretary continues to meddle with the economy, there will be a breakdown in the delicate machinery of supply and demand. There will be grave damage to investment, with consequent hurt to our competitive position, and ultimately to jobs. If the Government activate the lunatic Part IV of the Bill, these objections to the voluntary phase will be multiplied 100-fold.

These are the reasons why we believe that, even if the attitude of the Government has for the moment some public support, it is a very waning asset in the Government's hands. Disillusion and disenchantment will set in rapidly.

We are faced as a result of the Bill with a number of consequences to which I want to refer briefly. We are an economy of choice. Freedom of choice is taken for granted by our citizens. I accept that there is a small but vital proportion of wage earners who receive too little to have any effective freedom of choice. They should be dealt with; and we have urged it, just as hon. Members opposite have urged it, on the Government. But if they number 3 per cent. of the population, vital though they are, that is, I think, a fair estimate. For the other 97 per cent. of the population, freedom of choice, to a greater or lesser extent, is taken for granted. We expect to find the goods of the world in our shops. We are not a seige economy.

The biggest assets of a choice economy are invention and enterprise. We believe that the biggest victims of the Bill and of the voluntary policy behind it, if allowed to continue for more than a very short time, will be just those two—invention and enterprise. They will be crippled and shackled.

The Government themselves recognise that there must be redeployment of labour. If skilled men and women are to be redeployed—there will be a shortage of them, even in the new deflation—there must be, as one hon. Member from the Liberal Benches said so well yesterday, signals. There must be differentials which attract skilled men and women to where they are most needed.

How can there be those signals and differentials, unless there is freedom to move up prices and pay to attract resources and skilled labour to where they are most needed to satisfy the demands of the market? These, therefore, are a Bill and a policy deeply damaging to our choice economy. "To our economy of choice" would perhaps be less ambiguous.

We also believe that this whole policy concentrates on the wrong target. In its focus on incomes it ignores unit costs, which are the real measure of our competitive efficiency. We believe that restrictive practices should be the real target of Government policy. Of course there would be difficulties. Of course, we agree with the hon. and learned Member for Northampton (Mr. Paget) that age-long, deeply dug, restrictive labour practices are not knocked over by one blast, even from Mr. Aubrey Jones's trumpet. But we believe that here is a battle worth fighting, whereas the battle represented by the Bill is not worth fighting, because it is not the right battle.

We criticise the Bill and its consequences because still the Government are trying to squeeze and be loved. We prove that because they are controlling prices for one reason, namely, that only in that way do they think that they can make wage control palatable. We do not think that it will make wage control palatable.

Price control may defeat the whole economic operation. Pay will inch up—I do not think anyone would deny that—even over the next few weeks and months. Prices may move slightly less. To the extent that they do, purchasing power will increase and sq will imports. The end result will be a waste of all the efforts and the passion in the Bill.

We believe, too, that the Bill and the policy behind it will deeply damage investment. I do not think that the Government pretend that this is a danger lightly to be dismissed. I remind the Government that in France, where this sort of policy has been invoked for some years and where they have a great bureaucracy controlling prices, although in the last few years price increases have been reduced from 6 per cent. average to 3 per cent. average, investment is dead; investment is stagnant, and the national plan authorities in France are deeply worried.

Our next quarrel with the Bill and the policy behind it is the abrogation of contracts, moral and legal, which it wishes to impose upon employers. We believe that this will discredit the whole system of bargaining. We agree with the hon. Member for Ebbw Vale (Mr. Michael Foot), who asked what would happen if the railwaymen were asked once again to Downing Street. We think that here again the Prime Minister has discredited yet another instrument of Government. No longer will the meeting in Downing Street represent the credible ultimate in any industrial dispute. After what has happened to the railwaymen, I cannot imagine that people will ever want to visit Downing Street for that purpose under this Government.

Then we quarrel with the whole practicability of this operation, including the Bill. At the moment there is a voluntary price notification policy, which is to be widened by the new White Paper to cover all goods, except those made in workshops or establishments—we do not know which—containing fewer than 100 workers.

I do not wish to take up too much time, but contemplation of the torrent of people wishing, for one reason or another, even in a deflation, to alter prices, leads one to wonder whether the First Secretary has visualised what he is undertaking. There will be such a torrent of letters to him and his colleagues that we can only ask whether it is intended to have a great bureaucracy or to have great delays. Probably the answer is that there will be both.

So we regard the Bill as impracticable. We believe that the Government do not have the information to judge whether and when they should move from the voluntary to the statutory system, and we do not think it possible that the Government could really assess the merits of particular price increases, because the First Secretary has asked that each should be accompanied by a mass of statistical data which would absorb the attention of an investment analyst, let alone busy Ministers.

I come now to the unfairness and contradictions in the Bill. I can dispose of the contradictions in a sentence. In one month the Government introduce the regulator and the Selective Employment Tax to increase prices and to mop up demand. In the next month they introduce the Prices and Incomes Bill, which will penalise anyone who puts prices up. What a contradiction. What Government policy!

Part IV, however, with all its iniquities, is conceived in an attempt to produce fairness. I think we can give credit to the Government for that objective. However, I ask the Government: which is the greater evil—to infuriate all the 6 million with agreements in order to comfort those without agreements; or to let those with agreements have their bargains adhered to and to ask those who have not agreements to stay longer in the queue? I can see that there could be two answers to this question, but I cannot see that the Government can establish that their answer is infallibly the right one. All we know is that either solution will produce an intolerable number of grievances among the people.

Now I come to another aspect of unfairness which has not so far been brought out. This Bill and the voluntary principle of the Bill will hit hardest at the most scrupulous of businessmen, the producer of engineering goods, each carefully specified, and each price on a price list, will be absolutely caught. Even if he wanted to avoid it, which in 99.9 cases out of 100 he will not, he would not be able to do so. Who is going to measure the exact portion of candyfloss that is served at the end of a stick? Who will gauge whether the coconuts in a coconut shy have been fastened just that shade more fixedly to their stands? I do not want to use the Prime Minister's obsolete vocabulary, but all those which are commonly regarded as the frivolous activities of the people will be those that most easily escape from either the voluntary or the compulsory freeze, whereas the people serving the export needs of this country will suffer.

I need only remind people of the consequences for the trade unions. This voluntary policy will be the apotheosis, the heyday of the militant and the martyr. Here we agree with hon. Members below the Gangway on the Government side who spoke on this matter.

I now come to the question of timing. The Government laid great emphasis on the fact that the Bill lapses after 12 months. We do not doubt it. That is in the Bill. It lapses after 12 months; but the Government can legislate again. We believe that such is the clumsy touch of this Government that more evils may well beset the country and they will find it hard when the 12 months are up and will want to come to the House again for these draconic powers.

There is a further hurdle before the 12 months are up. The First Secretary is already dressing up as Santa Claus for the end of the first six months. He is promising to look kindly on the lower-paid workers. No doubt, there are other people at whom, in private conference if not in this House, he is promising to look kindly in their interests at the end of six months. There will be a flood of expectations building up for the end of the first six months. But at the end of the first six months the deflation introduced by the Government will be beginning to bite severely. Will there be a will to increase wages when the time comes? Even if the First Secretary decides that it is consistent with the national interest for him to wave the magic wand, will he find employers, in the new deflation introduced by this Government, so ready as they have been up to now? The economy seems to lurch from crisis to crisis. We have doubts whether the Government will catch up sufficiently under control to be able to avoid coming back to the House in 12 months for further new powers.

It is a sad commentary that the First Secretary, even himself, cannot pretend to look 12 months ahead. He has had the honesty not to try to tell us what the state of play will be in 12 months. Yet the same right hon. Gentleman is going to make another National Plan for the next five years.

We believe this is an evil and an unnecessary Bill, and I hope the Under-Secretary, if he has misinterpreted the solid series of votes that this side of the House cast against all stages of the Bill except Part I, will not misinterpret what I am now saying. Had the Government acted earlier to deflate far less severely than they now have, the economy would have been far healthier and the Bill would not have been required.

We have been told that the Bill is an alternative to deflation. The country has got deflation. Government spokesmen try to pretend that we want more deflation in place of this Bill. That is untrue. We do not. We wanted less deflation than the Prime Minister has inflicted on the country, but we wanted it sooner, when it would have been effective. Under any Government with a reasonable name for consistency and efficiency, the deflation introduced by the Prime Minister three weeks ago would have been more than enough. If the Government's creditors and the country's creditors asked for this Bill they should have been told that the Bill is not the remedy for our troubles. They could only have been told so by a Government who had performed their first duty to their citizens by getting the level of demand right. If our creditors needed to be placated, the Government should have thrown them a change of policy on steel, and not the liberties of the people.

We want a high-earnings low-cost economy. This Bill and the Government's policy are the antithesis of our needs and aims. We take no delight in the fact that we and the Labour rebels at least agree in hating the Bill, because we agree in so little else. The Labour rebels' paradise is full of controls, and their proposals would waste and ravage what prosperity this country has. They would tie up enterprise in shackles and divide a wealth that would dwindle and not grow. The Government should know better. They should know that enterprise, investment and choice are the life blood of this country. That is why we condemn this Bill, except Part I, so absolutely. It will achieve nothing that their own deflation, excessive and belated though it was, will bring about. We pray that the Government will never activate the infamous Part IV. There can be no doubt that they know the views of all parts of the House on this part of the Bill. If the Government have, as we believe, put the country into so desperate a plight that foreign advice has to be accepted, however unsuitable and intolerable, the sooner the Government go the better.

5.6 p.m.

Mr. J. Grimond (Orkney and Shetland)

The Government have told us this afternoon that they regret the necessity for this Bill. So, I should hope, they do. It is incredible to me that as mild a word as "regret" should be used about a Bill which carries a description opposite Clause 30 which reads: Authority for employers to disregard pay increases in existing contracts. Then the Government went on to say that it had been fully discussed. So it is quite sufficient to have 25 Members of this House sitting all night in an upstairs Committee room and then to say that it is an adequate forum for removing from people liberties which no other Government have ever thought of touching in peace or war. I wonder what the Minister thinks the House of Commons is for. Perhaps he thinks that the whole assembly could be reduced to 25 people and that they could sit through the night in a Committee room upstairs considering whatever business the Government like to put before them.

In any case, is it a good thing that the Government should regret it? Is it a virtue on the part of the Government that they introduce an economic policy which they regret? The truth is that they now go from crisis to crisis on a purely tactical exercise with no long-term economic strategy whatever. I for my part would make my view clear as to the general purpose which the Government claim is behind this Bill. I certainly regard inflation as serious. It may so far have been contained for many people to a degree which is tolerable, but for many other people it is already intolerable. Many of the people who suffer from it most are the most deserving members of the community. Further, it has made the economy extremely difficult to manage. Should it accelerate, it might turn into a general distrust of money and we could have an unmanageable situation such as has not been unknown in Europe in the last 40 or 50 years.

Further, I regard it as serious that there has been a steady decline in the position of this country relative to the rest of the world. The Prime Minister used to be a great one for quoting the league tables. He must now be haunted by his own speeches, when he considers that under his leadership we have dropped entirely out of the top division altogether and are now fifteenth in the world for output per man.

Certainly we need a policy which will check inflation, as well as a policy to increase productivity. We need a policy to relate incomes more closely to the goods and services available. But our case is that this cannot be done by the incomes and prices policy of the sort attempted under this Bill. The Government themselves never thought that it could be done in this way. As the right hon. Member for Leeds, North-East (Sir K. Joseph) said, they told us at one time that the Bill would be the alternative to deflation, but now we have both.

What is the position of the National Board for Prices and Incomes? The incomes and prices policy must pull with and not against the other policies of the Government, but while calling on everyone else to restrain their expenditure the Government have increased their own. It has gone up by £1,200 million since the Labour Government took office. The Board may be able to give us some guide lines about fixing rates of remuneration in, say, the public sector, it may be able to have a marginal effect if it is moving in the same direction as the Government, but it cannot be expected to dam a running tide of inflation propagated by the Government themselves. The nationalisation of steel is extremely inflationary, and this at a moment when the Government are appealing for an all-round standstill.

What is the position of the Prices and Incomes Board now? The Bill has produced a curious pantomime monster of which the head is the First Secretary and the hind legs are Mr. Aubrey Jones. As I understand it, the Board has nothing to do with the statutory freeze which may now be enforced. This might have had something to be said for it if the Board had been used for the long-term job of working out standards and priorities in the incomes structure and doing a task of education. But it has not been used for that purpose. It has been flung into the gap again and again to stem the tide of new demands for pay increases.

This having been done, it would be more reasonable to use the Board as the instrument for deciding whether action need be taken against any increases in the six months period rather than to entrust this task, as, apparently, it will be entrusted to a heterogeneous collection of Ministers and civil servants who have no experience in the matter whatever.

One of the many impractical parts of the Bill is revealed the moment one asks who is to decide whether action is to be taken. Who is to decide whether the price of screws is to go up a .d., who is to decide whether the "Bunny" clubs are entitled to increase the pay of their bunnies, and so on? If the machinery is worked in this way, it will either employ an army of civil servants or it will become a farce. This is one of the main objections to the Bill. It might be tolerable to have a Measure which brought about such flagrant infringements of personal liberty and well established customs and standards of industrial behaviour if it was workable, but to have an unworkable Measure which does that is more than the House should tolerate.

That is by no means the only contradiction between different aspects of Government policy introduced by the Bill. In the autumn, the new graduated contributions will come in. How far are employers to be allowed to raise prices or employees to demand extra pay? As for the Selective Employment Tax, the First Secretary himself said in the Budget debate that, although he hoped that a great deal of the extra cost would be absorbed, some of it would no doubt be passed on in higher prices. What about the additional charge for petrol? What about the regulator? Are these measures intended to put prices up or to put them down? It is no good saying that the costs can all be absorbed because if they were all absorbed the purchasing power in the hands of the public would increase and the amount available for investment would decrease. We must at least give the Government credit for not having that as their policy.

What about the contradiction between freezing council tenancy rents and trying to keep down rates? It is absurd to expect local authorities to keep down rates if we do not allow them to put up rents. In Glasgow the situation has reached such a pitch that if rates go up further they will unquestionably drive employment out of the city.

The most damaging charge against the Bill is that its provisions are entirely related to the short term. In the 20 months of Labour Administration, we have never got away from the short term. It is almost admitted in the Bill that, once the 12 months period is over, it will be in order to put in the usual round of price increases and pay demands. If that happens, we shall be back to inflation as before.

There is talk in the White Paper of productivity catching up—that is the phrase—but why should it catch up? It is not catching up. It may be rising slightly, but it is not rising nearly enough, and there is nothing in the Bill to encourage productivity to rise further. On the contrary, there will be the opposite result. The effect of the freeze will almost certainly be to reduce it. This was pointed out very forcibly by the Prime Minister himself in the days when he was critical of the sort of policies he now puts into effect.

Mr. A. Woodburn (Clackmannan and East Stirlingshire)

The right hon. Gentleman is giving a most interesting catalogue. Will he explain what is the good of anything?

Mr. Grimond

I am at the moment explaining the absolute uselessness of this Bill, and that, if I may say so, is a legitimate point on Third Reading. I said earlier that I did not deny that the problems with which the Bill is supposed to deal are real problems. What I am saying—I am trying to build up a reasoned case, unlike the case to which we have so often listened recently—is that the Bill will not achieve its supposed object. This is widely accepted now not only on this side of the House but by Members on the same side as the right hon. Gentleman himself.

Does the First Secretary of State think that the Bill will increase mobility? Up to now, it has always been believed that the way to increase mobility was to offer inducements to people to move, to make it easier for them to move by having retraining schemes adequate to meet the need. But we have no such thing. It was always believed that mobility would be greater in a time of expansion, not contraction. If we have a total freeze like this, whether it be necessary or not, it must have the effect of encouraging employers and labour to dig in and remain where they are, and this will be all the more so if we hold prices level and there is a severe deflationary situation next year. It will favour the unenterprising employer and the one who hoards labour.

Furthermore, I am given the impression all the time that the Government believe that this is a battle which can be won in six or 12 months. I do not believe that for a moment. It is a long-term battle, and I deeply regret that there is in the Bill no sufficient attention to the long term. Its provisions are wholly negative. Once again we are told that these measures are the price we must pay for time. We have been told that again and again in the last ten years, that we must do something which in the short run may be damaging and unpleasant, but we shall gain time. The truth is that we have never used the time we gain, and the painful events of the past three weeks give the answer all too clearly to what has happened in the last 20 months.

Let us hope that the Bill does succeed in buying time. I suppose that everyone in the House, however critical we may be of the Government's methods, must hope that we do get inflation under control, that we get productivity agreements, that we hold the £, and that at some period this country is able to expand. I am not in the least attacking the First Secretary of State for his objectives. I attack him for his methods, which is a perfectly legitimate thing to do in the House, as he appreciates.

As I say, whatever we may feel about the chances of our buying time by the Bill, we must hope that time will be gained, but what are we to do during that time? We must not emerge from this period with a helter-skelter rush of wage demands. I think that this has been accepted by the Government. I hope very much that they will allow the Prices and Incomes Board to gel down to its proper longer-term job of working out the priorities between the demands which may arise and establishing standards by which pay rises in the public sector are to be geared. I fully agree, as I have said, that it is essential to allow productivity agreements offering higher pay for better production, but it is essential also not constantly to allow the public sector in all its forms to fall far behind, thereby making it difficult for us to recruit to the police, for instance, and creating extreme dissatisfaction in various sectors of the economy which are of great importance although not directly engaged in exporting or manufacture.

On the question of productivity, I do not believe that it is possible for the Government to conduct our affairs at the centre by trying to control every agreement, every price and every wage structure in the country. They have to decentralise it. They must keep control over the climate to ensure that their own policy is not inflationary but is geared to the general needs of the country, and then they must encourage productivity agreements to be reached industry by industry or even plant by plant. One of the faults of the present incomes policy is that it is too centralised.

Further, the Government, in matters which lie directly under their hand, must show that they intend to pursue a policy which will contain inflation not merely for a year or so but much longer. The crunch will come at the end of the current period of cuts when we may be in not only a deflationary situation ourselves but a deflationary world. What do we do then? The great danger is that we may fail to raise productivity and get back to expansion, but still have to maintain controls on prices and incomes. To me, this will be a disastrous ending to the exercise, but one cannot rule it out. Just as I hope that the Prices and Incomes Board is working out priorities, so I hope that the Government, when they can tell local authorities that there is more money to spend, will be able to give a much better direction than has been given over the last ten years about the priorities that they should be pursuing.

I finish by saying that I believe that this is a misconceived Bill. It is a Bill which, by its attack on the good faith of employers who have come to agreements with their workers, may do very long-term damage not only to Britain as an industrial nation but also to the credit of the Government themselves. That having been said, no one should be under any misapprehension about the need for the country to take steps to deal with inflation, raise productivity and improve industrial relations. If we are to have any hope for the future, we must soon have from the Government a much clearer and more convincing account of their long-term strategy than we have had up to now.

5.22 p.m.

Mr. Iorwerth Thomas (Rhondda, West)

I note the eagerness of my hon. Friends to participate in this debate, a large number of them having risen at the same time as I did, so I shall be very brief.

It may sound rather strange that I should support the Bill because the proposals in it are a sincere and genuine attempt to establish over the major sections of our economy the principles, concepts, precepts and practices of my right hon. Friend the Member for Nuneaton (Mr. Cousins). It may appear to be paradoxical. But let us examine what my right hon. Friend declared in the Daily Mail immediately after his resignation: It must be understood in future that if we are to have a real basis for pay increases, they must be associated with production and efficiency. That is what my right hon. Friend the Member for Nuneaton believes, and he has on occasions boasted that he has been individually concerned recently in negotiating agreements on that basis.

The Bill proposes that the Prices and Incomes Board shall accept responsibility in examining agreements for applying the very test enunciated by my right hon. Friend the Member for Nuneaton. Therefore, having regard to what my right hon. Friend has repeated from time to time, I suggest that if he is conscientiously concerned about the precept and the policy, in fairness to his own union he should be a member of the Board. It would be unfair to my right hon. Friend if his union participated in the negotiating of wage agreements on the basis that he sets out and other trade unions recklessly disregard all these restraints and considerations.

In fairness to his own members, my right hon. Friend should be sitting on the Prices and Incomes Board to ensure that there is compliance with this concept of what should be done. I believe that as time goes on he and his supporters on this side of the House will find that the Bill will attain the very objectives that he has outlined.

I come to the basic principle involved in the Bill and the concepts that motivated its drafting. There is resentment on this side of the House against the Bill, and this is based on the fact that it is an interference with the rights and privileges of trade unionists, that the State has no right, particularly in the context of the present situation, to exercise any power of restraint or interference with the freedom and liberty of trade unions.

I will quote in aid of my support for the Bill the ideas many years ago of hon. Members who are violent in their opposition to the principles of the Bill. I believe that the Bill is sound for more reasons than one, and particularly sound because it supports the outlook of hon. Friends of mine who are now opposed to the Bill. I call the attention of some of my hon. Friends to their ideas and concepts on this principle in 1947. During that year, the publication "Keep Left" was issued. Among the authors of it were my hon. Friends the Members for Ebbw Vale (Mr. Michael Foot), Poplar (Mr. Mikardo) and Bosworth (Mr. Wyatt) and a former Member, Mr. Geoffrey Bing.

This is what they said on economic planning: A democratic Socialist economy cannot operate successfully if wage fixing is left either to the arbitrary decision of a wage freeze or to the accidents of unco-ordinated sectional bargaining. So they admit in principle that it is necessary to bring these elements into the economy, even so far as the unions are concerned.

Mr. Albert Booth (Barrow-in-Furness)

Will my hon. Friend examine that definition again? It speaks about a democratic Socialist economy. Our argument does not change. We are still waiting for a democratic Socialist economy.

Mr. Thomas

My hon. Friend has surely misinterpreted history. We cannot wait until we get to the Promised Land. We have to work our way to it. I hope that he will take note of that historical fact.

The resentment sincerely expressed here is the resentment of the trade unions to the fact that the Bill will interfere with their rights. During the time of the squeeze, when the late Sir Stafford Cripps was Chancellor, the authors of "Keep Left", my hon. Friend the Member for Ebbw Vale and my hon. Friend the Member for Poplar, resented the fact that the trade unions told them to mind their own business. What was their reply to the trade unions? Again, I read from that pamphlet of 1947: We are minding our own business. It is the measure of the greatly increased status of the trade union movement that its business is the nation's business and its difficulties are the nation's difficulties. Their sentiments of 1947 are in accord with the attitude of the Government as reflected in the Bill.

I come to the more basic part of their argument. Again it is in "Keep Left". This is another quotation: We recognise that wages in any industry are no longer only the business of the employer and the workers in that industry but of the whole nation. Those are the correct sentiments. In that period of freeze, there was a certain amount of condemnation of the fact that there was no lead from the Government of the day—that the Government of the day were not giving a lead by incorporating into their legislation and their policy the sentiments which I have quoted.

Mr. Michael Foot (Ebbw Vale)

I do not know whether my hon. Friend thinks that he is making a devastating comment by making this argument. When he made his speech yesterday, my hon. Friend the Member for Poplar (Mr. Mikardo) started by recalling precisely this argument. He said that the whole argument against the Bill was based on the acceptance of the principles which my hon. Friend has just read from that pamphlet, "Keep Left".

Mr. Thomas

As far as I understand the speeches of my hon. Friends——

Mr. Eric S. Heffer (Liverpool, Walton)

Was my hon. Friend here last night?

Mr. Thomas

I have been here many nights recently. I was a member of the Committee on the Bill.

Mr. Heffer

My hon. Friend was not here last night. Did he hear the speech of my hon. Friend the Member for Poplar (Mr. Mikardo)?

Mr. Thomas

I took part in the discussions on the Bill upstairs——

Mr. Heffer

Did my hon. Friend hear that speech last night?

Mr. Thomas

—when my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), who should have been sitting on that Committee, was away from the country.

Mr. Heffer

But did my hon. Friend hear the speech of my hon. Friend the Member for Poplar last night—the speech outlined just now by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot).

Mr. Thomas

Yes, I was here last night, and I am quoting from his remarks in 1947. I was on the Committee to which my hon. Friend the Member for Walton was appointed, but he chose to go away elsewhere instead of remaining on that Committee and expressing his point of view.

Mr. Heffer

I will get you for that, mate.

Mr. Thomas

May I remind my hon. Friend that I have lived too near to the woods to be frightened by owls.

Mr. Heffer

On a point of Order. Mr. Deputy Speaker, I should like to ask for your guidance. I was away at the Council of Europe's Political Committee, having been appointed to that Committee by this House.[HON. MEMBERS: "No".] Therefore, this decision to go was taken long before I was put on the Standing Committee. When I discovered that I was placed in this great difficulty, I asked to be replaced by someone who held my point of view in relation to the Bill. It was on that basis that I travelled abroad at that time, on Parliamentary business and on no other business.

Mr. Deputy Speaker

The hon. Member has given his explanation. May I now hope that the hon. Member for Rhondda, West (Mr. Iorwerth Thomas) will continue his speech?

Mr. Thomas

I will continue it—and continue it to conclude my speech.

At a time when, in 1947, we were experiencing the greatest austerity, hon. Members on this side of the House were calling for leadership. These again are words which I quote from "Keep Left"—in 1947: We need a strong lead from Downing Street. If the partnership between political labour and industrial labour means anything it should be strong enough to fashion a new and more responsible place for workers' organisations in the planning and operation of a Socialist economy. The Bill, in 1966, is the first effort made by a Government to put into legislation all these theories and ideals which have been expressed on the function of Government in relation to trade unions and the economy.

The great weakness of the opposition to the Bill on this side of the House and on the opposite side of the House is that they are attempting to apply normal standards to an abnormal situation. When we get rid of all the technical arguments on the Clauses and the Amendments, the issue before the House is very simple, we either vote for the Bill with all that some hon. Members think might be its imperfections, accepting that there is a need at this juncture for an element of restraint, an element of persuasion and an element of compulsion, or, in refusing to vote for the Bill, we say that we shall leave things as they are. That is the test—to leave things as they are and to throw the whole economic structure of the country back into the jungle.

I am conscious, as are most hon. Members on this side of the House, that we must have regard to our bitter experiences. I speak for a constituency in the Rhondda Valley and I probably reflect the view of most hon. Members from the old depressed areas. We are prompted to support the Bill by a certain amount of logical assessment of what it means, and fully conscious of the consequences; but there is also an undercurrent of fear that if we fail now to attain the objectives of the Government, we shall be faced with the only and the inevitable alternative, that we shall slide back to the days of the 1920s and 1930s.

I feel that the people I represent, and people in all the other depressed areas of the country, when they realise and balance up the situation—with certain fears of what may be in the Bill balanced against the more deep-rooted emotional fears from a recollection of the past—will recognise that it is far better to accept the complications and difficulties of the Bill than to be faced with the inevitability of a collapse which will not only undermine the standards of living in the former depressed areas, but will involve great sacrifices and a lowering of the standards of living of millions of people in this country.

I believe that the Bill, along with other measures taken by the Government, will bring about a situation which will avoid that possibility. I wholeheartedly support the Bill.

5.40 p.m.

Dame Irene Ward (Tynemouth)

The speech of my right hon. Friend the Member for Leeds, North-East (Sir. K. Joseph) magnificently and adequately expressed my own views about the Bill and I need not add anything, although I want to ask one or two specific questions for clarification and enlightenment.

I am sorry that the Under-Secretary did not see fit to give way to me. I would never bear him any malice for that, because I think that he is very young and I think that his political success has come a little too quickly. When he has lived a little longer and knows a little more about industrial problems, he will improve. I often disagree with right hon. and hon. Members opposite, but the way in which the hon. Gentleman dealt with the traditions of the trade union movement and the way in which the words tripped so eloquently and quickly from his lips showed that he did not know very much about the struggles of the past.

He will never be the success that he probably thinks he will be if he does not learn a little more about some of the motives to be found in the speeches of hon and right hon. Members on both sides of the House, whether one agrees with them or not. One has to accept tradition and one has to pay respect to tradition. Having struggled a long time in my part of the world, I think that perhaps I know a little more about the difficulties of ordinary people than the hon. Gentleman does. However, I bear him no malice, because I think that he will learn.

He spoke of the problem, and a serious problem it is, of the lower-paid workers. There are many lower-paid workers, as we very well know. I did not expect the suggestion which I intended to make would be of any benefit to the hon. Gentleman, but when we have the opportunity we ought to pool our ideas, whether they come from my side of the House, or from any of the divisions on the other side.

As the hon. Gentleman rightly said, it is difficult to define lower-paid workers, but there is one category which can be easily defined. It is only a very small section of the problem, but there are about 200,000 people who are excused paying National Insurance contributions because their incomes are too small to carry the burden. That might be the category from which the Department which the hon. Gentleman serves so well might proceed in order to try to find a solution to this problem. Coming from the part of the country which I represent, it is with great regret that I have to say that it will be those who can least afford to meet the obligations of the Bill who will be dealt with most hardly. That is why I disliked the slick attitude of the hon. Gentleman, because he does not know very much about lower-paid workers or people who live on small fixed incomes.

I did not serve on the famous Committee. I am sorry about that, because I would have liked the fight. However, I sat here most of last night and listened to most of the debates on the Bill, particularly on Part IV. What is to happen to that section of the community who are not to be allowed wage and salary increases to be put into operation at the expected time? I am thinking of the railwaymen and policemen as examples of a whole list. They will be badly hit by the Bill. What will be their position when the time comes to implement wage agreements for which a hard fight has been won?

How will their pension position be affected? I asked a Question about this the other day when I asked whether their pension position would be safeguarded. The deferment of wages and salaries for six or 12 months is reflected in pensions, and I asked whether that aspect of the situation would be protected. I was very perturbed to find that the answer was "No". I cannot believe that that was the whole answer. If it was, will have to co-operate in the national interest for the rest of their lives. I cannot think that that would be a fair those who co-operate in the national interest and whose pensions are affected interpretation of a fair share of the burden of co-operating in the national interest.

There may have been another explanation which I have not heard, but if what I was told reflects the true position, then it should be put on the record so that everybody who reads the debate, not least the trade union representatives of those who will be affected by the deferment of increases, will know exactly what the position is. For instance, the pension of a doctor reflects the amount of time he has spent in the National Health Service and the amount of pay which he has received.

It is absolutely essential that we should have this point clarified. There is also the matter of increments. There are various categories of people who receive yearly increments added to their salaries or wages. Will those people be allowed to accept the increments, or are these frozen, too? A great many people would like to know this. It is not only these people who are affected, but all of those who receive annual increments. Will they be paid or not? It may have been made perfectly clear, but I have never heard it being so made and it is very important that it should be.

Last night an hon. Gentleman opposite made an intervention during the speech of a Front Bench spokesman, who said that the hon. Member's point would be dealt with. I have tried to find the reference in HANSARD, but I am unable to do so because HANSARD only goes up to half-past ten in the evening. I listened to the right hon. Gentleman when he wound up, but I did not hear any reference to the point raised by the intervention. At four o'clock in the morning it is easy to miss something, but I would like to know the answer to this question, which dealt with the position of the public service pensioners and those who come under the Royal Warrant—Service pensioners, officers and other ranks. These are people who have already served their country.

I noticed that when we entered on the final discussion of this Bill the right hon. Lady the Minister of Social Security said that there was going to be no hold-up over the wage-related benefits. Everyone was very glad about this, but that only refers to those who are in employment, although a lot of these will be deprived of it when deflation sets in and the target figure of unemployment which the Government have set has been reached. What will be the position of a public service pensioner and those who are covered by the Royal Warrant? Although there are some who have a better pension than others, the vast majority of them are very badly-off indeed. I hope that the right hon. Gentleman, who I always find is a very sympathetic character and who, I think, knows a great deal more about life than his Parliamentary Secretary, will be able to answer this question.

I hope that he is not going to say, as has been said by Governments of both Parties, that the best that can be done for these people is to curb inflation. That is true, but one can curb inflation for those with higher wages and higher incomes, and one can curb inflation for people who have not got enough to live on anyhow. I want to know whether these people have to wait indefinitely. I have noted the intervention made by the right hon. Gentleman about nurses. That is something else which he has just thrown off the cuff. The nurses had the thick end of the original pay pause. I admit that because I addressed them at the Albert Hall, when I spoke in support of them. I do not always agree with my own Government. Why should I? I am free, much "freer than the Under-Secretary. From the way the right hon. Gentleman made his intervention about the nurses, one would have thought that we would have been able to solve the whole problem. I hope that he is not thinking that he is going to solve the problem, because it will be very hard on the nurses if he is.

The Government have imposed enormous burdens on the Royal College of Nursing, the General Council of Nursing and the Chartered Society of Physiotherapists through the S.E.T. These are all bodies which serve the public devotedly. It is all very well when it suits the right hon. Gentleman to throw out these words, but he did not convince his own Cabinet of the need to support these bodies. He has made them pay, so let us have no more argument from the right hon. Gentleman about what the Conservatives did about the nurses. What we did—[Interruption.] It is no good trying to do this, What we did for the country was to give it a much better position, without imposing increased taxation or curtailing liberty. There is no argument about that at all. [Interruption.] Hon. Gentlemen opposite mumur away like a lot of horses snorting in horse-boxes.

I am asking the right hon. Gentleman, when he winds up, to deal with the points that I have raised about those who are dependent on their pensions and their increments for preserving their living standards, because they have to meet inflation. I want to know how these people are to be affected. All I can say is that I hope I shall live long enough so that in about six months or twelve months' time I shall be able to challenge the Treasury Bench, speaking with many of the facts produced so excellently by my right hon. Friend, and hear it say that it wished that it had taken my advice at the appropriate time.

5.59 p.m.

Mr. Roland Moyle (Lewisham, North)

The House is likely to be a less gay place now that the hon. Lady the Member for Tynemouth (Dame Irene Ward) has sat down and I have begun to speak. I am very glad to be able to follow her, because she touched upon one or two points that I would like to raise.

I have worked in industrial relations, before coming into this House, for about 10 years, and I am well aware of the intricate and delicate relationships existing within the industrial relations sphere, which one has to recognise and with which one tampers only with great care and a clear idea of what one intends to do, even if one's general aim is to improve the situation. Nevertheless I feel that, in this particular situation, we have to endeavour to introduce some form of law and order into a situation which, in the industrial relations area of our economic jungle, is in need of a certain amount of regulation and order.

In spite of the bias which my experience gives me against the introduction of legislation in this field, I would think that this form of legislation is about the minimum and maximum which can be tolerated to achieve the results which we all desire. Nobody can deny that the legislative intervention being considered in this Bill is vigorous, severe and far-reaching. On the other hand, it is concentrated on the one important part of the bargaining process, which is the crunch of the negotiations.

The processes leading up to the negotiations are left free by this legislation. The processes by which the various interests are balanced by the parties, the various solutions put forward, and what are regarded as the relevant facts on which bargains are made are left free for the parties to consider. It is only when we come to the final possible bargain on wages and salaries and forms of income, on the one hand, or on a price increase, on the other, that there is legislative intervention. This is possibly the only way in which we can go about this knotty problem of trying to bring the industrial relations side and the prices side of our economy out of anarchy and into law and order.

I know that hon. Member opposite have put forward a number of suggestions for introducing legislation to cover the industrial relations process, but I feel that the Bill is a much better method of going about the matter because their ideas would involve clogging the industrial relations negotiations long before the settlement was reached and would tend to make the process, as we have operated it up to now, totally ineffective.

Although we have had a great deal of argument about whether Part IV is a separate series of principles from Part II, both parts, to my mind, are founded on the same principles. If a person is prepared to support the principles of Part II, I cannot see that he should have any objection, on principle, to supporting Part IV. I can readily understand that there must be a number of people in the country—and the union of which I am a member has made it patently clear that there are a number of people in the country—obviously suffering a bitter sense of injustice because increases which they were about to receive have been held up by the possible introduction of the policy embodied in Part IV. I appreciate how they must feel.

Nevertheless, if the principle of controlling the increase in wages related to the increase in the growth of the national product, which is the essential principle of Part II, is accepted, then, if the economy is not doing as well as one expects, it is legitimate for a new series of norms to be introduced for the control of the situation for a particular period.

This is what has happened under Part IV. I agree that the machinery under Part IV is different from the machinery under Part II, but the essence of the Part II machinery is that we are living in a situation in which there is a certain amount of room for manœuvre and we have to have a body with a certain amount of discretion to maintain the principles of the policy and, at the same time, allow for exceptions.

But during the current 12 months this situation will no longer be with us and, therefore, the need for different machinery which can act much more quickly can be justified.

Mr. Sydney Silverman

Is my hon. Friend really saying that the introduction of criminal sanctions into industrial relations is to be considered purely as a matter of machinery?

Mr. Moyle

I should have thought that essentially it was. I can understand that a number of people have the strongest objection to this point of view, but as a proposal for extending the essential operation of the policy I cannot see that the criminal sanctions in Part IV differ in principle from the criminal sanctions in Part II if it is introduced. We have to face this. This argument has already been met.

The policy enshrined in the Bill provides us with a number of opportunities for balancing the social requirements of one group against another which have not been met by policies pursued by previous Governments of either party. For instance, it has long been the practice that, whenever this country has run into considerable economic difficulties, the Government of the day have sought to deflate by concentrating entirely on the wage and salary movements of people in the public sector in the hope that in time it will spread to the private sector and in time will have some effect on the prices situation.

The effect of this policy on wages and salaries in the prices sector and on dividends and prices has been very long-term. In the meantime, public servants of all classes have suffered an acute sense of injustice. The public services and the nationalised industries have not attracted the type of labour which they would wish to keep their services going at the maximum efficiency, and a sense of social injustice has been created.

The Bill gives the opportunity for the first time of extending into other fields, such as wages in the private sector and prices, the controls which the Government have always been able to exercise and, in the past exercised, with discriminatory effect on servants in the public sector.

Mr. Heffer

Does not my hon. Friend think that there is a slight contradiction here? The Prices and Incomes Board made a report in relation to the manual workers in the Civil Service in which it suggested that the rates of pay of outside workers in private industry doing the same job was reasonable but that those in the Civil Service should have an increase. Would not my hon. Friend agree that because of the introduction of Part IV their position is worsened? The Government are not to implement this suggestion. I should like to see it implemented. Is not this a contradiction?

Mr. Moyle

I was talking about the long-term aims of the policy and not the situation which has arisen during the last few weeks, which has forced us to take certain positive action.

In the earlier part of my speech I referred to the very point which my hon. Friend makes, only in a broader sense. He will not find that I am in disagreement with him unduly. Nevertheless, these points have to be accepted when we are changing over in a situation of emergency from one set of economic facts to another. If one looks at the prices and incomes policy as a long-term policy, this is one of the facets of social injustice in our society which I should hope to see corrected as the policy becomes more effective.

There is the problem of the lower-paid worker. I took the Government to task on a previous occasion because I was afraid that the policy might not work in some respects and that the lower-paid worker might be worse off at the end of the day than he is now. On the other hand, if this policy works, as I hope it will—and a great deal depends not only on the Bill, but on the skill with which it is administered—there is no body of people who will derive greater benefit from it than the lower-paid workers.

Perhaps my colleagues who served on the Standing Committee would bear with me while I quote again the example of the members of the union of which I am a member, some of whom—and they are not the most lowly-paid members of the union—earn £11 a week basic and take home, even with the average overtime worked in our industry, about £14 a week from which deductions have to be made. It will be readily understood that the budgets of their families must be balanced and planned with the utmost care.

If, as soon as a wage increase is given, prices begin to rise, people rapidly begin to lose the benefit of their increase. These people are, and always have been, the most vulnerable to inflation. If we can get inflation out of our social system, these people will stand to benefit more than anybody in, for example, this Chamber, where, in most cases, one has sufficient financial resources to ride a bit of inflation. This is the point which should be borne in mind.

I hope that the operation of this prices and incomes policy will, in the long term, help to balance the weaknesses from which trade unionists as consumers have for some time suffered. The reason why the public servants of whom I have spoken have been so vulnerable to Government pressure is that their bargaining has been institutionalised. It is carried on through constitutional procedures and is open to the full glare of Press publicity.

The Government, therefore, have always known what happens and have been able to take action. These factors apply to the trade union movement generally. All the major trade union bargains are carried out in a blaze of publicity. Thus, by instituting the early-warning machinery for wage claims, the Government are not asking a great deal of the trade unions and I do not think that the trade union movement is giving up very much.

On the other hand, the majority of price increases have been decided in conclave by privileged elites behind locked doors and nobody has known that they were happening until they have happened. The early-warning system on price increases will bring these out into the light of day also and will enable the Government to take action on prices, just as they have always been able to take action on the major trade union bargainings of the last few years.

Everyone is sick of the continual business of wages chasing prices. Everybody who has had a wage increase has found that before long, rising prices have eaten into it. People would much rather be confident that the money that they take home at the end of the day will buy them their standard of living for a reasonably long period into the future. They are "fed up" with the process of finding that this does not happen.

The great trouble about trying to do anything about it—and let us be frank about this—is that no one group believes that if it exercised self-restraint this would have any effect on any other group in society. It is regrettable that this lack of trust has been the main driving force behind the wage-price spiral. If we can convince people that the Government can step in and hold the ring and balance the interest of one group as against the other with a fair sense of justice, people will have a sense of relief that wage increases which are granted to them will not soon be rendered worthless.

Mr. Eric G. Varley (Chesterfield)

Is not my hon. Friend arguing for the compulsory part of the Bill to be brought in quickly rather than allowing the voluntary basis to continue?

Mr. Moyle

No, I am not. I am opposed fundamentally to the idea of legal interference in industrial relations. I accept it with the greatest reluctance. I believe from experience, however, that given the fact that the Government will intervene to hold the ring between the various interests, people will voluntarily restrain themselves. I am grateful for my hon. Friend's intervention, which has allowed me to make the point.

Before entering this House, I took part in industrial negotiations in which powerful trade union interests restrained themselves from the full exercise of their bargaining position because they felt that there was a chance of a voluntary prices and incomes policy being introduced by the Government and made to operate.

One of the great attractions of the Bill is that it means that the Government have turned their back on what is nowadays called either the correct or the equitable aggregate of supply and demand. Hon. Friends of mine on this side of the House may not recognise the phrase, but it is the phrase invented by hon. Members opposite to distinguish an old friend of ours—the pool of unemployment. The right hon. Member for Leeds, North-East (Sir K. Joseph), who was much more frank than many of his hon. Friends, said that he wanted a bit of unemployment and that competition thereafter should be allowed to rip. Many hon. Members opposite try, however, to disguise this by using the phrase "aggregate of supply and demand", which will be qualified as being either correct, right, equitable or something of the sort.

Sir Tatton Brinton (Kidderminster)

The hon. Member is putting words into my right hon. Friend's mouth. My right hon. Friend made his position quite clear and referred to the enormous excess of vacancies which existed at the last count two months ago, when there were 450,000 notified vacancies irrespective of many more which people do not bother to notify. That was what my right hon. Friend was talking about.

Mr. Moyle

I listened carefully to the right hon. Gentleman's speech. We on this side talk about full and over-full employment, and we hear hon. Members opposite also talking of full and overfull employment, but we know that our meaning of these terms is totally different from what hon. Members opposite mean. That is the key to the situation.

Mr. John Biffen (Oswestry)

In that case, in the light of the Prime Minister's statement, how does the hon. Member define full employment? Will he give us some figures?

Mr. Moyle

Full employment is a situation in which everybody has a reasonable chance of continuity of employment in his job until it is reorganised in the interest of industrial efficiency, in which case he should then be able to move on to another job.

Several Hon. Members rose——

Mr. Moyle

I have given way a number of times, far more than anybody else on either side of the House. It is about time that I drew my remarks to a close, because a number of hon. Members, on both sides, wish to speak.

The key to the case of hon. Members opposite is the fact that they want a pool of unemployment to make sure that wage rates are held down to a suitable level. They are not worried that within that situation the strong will win irrespective of the economic arguments or that the weak shall go to the wall.

The other feature that has appalled me throughout our debates on the Bill is the sheer commercial logic used by hon. Members opposite. Anybody would imagine that they were buying and selling sacks of potatoes rather than dealing with human beings. It may be an inconvenient fact that when an employer asks a human being to work for him, the human being has views about what is happening to him. He reacts to the situation and very often, if he is not treated well, he rebels.

It is another criticism of hon. Members opposite that whereas—and I accept this—one must have some regard to economic factors in any industrial bargaining, and full weight should be attached to these, it is also necessary to have regard to the human relations factor. This is the factor which hon. Members opposite, in all their arguments in Standing Committee, completely overlooked.

This is one of the facts of the industrial bargaining situation which the Bill tries to right by having regard not only to the national growth factors, but also to the exceptions which must be made if employees, our fellow citizens, are to have a feeling that some of their sense of injustice will be adequately catered for by the policy.

6.20 p.m.

Mr. Kenneth Lewis (Rutland and Stamford)

This Bill is certainly not what it was. It is not the Bill which we first discussed on Second Reading, and in so far as the Bill is not what it was we are dealing also with a Government who are not what they were.

The Bill has made a great public impact because it is a watershed for the political parties. It is a watershed for the party opposite, for the Government; it is also probably a watershed for my own party on this side of the House. It is a watershed for the Labour Party, first, because the Prime Minister's image as a moderniser and expander has completely collapsed with the Bill. As in so many other fields, he has proved himself to be a traveller who goes, but never arrives.

The Bill is a watershed for the Labour Party also because of that party's acceptance for the first time of the need to restrain trade unions; to bring them under the law. It is a watershed particularly for the Government and also for the party opposite that the very basis and the assumptions of Socialism have now been called into account.

It is also, I think, a watershed for some of us on this side of the House, because those of my hon. Friends who have talked about the need for deflation, that we should place an emphasis upon laissez faire, will have to think again. They will have to think again because the party opposite is now in the process of deflating——

Mr. Biffen

Will my hon. Friend not agree that by no stretch of the imagination can the party opposite be accused of indulging in laissez faire?

Mr. Lewis

I did not say that. I said that the party opposite was in the process of deflation, and my hon. Friend must know that when one talks in terms of laissez faire and deflation many people outside this House think the two are synonymous. All I can say is that we are not to be caught with what hon. Members opposite tried to catch us with a few minutes ago, the argument that because they are deflating we intend to deflate more. We do nothing of the kind.

The second reason why this is a watershed for the Conservative Party is that a voluntary incomes policy under the party opposite has not worked, and that fact, and the fact that the Bill, because it goes too far, and because of its very complication, will probably not work either, is all the more reason why the Conservative Party should maintain the policy which it initiated and which it pursued in the last General Election—of continuing to support a voluntary prices and incomes policy. I want, if I may, to deal briefly with the points which I have just made about both the political parties.

First of all, the Prime Minister as a moderniser. One thing was evident throughout the Committee proceedings on the Bill, and that was that the Government were intent upon having nothing in it which would deal with what is the basic problem in this country, the problem of productivity. It is all very well for the Prime Minister to go to trade union conferences and talk about putting rule books into museums, but the Government of which he is head, and which have a very large majority, must accept a responsibility to do something about productivity. There is nothing in the Bill about that.

Hon. Members

Exactly.

Mr. Speaker

I hesitate to interrupt the hon. Member, but if there is nothing in the Bill about it he cannot talk about it now.

Mr. Lewis

I was afraid so, Mr. Speaker, but there were many speeches in Committee—all through the night—in which we talked about productivity, and the right hon. Gentleman the Member for Nuneaton (Mr. Cousins), of course, dwelt very largely upon it. However, I will leave that subject.

The Prime Minister has said, and it is also certainly implied in the Schedules to the Bill—many things are implied in the Schedules—that the country must be efficient, and that private enterprise must be efficient because we are still very largely living in a private enterprise society. Yet the Prime Minister and his Government over tax private enterprise and further complicates its efforts through the Bill. In addition, the Government continue to subsidise inefficiency. We saw in the newspapers today a further announcement about a £2 million subsidy going to the Beagle Aircraft Company. This, of course, is quite contrary to everything which is said to us, and the Schedule to the Bill. So the modernising image of the Prime Minister is completely dissipated.

The second point, I made was that the Labour Party, for the first time, is seeking to restrain the unions. The right hon. Gentleman and many of my hon. Friends know that I did not object very strongly to the first three parts of the Bill. I did not even object very greatly to the imposition of fines and sanctions for the providing of information for the early warning system. I did not object because I felt, in all logic, that as there were many employers who were fined for failing to provide information under many Acts passed by this House it did not seem to me wrong that we should introduce this kind of restriction on the trade unions.

But then Part IV of the Bill was introduced. This goes a good deal further, for this part of the Bill introduces fines not just for striking, not just for leading a strike, but for inciting to strike, and I am not surprised that the First Secretary is quite determined, as I think he seemed to indicate in Committee, that this part of the Bill is not to be brought in for at least some weeks—and, he hoped, not at all. If it were brought in during the next few weeks, when we are running into the trade union conference season, goodness knows what might happen. We might have the right hon. Gentleman the Member for Nuneaton as the first one to be brought under the Bill for inciting to strike against the policy of his own Government.

Thirdly, the Bill emphasises assumptions of the party opposite which have been apparent all the years it was in opposition and during the time it has been in Government up to now. The Bill has become necessary because the party opposite has got us into a situation economically where welfare payments are made without restraint because this was popular, and on the assumption, which is obviously false, that such expenditure will not affect the economy in any way. The last false assumption is that we can allow a situation to develop where there are many more jobs than there are men and women available for them; and that we can allow that situation to continue and still avoid inflation. These assumptions are now completely "bust" by this Bill.

I would like to ask the right hon. Gentleman and his right hon. and hon. Friends what they have been doing in the last two years, following up our policy, in providing wage-related unemployment benefit if we were not going to have some unemployment. What is the point of wage-related unemployment benefit if we do not have any unemployment. [Laughter.] Hon. Gentlemen may laugh. There was no point in introducing a Measure of that kind while retaining the present labour situation. What is the point in passing through the House a training Act in order to retrain men who want to change their jobs if we do not have the movement of labour resulting from the redeployment which is necessary to get people into the training centres? I would remind the House that we introduced that Act. What is the point of introducing a Redundancy Payments Act when there is no redundancy?

Mr. Speaker

Order. The hon. Gentleman knows that we are on the Third Reading of the Prices and Incomes Bill. He must talk about the Bill.

Mr. Lewis

I have made my point, Mr. Speaker, and I will get back to the Bill.

One of the Schedules to the Bill talks about planning. The main assumption of the party opposite which has been "bust" by the Bill is that it is possible to have planning without a plan or that it is possible to have a National Plan which is based on faulty criteria or on pure guesswork. The only result of that is the situation which we face now, where, after the Plan has come into existence——

Mr. Speaker

Order. I must ask the hon. Gentleman to come to the Bill, otherwise I must ask him to sit down.

Mr. Lewis

—it has to be rewritten.

In deference to myself, I must say that these things are dealt with in the White Papers and in the Schedule which we were discussing upstairs in conjunction with the Bill——

Mr. Speaker

Order. The hon. Gentleman must listen to the Chair. He can debate only what is in the Bill.

Mr. Edwin Wainwright (Dearne Valley)

On a point of order, Mr. Speaker. Is it fair for the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) to make references to certain Bills, Acts and plans, when the speaker following him cannot question what he has said because he was out of order?

Mr. Speaker

I thought that that was what I was pointing out to the hon. Gentleman.

Mr. Lewis

In so far as the Bill has been extended by Part IV, I believe that the First Secretary is right in seeking to postpone its impact and to try and work the voluntary system. I support him in that because I believe that, if he is successful in bringing in Part IV and it works, it will do such damage to industrial relations that it will be difficult to get back to good relations. On the other hand, if he brings in Part IV and it does not work, we shall find it extremely difficult to get back again to the voluntary system.

May I say to my own party that I have taken an interest in this subject for many years. When one takes an interest in a subject, one never knows when a particular time will come in the House which will make worth while all the work that one has done. That point has arrived for me during the last few weeks. In my early days, I was nurtured in the subject dealt with by the Bill, and my first work was concerned with it. It is very sad that we have to arrive at a situation where we need a Bill of this kind, particularly one which imposes the harsh penalties which are set out in Part IV.

I would say to the right hon. Gentleman the First Secretary that when we return to the House after the Recess I hope that he will have gained his policy of prices and incomes restraint without having had to bring in Part IV of the Bill. We maintain our stand on a prices and incomes policy. We were in at the beginning of the Board's policy. I am certain, and I think that many of my hon. Friends will agree with me, that we shall need it for many years to come. Whatever the right hon. Gentleman may do, we shall seek to do it on a voluntary basis.

I suppose that it is true that workpeople and others employed in industry rather like inflation. I am quite sure that managements enjoy inflation. Trade union organisations and their leaders and industrial organisations and their leaders do not take very kindly to Government restraint. That was the trouble encountered by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), when he tried to bring in his policy. Much of the criticism which this policy received came from managements. Some managements like the economy to become overheated, but it is the duty of the Government, whichever party is in power, to see that the economy does not become overheated to the extent that they have to bring in penal restraints. That is what has happened to the Government of the party opposite.

During the last few weeks, I have been interested to hear various Ministers speaking on television about Government economic policy in relation to this Bill, and I have been surprised that they have not spoken with one voice. The First Secretary and the Prime Minister have said that the country is in a serious situation and that that justifies the Bill. Yet, the Minister of Transport, the Secretary of State for Education and Science and the Minister of Housing and Local Government have said that the situation of the country will not affect roads, schools or housing.

The Bill has been introduced because of a serious situation in the country. The measures in Part IV of the Bill will have to be brought in unless the Prime Minister, the First Secretary and other leading Ministers can get it across to the country that it is important for the people to follow a clear lead. That means that a clear lead has to be given. The country cannot be given a clear lead if Ministers contradict one another. If the trumpet gives an uncertain sound, how shall they call people to the battle? It is because the Government have given an uncertain sound that we have this Measure. The Conservative Party would not have required it, because it would have spoken with a clear voice.

6.38 p.m.

Mr. Michael Foot (Ebbw Vale)

I will try to speak for a very few minutes, because I understand that many of my hon. Friends wish to contribute to the debate.

Since one of my own principal objections to the Bill was that I did not believe that the House had been provided with a proper opportunity for debating the essential Part IV, it is only fair to acknowledge that the debate which we had on many of these provisions on Report is one which hon. Members will agree was a full and extensive debate and one of the best debates that I have heard in the House. It is a small mercy which the Government have given us that they listened with great patience to what we had to say on that occasion, and certainly I acknowledge that fact.

However, my objection on that score still remains. The exclusion of a Second Reading debate on Part IV of the Bill means that the House is deprived of doing exactly what my hon. Friend the Under-Secretary said that he wanted it to do; that is, to state our alternatives. Some of us have a whole list of alternatives to this Measure which we would have wished to discuss as an alternative set of propositions for dealing with the country's difficulties, but we were denied the right to do so by the choice of the Government.

Secondly, there is a most curious feature of the Bill. As far as I can recall, it is the only Bill I have ever heard presented which is recommended chiefly on the ground that its principal features will never be applied. That is an astonishing proposition. I am sure that it is sincerely made. My right hon. Friend says that he wishes to carry out all these measures by voluntary means. The method he adopts to carry it through by voluntary means, however, is government by minatory exhortation and that is not a good way of governing. Minatory exhortation, whatever it may be, is not the same thing as the purposeful planning which I thought we were elected to execute.

My right hon. Friend says that his purpose and desire is to carry through these propositions by voluntary means, but he is still introducing, as an addition to the original Bill, a whole series of further measures and the House must consider the possibilities of those measures being put into operation and the consequences if all the eventualities foreseen by the Government were to develop. It is when we look at these consequences that many of us find the strongest objections.

We had deep objection to the proposition in the original Bill that certain penalties could be imposed upon trade unionists for activities they might carry out. But the offences for which these penalties can be applied have been greatly extended by Part IV. I have given a specific example before and I apply it now but in slightly different terms. It is the case of the railwaymen.

My right hon. Friend says that he hopes to carry out this Measure by voluntary means. But is the withholding of a wage increase from the railwaymen a voluntary act? It is not voluntary on their part. If we asked them, they would say, "Let us have it". Indeed, I have a message from the National Executive of the N.U.R. supporting what I have said. The Government are, presumably, saying to British Railways that it must not pay. That is not a voluntary act for those who will not get the money.

Already, there are features of compulsion in the Bill although my right hon. Friend says that he wants to rely on voluntary means. Presumably, the sanction is that if British Railways paid what it is committed to pay under bargain to the rail way men, or if the railway men accept the increase, my right hon. Friend would invoke his powers and recall Parliament to put into operation the sanctions contained in the Bill.

In that sense, although I am sure that my right hon. Friend is sincere in wishing the Measure to be carried through voluntarily, the element of compulsion is already present and is applied in circumstances and with results which to me are highly objectionable. The most serious feature of the Bill is the broken bargains, the broken promises to the railwaymen and many others. Once we break bargains we will not be able to make such bargains so readily or advantageously for the community in future. In any case, we have no right to break these bargains and Parliament should not be a party to it. Yet that is what we are doing, and I object.

The proposition that the House should agree under a wage freeze to break bargains with the railwaymen and others involved, totalling about 6 million workers—[An HON. MEMBER: "Including the doctors."] I include doctors among these workers—has never been accepted by any representative body of the Labour movement either within or without this House. It was never put to the electorate at the General Election. Had it been, most of us would have strongly repudiated it. When the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) implicated the then Government in the breach of such bargains, my right hon. Friend and the rest of the Labour Party protested most strongly. So now I protest on the same ground that the objections were made in 1961.

What makes my heart sink most about the policies which the Government are following is that we are embarked on a deep, savage and, I fear, long-term deflation in defiance of all the doctrines that we have preached about the proper measures for dealing with our economic difficulties. On all previous occasions when Governments have embarked on deflationary measures, one of the remedies has been that the increases in wages prevented the worst effects of the deflation. That happened in 1961 and 1957 and on earlier occasions. But not on this occasion.

If the Government are successful in carrying through the wage standstill successfully they will be depriving themselves of the kind of protection against the worst effects of deflation which have operated on previous occasions. I am bitterly sorry to see a Labour Government embarked on a course upon which I never thought to see it embark. We are on the wrong course. Some of us have tried to get this through to the Government and maybe some members of the Government themselves may think that we are on the wrong course. We want to get them on to a different course.

I cannot expatiate on alternative measures which can be taken, but they are available. Solutions are within our grasp. We can have full economic independence if we have the courage and determination to grasp it. But this Measure will not secure it for us. Speaking for myself, I find this proposition of the Government deeply objectionable, partly because of the essence of the Measure and partly because of the manner in which it has been presented for my approval. The Government have, in effect, thrown it at me and said, "Gulp this down, or else". But I am not prepared to do it.

I do not believe that if I did I would be properly discharging my obligations to those who sent me here. In my belief, my primary concern as an M.P. must be, in the open, on the Floor of the House, to discharge as best I can the obligations I have to those who sent me here. I am sure that all members of the Government are seeking to discharge their responsibilities as best they can—I make no accusation against their motives or intentions. But I demand the same right to be able to say and speak and vote in the House according to what I believe to be right for the nation and in conformity with the undertakings and policies I declared at the General Election.

I do not believe that it is good for the health of politics that politicians should stand on their heads and pretend that they are doing nothing of the sort. Politicians must say in the House what they say in the country, and that is what I propose to try and do to the best of my ability.

6.50 p.m.

Mr. Maurice Macmillan (Farnham)

It is a pleasure for me to speak following the hon. Member for Ebbw Vale (Mr. Michael Foot), particularly since he finds himself in this debate in a similar position to that in which I found myself in 1961. I have been induced to intervene having listened to the speeches of a number of hon. Gentlemen opposite. Their arguments—and I refer to the remarks of many hon. Gentlemen opposite, and not only those from below the Gangway—and the arguments adduced from the Treasury Bench have strengthened my conviction that this is a bad and dangerous Bill.

The Measure is bad for the country and dangerous to liberty. In the manner in which it is being brought before Parliament, it is derogatory to the whole concept of parliamentary government. It is bad and dangerous not only because of what it will do now, but because of the implications it has for the future, for the Government are giving themselves and any future Administration, by the Bill, the Industrial Reorganisation Bill and parts of the Iron and Steel Bill greater economic powers and greater powers of potential direction than any previous Government in Britain have ever taken, in time of peace or, I believe, in war.

The Bill is also bad and dangerous because, as the right hon. Gentleman the Leader of the Liberal Party pointed out there is no prospect of productivity catching up, to use one of the First Secretary's phrases. And, as usual with this Government there is nothing in the Bill except for the short-term, along with their usual willingness to sacrifice our long-term prospects for a superficial and doubtful short-term gain. The country will, therefore, depend on a degree of governmental control and persuasion which, I believe, is totally unworkable.

The Bill is bad and dangerous at this moment and for the immediate future because the Government have slid into a sort of neo-syndicalist policy, both in their economic and political approach, for they are prepared to damage liberty and harm industrial relations by trying to induce trade unionists to cut their own throats and, if they refuse the knife, to force it into the hands of management.

In what I admit was a wonderful, almost convincing, speech yesterday, the First Secretary really only made my case stronger. He admitted that his previous policy for voluntary incomes restraint had failed—failed as it did in the days of Sir Stafford Cripps and Mr. Dalton, who had greater apparatus of centralised control than ever before—that is, until this Measure was introduced. Indeed, it did not even have the limited success which the Day pause of my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) had.

Sometimes, when listening to the First Secretary, I thought that the voice was that of Belper but the words were those of Wirral. I attacked them in 1961, but at least my right hon. and learned Friend achieved a limited degree of success, which is more than this policy has any hope of doing. Now the First Secretary still hopes that a voluntary policy will succeed. But how can a policy be described as truly voluntary if, behind it, is the threat which we are being asked to put into the Bill and which the right hon. Gentleman is seeking to disguise as an appeal to the national interest?

The First Secretary calls it a "national emergency". It is, in fact, a situation created by a Government who lacked the courage to act in time, who refused even to consider the smallest restraint of demand and who are now faced with a degree of deflation which makes the deflation policy of my right hon. and learned Friend the Member for Wirral look like a modest and minor effort indeed. In this emergency, which the First Secretary has himself helped to create, the right hon. Gentleman is hoping to force people other than the Government to accept the main responsibility for the action that is needed.

Not least of the dangers in the Bill is the political danger. The Government are shelving their proper responsibility while seeking, at the same time, to increase their powers. They are disclaiming in advance the blame for any failure on the part of those on whom they are seeking to place this responsibility. According to the Government, the T.U.C. and the C.B.I., the trade unionists must create the conditions in which a voluntary policy will work—and if they do not do that, then it will be their fault that compulsion is introduced—remembering that it will be introduced if necessary, regardless of its effect on industrial relations.

On the T.U.C. and the C.B.I., according to the Government, will rest the main responsibility for implementing stage two of this policy, regardless of the effect that will have, the conflict of loyalties and the almost intolerable position in which it will place both management and labour. The issues are blurred by the Government's attempt to create a sort of false consensus of opinion, and it means that the incomes policy is becoming less under the control of the Government while the penalties are there for those to whom they have passed this responsibility.

No wonder Parliament is declining in importance in the eyes of the country when we see the contempt of Parliamentary procedure and practice—contempt of the rights of hon. Members—which the Bill, especially Part IV of it, entails. This is a pretence at policy; trying to justify a centralisation of power which is irrelevant and dangerous and which will not even work as well as Danegeld worked. The greatest threat of all is the threat to liberty and, in threatening liberty, there is no doubt that the unions and workpeople in combination will be affected the most.

It is no good the Under-Secretary saying that a prices and incomes policy is just as important as the conventions established in a previous era. What were those conventions? They represented the absolute freedom to bargain; the right to sell or withhold one's labour. These are fundamental rights in this country and the sole basis on which a system of free enterprise can be erected. The private sector of our free enterprise economy can, no doubt, survive any attempts by the Government at price fixing or dividend limitation, but not without causing damage to investment and distorting the capital market. It is bound to have some evil effects, although it will not go to the root problems we face in our system of free choice which depends on the effort and reward of individuals. This attempt to interfere with the most fundamental rights of free men to sell or withhold their labour is bound to have evil effects.

The hon. Member for Poplar (Mr. Mikardo) and the hon. Member for Ebbw Vale made it clear—and, without appearing to be impertinent, I believe they are right—that there is a case for having some greater control than I would like to see if there is to be a centralised economy, with control of wages, in a centrally planned Socialist economy. However, the hon. Member for Poplar pointed out that that was intolerable in a market economy, and he was right. No one would seek to argue that in the great trade union movement there is not implied a responsibility on those unions in this matter. If Britain and the union movement is to survive, the unions must co-operate to a reasonable degree with management and Government.

I still think that when it comes to restrictive practices it is the primary responsibility of management to cope with the situation that we now have, no matter how it may have arisen. That is what those in management are hired to do. But how can they do it if the Government are to forbid them to buy the rule book? Why should people accept the dislocation of modernisation, and give up the soft option of protection for higher productivity if there is no benefit for them now or in the future?

I have no doubt that the First Secretary's voluntary system is the end of the effectiveness of the free-choice economy, that it cripples investment—and all for nothing, because in the end it will lead only to stagnation and, I fear, unemployment, especially if we are moving to a more deflationary situation in the world as a whole.

If I may say so, I thought that the hon. Member for Rhondda, West (Mr. Iorwerth Thomas) showed some of the same illusions that have already corrupted clear thinking on both sides of the House, and have done even in the past: that the only alternative to a bad policy is to let things stand as they are. It is not. As the hon. Member said, one could put forward a perfectly good policy—though not in this debate. Although I agree with what the hon. Gentleman had to say this time, I do not suppose that our ideas of a suitable policy to get the country out of its difficulty would be precisely the same.

In 1961, I begged the then Chancellor of the Exchequer not to take short-term measures that damaged our long-term prospects. I fear that it is now too late to plead with the First Secretary, who has even forgotten his own child's first name; he referred to his prices and incomes policy, and left out productivity until reminded of it from this side of the House. The position is not improved by the Under-Secretary's rather patronising reference and comparatively short attention to expansion or productivity as against his emphasis on restraint.

We on this side can argue a strong case for the free-enterprise system, and there is a wrong but equally powerful intellectual argument for the sort of State socialism recommended by the hon. Member for Poplar, but there is nothing to be said for this bastard brand of State capitalism and centralised control which the First Secretary is putting forward, and which has nothing but restriction. There is nothing about incentives and investment—only negative thinking.

Lip service is paid to people's standard of living, but so little is said about raising it, and so little is said about opportunity. It is not Part IV that I resent so much as the rigidity of the ideas in the rest of the Bill, the lack of clarity about what we do when we start up again. There may be priorities in taking off restriction, but nothing is said about how we are to increase the effort or stop the freeze, and nothing about where we go from here.

I was, perhaps, a little unkind in 1961 to my right hon. and learned Friend the Member for Wirral. The words I used about the then Government were harsh, but many hon. Members would agree that, applied to the present Government, they are a gross understatement. I then said: … I do not believe they have.. a definite idea of what their objective should be. We all accept the need for occasionally turning off the main road and, so to speak, making a detour because of necessity and then coming back when we can to the main road, but the Government are wandering about in the highways and byways and lanes without even knowing where the main road is."—[OFFICIAL REPORT, 6th February, 1961; Vol. 634, c. 89.] The presentation of this Bill, and the manner of its presentation, have made that clearer to the House and, I hope, to the country than anything that the present Government have yet done.

7.5 p.m.

Mr. Hugh D. Brown (Glasgow, Provan)

I do not want to follow the hon. Member for Farnham (Mr. Maurice Macmillan) into his highways and byways, nor do I want to visit the watershed mentioned by the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis). It might have been interesting to have had a Second Reading on Part IV of this Bill, because at last we are bringing out some of the contradictions and differences of opinion that exist among hon. Members opposite. No one has ever attempted to deny that there are genuine differences of opinion on this side of the Chamber, but in the approach to this Measure there is obviously a clash of the rival ideologies we represent.

We should recognise from the speech of the right hon. Gentleman the Member for Leeds, North-East (Sir K. Joseph) that he has shied at coconut stalls. I fully expect to see him going round the shows during the Summer Recess seeing whether or not the coconuts on the stalls have got smaller and, if they have, bringing that fact to the attention of the Prices and Incomes Board. I thought that the right hon. Gentleman was preparing for the party conference season, but as he added nothing to his many contributions on this subject I shall not seek to follow him.

The one thing that comes out of all the speeches from hon. Members opposite is their fear of [HON. MEMBERS: "Hear, hear."] When I get that "Hear, hear", I know that I am right in suggesting that we could do with a little more Government interference.

In looking at the proposition that we are now asked to support, one has to apply certain simple tests. First, will it strengthen the economy? Second, will it enjoy the confidence of the people? Third, and this is applicable only to those of us on this side of the Chamber: will it help to change the distribution of wealth, power and responsibility in society? We on this side must apply those three simple tests to anything as fundamental as the Bill.

Does the Bill strengthen the economy? I confess that I am not yet quite sure that I appreciate that there is a crisis——

Sir Cyril Osborne (Louth)

Has the hon. Member had any first-hand connection with business that would allow him to be so dogmatic? If not, has he asked his nearest friends who have?

Mr. Brown

I was asking myself the question, but the hon. Gentleman's intervention is typical of the assumption on the benches opposite that unless one is a director of a business one knows nothing about the administration of the economy.

I am genuinely expressing some of the doubts in my mind, and that are certainly in the minds of many people outside, who—if I can say so without being patronising—probably think that the Euro-dollar is a nuclear weapon, or that liquidity has something to do with a change in the drinking laws.

We all have some responsibility to satisfy ourselves that there is a crisis. Only if we recognise that there is a crisis and discover what has caused it will we be able to apply the appropriate remedy. On this point, I have an inability to be as precisely dogmatic as are some of my hon. Friends; in other words, I am prepared to support the Bill.

I do not think that the other argument used by my right hon. Friend, fear of unemployment being the alternative to what we are doing, carries much weight. I say with humility and respect to my hon. Friend the Member for Rhondda, West (Mr. Iowerth Thomas), who spoke of Moses leading the people into the Promised Land, that it is just not good enough to make contributions here or elsewhere in the terms of the 1930s when the bitterness then directed against the Tories now seems to be directed against my hon. Friends the Members for Ebbw Vale (Mr. Michael Foot) and Poplar (Mr. Mikardo), or my right hon. Friend the Member for Nuneaton (Mr. Cousins). I hope that out of this debate all of us can throw overboard some of our out-dated ideas and face the real problems before us.

The second question is: does it enjoy the confidence of the people? I am satisfied that the people I represent will literally accept anything, provided that it is applied fairly. Whether it is distribution of wealth or of privilege, they will accept it. One cannot spread privilege fairly. Nevertheless, they will even accept hardship or sacrifice provided they feel that no one is getting away with it. This is a real challenge to the Government. It will not be answered just by slick contributions by too many economists. We have a spate of them on our side. I do not speak for the other side, but I think we have more economists in the Cabinet now than we have ever had. [Laughter.] Hon. Members opposite had better speak for themselves. I am merely making this observation and not referring in particular to my right hon. Friend the Prime Minister in doing so.

The second point, whether it will enjoy the confidence of the people, I answer by saying it will provided it gets through to the people and is applied fairly. That, of course, is an enormous task. We could have people running to the Department of Economic Affairs and asking for an interpretation of this, that and the other. We could have all sorts of anomalies and the things which arise whenever we attempt to do anything. But I am satisfied that, given good will and being constructive about prices, it could be accepted. I am not unmindful of the many criticisms which could be made.

On the third point, I think that we are perhaps accepting too much in asking if one is for or against it. I think some of my hon. Friends are lacking in a little constructive thought. I am not being personal. Will it apply to a changing society? I do not think it will. I do not think it will do even what one hon. Member suggested, look after the under-paid or lowly paid. There is nothing in the White Paper which says that it will. This is one of the weaknesses.

Mr. Michael Foot

Hear, hear.

Mr. Brown

I do not think it good enough for my hon. Friend for Ebbw Vale just to say "Hear, hear". This is something which many of us should have been thinking about ever since the Government came in in 1964.

We have had to introduce a mass of legislation to help the lowly-paid workers and we have not achieved an incomes policy. This applies to all of us. I think that it fails in the test of whether it will change society or the inequalities which are in society. I understand where hon. Members opposite stand. They do not want interference with business or directorships or the bastions of power which they hold at the moment. I have to ask myself: where is the opportunity in this situation, of crisis to some extent, which will enable us to come out of it stronger and at least with the hope of making the changes in society which are needed?

It is the dilemma of a democratic party operating in a mixed economy. Where are we ever to get power given up on a voluntary basis? I can speak frankly. Perhaps that is more difficult for my right hon. Friend the First Secretary of State—not to speak frankly, because sometimes that is one of his faults; he speaks too frankly. What I mean is that it is easier for me with no responsibility. I recognise the difficulty in the dilemma which faces us, of having to go to private enterprise, for want of a wider description, and to appeal on the basis of a philosophy which says, "We are appealing for your co-operation now, but we shall take you over in a few years' time." This is one of the dilemmas we have to face, the Government and all of us.

There is not just the question of steel. We heard yesterday that we are to put £60 million into shipbuilding. How can we expect £60 million to be put into shipbuilding without some kind of interference and some expectation of something coming back to the community? If we are to try to run the policy in a mixed economy, what do we do? Is it to be said to private investors that their expectation of a return on their investment will be limited?

Mr. Speaker

Order. I am sorry to interrupt the hon. Member, but he must not discuss what is outside the Bill.

Mr. Brown

I am not actually discussing shipbuilding in this sense. I was certainly talking about it, but what I hoped I was doing was drawing attention to the dilema which faces us of trying to run a mixed economy. I was using, I hope quite properly, shipbuilding as an instance of the dilemma which faces us. I think that I have made the point that it calls in some way for some powers of compulsion to limit the expectation of high dividends or high profits in an industry when we are to put public money into it. If it is good enough for us to face this kind of situation, what about the banks? What about taking over the banks next, or the insurance companies, or the building societies?

Mr. Speaker

Order. These may be interesting suggestions, but they cannot be worked into this debate. We are talking about a Bill.

Mr. Brown

Building societies and mortgage rates, I should have thought from the past few days, are very much a matter which to some extent is related to the Bill. I think it relevant to the speech made by the right hon. Member for Leeds, North-East when he was talking about consumer choice. Where is the consumer choice if one is buying a house and wants a mortgage? One gets the same rate of interest. It is a matter of finding a society which will lend the money, but one does not get consumer choice. This is the kind of dilemma we are in. I cannot see it being solved unlesss there is more courage among members of the Government in thinking in terms of changing society and not merely playing with it.

This is the appeal I make to my hon. Friends who feel strongly enough to oppose the Bill. I recognise the sincerity of their convictions. I am not sneering at them—anything but—but I should like to think that we can be more positive and constructive in facing the real challenges in society at the moment and in seeing the Bill in its proper place.

7.20 p.m.

Mr. Peter Hordern (Horsham)

I am sure that the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) will forgive me if I do not follow him too closely, particularly in his criticisms of economists, because my hon. Friend the Member for Worthing (Mr. Higgins) is an economist and he is to wind up the debate on behalf of the Opposition. My hon. Friend is well able to defend himself.

The Bill marks the end of confidence in the Government's credibility both at home and abroad, for the stronger the powers they take—they are very considerable powers in Part IV—the less confidence they engender in their capacity to control the economy. It also marks, although this is not such an important point, the end of a myth held by the Labour Party, namely, that it can, by planning, by talk of collusion or consultation with both sides of industry, avoid any semblance of stop-go. This is how the Prime Minister described it on so many occasions in glittering phraseology. For 13 years, while the Labour Party was in Opposition, Labour Members held this myth very true and very dear to their hearts, that it was possible by planning—by purposive planning, whatever the adjective was which was used at that time—to avoid the series of stop-go that every economy in the free world had experienced. This was the idea that Labour Members had had very firmly implanted in their own minds by the Prime Minister himself.

This is the end of that myth. It is the end of a period of 13 years of fractious and irresponsible opposition led by the Prime Minister when he was Leader of the Opposition. Hon. Members opposite now know that the whole rationale behind their so-called policies has completely disappeared. The promised land of the Prime Minister has turned out to be nothing more than a mirage. Labour Members know that for them things will never be quite the same again. So much for the Labour Party.

The economy will perhaps never be quite the same again so long as this Labour Government are in power. Hon. Members opposite know that they are now adopting measures in the Bill—or proposing to adopt measures, if Part IV should be invoked—which every Labour Member must have described at the election as Tory Measures. There have never been so many conversions since the early days of Christianity, nor quite so quickly.

What is more important is that hon. Members opposite are now beginning—or at least the Treasury Bench is beginning—to wake up to the reality of the situation into which they have pitched the country. It is against this sombre background that we must now view the Bill, and in particular Part IV.

What are the circumstances against which the Bill will operate? We on this side recall very well that before the election the Chancellor of the Exchequer spoke in terms of no severe increases in taxation. We recall how the Chancellor aimed at three objectives in his first post-election Budget, when he introduced the Selective Employment Tax as an alternative to hire-purchase controls and the regulator. Now, as the House knows, we have both those things.

One objective was growing industrial strength. We now have stagnant production and an actual decline in the rate of investment. Full employment was another objective. Now the Prime Minister has said that a rate of 1.6 per cent. is acceptable—that is, 480,000 unemployed.

The Chancellor's third objective was a strong £. Sterling is now constantly at the support level and War Loan is at its lowest level ever. It is no wonder that the Chancellor is looking with hungry eyes at the Foreign Office. As far as one can judge, the sooner he is off on some form of trade delegation to South America the better.

The Bill must be considered against the background of the Chancellor's and the Government's refusal to regulate the level of demand. This is why the Bill has had to be introduced. The Government no longer has the status to call for voluntary agreements. In any case, a voluntary wage freeze cannot work with unemployment at its present level. In Committee we were told that 6 million workers—that is, one-quarter of the labour force—have some form of contract of employment. Yesterday, the First Secretary expressed the hope that there would be voluntary restraint; he hoped that both sides would, in the period of voluntary restraint, consult and agree to defer increases which have been awarded under a contract signed between employer and employee. The First Secretary expressed the hope that the employee would postpone his right to his side of the contract.

I do not suppose that the trade unions have missed the replies which were made and the further questions which were then posed to the First Secretary. We asked what would happen in the event of an employee suing his employer at that stage? The First Secretary said that in that event the employer must pay up in order that he should not be found liable to legal action. This was the only thing the First Secretary could say.

Therefore, with 6 million workers involved, what real chance is there of a voluntary system working, when a trade union has only to threaten legal action for employers—quite rightly, according to the First Secretary—to say straight way, "We must honour our legal obligations"? This is quite apart from the points which have been made about the sanctity of contracts entered into by individuals, a matter where the Government have no right to interpose themselves.

From a practical point of view, is it right that the economy should be so frozen and, as it were, put into a deep freeze? Is it right—is it possible—in this present state of full employment, to prevent firms from offering inducements in kind, not necessarily in wages, to other workers to draw them into their factories where they can perhaps use them better? Is it right that trade union leaders should be asked not to do what they were elected by their own members to do? We on this side do not think that it is right.

I believe that Part IV will have to be introduced. It will have to be introduced at the very time when unemployment will begin to rise.

Although I do not think that the voluntary part of the Bill will work at all, there will nevertheless be some effect on the level of prices. Because the level of prices will perhaps be moderately reduced from what it would otherwise have been had there been no price freeze, it will undoubtedly have an effect on the total level of investment.

I believe that that is why the First Secretary tendered his resignation. It was not just because he saw that the framework of the National Plan was to be demolished, but because he saw what the trend of investment was likely to be. The impact, if a price freeze should actually work, is likely to be even worse than the right hon. Gentleman feared. Because it will work pretty quickly, the effect on profits will be such that there will not be any money available for investment.

Therefore, the effect of Part IV, which in my view will have to be invoked, will begin to be felt precisely at the time when firms are already reducing their investment plans. Therefore, Part IV will take effect at the worst possible time.

We on this side want to be sure that the price freeze, if it is to work voluntarily, will at least be operated voluntarily by the nationalised industries, too. Can the Under-Secretary explain why the South-West Gas Board, in an announcement dated 29th July——

Mr. Biffen

May I inform my hon. Friend that at about 4 o'clock this morning this incident was brought to the Under-Secretary's attention?

Mr. Hordern

I should like to know whether the Under-Secretary gave a reasonable reply or not. If he did, I should like to know what it was.

I was about to say that I have a letter written by the South West Gas Board, dated 29th July, recommending that the price for 29 lb. bags of Gloco should be increased by 2d. a bag. What is the position there? Of course, the price freeze must apply to the nationalised industries as well as to the private sector.

During the Committee stage we had an uproarious time when we discussed mortgage rates on Part II of the Bill. The Minister of Housing and Local Government has told the House that mortgage rates are to be voluntarily frozen, he hopes, by the building societies. The effect of such a voluntary freeze by the building societies must be to diminish the amount of money going into the building societies. It cannot possibly have any other effect. Consequently, the level of private house building must inevitably decline. I hope the Government have taken this effect properly into account.

On Clause 12, relating to company distributions, there have been several arguments in Committee, but we have never had from the Government a proper assurance that they have really understood the effect, or even, indeed, the meaning, of distributions so far as they relate to dividends. What should be compared with wages, if we are to compare like with like, is the totality of dividend distributions and not just the increases which may be given, although I find it difficult to understand how they can be given in these conditions. One never hears the suggestion that wages should actually be cut, but I assure hon. Members that there are many companies whose dividends will have to be cut this year. Part IV will, therefore, be brought in at the very time when the Government's deflationary measures will have produced the number of unemployed that they have planned, namely, 480,000 people. The tragedy is that the whole philosophy of productivity agreements will be dealt a savage blow from which it may take many years to recover.

I was disturbed when I heard the First Secretary last night talking about the period at which Part IV, if it had to be invoked, would come to an end, when the wages and price freeze period finished. I have not been able to obtain the right hon. Gentleman's exact words because this morning's HANSARD does not include the report of that part of the debate, but I believe the right hon. Gentleman said that that is a period in which, on wage claims, we can walk out into the open. Even now the First Secretary does not seem to appreciate the effect of these words on confidence abroad. Perhaps he did not want it to have that effect. But his hon. Friends must appreciate that even during that period we cannot talk about walking out into the open, as if there would be a great surge of wage and pay increases. That is not possible.

The whole point of the wage freeze, if it has any point at all, is that it should be aligned with productivity. The First Secretary made no mention of that at all. We think that to invoke Part IV of the Bill, which I believe is inevitable, will be fatal to the fabric of the economy. It would have been quite unnecessary had the Government at any time in the last 18 months really sought to control the level of demand. It is their failure to do this and to direct their attention to this objective which every free country in the world always does, which has landed this, country in the present situation.

Even now it is not too late to make a declaration that they will on no account invoke Part IV of the Bill. It cannot serve any useful purpose whatever. By the time there is evidence that some further restriction is necessary, if the Government's deflationary measures do not work—and they are the most swingeing deflationary measures which have ever been brought to bear upon the economy of this country since the war—Part IV, the compulsory part of the Bill, will be entirely unnecessary. I make that final plea to the Government, to drop Part IV in view of the damage that it will do to the fabric of the economy.

7.35 p.m.

Mr. Bob Brown (Newcastle-upon-Tyne, West)

I have a deep vested interest in this Bill, for apart from the fact that I sat for 40 hours in the Standing Committee, my trade union at the Labour Party Conference in 1963 moved a motion calling for an incomes policy to include salaries, wages, dividends and profits, including speculative profits, and social security benefits.

In December, 1964, the Declaration of Intent was agreed by the Government, the C.B.I. and the T.U.C. That joint Declaration was endorsed by a four-to-one majority at a conference of trade union executives held on 30th April, 1965. In March, 1965, agreement was reached on the establishment of a prices and incomes board. If the nation, as represented by the Government, employers and organised labour, accepted the need for an incomes policy in 1964, I would suggest that the nation, in terms of the working populace, accepts even more today this great need to make an incomes policy succeed.

It is no use at all hon. Members or members of outside bodies on either side of industry paying lip service to such a policy. Lip-service is so easy to give, but in the present-day circumstances only practical support will be accepted by the nation. I say to my right hon. and hon. Friends that the membership of trade unions will certainly not thank them if they take or encourage any action which could result in undermining the successful operation of the Bill when it becomes an Act, as surely it will this weekend.

I have heard it suggested both inside and outside the House that the Government's recent announcement is the same old Tory medicine prescribed by a Socialist practitioner. I say at once that I do not accept this, not by any stretch of the imagination. I would draw a comparison between the present measures and the Tory Measures of 1958 and 1962, when the first institutions to feel the draught were the social services and the public authorities. As I said in the economic debate last week, areas like my own on the North-East Coast were the areas that really felt the draught badly. These areas are being cushioned today, as they certainly never were under previous Tory Governments. I do not forget that in 1962, as a direct result of Tory Government measures, we had 878,000 fully unemployed people in this country and 165,000 on short time. I do not forget that of that total of about 1 million either unemployed or on short time 15 per cent. were in the Northern region, a totally disproportionate sacrifice for one area to make.

The right hon. Member for Leeds, North-East (Sir K. Joseph) condemned the prices and incomes policy, saying that it had so far been a failure and that, because it had been a failure, the Government now wanted legislation to make it work. Why does not the right hon. Gentleman espouse the true facts? The policy started to operate in May, 1965. By March, 1966, prices had risen by about 2 per cent., compared with 3 per cent. between May, 1964, and May, 1965. So much for a policy which was completely failing. In April, 1966, reported profits had increased by 3.5 per cent., the lowest rise since 1963.

I put it to my right hon. and hon. Friends that, in my opinion, keeping a check on prices is the best method of maintaining profits at a reasonable level.

Mr. Hordern

Will the hon. Gentleman refer to the increase in earnings over the same period?

Mr. Brown

I will, if the hon. Gentleman will give me a moment to look through my notes. If he is referring to money wages, I am coming to that.

The policy is absolutely vital for our continued economic expansion, for the preservation of full employment, and for higher increases in real wages.

I come now to the reference for which the hon. Gentleman asked. During the eight years 1956–64, weekly earnings rose by 54 per cent. and retail prices rose by 26 per cent., which meant that real earnings rose by only 22 per cent. This, surely, is the lesson for trade unionists, that it is real earnings they want to put up, not overall earnings.

Now, the question of export prices in the 10 years 1953–3, a point to which the right hon. Gentleman referred. Our prices rose by 17½ per cent., but in that same 10 year period French export prices stayed at precisely the same level, Japanese export prices fell by 13 per cent., and Italian export prices fell by 19 per cent. These were the 10 years of the Tory Government's heyday. The Labour Party must accept responsibility for any increase in export prices between 1951 and 1953 because the outgoing Government must accept responsibility for the results of their actions in the two years after they leave office. That is why I refer to the 10 years from 1953 to 1963.

As a trade unionist, I completely accept that the basic purpose of a trade union is to maximise the living standards and job security of its members. I say to my trade union colleagues outside and on both sides of the House—I understand that I have a couple on the other side now—that they can do best for themselves and for the nation by co-operating in the implementation of the prices and incomes policy.

The right hon. Member for Orkney and Shetland (Mr. Grimond) said that the Government simply staggered about from crisis to crisis. I repeat what I said during the debate on economic affairs two weeks ago. During the past 20 years, the country has never known what it is to do other than stagger from crisis to crisis. The Leader of the Liberal Party ought to know what staggering about from crisis to crisis is. He staggers from one General Election to lead a single-figure group of Liberals in the House, and after the next General Election his group reaches double figures, and then——

Mr. Speaker

Order. The hon. Gentleman must now come to the Bill.

Mr. Brown

I shall stick to the Bill, Mr. Speaker, and conclude by saying now, as I did in Committee, that I fully support it.

7.45 p.m.

Mr. Ray Mawby (Totnes)

The hon. Gentleman the Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) said that he understood that he had been joined by two trade unionist friends on this side of the House. As I have been here for 11 years, I regard that as something of an understatement.

What I have noticed more than anything else in the debate today is the deafening crash of shattered illusions. One has seen this among those who support the Bill and those who oppose it on the benches opposite. Many hon. Members, particularly the hon. Member for Ebbw Vale (Mr. Michael Foot), spoke in great sorrow because they saw the end of illusions which they had held dear for many years. This is one of the terrible consequences of the Bill.

The Under-Secretary of State said that the Prices and Incomes Board had become part of the established national machinery and we now needed Part I of the Bill to give it statutory powers. But he went on to say that the initiative will still lie with Ministers in deciding which cases they refer to the Board. Obviously, therefore, Part I could have been brought in this year, next year, or at any time.

The hon. Gentleman told us that Ministers would have the right to make references and that it was proper that the Bill should lay down the appropriate criteria which the Board would be expected to follow in making its recommendations. But he did not add that the criteria laid down in Schedule 2 have completely lost their meaning and been made a nonsense. In paragraph 3 of Schedule 2 it is said: The figure for the growth of the economy between 1964 and 1970 which is being assumed in the preparation of the Government's plan for economic development is 25 per cent. This gives an annual rate of growth of rather less than 4 per cent. Those figures are now made absolute nonsense. They were inserted in the National Plan, to the ceremonial burning of which in the yard outside we now look forward because it has lost its relevance to our situation now or in the future, if it ever had any. The Government knew that these figures were false when the Bill was presented for Second Reading. To write in these false figures shows exactly how the Government treat the House.

Why should there be this sudden rush? Twenty-five hon. Members from both sides of the House spent many hours, day and night, in the Standing Committee dealing with the Bill. Yet the Bill was published and printed and presented to the House in February, before the General Election. I ask opponents of the Bill on the Government benches seriously ask themselves, if they fought the election on the Bill, how they can now oppose it. This is, however, a matter of semantics and it is for their own consciences.

Mr. Eric Ogden (Liverpool, West Derby)

Would not the hon. Gentleman agree that there have been two Bills? If he cannot tell the difference between them, he ought not to be making a speech.

Mr. Mawby

I give the hon. Gentleman that point. Probably I was being too sweeping in saying that this was exactly the same Bill as that presented in February.

One new Clause, added to the Bill since February, instructs the Board to keep certain prices and incomes under continuous review. Another lays down that notice must be given of increases in companies' distributions. I should have thought that the addition of the second new Clause would have made the right hon. Gentleman the Member for Nuneaton (Mr. Cousins) more in favour of the Bill now than he was in February. But it is merely a matter of the consciences of hon. Members.

The Bill was presented in February, and yet it had its Second Reading only on 14th July. The Prime Minister made his famous statement six days later, on 20th July. I believe that the only reason for bringing in the Bill in a rush was to use it as a vehicle for Part IV. The Government, rather than come honestly to the House, saying, "We wish to bring in the Clauses which now form Part IV"—those are the complete measures which make the First Secretary a complete dictator and take all powers away from the Prices and Incomes Board-have attached Part IV to the Bill, which has been before the House for many months.

The most important point, which supports my argument that the Bill is being used as a vehicle, is the different method used in bringing in Part IV from that laid down for the bringing into operation of Part II. The original Bill laid down that Part II could not be brought into operation unless a positive vote had been taken by both Houses of Parliament. But the Minister can take executive action to bring in Part IV as long as he lays an order and both Houses support it within 28 days. Having a suspicious mind, I suspect that the main reason was to use the Bill as a vehicle to enable the First Secretary to bring into operation Part IV. As long as he recalled Parliament within 28 days of his taking that executive action, he would be all right.

At the General Election, the Government either deliberately misled the electorate or were completely incompetent. The Bill was presented in February, and if there was a need for it it ought to have made some progress. For the Government to wait until now, when we have suddenly had to deal with the Bill—it is an issue of tremendous importance—in a matter of days, hits at the roots of some of our established practices and beliefs, and it is a very bad business.

Part II is bad enough, but at least it gives the Prices and Incomes Board power seriously to study an application for a price or wage increase. The Board will be made up of people from different walks of life, and they will, no doubt, give serious consideration to these matters, as we have seen from their very valuable reports which have been brought forward from time to time. If Part II were brought into operation, it would at least give the Board statutory power to lay down that a price or wage rise should not be more than a certain norm. But Part IV leaves the Board completely out on a limb. The Board no longer has any powers.

Part IV makes a gauleiter or dictator of whoever holds the office of First Secretary. The right hon. Member for Belper (Mr. George Brown) may well remain the First Secretary. We know that he has a big heart and really believes in the policy that he is putting forward. I should be the last to suggest that he does not have his whole heart in the policy. But there were doubts in the recent past whether he would remain First Secretary. Have those doubts been completely dispelled? If the Bill becomes an Act, what will be important is not what has been promised by the present First Secretary, but what the Bill actually says.

When one is asking for volunteers, it is a bad thing to point a pistol at their heads at the same time and say, "If you are not prepared to volunteer, we shall force you to". Surely we have all learnt that the British working man tends to be a little cussed; he will do all sorts of things if he is a volunteer, but there are many things that he will not do if he feels that he is being pressed.

In a firm where I worked there was a man who had been employed there for 15 years and it suddenly came to his notice that the Control of Engagements Order meant that he would not be able to leave the firm except by special permission. Finding that he was not allowed to leave the firm, he decided that he would leave it. That was only because he had a cussed nature. He appeared before the tribunal and gave the reasons that he thought were good for leaving the firm.

Part IV of the Bill not only deals with future agreements which may be entered into between employer and employed, but with all agreements that may have been arrived at but not implemented before 20th July. This is a very important point. We know that the line has to be drawn in many matters and that some will always be on the right side and others on the wrong, but I agree with those who have said that this trend is against the people the right hon. Gentleman himself wants to help—the lower-paid workers, those who, for example, are dealt with by wages councils, the Railways Board and other organisations, for these are more liable to carry out the terms of the voluntary freeze than others.

Clarification is also needed on the question of which wages increases will be disregarded in both Part II and Part IV. The White Paper says: It is not intended that the standstill should be regarded as applying …"— and there follows a number of exceptions, including— … increases in pay resulting directly from increased output.

But, as the Under-Secretary of State pointed out, the problem of the men who, on raising productivity, insist upon receiving the full benefit, leaves behind the problem of the day worker who cannot increase productivity.

In Committee, I gave the example of a bus driver who could raise productivity only by breaking the speed limit. There are many other such cases of valuable servants of the community and they should be able to keep pace with the general rise in the standard of living. I agree that there will be a problem if production workers are able to receive the full benefits of increased productivity while the benefits cannot be shared out among their brothers who also play their part. So we had better make it clear that increases resulting from increased output should be disregarded under the freeze. There is also the question of the large group, particularly in local government, who have long-term agreements for regular increments to their salaries during their working life. The White Paper tends to suggest that they, too, should be disregarded. If they are to be disregarded, that is one thing, but if they are not to be disregarded then the question arises as to pension entitlement, particularly if the man concerned is due to retire this year, next year or the following year, because his pension will relate closely to his earnings in his last year of work or the last two years.

If the freeze is to apply to incremental earning there should be some arrangement whereby an increased notional contribution at least could be made by the person concerned so that he would not suffer throughout retirement because he had been caught at this moment by a wage freeze. Perhaps this can be sorted out by the responsible Ministers, such as the Minister of Housing and Local Government. It is certainly something to which we should pay attention.

I remind the House of the prophetic words of the right hon. Member for Belper in 1963: I am sure that the nation does not want to be regarded anywhere in the world as in need of baling out. I believe that today it would take strong determined leadership.

A little earlier, he had said: we must take the trade unions fully into consultation from the outset. We must assure them that their negotiating and arbitration machinery will again be free.

What the right hon. Gentleman said then about the negotiating machinery he asks us to reverse now. I believe that the House should refuse such permission.

The right hon. Gentleman went on to say: Yesterday, my right hon. Friend the Member for Huyton repeated the call. Go to the country, give the people the choice. We are ready and we are prepared to face the test. Are the Government."—[OFFICIAL REPORT, 12th February, 1963; Vol. 671. c. 1240.]

I ask the right hon. Gentleman to rethink those words seriously tonight and consider whether he should not withdraw the Bill even at this late hour. If not, then at least he and the Government can resign.

8.5 p.m.

Mr. Trevor Park (Derbyshire, South-East)

I last addressed the House on this Bill on 14th July on the occasion of its Second Reading. I declared that I believed it to be wrong in principle and that it would be ineffective in operation. I said that the Bill then being presented was totally contrary to the democratic and Socialist traditions on which the Labour movement was based.

For reasons not entirely mysterious to me, I was not placed on Standing Committee B. Last night, on Report stage, the Government refused to accept the Amendments which I and a number of my right hon. and hon. Friends had sponsored. The Bill, therefore—at least that part of it presented to us on Second Reading—comes back to us substantially unchanged and, from my point of view, it is neither more nor less unacceptable than it was at that time.

But it also comes to us with an addition—Part IV—which introduces new basic principles. It means that we are confronted with a Measure transformed from the Bill we were presented with for Second Reading. I find the transformed Measure more obnoxious, more unacceptable and even more unworkable than the original Bill. It is against that background that I approach the attitude which I am to take on Third Reading.

What the Bill now does is to suspend the operation of a system of free collective bargaining for which trade unionists have fought and died over the generations. Indeed it was in part at least to defend those trade union freedoms that the Labour Party itself was called into existence. All these rights, so hardly won over so many years, are now to be put into suspense and instead we are asked to accept a system of wage fixing by Government decree. Trade union leaders are to be forced outside the law in order to carry out their functions of maintaining and improving the conditions of those they represent. Trade union members may be thrown into prison for seeking to work together to raise their standard of living.

All this is being perpetrated not by the party opposite, as could perhaps have been expected, but by a Labour Government claiming to enshrine the very principles which they are now treating with such contempt.

The Bill is unfair because, in instituting a total wage freeze, it not only freezes wages but the existing inequalities between wages. It is once again the poorest paid who will have to bear the heaviest burdens as a result of this Measure. Those who are on higher rates, those whose labour is in greatest demand, those whose employers are prepared to find ways of evading the operation of the freeze—and there are many—will be able to escape comparatively unaffected. Professional people, people who are on incremental scales, will still obtain their annual increases. Dividends which are not paid out in the freeze will only be deferred to be paid out later, whereas wage increases, particularly basic wage increases, once lost will be lost for ever. But those who will suffer most will be those on the lowest pay, those who are dependent on basic rates and those whom my right hon. Friend the First Secretary said that it was the particular purpose of a Labour Government and the Labour movement to defend.

Mr. Roy Roebuck (Harrow, East)

Would my hon. Friend care to say whether he thinks that lower paid people and people on fixed incomes, such as pensioners, would benefit if this legislation were not introduced and inflation continued at its present rate?

Mr. Park

My hon. Friend the Member for Harrow, East (Mr. Roebuck) has not put forward the correct choice. There are other choices. There are alternatives to the Bill other than those of inflation or severe deflation. Unfortunately, the rules of the House do not allow me to develop them tonight, but I shall be very pleased to spend a considerable time expanding on this theme to my hon. Friend on some other occasion.

The Government have no authority to introduce the Bill. They have no authority from the electors. They have no authority from the Labour Party Conference, and I do not believe that they have any authority from the Parliamentary Labour Party, which has not taken any decision on this matter. I do not believe that they possess the confidence and the support of those millions of trade unionists on whose support in the end the whole practicability of an incomes policy must rest.

What the Bill seeks to do is to secure by coercion what it is felt persuasion has failed to obtain, but the bitterness and the discontent which will emerge will make persuasion impossible and my real fear is that by this action, and particularly by introducing Part IV, the Government will be forced into a situation in which at the end of the day they have only two alternative policies which they could pursue and both of which would be almost equally invidious. Either they must accept total defeat in an attempt to secure an incomes policy and to go back to a free-for-all—which I would not support, because I believe in an incomes policy based on consent and co-operation—or they will be driven into a position in which they seek to impose Part IV as a permanent feature of our industrial relations, and that would be equally detestable.

The answer to the problem which confronts the Government is an incomes policy obtained by voluntary means, an incomes policy whose principles the trade union and Labour movement can accept because they know that those principles are in line with their Socialist convictions. I am sorry that the Government appear to have lost faith that it is possible any more to achieve that kind of policy. I would have liked to have seen an incomes policy accompanied by such measures as, for instance, a massive reduction in arms expenditure; an incomes policy accompanied, for instance, by selective import controls and controls on the export of capital; I would have liked to have seen an incomes policy also accompanied by a radical extension of publicly-owned industries; I would have liked to have seen an incomes policy accompanied by the determination of the Government that the basis of our approach should not be to make existing society work and to enforce statutory sanctions in order to bring it about, but that the basis of our approach ought to be to transform the nature of society.

If we had made that clear, we would have got an incomes policy by voluntary means and even the Government themselves would not now talk in terms of statutory measures. If I felt that the only possible solution to a grave and urgent economic crisis in which the very existence of the nation was at stake was this Measure, I might be prepared even at this late stage to reconsider my position, but this is not so. The Bill is irrelevant to the real problems which the nation faces and if in any case we have to pursue the path of the Bill, a permanent and final solution to our economic difficulties will be rendered more remote.

In all the circumstances, therefore, I must adhere to the view which I have expressed. The Bill flies in the face of some of the most cherished principles on which the Labour movement was founded. It does so without either economic justification or political necessity. It constitutes a breach of faith with the Labour movement, with the trade unions and with the electors, and in that breach of faith the Government do not possess either my confidence or my support.

8.18 p.m.

Mr. John Biffen (Oswestry)

The hon. Member for Derbyshire, South-East (Mr. Park) has made a powerful contribution to the debate this evening as he did on Second Reading. I was in the Chamber for the Second Reading of the Bill and I enjoyed his speech then and was even accused by one of his hon. Friends of nodding in agreement with much of what the hon. Gentleman said. I did not nod in much agreement with the second half of his contribution this evening, but by rather different methods we may have arrived at limited agreement in our conclusions.

What interested me very much about the hon. Member's speech was that coming at what is normally a dead hour in a debate, at twenty minutes past eight on the Third Reading of a Bill at this stage of the Parliamentary year, there was an extraordinary number of Members in the Chamber to hear it. That is Parliament's way of expressing its conviction that this is one of the most important Bills likely to come before the House during this Session. This is Parliament's way of asserting that it agrees that an incomes policy is central to the Government's entire economic policy and that the Bill is the legislative embodiment of that incomes policy.

At the outset, it is necessary to define one or two terms, because the expression "incomes policy" has been thrown around fairly liberally. Last night, the Parliamentary Secretary to the Ministry of Labour, the hon. Lady the Member for Hitchin (Mrs. Shirley Williams), speaking with the enthusiasm of a detergent salesman saying that no decent household was without one, said that not one industrial community in the Western world was without an incomes policy. That statement needs examination.

The hon. Lady quoted the Three Wise Men, as they were in the days of Mr. Peter Thorneycroft, and the example of Germany. This is a novel interpretation as to what constitutes an incomes policy because what goes on in Germany and what was provided by the Three Wise Men is in no sense consistent with what we see as the developing policy that reaches its culmination in this Bill. Whereas many of us may support bodies which seek to illumine and inform us on the workings of a complex modern industrial society, and we argued in that light on Part I of the Bill, the real nature of a Labour incomes policy is that it seeks to give to a central power the capability of identifying, and of selecting and then instructing.

That is what the Bill is all about and that is why there is repeatedly reference to the Secretary of State; "The Secretary of State and another Minister acting jointly may refer …"; or "The Secretary of State may by order apply this section …" The whole of Part II, Clauses 7 to 8, is concerned to give to a central power, to the First Secretary of State and those who are associated with him, a limited power of price and income control. There can be no doubt about this and my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) must take all of this into account, because I agree with the hon. Member for Lewisham, North (Mr. Moyle) when he said that in certain instances Part IV and Part II were not altogether dissimilar.

In both instances, they seek to give to the First Secretary certain powers of intervention. There are penalty Clauses, arising from failure to carry out parts of the Bill. There were other very considerable differences between the parts, but there are certain similarities. My fear is that we are only seeing the beginning of this process. At the moment, the provisions of the Bill lay down a four-month standstill, a four-month price and income control. This is made up of one month during which the price or income is notified to the First Secretary so that he may decide what he is going to do, and three months thereafter while it is with the Prices and Incomes Board. There are already signs that this will drift into something much more than a four-month standstill. Many of our discussions, upstairs and here, on Report, have been concerned with mortgages.

I would like to remind the House of what the Minister of Housing and Local Government said yesterday. He said: 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."—[OFFICIAL REPORT, 9th August, 1966; Vol. 733, c. 1396.] What the Minister is suggesting is not that the price should be fixed, controlled, until three months after the reference to the Board, but until the Board has reported. The reference was made on 20th May and three months afterwards will be 20th August. We are now informed that the report is not likely to be available until mid-October.

Very well, today it is the building societies, today it is someone in the dock who, in a sense, is a fairly obvious object of political pillory. But the time will come when it will be a manufacturer, the time will come when it will be a trade union leader—doubtless a small group of trade union leaders, perhaps politically motivated and tightly-knit. I have no doubt on the existing evidence of the way that the Government has behaved that what is good for the Minister of Housing and Local Government with the building societies today can be good over a much wider range of manufacturers and trade union leaders in the months to come.

Because this incomes policy is discriminatory and interventionist and is acknowledged to be such by Members on the Treasury Bench and by supporters such as the hon. Member for Lewisham, North, it is not just going to be concerned with fact-finding. It will want to look for sub-contractors.

There is nothing in the Bill which leads us to believe that the administrative machine is anything like capable of dealing with the quantity of price notification and income notification that will come its way. Therefore, it will seek, naturally, to operate through bodies like the T.U.C. and the C.B.I.

I ask the House to consider the implications in Clause 16, as it affects incomes increases. If this is to be operated substantially through available organisations, what I would call die sub-contracting agencies, which must be the trade unions, then one must take note of the fact that less than 50 per cent. of workers are members of unions. If one is in a union one will feel that one is much more likely to be affected by the incomes policy than a fellow worker who is non-unionised. This is a perfectly natural conclusion and reaction to provisions of this kind.

Within the whole spectrum of employment incomes it is bound to touch the wage-earner more than the salary-earner. I say this, again on the same question of organisation, and I have a little evidence to support this. From the Census of Population I have a calculation that 31 per cent. of those receiving employment incomes were salary-earners. I asked the Ministry of Labour if I could be told the figures known to it of salary and wage-earners who had received increases of income during 1965.

The figures given, when broken down, reveal that of the total number known to the Ministry to have received increases, only 11 per cent. referred to salary-earners. No one in the House believes for a moment that the salary-earners have not been receiving rates of increase any less than wage-earners. It is widely known that they are in step. Yet we know that there are roughly 30 per cent. of salary-earners as a percentage of total employment incomes and only 11 per cent. are known to have received increases.

On the simple question of practicability, the way in which this will be administered, it is bound to be seen to be likely to affect wage-earners rather than salary-earners. This is particularly true of Clause 4. When I hear talk about social justice being enshrined in the operation of Part IV of this Bill I begin to have very serious doubts. I talked to one employer and his reaction was, "I suppose that this covers centrally negotiated wages?" I said, "No, it covers everything." He said, "We are going to have very great difficulty in keeping our key salaried staff, They are the people going off to America and we cannot afford to see them go. The cost of replacement of these people is considerable."

Make no mistake, while Part IV may be invoked successfully against people in the £15 to £25 bracket, above that range the sheer market forces will still operate, whatever may be said. To suggest otherwise is to delude the House. The railwayman who finds he is not to get his 3½ per cent. increase cannot "up sticks" and practise his skills in North America. But this is undoubtedly true of many professional people on contracts with salaries of £2,000, £3,000, £4,000, £5,000 and more a year. That is the reality of the situation. I only ask that we accept it and realise it. It is not right that the House should be told that social justice will be protected by the operation of Part IV.

I turn to the operation of the Clauses relating to prices. Prices affecting goods are much more readily known that prices affecting services. This is a sheer administrative factor. The Government will know much more about price movements of physical goods than they know about the price movements of services. Much of the argument we have heard about the Selective Employment Tax relationship between services and manufacturing industry will be inverted. It will be stood on its head in the next few months and under the longer term provisions of Part II.

The argument which I have sought to deploy substantiates the almost pedantic concern which a number of my hon. Friends and myself have expressed about Government statistics over the past few months. The whole purpose was merely to demonstrate that once we place these levers of power in Whitehall to be pulled by the First Secretary, or whoever the Minister might be, the information available is the real point of power. Knowledge is power. Certainly, the limitations of knowledge available to the central machine reveal the limitations, arbitrariness and unfairness of this policy.

The Bill is a vindication of the scepticism expressed from these benches from the very early days of this Labour Government. The Parliamentary Secretary said, "Twenty months ago we did not think that we should have to introduce a Bill of this kind". But some of us did. We argued that there would be a drift from the voluntary system to elements of compulsion. We are not sure that we have yet come to the end of the drift. I am not sure that the Government will not after a year say, "we were blown off course". The Prime Minister, at the airport on his return from Washington, said that we had been blown a bit off course. It may take a little longer to get back on course than we realise.

The right hon. Gentleman will say, "Sacrifices are being made". I can imagine that we shall be asked perhaps not to invoke Part IV, but to adjust the standstill periods in Part II. It was said that the Government would try to operate the freeze through Part H. Then we should not had had this rubbish, almost this obscenity, about breaking contracts under Part IV. We thought that we would go a long way towards getting a freeze under Part II. This fear is still with us.

The incomes policy of the Government has been presented as an exercise in national co-operation. It is absolutely nothing of the sort. It is an exercise in Whitehall discrimination. The Bill is a greater testimony to that than any of the powerful doubts expressed by my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). Those of us who have criticised the Bill and the policy have argued with restraint and, I hope, some degree of responsibility. But make no mistake: we regard the Bill as unacceptable under two broad and, I think, fundamental heads. First, it is a token of lawless Government, and I cannot do more than echo the words of the hon. Member for Ebbw Vale (Mr. Michael Foot). Secondly, I believe that it still represents an escape from economic realism.

No more foolish words were spoken than those uttered by Mr. Clive Jenkins, of the Association of Supervisory Staffs, Executives and Technicians, when he said that the Bill should not have been published in English because it was intended for a continental audience. No banker would care a ha'porth for the Bill; it means nothing. The hon. Member for Harrow, East (Mr. Roebuck) talked about the Bill having some effect on inflation. I do not think that that is a story which would win the heart of a single banker. He is looking at the £500 million deflation which the Prime Minister has already produced, superimposed on the many other measures. I at least have the courage of the Prime Minister's convictions. I think that deflation was necessary and should be allowed to work, but, believing that, I regard the Bill as a totally irrelevant nonsense.

Mr. Roebuck

Is the hon. Gentleman arguing that we should go ahead and have a scramble for wages, with those who are most highly skilled or organised getting the lot and other members of the community not so highly organised, such as probation officers, always being at the end of the queue?

Mr. Biffen

No. The hon. Gentleman is concerned about the bargaining power and the special privileges conferred by the laws of combination on unions—a subject which I suggest is not in order on Third Reading, although I assure the hon. Gentleman that I have a view on it—I believe the market should establish the pattern of wages. One should pursue a social policy which is designed to deal with the casualties of a free enterprise economy. The hon. Member knows perfectly well, however, that I cannot embark upon comprehensive discussion of my alternative without upsetting all my hon. Friends, as well as his own hon. Friends, who wish to speak, in addition to being out of order.

Tonight, we come to a vote. Some people seem to imagine that politics should be conducted with the partisanship and symmetry of a Celtic-Rangers football match. I am not one of those. It does not seem to me that there will be a grotesque loss of face for the Patronage Secretary or his opposite number if there is a certain amount of cross-voting in the Lobbies, or if some hon. Members abstain. What I can say is that the divisions revealed in the vote tonight will be more relevant and meaningful to the situation than a lot of the synthetic unity dreamed up by the First Secretary during the past 18 months.

8.36 p.m.

Mr. Eric G. Varley (Chesterfield)

I hope that the hon. Member for Oswestry (Mr. Biffen) will forgive me if I do not follow him in all the details of his speech, because I wish to be brief and to put on record some of my objections to the Bill. I was not successful enough to be called on Second Reading, I did not have the honour to be a member of the Standing Committee, and I would not like the Bill to pass without at least stating briefly, probably exclusively from the trade union point of view, some of my objections to the Bill.

I have been a relatively short time in the House of Commons, and naturally from time to time Measures come before the House which require a certain amount of digesting. I have found that I could digest every piece of legislation introduced by the present Government except, possibly, for this one. No Measure has stuck in my throat more than this one. If Clause 16 and Part IV of the Bill are activated, I think that there will be considerable industrial unrest throughout the country.

Only this morning I had a letter from my constituency, from a joint shop stewards' committee, from which I would like to read an extract. It states: We have already felt the effect of this"— that is, the Bill— in our factory, as a domestic agreement signed by the shop stewards for some increases in pay for a section of our members, signed 26th June, to operate on 1st August, is now proclaimed by the management to be illegal under the terms of the new Bill. My correspondent goes on to say that managements are able to sit back and refuse everything on the plea of being loyal to the Government and that frustration and disillusionment will spread through the movement. I am assuming that the chairman of the joint shop stewards' committee was referring to the Labour movement.

I know that shop stewards' committee. They are very hard bargainers. They are shrewd men. The factory in which they work is reasonably well equipped, reasonably modern and efficient. The profits are reasonably high. Labour relations have been reasonably good, and I understand—I have lived in the Chesterfield constituency all my life—that there has been no unconstitutional action at this factory. I know, however, that if the full terms of the Bill are applied, as I think that they will be, unofficial action is likely.

My right hon. Friend the First Secretary has said throughout the stages of the Bill that he hoped to maintain the voluntary system and voluntary agreement. As a consequence of these statements, some of us have watched the deliberations and reports of the Trades Union Congress. I have certainly formed the opinion—and I know this goes for quite a few of my hon. Friends—that the T.U.C. is only half-hearted about this Bill. In a phrase, we could probably say that it is acquiescing to it.

There is no doubt that in the T.U.C. there is a tremendous amount of good will for this Government. It wants the Government to succeed. Of this I am absolutely sure, as many of us on this side want them to succeed, but there are some members of the General Council, I am sure, who are not carrying their rank and file or individual unions with them on this Measure. I can think of my own union in particular. I do not think they are necessarily carrying their own members with them. There are those trade unionists, like my right hon. Friend the Member for Nuneaton (Mr. Cousins) who will have nothing at all to do with this Bill. There are many secretaries of trade unions who have said precisely the same thing, and they will refuse to cooperate.

This brings me to my point about the maintenance of the voluntary principle. What happens to the voluntary principle if it is breached by my right hon. Friend the Member for Nuneaton on behalf of the Transport and General Workers Union, or if it is breached by some other union? What happens to the loyal section of the T.U.C. General Council? What will they do? It is my view that they will probably totter along to the First Secretary and say, "Really, First Secretary, you ought to introduce the compulsory part very quickly and protect us", because I am suggesting to the House that it is very difficult for a trade union leader to tell his members to hold back on a wage claim when those very same members see people in similar occupations, and being represented by a different trade union, winning a wage award and getting the policy breached. So it is my opinion that the First Secretary will be asked in some cases to bring the compulsory part of the Bill into operation as soon as possible.

Then I think we have to ask ourselves this question, too: is it a good law? By a good law I mean one which is enforceable. I do not think this is enforceable. My mind begins to boggle when I look at some of the consequences which could arise for an individual trade unionist and certain trade unions. I was brought up, and have lived nearly all my adult life, in a mining village, and I know that in a mining village there is a tremendous amount of solidarity; they stand together in a case of industrial dispute. If the compulsory part of this Bill is put into operation and certain trade union leaders have to go to gaol or are fined as a consequence of it, there will be absolute chaos, and the Government should remember that we still need a fair bit of coal yet if we are to achieve all of our objects. I know that the coal industry, to some extent, is running down, but, nevertheless, if the Government understand this we should ask them to look at it again.

I have a great deal of respect for my right hon. Friend the First Secretary,—for his tenacity, and for his zeal, and for the method in which he tries to pursue the things in which he believes. However, I feel that this Bill is constructed in a manner which is likely to cause a great amount of industrial unrest. I hope it does not, but I think that it is highly likely that it will. It will most certainly, as my hon. Friend the Member for Derbyshire, South-East (Mr. Park) said, injure this unique Labour Party-trade union relationship, and I think that time will prove that this Bill is both unwise and unnecessary and ought not to have been introduced.

8.44 p.m.

Sir Cyril Osborne (Louth)

I entirely agree with what the hon. Member for Chesterfield (Mr. Varley) has just said, and with the burden of his argument that the Bill will be unenforceable. On that ground alone, I think that it ought to be withdrawn. I think it fair to say that the Bill gives pleasure to nobody. No one loves it. It is a tragedy for the Labour Party, for the Labour Government, and for the whole country.

Four and a half months ago, we came back as a new Parliament, and hon. Members opposite assembled with great glee, almost equal to that in 1945, thinking that the new Jerusalem was just round the corner. Not one of them would have believed last April that a Bill of this nature would be brought into the House by their own Government. It is a greater tragedy for them than it is for us, but it is a tragedy also for the nation.

The country is asking what has gone wrong in the past four and a half short months to cause the Government to bring in a crazy Bill like this. What justification is there for it and for trying to ram down the throats of trade unionists what obviously they will not accept? The hon. Member for Glasgow, Provan (Mr. Hugh D. Brown) revealed the crisis within the crisis when he said that he was not aware that there was a crisis. He asked: why bring in a Bill like this? In his innocence, he wanted to know what is wrong with the country.

May I make three quick comments in reply to the hon. Gentleman? The Prime Minister's policy will deliberately create an unemployment figure of 460,000. That, to me, is serious. By next February, unless we are lucky, it may roll on to 1 million. The problem that we are facing is a worldwide one. There is a world deflationary wave collecting force now. In my worst moments, I feel that it could engulf us all, as it did in 1931. During the last two or three years, though no fault of their own, the Government have had to borrow about £1,200 million from abroad. Our total reserves are £1,134 million. We have not a brass farthing in the "kitty"; it is all borrowed, and in three years' time we have to repay it. We have to earn £1,200 million to keep our promise. That is the crisis. Going round the country, and talking to the men with whom I work, the problem as I see it is that they do not realise it.

The charges which I bring against the Government are, first, that the Bill will not work. It has not a hope in you-know-where of working. The second charge is that the Government have never convinced all sections of the nation of the gravity of the situation. The real problem before the nation is that we are living beyond our means, and the Bill does nothing to cure that basic fault. It does nothing to increase the productivity of the nation or to increase our industrial efficiency, and those are the two things which are needed. The simple fact is that we are fooling ourselves.

Hon. Members who have been here for many years know that I have pleaded hard for a prices and incomes policy. Such a policy, on a voluntary basis, is not only necessary and just, but inevitable. It is in everyone's interest to keep prices down. However, if we are to do that, in the same way we have to keep incomes down, because the two must march together.

The policy is right, but the Government are going the wrong way about it to achieve their end. The hon. Member for Rhondda, West (Mr. Iorwerth Thomas) referred to the fear of unemployment, and the debates that we had in 1947. He quoted the circular written by the hon. Member for Ebbw Vale (Mr. Michael Foot) at that time. In those days, as the hon. Member for Ebbw Vale will remember, a similar policy was put before the House by Sir Stafford Cripps, who was a man of immense moral stature and authority. For two years he succeeded. It is not unfair to right hon. Gentlemen in the present Government to say that there is not one of them who compares with Cripps in moral authority.

If he could not succeed, how do the present Government think that they will succeed? The hon. Member for Ebbw Vale speaks about his fear of unemployment, which I understand, because f share that fear. Unless we have, not this policy, but greater industrial efficiency and greater productivity, there will be far more unemployment than anyone in the House is prepared to believe. It is our own folly which will bring that unemployment back, the fear of which upset the hon. Member so much.

May I make a protest in the absence of the First Secretary? I think that a senior Minister ought to be on the Front Bench listening to the debate. There has not been one on the Front Bench for the last three hours. I observe the presence of the hon. Lady the Parliamentary Secretary to the Ministry of Labour, and I am glad to see her here, but no senior Minister has been here to listen to the debate. This is the amount of interest which the Government show in this vital problem.

As I speak, I notice that the First Secretary is returning to the Chamber. It is nice to see him come to save the honour of the team. Instead of sneering at him, as do hon. Members on both sides of the House, we should congratulate him on taking on a very unpopular and difficult task, which I think will prove an impossible task. At least, I respect him highly for trying to do what I believe to be right, although he is going the wrong way about it.

I believe that if the Government Whips were taken off the Bill would be defeated on Third Reading. It is not wanted by the country, it is not wanted by the Labour Party as a whole, and it is not wanted by this side of the House, because it cannot work, for the simple reason that no incomes policy can work unless it has the whole-hearted co-operation of the trade union movement. We cannot force a Bill such as this down the throats of the leading trade unionists, who do not want it. This is the problem which the right hon. Gentleman must face, as he well knows, and until he can convert his own colleagues in his own union it is doubtful whether the rest of the trade union world will accept the Bill.

If a Bill of this nature, with these penal Clauses, had by any chance been introduced by a Tory Government and a Tory Minister, what would the hon. Member for Ebbw Vale have called us? "Fascist beasts" would have been modest. Never in their wildest moments did they think that they would see their Government bringing in a Bill like this, against the wishes of the unions upon whose votes and money they so largely depend.

There are many other things that I should like to say, but I will cut my speech short because other hon. Members wish to speak. I wish to ask one fundamental question. I believe that many people in the country, and more outside, believe that this policy is not the free choice of the Government, but was forced upon them by the international bankers. I want this cleared up. I want to quote from the letter of resignation written by the right hon. Member for Nuneaton to the Prime Minister. It is immensely relevant to the debate and if the First Secretary would be good enough to listen, I should like him to answer the question, because it touches upon himself and his honour.

Writing to the Prime Minister, the right hon. Member for Nuneaton, a colleague and a senior member of the Cabinet, said: Just before the General Election you gave me to understand that you would help to break down the shibboleths of a belief that what we needed to secure economic recovery was sufficient power in the hands of the Gov-ment to compel the unions to accept without question the decisions of the National Board for Prices and Incomes. Unfortunately, you did not maintain that view. Having given the right hon. Member for Nuneaton, a senior member of his Cabinet, that assurance, why did the Prime Minister change his mind? We are entitled to know the answer to that question. The right hon. Member for Nuneaton went on, in his resignation letter: The present attitude of the Government has obviously driven us to the position where our international monetary transactions have been based on assurances of our intention to restrict internal demand". I put a Question to the Chancellor of the Exchequer about this on 26th July, in which I asked whether those assurances had been given, when they were given and on what conditions they were given. If the Bill is before us because the Government could borrow money from Zurich only on condition that they imposed restrictions of this type, we are entitled to know the answers to those questions, particularly since the Chief Secretary to the Treasury replied: No such assurances have been asked for and none has been given."—[OFFICIAL REPORT. 26th July, 1966; Vol. 732, c. 1431.] Someone is not speaking the truth and we are entitled to know precisely what the position is. When the Prime Minister received the letter of resignation from the right hon. Member for Nuneaton he did not refute what his former senior colleague in the Cabinet said—the accusation that the Bill was being introduced because of assurances given to some financial organisation, which means the international bankers. We are entitled to know whether this policy has been forced on the Government, as the right hon. Member for Nuneaton alleged.

This piece of Government legislation will not work. It is a tragedy for us and it does not in any way relate to our problems. If there were a free vote tonight the Bill would be defeated. [HON. MEMBERS: "Rubbish."] Try it. I would put any money on its being defeated. I deeply regret that the Measure has been forced on the House. I wish that the policy could succeed, but it cannot, and I am, therefore, compelled to vote against it.

8.58 p.m.

Mr. R. B. Cant (Stoke-on-Trent, Central)

I am pleased that a few extra minutes have been made available to allow additional speeches to be made, although I find myself in a rather embarrassing situation; it is a pity that I was not able to catch your eye earlier, Mr. Speaker, so that my words could have been lost in the OFFICIAL REPORT. I say that because I am unable to support the Bill as it stands.

Fortunately, I do not live in London. I can get away each weekend to my constituency, which is my home town, and there I meet happy people who are not enshrouded in the gloom of crisis and disaster which so often envelops us in Parliament. These people are aware that there are problems, but perhaps they do not see them in the black and white way in which we in this Chamber see them.

Britain is one of the great and wealthy nations of the world, with a tremendous output each year, involving about £30,000 million worth of goods and services. Despite this, we are crucified on a cross of a balance of payments deficit of £200 million to £300 million. Some future economic historian can unravel that.

We have a problem because the level of our aggregate demand is too high, and it is too high for all the reasons we know. If we do not know them, we can find them in the preliminary estimates of national income. We also have a problem because the crisis of the £ does not wholly reflect our own basic balance-of-payments deficit. We have to accept that one of the aspects of our mismanagement—and this applies to the Opposition as well as to the present Government—relates to our failure in the sphere of foreign exchanges, and useful suggestions have been put forward from time to time from both sides of the Chamber.

My belief is that we are trying to swim against the tide of history. Although people keep on saying, as the hon. Member for Oswestry (Mr. Biffen) has said, that evidence is scattered round Europe and the world that an incomes policy can be a successful economic institution, that evidence is extremely fragmentary. The two authors of the latest publication of the International Labour Office, an Englishman and a Dutchman, reach the rather sad conclusion that an incomes policy will operate only if we get rid of demand inflation within the economy and, secondly, if trade unions are prepared to sacrifice a measure of their autonomy on the basis of agreed co-operation.

The implication is clear. An incomes policy depends on getting rid of demand inflation, but if we get rid of demand inflation we do not need an incomes policy——

Mr. Iain Macleod (Enfield, West)

It does not follow.

Mr. Cant

I am told that it does not follow. Perhaps I am being carried away on this economic——

Mr. Macleod

I did not mean to make a sedentary interruption. I believe that if one can get rid of demand inflation, an incomes policy has a marginal value, but a true effect at the margin. That is what I meant.

Mr. Cant

I am grateful for that interruption because it confirms my own verdict in these matters. There is a place for an incomes policy provided we decide what we want to do with that policy, but we have not come to that sort of decision. We are in the same sort of dilemma as we were with the selective employment tax. We thought that it was something that might perform a number of rôles.

I agree entirely with that portion of the Bill that relates to prices, because despite the comment made straight from that Tory organ of opinion, the Economist, by the right hon. Member for Leeds, North-East (Sir K. Joseph) that the French experience has been entirely disastrous, if the right hon. Gentleman has quoted fully from the Economist it would have appeared that we are the only country that has not visited France to make some sort of investigation there. As in military life, the strategy of indirect approach is very often the more successful. If we cannot freeze prices, except for this initial interval, perhaps we can make searching inquiries into prices, by means of which we shall moderate incomes in the way we are suggesting. This is very important. We have moved into a situation in which we have far too many bodies of one kind and another looking into prices. We have the Monopolies Commission which looks into prices, the Restrictive Trade Practices Court which investigates prices, and we have the Prices and Incomes Board. This is something of which one can wholly approve and which should be developed.

If incomes policy is to meet the problem of regulating demand within the economy, it needs to be given a great deal more consideration than it has been given by the Government to date. If we are to use incomes policy in this respect it can have this marginal influence on prices and incomes within the community, but it should be developed from that point to have an important influence, not only on incomes as a component of agreggate demand, but in the shaping of incomes in terms of what should be paid for this particular job and that particular job.

I take up a point which was made by the hon. Member for Oswestry about voting. He says, "Do not bother whether you go into the Ayes or the Noes Lobby; just vote according to your intellectual conscience." I say to him that I do not believe that kind of political nonsense. I say to those who, like me, are not exactly enamoured of the Prices and Incomes Bill and may be thinking of abstaining, that what they are voting for tonight is the whole Labour movement. [Laughter.] I am perfectly serious. If they do not demonstrate their support for the Government by voting tonight, I know the sort of interpretation that the people who put this Government back will place on their abstention. I say to them, do not be led astray by the hon. Member for Oswestry.

9.6 p.m.

Mr. Terence L. Higgins (Worthing)

The debates which have taken place over the last two days have surely been among the highlights of the Parliamentary Session. Certainly the standard of speeches which I have had the privilege of listening to over the last two days have equalled, and even exceeded, anything I have heard since I came to the House in 1964.

In summing up the debate, I think it necessary to say that I find the Bill as it stands, as it comes before us for the Third Reading, totally unacceptable and abhorrent, because it strikes at the very basis of free trade union bargaining and at the prices mechanism on which we inevitably rely in the absence of rationing or direction of labour for the allocation of the resources in our economy. There could be no more vital issue which we could be discussing at this time.

It is none the less a sad occasion. It was, I think, rather aptly described by my hon. Friend the Member for Totnes (Mr. Mawby) when he said that the debate was largely a deafening crash of shattering illusions. There is no doubt at all that the policy which the Government are now pursuing is likely to be disastrous. This is becoming apparent, not only on this side of the House but on the other side of the House. I cannot hope in my speech tonight to match the expertise or eloquence of the First Secretary of State and Secretary of State for Economic Affairs, because I have no doubt that he will be inspired by his passionate—one might almost say fanatical—belief in what clearly must be regarded as his Bill. The approach which the First Secretary has taken throughout the passage of the Bill—that it is a sine qua non without which the whole economic policy otherwise is meaningless—has not invariably been shared by the Chancellor of the Exchequer. There is this report in the Financial Times of 26th July of what the Chancellor said when speaking at The Hague: He said the new and directly deflationary measures combined with planned foreign exchange savings, particularly in the military field, would be sufficient to do the job on their own. The prices and incomes part of the package should therefore be viewed as 'a bonus on top of it all'. While the Government meant it to succeed, the Chancellor said, ' we would not be all at sea again if it failed'. It is true that in subsequent statements the Chancellor of the Exchequer has sought to recant from what might otherwise appear to be a Freudian slip.

We must be clear that, if the Chancellor was right on that occasion, or, indeed, if the incomes policy is not the main essential element in our whole economic policy, then the price which the House of Commons and the country is being asked to pay, in terms of a fundamental alteration in the whole structure of our industrial relations, is indeed a very high one. I do not believe that the House, when it comes to vote tonight, can reasonably give the Bill a Third Reading, balancing, on the one hand, the alleged advantages of the Bill, and, on the other hand, the effect which it will have on the whole of our society.

It is sad that we did not have an opportunity of debating the principles of Part IV. It is relevant to ask why we did not have that opportunity. The fact is that we did not have it because the First Secretary did not have sufficient foresight to incorporate it in the original draft of the Bill for Second Reading.

This is typical of the Government. It is not only a policy of meddle and muddle. It is, above all else, a policy of myopia, a policy of shortsightedness. This is typified by this statement by the Under-Secretary on Second Reading: … may I make it clear again that there is opportunity in the normal way for negotiations to continue during the period when the Board is preparing a report. There is no delay in that respect. Claims can be made: negotiations may go forward. There is no interference at all in that respect with free collective bargaining. I hope very much that there will be no further misrepresentations about the Government's attitude and what the Bill says in this respect."—[OFFICIAL REPORT, 14th July, 1966; Vol. 731, cc. 1850–51.] What a fantastic transformation between Second Reading and the incorporation of Part IV. Is it not sad that we have been denied the opportunity to submit the principles of Part IV to full Parliamentary discussion on the Floor of the House? Is is not sad also that the Bill should have been rushed through the Committee stage because the First Secretary could not bring it to the House at an earlier date? Therefore, in Committee we had to rush our deliberations and were deprived of the full advantage of representations on detailed points which might otherwise have been brought before us.

It is quite clear that a major change is taking place in the whole structure of the economy. It is relevant to point out that there are great differences between our views and those of hon. Members opposite below the Gangway, for whose views I have the greatest respect. They have spoken with great sincerity and I fully understand their viewpoint. There are indeed great differences between us, but I am sure that we are not divided at all on the need for proper Parliamentary scrutiny. Moreover, I do not believe that we are divided at all on the question whether respect should be had for the sanctity of negotiations freely entered into and for the sanctity of contracts between the contracting parties on both sides of industry. We shall now have a situation involving, instead of that sanctity of procedure and the free process of bargaining, a system where the First Secretary in a freeze of six months can cut across that and impose an arbitrary freeze with all that that implies, and then a second period when he himself is the arbiter of what shall happen—not the normal process of collective bargaining but an outright statement by the First Secretary based on criteria of which we know nothing.

The point which divides the House most seriously is the question of the level of demand. I think one should distinguish carefully between whether one feels that one should have a state of free collective bargaining in a state of over-full employment where the power of the large unions is likely to lead to inflationary wage increases, or whether one would prefer to have free bargaining carried out in a situation where the level of demand is right.

In this connection it is important to point out that we on this side of the House have been accused of being in favour of deflation. It is true that we feel that there should be a reasonable balance between supply and demand, but I think it is also relevant to point out that the level of deflation which we feel would have been necessary had adequate measures been taken in time is most certainly on a lower level than the large level of deflation which is likely to be brought about by the incompetence of the present Government.

It cannot be argued that we have not pointed this out during the past year. Indeed, ever since the debates on the April budget and the subsequent Finance Bill, we have pointed out time and again that if the Government did not take reasonable action soon, they would have to take massive action later. Therefore, there is a very real prospect that we shall suffer a level of unemployment far higher than that which would otherwise have been the case.

The irony of the situation is that in those circumstances we may find that the subsequent reduction in the level of inflation which takes place may be attributed to this Bill, whereas it is no such thing. This is a typical witch doctor's approach, when he forecasts when the sun is going to rise and everyone thinks that it happens because of a certain spell. Nothing could be further from the truth. This is, indeed, a typical post hoc ergo propter hoc fallacy. I believe the measures which the Chancellor has taken rather than the measures taken under this Bill will prove effective in the long run.

I want to turn to the voluntary as against the compulsory action under this Bill. We on this side of the House have said that we believe there is a case for a voluntary incomes policy. As was made clear in the splendid debate last night on Clause 16, we do not believe that it is right, either under Part II or under Part IV of the Bill, to impose compulsory restraint with all that it implies. We believe it is totally wrong that the bargains and contracts to which the hon. Member for Ebbw Vale (Mr. Michael Foot), for example, referred in a moving speech this afternoon with regard to the railwaymen's claim, should be swept aside in the interests of the First Secretary's policy.

The absurd situation arises that in Committee we were told by the First Secretary that he did not want to introduce compulsion. He said that if there was a break in the voluntary arrangement he would have to introduce compulsion. But he himself admitted that the compulsory system could not possibly hope by itself to be comprehensive. This seems a basic paradox in the approach which he has adopted. Indeed, a number of hon. Members in all quarters of the House have pointed out that it is absurd to call it a voluntary system if the threat of compulsion is hanging over everybody's heads.

The other point is that the First Secretary himself admits that the system which he is proposing to adopt, if necessary, with regard to compulsion cannot hope to be really effective. In Committee over and over again he conceded that it will be impossible to work out exactly whether there has been a change in the product or in the quality of the product, whether there has been a price increase, and so on. This is brought out in his own White Papers. The early warning White Paper rules out a comprehensive compulsory system whereas the subsequent one does not.

How is the First Secretary to decide when the voluntary system has failed? It may well be—indeed, it is crystal clear—that it has failed over the past 18 months; but in the new economic environment created by the Chancellor of the Exchequer the system might work on a voluntary basis. I ask again, how is the right hon. Gentleman to determine whether the policy has failed?

During the first period, because of the Chancellor's measures, the First Secretary of State may be successful in achieving a freeze. We shall then move into the next six months, which he calls the period of severe restraint. Again, because of the Chancellor's measures, the right hon. Gentleman may have reasonable success in achieving severe restraint. But the great danger at that point, after he has been lulled into a sense of false security, between December and February, is that a large re-inflationary measure will be introduced by the Chancellor. In February, £800 million is to be pumped back into the economy, and this at the very moment when the First Secretary, with a large backlog of claims building up, will be trying to impose severe restraint. At that point, we shall be in exactly the same position as the right hon. Gentleman was before he was forced to introduce this iniquitous Bill.

The First Secretary does not seem to have learned any lessons at all. He goes through an initial period, which, happily, we have now survived, when he optimistically thinks that it can all be done by consultation and agreement. Later he goes through the period of severe restraint, but then, because of the Chancellor's measures re-inflating the economy at the very moment when the right hon. Gentleman is becoming optimistic again, the danger will be that wage claims are granted and prices start to rise once more. There is, as it were, a Jekyll and Hyde approach to the problem because there is not sufficient co-ordination in economic affairs between the First Secretary and the Chancellor of the Exchequer.

There is no doubt that the First Secretary of State is taking unto himself powers which can only be regarded as dictatorial. In a powerful and moving speech, similar to many which he made in the Standing Committee, my hon. Friend the Member for Oswestry (Mr. Biffen) pointed out that the Bill as it stands is unworkable and that if attempts are made to enforce it the effect is likely to be, first, that the restraint is more effective on wage earners than on salary earners, so that those at the lower end of the income scale will be most adversely affected; and, second, that, on the whole, "the restriction on prices will be more effective on physical goods than on services.

Thus we are asked to give a Third Reading to a Bill which, if one goes into detail, is seen clearly not to be workable. Moreover, as the right hon. Member for Nuneaton (Mr. Cousins) has said several times, it is clear that it will not be enforceable, to the extent that trade unionists are not prepared and are not likely to be prepared to pay fines which result from either Part II or Part IV and would rather go to prison than put themselves in that position. It is quite wrong for the House of Commons to be asked to give a Third Reading to a Bill which is both unworkable and unenforceable.

I turn to consider some of the economic effects of the Bill. Economists have come in for some denigration today. Perhaps one of the least fortunate aspects of the Government's policy has been the way in which, by bringing economists into government and by having people in Government who were once, at any rate, qualified economists, they are bringing economists into disrepute, because they are attaching to these economists their own value judgments. It would be a disaster for the management of this country's economy if economists were to have their views perverted in this way and then put forward as scientific analyses. I cannot help feeling that this is a by-product of the Government's policy which should be wholly deterred.

The Government's prices and incomes policy hitherto has been a great deal more effective in restraining prices than in restraining wages. As a result of this, it necessarily follows that the sums available for investment have been squeezed. I think that this was summed up admirably in an article in the Economist a little while ago which said: It needs to be said again that if prices are rigidly held down, while money earnings are not, the result will be to transfer real purchasing power into the hands of consumers, and away from the undistributed profits and reserves (which in practice is going to mean away from the inadequate savings) of private and nationalised industries. This is the exact opposite of what the Government's other painful measures, such as the increase in indirect taxes, have been introduced to achieve. It is no good hon. Members on both sides of the House arguing that we want a policy which will encourage productivity if a Bill such as this is introduced and a policy such as this is followed which will reduce the level of investment. One can hope to have higher productivity in the economy only if the level of investment is kept high.

There is a second point on the purely economic side which needs to be considered. The Prime Minister has told us that the object of the Chancellor's measures is to have a shake-out—whatever that may mean—in the labour force. At the same time the First Secretary is imposing a freeze on wages and salaries. Yet it is changes in the differential rate of salaries and wages that are likely to attract labour into those occupations which are expanding. If we are to have the shake-out in the same period as the freeze, how are the people who are shaken out going to be attracted into the right industries? This ought to be considered.

The final point on the economic side is that if we have a policy which restricts prices more effectively than it restricts wages and which, therefore, leads to an overall increase in consumption, this will inevitably mean that imports will be sucked into the economy, and this will inevitably mean that the effect on our balance of payments, far from being favourable, will be unfavourable.

I have outlined the main points that we on this side of the House, and, indeed, I think hon. Gentlemen on both sides, have against giving the Bill a Third Reading. The important point that needs to be made here is that the Government are still pursuing an ambivalent policy with regard to their whole economic strategy. More particularly, they are continuing to pursue a policy whereby they say one thing at home and another thing abroad. This has been constantly pointed out. It was even pointed out from the other side of the House yesterday. While this policy continues of saying one thing at home and another thing abroad—saying one day at home that an incomes policy is vital and then when one is speaking abroad saying that it is not vital, and then saying it the other way about the following week—the confidence on which the whole future of our economy must depend, and without which we cannot hope to achieve a stable policy where economic growth can be resumed, is bound to be adversely affected.

This is a vitally important point. My hon. Friend the Member for Oswestry pointed out that in all probability this Measure is not really going to have any great effect on the confidence of overseas bankers. Some of my hon. Friends, for example the hon. Member for Louth (Sir C. Osborne), asked whether this has been introduced to satisfy overseas bankers. Personally, I come down rather in favour of the view expressed by my hon. Friend the Member for Oswestry, that they would not be so foolish as to believe that a Measure which was unworkable and unenforceable would have any significant effect on our economic policy.

In the present situation, we cannot help feeling that the First Secretary of State, with all his enthusiasms, has failed to grasp the fundamental economic problems associated with the interrelationship between prices, incomes and wages. He is constantly moving from one enthusiasm to another. One might almost describe him as the "Tommy Cooper" of politics. One trick after another tends to fail, and we find ourselves moving from the Declaration of Intent to the National Plan to the incomes policy.

In the present economic environment, the measures introduced by the Chancellor of the Exchequer, although delayed, are right and there is a real opportunity for the country to be put back on the right rails. But the Bill, which introduces an element of compulsion into our industrial relations, cannot possibly lead to the improvement in productivity, investment and co-operation which all of us would like to see because, without the increase in growth that we must have, we cannot hope to fulfil the social obligations our people demand. The Bill will do nothing to further these ends and it is our duty to vote against it.

9.32 p.m.

The First Secretary of State and Secretary of State for Economic Affairs (Mr. George Brown)

Many of us have lived for a long time, so it seems, with this Bill and some of us for a long time with the policy. I hope that the House will forgive me if I begin by paying a tribute to my hon. Friends the Under-Secretary of State for Economic Affairs and the Parliamentary Secretary to the Ministry of Labour. They have worked tremendously hard and have carried most of the burden in Committee and elsewhere and I am sure that the House will agree that they have done it extraordinarily well.

The right hon. Member for Leeds, North-East (Sir K. Joseph), delivering himself of a number of interesting statements, said—and I think I quote him correctly, for I took down his words—that the slogan upon which the Government were trying to live was "to squeeze and be loved". I am very happy to be judged by that as far as my hon. Friend the Parliamentary Secretary to the Ministry of Labour is concerned. I wish to thank both her and my hon. Friend the Under-Secretary of State for all their hard work.

The Opposition have been faced with a Bill which, in many ways—and I quite understand this—runs counter to their thinking and their feelings and which they do not like. Nevertheless, I would like to say "Thank you" to the Opposition for the extent to which they have helped the Government to get their business while, at the same time, ensuring that the opposition to it was fully expressed and pressed through in the Division Lobbies. That is what Parliament is about. At the end of the day, the Government must have their business, but there should be no suggestion that the opposition to it has not been pressed.

We are now debating the Third Reading of the Bill and you, Mr. Speaker, have reminded us several times that there are limits to what can be said. Therefore, it is not a day on which alternatives to our policy can easily be canvassed, although, as those of us who have been here some time know, if one is very careful, there are ways round; and I noticed that this afternoon some right hon. and hon. Gentlemen were rather cleverer at it than some others.

But even given the limitations of a Third Reading debate, the Opposition have not had very much which was constructive to say. There is a problem. I listened to the right hon. Member for Orkney and Shetland (Mr. Grimond) having a day out this afternoon. I took down a quotation or two from him. Of course, if one is a Liberal, and has nothing to do except bother oneself with criticisms to make, one can have a day out. The right hon. Gentleman made one remark which I thought rather fascinating. He said that it was bad enough that the Bill should interfere with liberty. It sounded very well and he delivered it extremely effectively. But, he said, the Bill was ineffective, and that was more than the House could put up with. I would have thought that if we were interfering with liberty, and it was effective, that would be more than the House could put up with. If it is not effective, I cannot quite see what the right hon. Gentleman is grumbling about. I do not know whether that is what is called a non sequitur, but there was something the matter with it anyway.

Mr. Grimond

I do not know why this is so difficult. There is something to be said for interfering with liberty if something is thereby achieved, but if absolutely nothing is achieved it is a pointless exercise.

Mr. Brown

That is not what the right hon. Gentleman said. He said that we should not interfere with liberty, but that if we did so ineffectively that was too much. He will be able to have a look at it in HANSARD tomorrow and see what he can do with it next time he addresses us.

The right hon. Gentleman will understand when I say that I referred to that in order to introduce something I wanted to say, because he differed very characteristically from the right hon. Member for Leeds, North-East, because at the end of a speech, which by its very nature had to be destructive and show what was wrong with the Bill—and I accept that that is the whole nature of the debate—he admitted the serious nature of the problem and the serious character which any correctives to that problem would have to take. In that sense he differed totally from the right hon. Member for Leeds, North-East.

Among the remarkable statements of which the right hon. Member for Leeds, North-East delivered himself this afternoon there was one to which I would like to draw attention. I got myself into some trouble in the early hours of the morning at an earlier stage of the Bill by saying to some of my hon. and right hon. Friends, "If you vote with the Conservatives against us, you had better realise that you are voting for the only alternative yet put forward, which is theirs". That did not commend itself to those hon. and right hon. Friends of mine. Perhaps they will let me draw their attention to what the right hon. Gentleman said this afternoon. He said that the only thing to do was to get the level of demand right and let competition rip. The basis of the Bill is that the Government are not willing to get the level of demand right and let competition rip.

The Chancellor of the Exchequer (Mr. James Callaghan) indicated assent.

Mr. Brown

The right hon. Gentleman the Member for Leeds, South-East has expressed what he termed getting the level of demand right. The right hon. Gentleman the Member who lost Don-caster—I mean the right hon. Gentleman the Member for Altrincham and Sale (Mr. Barber)—was not here then, and perhaps he will allow me to tell him what his right hon. Friend said just before his right hon. Friend delivered himself of the remarkable statement of what he meant by getting the level of demand right. I want my hon. and right hon. Friends to flavour it. He said that getting the level of demand right means reducing the number of vacancies. If that does not mean creating unemployment for the sheer sake of it I do not know what does.

This is what these things mean, that is what the Opposition's alternative is and that is the only alternative put forward to a policy which we are pursuing, of which the prices and incomes policy is part. I have heard the right hon. Member for Leeds, North-East say today that we have paid too much attention to this, that we had concentrated too much of our energies on it. That may or may not be true. I must be judged by whet people think that I have tried to do. Since I began this task, a little over 20 months ago, I have tried to follow through with some of the things with which the right hon. Gentleman the Leader of the Opposition, the right hon. Member for Barnet (Mr. Maudling), the right hon. Member for Enfield, West (Mr. Iain Macleod), and the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) have all been concerned, and with which those who follow after us must still be concerned.

How do we, in our difficult situation—and the difficulties are the same, whatever Government are in power—expand and develop our industries? How do we get investment, how do we use our resources, how do we fight inflation while we do all of that? Too many of us have been at the stop and go point for too long. We have all tried to get out of this situation. It is not true that for the last 20 months all that I have done is address myself to prices and incomes. I have addressed myself to many other things.

I know as well as the right hon. Gentleman the Leader of the Opposition, that unless and until we get an answer to relating productivity and prices and incomes movements to each other we will not have provided the basis upon which growth and expansion can take place over a continuous period. This is the problem to which I have addressed myself and it is not that I have said that one thing alone will cure it. What I do say tonight is that one thing alone is the conditioner of the climate in which we can do it.

Mr. Edward Heath (Bexley)

I have been following the right hon. Gentleman with interest and care and, of course, I agree, as do my right hon. Friends, about the nature of the problem. The specific point that I want to put is how does the right hon. Gentleman reconcile the condemnation of any reduction in vacancies, and the condemnation of my right hon. Friend for saying this, with the present position of an unemployment figure of 1.1 per cent. and the Prime Minister's statement that all of the policies announced on 20th July will, after redeployment changes and all the rest, be acceptable if there is an unemployment level of between 1½ per cent. and 2 per cent.—in other words, of up to 470,000 after redeployment?

Mr. Brown

Because I do not believe that there is any point in creating unemployment by itself. One can state any figure as being acceptable. One can say that if it should turn out that this would involve a certain number of people being out of work on a given day, that might, to quote my right hon. Friend's exact words, be acceptable. But that was not the philosophy behind what the right hon. Gentleman said.

The right hon. Gentleman said that as long as we reduce the vacancies, and as long as there are not the opportunities, we shall not need a prices and incomes policy, that if we get that right we will not want a prices and incomes policy. What did he mean by that? He meant that people would not have the bargaining power. He was not talking about what might be acceptable on a given day, or what level of people moving from job to job on a given day one might accept. He was saying, "You will not want a prices and incomes policy as long as you have more men looking for jobs than you have jobs looking for men".

This I totally reject, and this is why I have, if that is the charge against me, directed so much of my energy and attention over the last 20 months to trying to solve this problem. This is why somebody, some day, will have to solve it unless we are to put up for ever with more men looking for jobs than there are jobs looking for men. I feel that it is a crime to waste resources, whether they be human or physical resources. We should be able to employ all that we have got. But if we want to do that people will have to accept disciplines.

This brings me to what the Bill does and does not do. I understand the dislike that people feel for what is in the Bill. But I think that the House has to answer this essential question: it may be unusual, it may be novel, but is it so wrong that we should ask for early warning notification of intended increases in prices and pay? What is so wrong about that if we want to try to run our society on a planned basis? It gives us power to impose a standstill for quite short periods while somebody checks whether the claim which vested interests make seems to be right. That may be novel. It may be unusual. But what is so wrong about it?

I said the other night that a powerful trade union, a powerful manufacturer, a powerful group of manufacturers, getting together, may make a deal. Somebody has to speak for the third party. The gibe which the right hon. Gentleman just muttered across the Table—"a powerful Minister"—is what the public elects Ministers to be. I am not upset if people accuse me of being a powerful Minister. That is exactly what they sent me here to be. I am here to speak for the third party. That is not the trade unions, the C.B.I., or any vested interest. It is the consumer, the people on small incomes who are so often done down in the free run of the market, in the jungle which exists.

We are taking powers. If it does not work voluntarily—and I accept what my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said in a speech to which I listened with great care—I will impose it. My hon. Friend was quite right to say that we are presenting to our people the choice between doing it voluntarily or being faced with an imposition afterwards. I do not regard that as an accusation because, I repeat, I was not sent here as the delegate for a vested interest. I was sent here to speak for a whole lot of people among whom, but only among whom, are there these vested interests to which people have drawn attention.

Mr. Michael Foot

I do not think that my right hon. Friend understood exactly my argument, or, at least, part of it. The fact that the railwaymen have been denied their claim is not voluntary. My right hon. Friend may say that the system is working voluntarily, but it is working compulsorily for the railwaymen.

Mr. Brown

That is quite right. Taking everything into account and taking, I trust, all my responsibility for this, being willing to stand up for it in this House and outside, I say to the railwaymen, since theirs is the case which has been quoted, and I say to lots of others, that the national interest—the third party in this—requires that there should now be a standstill for six months while we catch up with what we have been cashing over the last 20 months.

I could prove this by reference to figures, but I do not want to quote anybody in particular who is responsible. During die last 20 months we have cashed as a nation more than we have been putting in. The only thing that we can sensibly do at this point is to hold still for a bit while we have a look and work out the new criteria and phase-in the claims from here on.

That is what the Bill is about. It is to reinforce the standstill and give us the chance to work out the criteria which will give effect to what so many of my hon. Friends and so many hon. Members opposite have said. We all know that during the last 20 months we have not given the lower-paid people the priority that they ought to have. Nobody is "kidding" anybody that we have not allowed genuine productivity bargains to get through. The reason is that everybody else has been using those two excuses to get through as well.

Therefore, what we are doing is to provide a six months' standstill period—the six months ends at 31st December, which is not such a long time away—during which we can work out, with management and with the unions, the criteria by which we can phase the claims in for the first six months of next year and by which we can give priority to the classes, groups and claimants who ought to have them. That we are now engaged upon. If we do that, we will have got more than a temporary advantage out of the standstill.

There is, in a way, a difference here from what the right hon. and learned Member for Wirral was able to do. We will not have a date when the dam goes down. We will be phasing things back in. From the first six months of next year, when we have criteria for that, we can then move on to the criteria that shall govern what follows on from there. We shall be phasing claims for wages and salaries. We shall be phasing what ought to happen in prices and in dividends. If we do this we shall have for the first time what this' country has needed for so long—the inescapable, essential basis for expansion and growth. Let me repeat, there is no future for this country in not producing more; there is no future for this country in not using its people more; there is no future for this, country in not building more factories, developing more technical processes. Yet there is one inescapable basis for it, which is that prices, the movement of prices, profit margins, pay and incomes, are judged against the overall need. What we are trying to set down here, what I think we may achieve here, is the basis for doing this. Therefore, we think that we need a breathing space at this time.

We think it wrong of those Members who say that this is a wage restraint policy. That is not what we are running at all: not at all. And the people outside know this. This is what makes so unreal the kind of muttering going on over there on that side of the House now—as against the reception one gets outside. People outside understand that there is a problem here and understand how it has to be dealt with. We are not trying to run a wage restraint policy. I am not interested in that at all.

Equally, I am not running a profit restraint policy. As I have said before, in Committee and on Report, and I say now, given that we have a mixed economy, given that a very large part of it is private enterprise, I accept that for that part of it profit is the motivation, but what I do not accept is that profits,

any more than pay, should come from capacity to exploit the market. They should come from contribution, they should come from investment, they should come from effort.

This applies to profits, but it applies to all other forms of income, too, and prices is one of the places where one operates in order to bring this about. Therefore, what we are trying to secure here is the basis for the long-term policy in which prices are judged against need, profits are judged against effort, and pay and claim demands are also judged both against the requirements of social justice and the effort put in.

The Bill, as my hon. and right hon. Friends have pointed out, particularly my hon. Friend the Member for Lewisham, North (Mr. Moyle) and my hon. Friend the Member for Rhondda, West (Mr. Iorwerth Thomas), both of whom I heard, and others have said it, too, has a long-term and a short-term component. Part IV is the short-term component. This is short-term while we get things under control. Parts I, II and III are the long-term component, and we need both components.

Having debated this over very many hours—and had we done it any other way the arguments would not have been any different or any less strongly put—having heard all the arguments, I ask the House to give us the short-term component in Part IV, genuinely and willingly, so that we get the breathing space we need, and to give us the long-term component in Parts I, II and III, so that we can give the country the basis for the expansion and the growth which it needs.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 272, Noes 214.

Division No. 170.]	AYES	[10.0 p.m.
Abse, Leo	Baxter, William	Boyden, James
Albu, Austen	Beaney, Alan	Braddock, Mrs. E. M.
Alldritt, Walter	Bellenger, Rt. Hn. F. J.	Bray, Dr. Jeremy
Allen, Scholefield	Benn Rt. Hn. Anthony Wedgwood	Brooks, Edwin
Anderson, Donald	Bennett, James (G'gow, Bridgeton)	Broughton, Dr. A. D. D.
Archer, Peter	Binns, John	Brown, Rt. Hn. George (Belper)
Armstrong, Ernest	Bishop, E. S.	Brown, Hugh D. (G'gow, Provan)
Ashley, Jack	Blackburn, F.	Brown, Bob (N'c'tle-upon-Tyne, W.)
Atkins, Ronald (Preston, N.)	Blenkinsop, Arthur	Brown, R. W. (Shoreditch & F'bury)
Bacon, Rt. Hn. Alice	Boardman, H.	Buchan, Norman
Bagier, Gordon A. T.	Boston, Terence	Butler, Herbert (Hackney, C.)
Barnes, Michael	Bottomley, Rt. Hn. Arthur	Butler, Mrs. Joyce (Wood Green)
Barnett, Joel	Bowden, Rt. Hn. Herbert	Callaghan, Rt. Hn. James
Cant, R. B.	Hughes, Hector (Aberdeen, N.)	Price, Thomas (Westhoughton)
Carter-Jones, Lewis	Hughes, Roy (Newport)	Price, William (Rugby)
Castle, Rt. Hn. Barbara	Hunter, Adam	Probert, Arthur
Coe, Denis	Hynd, John	Pursey, Cmdr. Harry
Colman, Donald	Irvine, A. J. (Edge Hill)	Randall, Harry
Concannon, J. D.	Jackson, Colin (B'h'se & Spenb'gh)	Rankin, John
Conian, Bernard	Janner, Sir Barnett	Redhead, Edward
Corbet, Mrs. Freda	Jay, Rt. Hn. Douglas	Rees, Merlyn
Crawshaw, Richard	Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)	Rhodes, Geoffrey
Cronin, John	Jenkins, Rt. Hn. Roy (Stechford)	Richard, Ivor
Crosland, Rt. Hn. Anthony	Johnson, Carol (Lewisham, S.)	Roberts, Albert (Normanton)
Crossman, Rt. Hn. Richard	Johnson, James (K'ston-on-Hull, W.)	Roberts, Goronwy (Caernarvon)
Cullen, Mrs. Alice	Jones, Dan (Burnley)	Roberts, Gwilym (Bedfordshire, S.)
Dalyell, Tam	Jones. Rt. Hn. Sir Elwyn (W. Ham, S.)	Robertson, John (Paisley)
Darling, Rt. Hn. George	Jones, J. Idwal (Wrexham)	Robinson, Rt. Hn. Kenneth (St, P'c' as)
Davidson, Arthur (Accrington)	Judd, Frank	Rodgers, William (Stockton)
Davies, Dr. Ernest (Stretford)	Kelley, Richard	Roebuck, Roy
Davies, G. Elfed (Rhondda, E.)	Kenyon, Clifford	Ross, Rt. Hn. William
Davies, Ednyfed Hudson (Conway)	Kerr, Dr. David (W'worth, Central)	Rowland, Christopher (Meriden)
Davies, Harold (Leek)	Leadbitter, Ted	Rowlands, E. (Cardiff, N.)
Davies, Ifor (Gower)	Ledger, Ron	Ryan, John
de Freitas, Sir Geoffrey	Lee, Rt. Hn. Jennie (Cannock)	Sheldon, Robert
Delargy, Hugh	Lee, John (Reading)	Shinwell, Rt. Hn. E.
Dell, Edmund	Lestor, Miss Joan	Shore, Peter (Stepney)
Dewar, Donald	Lever, Harold (Cheetham)	Short, Mrs. Renée (W'hampton, N. E.)
Diamond, Rt. Hn. John	Lever, L. M. (Ardwick)	Silkin, Rt. Hn. John (Deptford)
Dobson, Ray	Lomas, Kenneth	Silkin, S. C. (Dulwich)
Doig, Peter	Loughlin, Charles	Silverman, Julius (Aston)
Donnelly, Desmond	Luard, Evan	Skeffington, Arthur
Dunnett, Jack	Lyon, Alexander W. (York)	Slater, Joseph
Dunwoody, Mrs. Gwyneth (Exeter)	Lyons, Edward (Bradford, E.)	Small, William
Dunwoody, Dr. John (F'th & C'b'e)	Mabon, Dr. J. Dickson	Snow, Julian
Edelman, Maurice	McBride, Neil	Spriggs, Leslie
Edwards, Robert (Bilston)	McCann, John	Steele, Thomas (Dunbartonshire, W.)
Edwards, William (Merioneth)	MacColl, James	Stewart, Rt. Hn. Michael
Ellis, John	MacDermot, Niall	Stonehouse, John
English, Michael	Macdonald, A. H.	Summerskill, Hn. Dr. Shirley
Ennals, David	McKay, Mrs. Margaret	Swingler, Stephen
Ensor, David	Mackie, John	Symonds, J. B.
Evans, Albert (Islington, S. W.)	Mackintosh, John P.	Taverne, Dick
Evans, loan L. (Birm'h'm, Yardley)	Maclennan, Robert	Thomas, George (Cardiff, W.)
Faulds, Andrew	McMillan, Tom (Glasgow, C.)	Thomas, Iorwerth (Rhondda, W.)
Fernyhough, E.	McNamara, J. Kevin	Thornton, Ernest
Finch, Harold	MacPherson, Malcolm	Tinn, James
Fitch, Alan (Wigan)	Mahon, Peter (Preston, S.)	Tomney, Frank
Fletcher, Raymond (Ilkeston)	Mallalieu, J. P. W. (Huddersfield, E.)	Urwin, T. W.
Fletcher, Ted (Darlington)	Manuel, Archie	Varley, Eric G.
Floud, Bernard	Mapp, Charles	Wainwright, Edwin (Dearne Valley)
Ford, Ben	Marquand, David	Walden, Brian (All Saints)
Forrester, John	Marsh, Rt. Hn. Richard	Walker, Harold (Doncaster)
Fowler, Gerry	Maxwell, Robert	Watkins, David (Consett)
Fraser, John (Norwood)	Mayhew, Christopher	Watkins, Tudor (Brecon & Radnor)
Fraser, Rt. Hn. Tom (Hamilton)	Mellish, Robert	Weitzman, David
Freeson, Reginald	Millan, Bruce	Wellbeloved, James
Galpern, Sir Myer	Mitchell, R. C. (S'th'pton, Test)	Wells, William (Walsall, N.)
Gardner, Tony	Molloy, William	Whitaker, Ben
Garrett, W. E.	Morgan, Elystan (Cardiganshire)	White, Mrs. Eirene
Garrow, Alex	Morris, Charles R. (Openshaw)	Whitlock, William
Gordon Walker, Rt. Hn. P. C.	Morris, John (Aberavon)	Wigg, Rt. Hn. George
Gourlay, Harry	Moyle, Roland	Willey, Rt. Hn. Frederick
Gray, Dr. Hugh (Yarmouth)	Mulley, Rt. Hn. Frederick	Williams, Alan (Swansea, W.)
Greenwood, Rt. Hn. Anthony	Murray, Albert	Williams, Alan Lee (Hornchurch)
Gregory, Arnold	Norwood, Christopher	Williams, Clifford (Abertillery)
Griffiths, David (Rother Valley)	Oakes, Gordon	Williams, Mrs. Shirley (Hitchin)
Gunter, Rt. Hn. R. J.	Ogden, Eric	Williams, W. T. (Warrington)
Hamilton, James (Bothwell)	O'Malley, Brian	Willis, George (Edinburgh, E.)
Hamilton, William (Fife, W.)	Oram, Albert E.	Wilson, Rt. Hn. Harold (Huyton)
Hamling, William	Orbach, Maurice	Wilson, William (Coventry, S.)
Hannan, William	Oswald, Thomas	Winnick, David
Harper, Joseph	Owen, Dr. David (Plymouth, S'tn)	Winterbottom, R. E.
Harrison, Walter (Wakefield)	Owen, Will (Morpeth)	Woodburn, Rt. Hn. A.
Hart, Mrs. Judith	Page, Derek (King's Lynn)	Woof, Robert
Haseldine, Norman	Pannell, Rt. Hn. Charles	Wyatt, Woodrow
Hazell, Bert	Pavitt, Laurence	Yates, Victor
Healey, Rt. Hn. Denis	Pearson, Arthur (Pontypridd)
Henig, Stanley	Peart, Rt. Hn. Fred	TELLERS FOR THE AYES:
Herbison, Rt. Hn. Margaret	Pentland, Norman	Mr. Charles Grey and
Houghton, Rt. Hn. Douglas	Prentice, Rt. Hn. R. E.	Mr. George Lawson.
Howarth, Harry (Wellingborough)	Price, Christopher (Perry Barr)

NOES
Alison, Michael (Barkston Ash)	Grant, Anthony	Munro-Lucas-Tooth, Sir Hugh
Allason, James (Hemel Hempstead)	Gresham Cooke, R.	Nabarro, Sir Gerald
Awdry, Daniel	Griffiths, Eldon (Bury St. Edmunds)	Neave, Airey
Baker, W. H. K.	Grimond, Rt. Hn. J.	Noble, Rt. Hn. Michael
Balniel, Lord	Gurden, Harold	Nott, John
Barber, Rt. Hn. Anthony	Hall, John (Wycombe)	Onslow, Cranley
Batsford, Brian	Hall-Davis, A. G. F.	Orr-Ewing, Sir Ian
Bennett, Sir Frederic (Torquay)	Hamilton, Michael (Salisbury)	Osborn, John (Hallam)
Berry, Hn. Anthony	Harris, Reader (Heston)	Osborne, Sir Cyril (Louth)
Bessell, Peter	Harrison, Col. Sir Harwood (Eye)	Page, Graham (Crosby)
Biffen, John	Harvey, Sir Arthur Vere	Pardoe, John
Birch, Rt. Hn. Nigel	Harvie Anderson, Miss	Pearson, Sir Frank (Clitheroe)
Blaker, Peter	Hastings, Stephen	Peel, John
Body, Richard	Hawkins, Paul	Percival, Ian
Boyd-Carpenter, Rt. Hn. John	Hay, John	Pike, Miss Mervyn
Boyle, Rt. Hn. Sir Edward	Heald, Rt. Hn. Sir Lionel	Pink, R. Bonner
Braine, Bernard	Heath, Rt. Hn. Edward	Pounder, Rafton
Brewis, John	Heseltine, Michael	Price, David (Eastleigh)
Brinton, Sir Tatton	Higgins, Terence L.	Prior, J. M. L.
Bromley-Davenport, Lt. Col, Sir Walter	Hill, J. E. B.	Quennell, Miss J. M.
Brown, Sir Edward (Bath)	Hobson, Rt. Hn. Sir John	Ramsden, Rt. Hn. James
Bruce-Gardyne, J.	Hogg, Rt. Hn. Quintin	Rawlinson, Rt, Hn. Sir Peter
Bryan, Paul	Holland, Philip	Renton, Rt. Hn. Sir David
Buchanan-Smith, A lick (Angus, N&M)	Hordern, Peter	Ridsdale, Julian
Buck, Antony (Colchester)	Hornby, Richard	Rippon, Rt. Hn. Geoffrey
Bullus, Sir Eric	Howell, David (Guildford)	Rodgers, Sir John (Sevenoaks)
Campbell, Gordon	Hunt, John	Rossi, Hugh (Hornsey)
Carlisle, Mark	Hutchison, Michael Clark	Royle, Anthony
Carr, Rt. Hn. Robert	Irvine, Bryant Godman (Rye)	Russell, Sir Ronald
Cary, Sir Robert	Jennings, J. C. (Burton)	St. John-Stevas, Norman
Chichester-Clark, R.	Johnson Smith, G. (E. Grinstead)	Sandys, Rt. Hn. D.
Clark, Henry	Johnston, Russell (Inverness)	Scott, Nicholas
Clegg, Walter	Jones, Arthur (Northants, S.)	Sharples, Richard
Cooper-Key, Sir Neill	Jopling, Michael	Shaw, Michael (Sc'b'gh & Whitby)
Cordle, John	Joseph, Rt. Hn. Sir Keith	Sinclair, Sir George
Corfield, F. V.	Kaberry, Sir Donald	Smith, John
Costain, A. P.	Kerby, Capt. Henry	Stainton, Keith
Craddock, Sir Beresford (Spelthorne)	Kimball, Marcus	Steel, David (Roxburgh)
Crouch, David	King, Evelyn (Dorset, S.)	Stodart, Anthony
Crowder, F. P.	Kirk, Peter	Stoddart-Scott, Col. Sir M. (Ripon)
Cunningham, Sir Knox	Kitson, Timothy	Summers, Sir Spencer
Currie, G. B. H.	Knight, Mrs. Jill	Talbot, John E.
Dance, James	Lambton, Viscount	Tapsell, Peter
Davidson, James (Aberdeenshire, W.)	Legge-Bourke, Sir Harry	Taylor, Frank (Moss Side)
d'Avigdor-Goldsmid, Sir Henry	Lewis, Kenneth (Rutland)	Teeling, Sir William
Dean, Paul (Somerset, N.)	Lloyd, Ian (P'tsm'th, Langstone)	Temple, John M.
Deedes, Rt. Hn. W. F. (Ashford)	Lloyd, Rt. Hn. Selwyn (Wirral)	Thatcher, Mrs. Margaret
Dodds-Parker, Douglas	Longden, Gilbert	Thorpe, Jeremy
Doughty, Charles	Loveys, W. H.	Tilney, John
Douglas-Home, Rt. Hn. Sir Alec	Lubbock, Eric	Turton, Rt. Hn. R. H.
Drayson, G. B.	McAdden, Sir Stephen	van Straubenzee, W. R.
du Cann, Rt. Hn. Edward	MacArthur, Ian	Vaughan-Morgan, Rt. Hn. Sir John
Eden, Sir John	Mackenzie, Alasdair (Ross & Crom'ty)	Vickers, Dame Joan
Elliot, Capt. Walter (Carshalton)	Maclean, Sir Fitzroy	Wainwright, Richard (Colne Valley)
Errington, Sir Eric	Macleod, Rt. Hn. Iain	Walker, Peter (Worcester)
Eyre, Reginald	McMaster, Stanley	Wall, Patrick
Farr, John	Macmillan, Maurice (Farnham)	Ward, Dame Irene
Fisher, Nigel	Maddan, Martin	Weatherill, Bernard
Fletcher-Cooke, Charles	Marten, Neil	Webster, David
Fortescue, Tim	Mathew, Robert	Wells, John (Maidstone)
Foster, Sir John	Maude, Angus	Whitelaw, William
Fraser, Rt. Hn. Hugh (St'fford & Stone)	Maudling, Rt. Hn. Reginald	Wills, Sir Gerald (Bridgwater)
Galbraith, Hn. T. G.	Mawby, Ray	Wilson, Geoffrey (Truro)
Gibson-Watt, David	Maxwell-Hyslop, R. J.	Winstanley, Dr. M. P.
Giles, Rear-Adm. Morgan	Maydon, Lt.-Cmdr. S. L. C.	Wolrige-Gordon, Patrick
Gilmour, Sir John (Fife, E.)	Mills, Peter (Torrington)	Wood, Rt. Hn. Richard
Glover, Sir Douglas	Miscampbell, Norman	Woodnutt, Mark
Glyn, Sir Richard	Mitchell, David (Basingstoke)	Worsley, Marcus
Godber, Rt. Hn. J. B.	More, Jasper	Wylie, N. R.
Goodhart, Philip	Morgan, W. G. (Denbigh)	Younger, Hn. George
Goodhew, Victor	Morrison, Charles (Devizes)
Gower, Raymond	Mott-Radclyffe, Sir Charles	TELLERS FOR THE NOES:
		Mr. Francis Pym and Mr. Elliott.

Bill accordingly read the Third time and passed.