Commons Sitting of 14 July 1966

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
MESSAGE FROM THE QUEEN

  DEATH DUTIES
  The VICE-CHANCELLOR OF THE HOUSE-HOLD The VICE-CHANCELLOR OF THE HOUSE-HOLD reported Her Majesty's Answer to the Address, as follows:
  I have received your Address praying that the Double Taxation Relief (Estate Duty) (Italy) Order, 1966 be made in the form of the draft laid before Parliament.
  I will comply with your request.

PRIVATE BUSINESS
  TEES VALLEY AND CLEVELAND WATER BILL (By Order)
    EXETER CORPORATION BILL [Lords] (By Order)
    Consideration, as amended, deferred till Tuesday next.
    TEES AND HARTLEPOOLS PORT AUTHORITY BILL [Lords] (By Order)
    Second Reading deferred till Tuesday next.
    MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (CITY OF OXFORD) BILL
    Read the Third time and passed.
ORAL ANSWERS TO QUESTIONS
  BOARD OF TRADE

    Industrial Development
    Mr. Dempseyasked the President of the Board of Trade what timetable for new developments he sets for proprietors who have been granted industrial de-
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    velopment certificates; and if he will make a statement.
    The Minister of State, Board of Trade (Mr. George Darling): Industrial development certificates are normally issued on the basis that an application for necessary planning permission must be made within a period of 12 months. My right hon. Friend has at present no powers to attach conditions to an i.d.c. about the date by which a project should commence, but under the Industrial Development Bill we are seeking powers which will enable us to make such conditions in appropriate cases.
    Mr. Dempsey: Is my right hon. Friend aware that there is a need to expedite the implementation of these certificates? Does he realise that, contrary to the general rule, in my own constituency unemployment has been rising until June, and will he try to do something very urgently to help these developments?
    Mr. Darling: It is for these reasons that we have put the conditions in the Bill.

    Motor Car Manufacturers (Soviet Market)
    Mrs. Renée Shortasked the President of the Board of Trade what plans he has to encourage motor car manufacturers to show initiative in entering the Soviet market.
    The President of the Board of Trade (Mr. Douglas Jay): British motor manufacturers are already in direct touch with the Soviet authorities at high level about the supply of plant and know-how for the production of motor vehicles in the Soviet Union. I have made it plain to the Soviet authorities that British manufacturers are anxious to be informed about detailed Soviet requirements.
    Mrs. Short: Is not my right hon. Friend concerned at the progress which Fiat and Renault have made in the Soviet market, and does he not think that he ought to be a little tougher with private enterprise?
    Mr. Jay: I have discussed this in the last week both with the Soviet Minister of Trade and with Mr. George Harriman and Sir Donald Stokes. Leylands and B.M.C. are now pressing the Soviet

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    authorities for details of their requirements.
    Mr. Alison: To what extent did the President of the Board of Trade, when he was in Moscow, indicate to the Russians that the Government would be happy to welcome Soviet manufacturers in this country?
    Mr. Jay: I do not think that that point arose, but we certainly should in appropriate circumstances.

    Industrial Investment
    Mr. Biffenasked the President of the Board of Trade what estimates he has made of the likely levels of investment in buildings, plant and machinery by manufacturing industry during 1966 and 1967; and if he will make a statement.
    Mr. Gresham Cookeasked the President of the Board of Trade what the general prospects are for industrial investment in the coming year; and how industry's present investment intentions for 1966 and 1967 compare with their intentions as expressed at the end of last year.
    Mr. Darling: Recent surveys suggest that industry now expects to spend less than was intended at the end of last year when it was estimated that investment would be about the same in 1966 and 1967 as in 1965. I do not believe that there will be any very large reduction.
    Mr. Biffen: Is the right hon. Gentleman aware that the National Plan foresaw an increase in manufacturing investment at an annual rate of 7 per cent.? As that seems likely not to be realised, do the Government propose to take any special steps to remedy this?
    Mr. Darling: If the hon. Gentleman will look at the National Plan again, he will see on page 56 that it was recognised that the short-term measures to assist the balance of payments and reduce the pressure of demand in overloaded sectors of the economy might lead to some temporary slackening in private investment.
    Mr. Gresham Cooke: Is it not rather sad that plans for industrial investment are lower than they have been for several years and does not this foreshadow a sort of forthcoming stop-go?
    Mr. Darling: I do not think so because, as the hon. Gentleman knows, Government action cannot entirely eliminate the cyclical character of industrial investment. I would remind the hon. Gentleman that the selective measures used by the Government to control demand are not so far producing the sharp down-turn in manufacturing investment that was experienced in 1962–63.
    Mr. Sheldon: Is my right hon. Friend aware that a decline in investment would be the most important economic feature of this year, with most serious economic consequences, and that other measures, however unpalatable, would be more palatable than this, including the quantitative restriction of imports?
    Mr. Darling: Yes. I do not quarrel with my hon. Friend's view on this, but I would point out that the new grant scheme which has been introduced has not yet had time to exert much influence on investment, and I am confident that it will prove to be a more effective instrument than the old system, once manufacturers get accustomed to it.
    Mr. Barber: In view of what my hon. Friend said about the average of 7 per cent. referred to in the National Plan, and the fact that for the first time since 1963 the Confederation of British Industry's investment intentions show that investment this year by manufacturing industry is expected to fall, surely the National Plan will have to be revised considerably, will it not?
    Mr. Darling: I should not think so, but we will see how we go on.

    Import Surcharge
    Mr. Biffenasked the President of the Board of Trade if he is satisfied that the current trends in United Kingdom imports and exports will enable the import surcharge to be removed without recourse to import quotas; and if he will make a statement.
    Mr. Jay: I have nothing to add to the Answer I gave the hon. Member on 19th May.
    Mr. Biffen: Does the right hon. Gentleman recall his Answer on that occasion, that he did not think there would be any likelihood of the imposition of

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    import controls? Is he saying that, notwithstanding the high price of Zambian copper, and notwithstanding the consequences of the N.U.S. strike, he still stands by the assertion that we are not to have import controls this autumn?
    Mr. Jay: With the best will in the world, and wanting to help the hon. Gentleman, I am afraid that I cannot add anything to what I said then.
    Sir S. McAdden: How can the right hon. Gentleman reconcile that answer with the qualified blessing given by his right hon. Friend in answer to a question by his hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) endorsing his view that quantitative restrictions would be a good thing?
    Mr. Jay: My right hon. Friend did not endorse what my hon. Friend said. It was merely a question. My right hon. Friend said that he did not quarrel with my hon. Friend's right to hold those opinions.
    Mr. Gresham Cookeasked the President of the Board of Trade what evidence he has of a deliberate holding back of imports to take advantage of the removal of the surcharge in November this year.
    Mr. Darling: None.
    Mr. Gresham Cooke: If there is no evidence of a likely rush of imports in November, can the right hon. Gentleman give an assurance that the Government will not introduce import quotas and regulators on imports in November?
    Mr. Darling: That is a different question. I would refer the hon. Member to the Answer given to a similar Question by my right hon. Friend the Chancellor of the Exchequer on Tuesday.
    Mr. Barber: When we are considering this matter, surely it is reasonable for the right hon. Gentleman to give the House an assurance that there will not be an introduction of import quotas in the autumn? Surely this is a reasonable question to ask?
    Mr. Darling: I have nothing to add to the Answer which the Chancellor gave on Tuesday.

    Industrial Designs (Committee's Recommendation)
    Mr. Atkinsasked the President of the Board of Trade what proposals he has for implementing the recommendations of the Johnston Committee on the protection of industrial designs.
    Mr. Darling: At present none, Sir.
    Mr. Atkins: Is the right hon. Gentleman aware that there is a considerable need for legislation to implement the recommendations of the Johnston Committee? A number of manufacturers, for example, those in the toy industry, are suffering considerable embarrassment through the copying of their designs by foreigners, and they are wondering whether it is worth while employing highly paid and qualified designers under the present circumstances.
    Mr. Darling: I would not quarrel with a word of the hon. Gentleman's question, but the answer lies on the Order Paper. If hon. Members look at it, they will see that 10 questions to the Board of Trade contain requests for legislation. I assure the hon. Gentleman that it is not reluctance on our part which frustrates his request. We have not adapted our Parliamentary procedures to suit these demands.

    Banking Profits
    Mr. William Hamiltonasked the President of the Board of Trade what plans he has for ensuring that banking profits are fully disclosed.
    Mr. Jay: I expect to propose, as I did in the Companies Bill introduced in the last Parliament, that the Board of Trade should have power by order to modify or repeal the provision in the Companies Act, 1948, which controls disclosure by banking companies.
    Mr. Hamilton: Can my right hon. Friend say whether he intends to introduce that Bill in the current Session? Secondly, does he accept, in whole or in part, the validity of the banks' argument as to why they should not make full disclosure?
    Mr. Jay: The answer to the second question is"Not fully ". The answer to the first is that I hope to legislate during the present Session.

    Seamen's Strike
    Mr. J. H. Osbornasked the President of the Board of Trade what estimate he has made of British exports held up at the ports and in this country by value and weight due to the seamen's strike.
    Mr. Jay: None, Sir.
    Mr. Osborn: Is it not true that, although manufacturers have shipped their goods from their works, these goods have stayed on board ship during the period of the strike, and has not this accounted for large delays? I am surprised that the right hon. Gentleman has no knowledge of this.
    Mr. Jay: It is true that the shipping strike has done serious harm to our exports and to our balance of payments, but it has, happily, not been as disastrous as some people foretold. As to the statistical measure of it, I do not think that we shall get a better one than the trade figures published yesterday.
    Mr. J. H. Osbornasked the President of the Board of Trade whether he will estimate the long-term effect of the seamen's strike on the 1966 trade balance so far.
    Mr. Jay: No reliable estimate can be made of the long-term effect, which depends on our success in the coming months in recovering the losses caused by the strike.
    Mr. Osborn: Would not the right hon. Gentleman agree that the statistics published yesterday indicate the effects so far? Can he say whether new exports will vary at the rate provided in the National Plan?
    Mr. Jay: I cannot say as to the next few months, because I think that we must expect the trade figures for two or three months to be distorted by the effects of the strike.
    Mr. Barber: Has the Board of Trade made any estimate of the extent to which the £105 million trade gap for June was due to the seamen's strike and, if it has, although it must be approximate, may the House be told?
    Mr. Jay: It was clear to everyone that the strike in June would affect exports more than imports. Therefore, I think
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    that if the hon. Gentleman compares the June figures with those of May he can get as good an estimate as it is possible to get of the effects of the strike during June.
    Sir C. Osborneasked the President of the Board of Trade how much car exports have fallen as a result of the seamen's strike; what has been the increase to the home market; what effect this is having on the balance of payments; how long he estimates it will take for exports to be recaptured; and if he will make a statement.
    Mr. Jay: The loss of exports cannot be accurately measured. I expect most of it to be quickly regained, and the eventual loss to the balance of payments to be small—on account of cars. Relatively few cars produced for export were sold in the home market during the strike.
    Sir C. Osborne: Can the right hon. Gentleman give the House an assurance that he feels that we shall recapture the orders that we lost, or are some of them lost and gone for ever?
    Mr. Jay: If the hon. Gentleman is referring to cars, which are mentioned in his Question, I am assured by the industry that there was a remarkably small loss of exports, except to Australia and New Zealand, and here I do not think that we need fear any serious loss.

    Highlands and Islands (Employment)
    Mr. G. Campbellasked the President of the Board of Trade what has been the effect on employment in the Highlands and Islands of the Government's control of office development.
    Mr. Darling: By restricting the development of facilities for increased employment in London and Birmingham the Government's policy directly or indirectly benefits the rest of the country.
    Mr. Campbell: But as this control can have had no effect in the Highlands and Islands on unemployment and increasing development, will the right hon. Gentleman ask Treasury Ministers to stop adducing this as a regional development measure to help the Highlands in reply

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    to complaints about the ill-effects on employment in the Highlands of the Selective Employment Tax?
    Mr. Darling: The Control of Offices Bill is only one of the industrial measures which we have for the dispersal of industry and commerce. All the measures, taken together, are doing what the hon. Gentleman wants—perhaps not quickly enough.

    Measurements (Decimalisation)
    Mr. Whitakerasked the President of the Board of Trade whether he will now announce plans to decimalise all measurements.
    Mr. Darling: No, Sir. The first need is to bring about the wider use of the metric system in British industry.
    Mr. Whitaker: Will my right hon. Friend endorse this in principle? Does not he agree that the arguments used by the Chancellor for his welcome reform of the currency, equally obtain in these cases?
    Mr. Darling: That may be true, but I think that it would be very difficult to introduce decimalisation in this field at the same time as we introduced decimal currency. The effect on our traders of having to deal with both at the same time, and the effect on customers, would be rather formidable. I think that it would have one positive result—it would increase the sale of headache powders.

    Marine Nuclear Propulsion
    Mr. Wallasked the President of the Board of Trade if he will make a statement on the development of nuclear propulsion for merchant ships.
    The Minister of State, Board of Trade (Mr. Roy Mason): I have nothing to add to the Answer my right hon. Friend the Minister of Technology gave on this subject to the Hon. Member for Manchester, Moss Side (Mr. Frank Taylor) on 5th July.
    Mr. Wall: Is the hon. Gentleman aware that a growing volume of informed opinion believes that progress cannot be made until we can get a prototype ship at sea? Are the Government working towards this objective?
    Mr. Mason: Not at the moment. There is no economic nuclear marine propulsion unit yet in sight, and it would not be worth while for the Government to expend money on such a project.
    Dame Irene Ward: Does the hon. Gentleman recollect the pressure which was exercised on the Conservative Government by the present Government when they were the opposition in relation to this whole proposition? What has happened to make the lack of progress so apparent?
    Mr. Mason: I am not aware that the then Opposition pressed on the Government the need for a nuclear ship.

    Flight Time Limitations
    Mr. Lubbockasked the President of the Board of Trade if he will make a statement on the introduction of new flight time limitations.
    Mr. Mason: The Department hopes to announce its new proposals for flight time limitations within the next few weeks. They will be circulated to all interested parties for comment before the current legislation is amended.
    Mr. Lubbock: Is the hon. Gentleman aware that it was as long ago as November of last year that the then Minister of Aviation wrote to me saying that he expected that interim changes in flight time limitations would be introduced? Why have we had to wait for nine months for this to happen? Will the hon. Gentleman make sure that every opportunity is taken for consultation with the British Air Line Pilots' Association and others before these changes are put into effect?
    Mr. Mason: We are trying to speed up this process. This is being done in the interests of safety. Many consultations are taking place, and we hope that the legislation can be prepared for late 1967 or early 1968. Consultations must take place in the meantime.
    Mr. Rankin: Will the hon. Gentleman try to see that the aircraft flying times are based on the assumption that aircraft always have to contend with a headwind?
    Mr. Mason: Yes.

    Prestwick Airport
    Mr. Dempseyasked the President of the Board of Trade what representations he has recently received on the matters within his responsibility at Prestwick Airport; what replies he has sent; and if he will make a statement.
    Mr. Mason: Letters on a variety of subjects concerning Prestwick Airport have been received over the past three months. If my hon. Friend would let me know his particular interest, I will write to him with details.
    Mr. Dempsey: In view of the fact that there is some apprehension about the danger of the new Glasgow Airport developing to the detriment of Prestwick, will my hon. Friend state that he will ensure hat there will be a policy of coordination in this matter, and that each airport will be used for its own specific purpose—one for domestic flights and the other for international flights.
    Mr. Mason: These two airports have complementary roles. One will cater for long-haul services and the other for short-and medium-haul services. I hope that the British Airports Authority and Glasgow Corporation will recognise that they are complementary, and that both will work together in a co-operative and friendly spirit.
    Mr. Emrys Hughes: Is my hon. Friend aware that at this time of year the fog comes down over Abbotsinch, which makes it impossible to get away? Is my hon. Friend aware that we will be prepared to receive all these people at Prestwick?

    Metrostore (Trading) Limited
    Mr. Sharpiesasked the President of the Board of Trade what progress has been made by his inspector investigating the affairs of Metrostore (Trading) Limited.
    Mr. Darling: The inspector has made progress, but he cannot yet indicate when he expects to make his report to the Board of Trade. He has been delayed by his inability to get certain information.
    Mr. Sharpies: Is the right hon. Gentle. man aware that I originally drew the
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    attention of the Board of Trade to this case in December, 1963, and that a number of former employees of this company claim that they are owed considerable sums? Is he satisfied that his inspector has sufficient powers to be able to obtain the necessary information to conduct his investigation?
    Mr. Darling: It has been recognised for some time that the powers of inspectors in this matter are in some respects defective, and this is one matter that we want to put right. Meanwhile, if the hon. Gentleman will allow me, I would prefer not to say who, in this case, is withholding information, and what legal processes the inspector may have to invoke in order to obtain it.

    Caledonian Airways (Boeing 320C Aircraft)
    Mr. Ian Lloydasked the President of the Board of Trade (1) whether he will consider the detailed analyses of comparative aircraft performance and economics prepared by Caledonian Airways before reaching a decision on the question of duty remission on the import of a Boeing 320C;
    (2) what information he has on the loss of dollar earnings which will be incurred if Caledonian Airways are refused permission to import a Boeing 320C aircraft free of duty.
    Mr. Jay: I considered all the relevant information provided by Caledonian Airways before making my decision.
    Mr. Lloyd: Is the President of the Board of Trade aware that even though he thinks that he has considered all the relevant information, Caledonian Airways do not think so. If the public is to have confidence in Ministerial judgment of a complex question of this kind., should not at least one of the major parties to that decision have confidence in it?
    Mr. Jay: According to the legislation, passed by the party opposite on this point, I merely have to be satisfied that similar aircraft—not identical aircraft—are available, and I was satisfied of that.
    Mr. Fortescue: In view of the fact that B.O.A.C. was permitted to import an identical aircraft during the earlier part

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    of this year for freight purposes, when British United Airways were flying the VCIO aircraft for freight, will the right hon. Gentleman see that independent airways and public corporations are treated in the same manner?
    Mr. Jay: Yes, but that was a matter of freight, in respect of which the considerations are quite different. I do not know whether the hon. Member realises that the United States charges import duty on our aircraft entering that country and I do not see why we should not do the same.

    Manufactures (Imports)
    Mr. Alisonasked the President of the Board of Trade if he will give the figure showing United Kingdom imports of manufactures as a percentage of total imports in the years 1964 and 1965, respectively.
    Mr. Darling: 14·7 and 15·3 per cent.
    Mr. Alison: Does the right hon.Gentleman agree that this represents a very small proportion of our total imports, certainly compared with the imports of manufactures in comparable industrial countries? Does he agree that we should encourage these imports as a natural corollary to our expanding exports?
    Mr. Darling: The proportion has been increasing, as the hon. Member probably knows. In fact, there was a rather rapid growth over the last 10 years-18 per cent. a year—and this reflects the increasing trade between industrial countries. I think that this will continue.
    Mr. Turtonasked the President of the Board of Trade whether, in view of the increase in the imports of miscellaneous manufactured articles during recent months, he proposes to take any emergency action.
    Mr. Darling: No, Sir.
    Mr. Turton: In view of the fact that this class of imports has increased by 375 per cent. during the last five years, will the right hon. Gentleman take action to prevent this very great danger to our balance of trade?
    Mr. Darling: No, Sir. As I said in my previous reply, this is a tendency in the
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    trade of industrial countries, one with another, and the right hon. Gentleman is correct in saying that the increase has been substantial in recent years—certainly in the last 10 to 12 years—and I think that it will go on.

    Investment Grants
    Mr. Hall-Davisasked the President of the Board of Trade what steps he proposes to take further to publicise the new system of investment grants.
    Mr. Jay: A booklet explaining the scheme in more detail will be published as soon as possible after the Bill has become law and this will be given wide publicity I intend also to announce in the autumn full details of the administration of the scheme. Application forms will be accompanied by guidance notes indicating how the forms are to be completed.
    Mr. Hall-Davis: Does the right hon. Gentleman recognise that with the further intensification and indefinite prolongation of the credit squeeze, industrial concerns must know when they can expect investment grants to be paid if expenditure on new plant and machinery is not to be further heavily curtailed?
    Mr. Jay: I agree that there is an obligation on us to make the details of this scheme plain as soon as we can, but we cannot do that until the Bill receives the Royal Assent, and that partly depends upon the Opposition as well as upon the Government.
    Mr. Corfield: In view of the fact that the Minister is expecting about 1,000 applications a day, what provision is he making to deal with these, and what sort of delay does he expect between an application and its acceptance for grant?
    Mr. Jay: I have been building up the organisation to do this job for the past six months. Its offices are dispersed in the way that I have already explained. We are confident that it will be able to cope with the task.
    Mr. Bruce-Gardyne: Is the right hon. Gentleman aware that industrial firms in development areas in Scotland are finding that the new system is worth about 50 per cent. less to them than the old system was? In the light of that, will he stop

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    saying that the new system is more valuable than the old one?
    Mr. Jay: No, Sir. The hon. Member is wholly wrong. I would refer him to the detailed Written Answer that I gave on 1st March.

    Consumer Organisations (Commercial Concerns)
    Mr. Scottasked the President of the Board of Trade whether he will seek to ensure, by legislation or otherwise, that commercial concerns are denied the chance to describe themselves as consumer organisations.
    Mr. Gardnerasked the President of the Board of Trade if he will introduce legislation to prevent misleading use of the description consumer council.
    Mr. Darling: No, Sir. But my right hon. Friend will try to ensure, by means of his powers under the Registration of Business Names Act and the Companies Act, that concerns are not registered by names which might mislead by suggesting a connection with well-known organisations for consumer protection.
    Mr. Scott: Is it not well known that at least two bodies which have no connection at all with consumer protection are masquerading as such? Would it not be useful if the Registrar had powers to prevent companies using these names even when they have been registered?
    Mr. Darling: There is a great deal in what the hon. Gentleman says, but unfortunately the Act at the moment does not allow the Registrar to remove names which, in the opinion of many people, might be considered undesirable.
    Mr. Gardner: Will my right hon. Friend therefore impress upon his right hon. colleagues the importance of securing the early introduction of a Bill to amend company law?
    Mr. Darling: Yes.
    Mr. Francis Noel-Baker: While my right hon. Friend is considering this matter, will he also have another look at the so-called Advertising Standards Authority—a body set up by advertising business interests and wholly financed by
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    them, the title of which is totally misleading?
    Mr. Darling: That is another question.

    Shipbuilding Industry
    Mr. McMasterasked the President of the Board of Trade what progress he has made in implementing the recommendations of the Geddes Committee's inquiry into the British shipbuilding industry; and if he will make a statement.
    Mr. Moyleasked the President of the Board of Trade to what extent Her Majesty's Government has now decided to implement the recommendations of the Geddes Report on the Shipbuilding Industry.
    Mr. Mason: My right hon. Friend hopes to make a statement before the Recess.
    Mr. McMaster: Why did the Government rush the preparation of this Report and its presentation in March this year if they were going to sit on it for so long? Are the Government aware of the urgent need for the expenditure of money in our shipbuilding yards in order to provide such things as building docks, which are available in Japan and to our competitors elsewhere? Will he expedite this matter?
    Mr. Mason: We are keeping exactly to the time table laid down by the Geddes Committee.
    Mr. Rankin: Would my right hon. Friend note how well Fairfield's is proceeding under a form of public ownership?
    Mr. Mason: Yes, Sir.
    Mr. Moyle: Will the hon. Gentleman give an undertaking that any arrangement he enters into will not be of such a nature that the public taxpayers pay all the bills and the private shareholders get all the profits?
    Mr. Mason: Certainly, Sir.

    D.A.W.S. Ltd.
    Mr. Harold Walkerasked the President of the Board of Trade if he will appoint inspectors to investigate the affairs of the Company D.A.W.S. Limited

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    pursuant to Section 165(d) (ii) of the Companies Act, 1948, following iregularities by employees, in view of the fact that persons managing its affairs have been guilty of misconduct towards its members.
    Mr. Darling: A creditor has presented a petition to the court for the compulsory liquidation of the company. If a winding-up order is made, the Senior Official Receiver will investigate the company's affairs. A separate inquiry by an inspector is not, therefore, appropriate.
    Mr. Walker: Is my right hon. Friend aware that serious irregularities have been reported in the Press concerning the conduct of some employees? Would he, therefore, under the companies law, seek out who is responsible and appoint an inspector as soon as possible?
    Mr. Darling: There is no need at this stage to appoint an inspector. The court has fixed the hearing of the petition for 25th July and I understand that the company will not oppose the making of a winding-up order. As the matter is now before the court, it would not be proper for me to discuss the company's affairs.

    New Zealand Trade Agreement
    Mr. Bruce-Gardyneasked the President of the Board of Trade if he will take steps to accelerate the signing of the new Protocol to the United Kingdom-New Zealand Trade Agreement, so that its details can be scrutinised by hon. Members as soon as possible.
    Mr. Jay: Full details of the results of the recent trade talks were made available to the House on 12th July.
    Mr. Bruce-Gardyne: Is the right hon. Gentleman aware that my Question refers to the Protocol which he promise to publish? Will he hurry up and publish it? Is he aware that we recognise the great importance of the United Kingdom market to New Zealand, but that at the same time it would appear that this rules out the possibility of British membership of the Common Market up to 1972? Would he not agree that this is a serious situation which conflicts with Government policy?
    Mr. Jay: The records of understandings have already been placed in the Library. The Protocol, which is a legal document, takes rather longer to
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    prepare. We on this side who are in favour of an expanding Commonwealth trade note that apparently that is no longer the policy of hon. Gentlemen opposite.
    Mr. Ridleyasked the President of the Board of Trade whether he sought the views of the Governments of the European Economic Community countries on the New Zealand Trade agreement, in view of the Government's intention to negotiate for membership of the European Economic Community.
    Mr. Jay: No, Sir.
    Mr. Ridley: Although we are all in favour of expanding Commonwealth trade, is not the right hon. Gentleman aware that it is Government policy to join the European Economic Community and that he must consult them and get their agreement to the course of action which he is taking? Is he further aware that he is making impossible the fulfilment of the Government's policy to join the Common Market?
    Mr. Jay: We do not have to obtain the permission of countries on the Continent about how we conduct our policy in the Commonwealth.
    Mr. Worsleyasked the President of the Board of Trade whether he is satisfield that the provisions of the recent trade agreement with New Zealand are consistent with British membership of the European Economic Community; and if he will make a statement.
    Mr. Jay: Yes, Sir.
    Mr. Worsley: Does the right hon. Gentleman appreciate that every hon. Member understands that New Zealand will need special trade arrangements when we join the Common Market and that the six nations must accept it? But is he aware that his failure in his statement even to mention the Common Market negotiations throws doubt on the genuineness of the Government's intention to join?
    Mr. Jay: No. Sir. We have repeatedly said in all statements on the Common Market negotiations that we intend to safeguard Commonwealth interests. This agreement shows that we mean to keep that pledge.
    Mr. Worsleyasked the President of the Board of Trade whether he discussed with the New Zealand Minister of Overseas Trade the current soundings being made by Her Majesty's Government with a view to a British application to join the European Economic Community.
    Mr. Jay: This was not on the agenda of the bilateral talks I had with Mr. Marshal.. The subject was discussed at the meeting of Commonwealth Trade Minister; which Mr. Marshall attended.
    Mr. Worsley: Does this not prove the point of my previous supplementary question, that the Government cannot be serious about this intention if they carry out negotiations with New Zealand without even discussing how this will be affected by our joining the Common Market?
    Mr. Jay: No, Sir. It proves nothing of the kind, as every hon. Member can see.
    Mr. Shinwell: Is my right hon. Friend aware that probably a majority of hon. Members on this side were glad to hear what the hon. Member opposite said and agree with him?

    Manufactured Goods (Guarantees)
    Mr. Boardmanasked the President of the Board of Trade if he is aware that, following the abolition of resale price maintenance, some manufacturers will not honour their own guarantees if the goods have been sold below the manufacturers recommended price; and what action he will take by legislation or otherwise to deal with this situation.
    Mr. Darling: The Resale Prices Act, 1964, does not affect the rights of a manufacturer to give or withhold a guarantee for his product. However, I shall be glad to consider any evidence my hon. Friend may have that refusal to give guarantees has increased since the Act came into force.
    Mr. Boardman: Is my hon. Friend aware that the use of the term"recommended price"is rendering the Resale Prices Act largely ineffective and, in such cases where the normal guarantee is subject to a condition of sale, almost completely ineffective? Cannot his officials
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    track down these cases He has enough of them.
    Mr. Darling: We may have enough of them, but we cannot get the kind of evidence which my hon. Friend thinks we should have. If he has any evidence we should be glad to look at it.
    Mr. Thorpe: Would the Minister of State agree that this would be an outrageous way of subverting the intentions of the Resale Prices Act? Would he see whether he has adequate powers to refer any case to the Monopolies Commission? If not, would he seek to take powers from the House?
    Mr. Darling: We have gone carefully into the question of powers and the Law Commission has set up a working party to consider exclusion clauses in contracts, which will cover the question of guarantees. We will await its report and act upon it.

    Exhibitions
    Mr. Cordleasked the President of the Board of Trade, in view of the success of the Beirut Hospital Exhibition, what plans he has for similar exhibitions; and when and where they will be staged.
    Mr. Mason: Discussions are taking place with the trade organisations concerned and the Ministry of Health about a number of promising possibilities, but I am not yet ready to give details.
    Mr. Cordle: Will the hon. Gentleman bear in mind that Amalgamated Development Limited, which initiated the Beirut Exhibition, will very much welcome this news?
    Mr. Mason: Yes, it was an excellent joint venture. A good deal of trade flowed from it and we are considering another six abroad.

    Trade With Nigeria
    Mr. Tilneyasked the President of the Board of Trade whether British-Nigerian trade for the first quarter of 1966 showed an improvement over the equivalent quarter of the previous year.
    Mr. Mason: There was no significant change between the two quarters.
    Mr. Tilney: Even so, would not the Minister agree that the fact that, despite

    1707
    the difficulties over law and order earlier this year, trade has been maintained, is an encouragement to the new Nigerian Government?
    Mr. Mason: Yes, Sir.

    Aircraft Navigation (North Atlantic Routes)
    Mr. Geoffrey Lloydasked the President of the Board of Trade what steps are being taken to assist in building ocean platforms to help navigation and communications by aircraft on the North Atlantic routes, particulars of which have been sent to him; and if he will make a statement.
    Mr. Mason: The implementation of this very promising scheme would involve countries on both sides of the Atlantic, and is also, in our view, largely dependent on the willingness of transatlantic operators, as the principal beneficiaries, to bear the bulk of the cost. My Department is continuing consultations about it with the International Air Transport Association and with the other administrations concerned.

    Companies (Shipping Companies Exemption) Order, 1948
    Mr. Whitakerasked the President of the Board of Trade whether he will implement paragraph 416 of the Jenkins Report and seek power to revoke the Companies (Shipping Companies Exemption) Order, 1948.
    Mr. Jay: I would ask my hon. Friend to await the proposals I shall make when it is possible to introduce a Companies Bill.
    Mr. Whitaker: I thank my right hon. Friend for that Answer. Will he not agree that the secrecy aggravated the distrust during the recent dispute? What has the public interest to gain from this secrecy?
    Mr. Jay: We believe that amendments of the law should be made and it is our intention to make them in the forthcoming legislation.

    Rights Issues (Northern Ireland Bank Cheques)
    Mr. Stratton Millsasked the President of the Board of Trade if he will introduce legislation to prevent banks and issuing houses including a proviso in
    1708
    rights issue documents refusing to accept cheques drawn on any Northern Ireland bank when offering a rights issue to their existing shareholders living in Northern Ireland.
    Mr. Pounderasked the President of the Board of Trade if he will introduce legislation to prevent banks and issuing houses including a proviso in offers for sale documents refusing to accept cheques drawn on any Northern Ireland bank.
    Mr. Darling: This is a matter for the companies and banks concerned and I see no reason to intervene.
    Mr. Mills: I thank the Minister for his letter, with particular reference to the company I had in mind, but is he aware of the considerable concern in Northern Ireland at the practice of excluding Northern Ireland cheques? Would he consider consulting the Issuing Houses Asociation to see if this temporary defect cannot be ironed out without legislation?
    Mr. Darling: If this is a temporary defect, I do not think we need legislation. As I understand it, it is very unusual for a rights issue to exclude Northern Ireland cheques. As we have explained to the hon. Member, the cause here seems to be the Irish banks' strike.

    Hotels (Overseas Visitors)
    Sir J. Edenasked the President of the Board of Trade whether he will make a statement on the results of his discussions with the British Travel Association concerning the method by which he is to encourage hotels to attract more overseas visitors.
    Mr. Mason: I have nothing to add at this stage to the reply which my right hon. Friend gave to the hon. Member on 29th June last.
    Sir J. Eden: Would not the hon. Gentleman agree that it would have been much simpler if the Government had decided either to restore investment grants or resist the folly of the Selective Employment Tax?
    Mr. Mason: No, Sir, and it would have been very expensive.

    Development Areas (Assistance)
    Sir J. Edenasked the President of the Board of Trade what has been the total Government contribution to projects in development areas since January, 1965;

    1709
    how much employment has thereby been created; and what is the total state outlay per head of those found employment.
    Mr. Jay: The total assistance offered by the Board of Trade under the Local Employrnent Acts to projects in development districts between 1st January, 1965, and 31st May, 1966, was £58·5 million. It is estimated that 117,500 jobs will result-2 cost per head of £498.
    Sir J. Eden: Would not the right hon. Gentleman agree that we would get a much better return on the investment of public money in this regard if the areas were concentrated more than they are under the Government's present proposals?
    Mr. Jay: No, certainly not. That experiment was tried by the previous Conservative Government and it had very poor results.
    Mr. Patrick Jenkin: Does the right hon. Gentleman recognise that the new system of investment grants is substantially less favourable to industry than the previous system of allowances, and will he stop quoting"phoney"figures— [Interruption.]—and instead pay attention to the Written Answer which I received on 1st July?
    Mr. Jay: As I have repeatedly explained to the hon. Gentleman, it is his figures are are"phoney ". [Interruption.] He will be pleased to know that since we introduced this scheme there has been a great increase in the number of applications for factories in the development areas.
    Mr. Sheldon: Is my right hon. Friend aware that the Question to which the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) referred and to which he received a Written Answer on 1st July posed seven conditions, each of which could have been phrased differently, and that it represented an artificial exercise in comparing investment grants with investment allowances?
    Mr. Jay: Yes, Sir. That is one of the phoney elements, but not the only one.

    Civil Air Pilots
    Sir A. V. Harveyasked the President of the Board of Trade what steps he is taking to increase the number of civil air pilots available for British airlines.
    Mr. Mason: The recruitment and training of civil air pilots for British airlines is primarily the responsibility of the prospective employer. The Government contribute, however, up to 25 per cent. of the cost of training properly selected students at one of the courses approved by my Department. In addition my Department is in consultation with the various interests concerned with a view to increasing the supply.
    Sir A. V. Harvey: In wishing the right hon. Gentleman well in dealing with these important matters, may I ask whether he is aware that the first part of his Answer is highly unsatisfactory, that B.O.A.C. is now working with 60 pilots below its normal strength and that a number of pilots are volunteering to go to American airlines? Will he do all he can to put this important matter right, since he has the overall responsibility and cannot get rid of it to the employers?
    Mr. Mason: There is a world shortage of pilots and many foreign airlines are advertising in Britain for pilots. I assure the hon. Gentleman that we are in consultation with the airlines, the training organisations and the pilots associations to estimate the total requirement for pilots particularly in the next five or so years and to examine the extent to which the existing training facilities need to be augmented. Training is just as important as anything else.
    Sir Ian Orr-Ewing: Would the hon. Gentleman make sure that ex-Service pilots from the Royal Air Force and the Fleet Air Arm are given adequate seniority when they try to join the airlines, remembering that otherwise their experience and the investment which has been made in their training will count for nought, particularly since the present two years' seniority is not commensurate with their experience?
    Mr. Mason: That is one of the problems we must consider. The R.A.F. and R.N. supply of pilots has drained away and we are now having to recruit and train right from the beginning.

    Australian Trade Agreement
    Mr. Turtonasked the President of the Board of Trade whether, in view of the fact that the present United Kingdom-Australian Trade Agreement is terminable

    1711
    on six months' notice, he will open negotiations with the Australian Government with the aim of securing a more lasting agreement.
    Mr. Jay: It has been agreed hitherto not to re-negotiate this Agreement until the Kennedy Round has been completed.
    Mr. Turton: In view of the value of the Anglo-New Zealand agreement, will the right hon. Gentleman make it quite clear to Australia that he would open negotiations for a longer-term agreement if Australia so desired?
    Mr. Jay: I fully agree with the hon. Gentleman that the New Zealand Agreement is of value both to us and to New Zealand. We have not so far had a request from the Australian Government for a similar agreement, but if we do we will, of course, consider it.

    European Economic Community
    Mr. Ridleyasked the President of the Board of Trade what consultations he has had with Commonwealth Governments regarding the effects on Commonwealth trade of Her Majesty's Government's policy of exploring the possibility of joining the Common Market.
    Mr. Jay: There was some general discussion of the subject at the Commonwealth Trade Ministers' Conference in London in June.
    Mr. Ridley: Has a common position yet been adopted? Have the obstacles from this source been analysed and, if so, will the right hon. Gentleman place a document in the Library showing what the obstacles are?
    Mr. Jay: I do not think that I could say more than that we have assured the Commonwealth countries that their interests would be safeguarded and that they would be fully consulted in any such negotiations which took place.

    COMMONWEALTH PRIME MINISTERS' MEETING
    Mr. Wallasked the Prime Minister if he will now make a statement on the date and place of the Commonwealth Prime Ministers' Conference.
    Mr. Edward M. Taylorasked the Prime Minister when the next conference
    1712
    of Commonwealth Prime Ministers will be held; and where the conference will take place.
    The Prime Minister (Mr. Harold Wilson): I would refer the hon. Members to the Answer I gave on 5th July to a Question by my hon. Friend the Member for Oxford (Mr. Luard).
    Mr. Wall: Can the right hon. Gentleman say how many Prime Ministers or Heads of State have agreed to attend this Conference? In view of his undertaking at the last conference, six months ago, that he would settle with Mr. Smith in weeks rather than months, does he expect to reach a settlement before the next conference?
    The Prime Minister: I do not know how many Prime Ministers, Heads of Government, will be coming on the date fixed, which was the date generally most convenient for the majority of Commonwealth Prime Ministers, having regard to their Parliamentary commitments. In regard to the last conference, it certainly is a fact that our hopes were not realised, but I have nothing to add to the last statement which I made about the situation in Rhodesia.
    Mr. Taylor: Will the Prime Minister be raising at the conference the proposal, made as a matter of urgency in the spring of 1964, for a Commonwealth preference in the awarding of civil engineering and public works contracts, and what has happened to this idea?
    The Prime Minister: This was raised by my right hon. Friend the President of the Board of Trade at the recent Commonwealth Trade Ministers' Conference. A report from that conference will be made to the Prime Ministers' Conference so that we will be able to pursue the matter further there.

    GOVERNMENT AND THE PRESS
    Mr. William Hamiltonasked the Prime Minister what steps he is taking to improve and extend the means of communication between Her Majesty's Government and the Press.
    The Prime Minister: This matter is kept under review and if my hon. Friend

    1713
    has any suggestions to make I would be happy to consider them.
    Mr. Hamilton: Does not my right hon. Friend agree with the general principle that the greater the amount of official disclosure, the less chance there is of unofficial leakage? Will he seek to take steps to reduce the amount of leakage, compared with what took place under the previous Conservative Administration, remembering that there was a good deal of concern in those days and that we do not want it to be repeated in the forthcoming years?
    The Prime Minister: I think that, in general, I agree with the proposition that the more factual news put out the less the tendency for leakages. However, there is a limit to what can be said publicly when, considering the public interest, it is best served by not saying too much. I am afra d that even if there were very much fuller statements of news, there would still be leaks under any Government and a great deal of invention of facts that never were facts.
    Mr. Kershaw: In the interests of better Press relations, would the Prime Minister instruct iimself and his Ministers not to make statements about grave issues, such as E.L.D.O., South Arabia and arms to Australia and the United States, which are virtually contradictory and are wholly inaccurate?
    The Prime Minister: They are not virtually contradictory and wholly inaccurate and, on all of those questions, we have made full statements to the House.
    Mr. Heath: Can the Prime Minister yet tell us the results of the inquiry which he himself instituted into the alleged leak about E.L.D.O.?
    The Prime Minister: No, Sir. I am not in a position to do that. Certain lines have been followed up and I have had an interim report. As soon as I am in a position to do so, I will certainly inform the right hon. Gentleman.

    HEAD OF DEFENCE SALES
    Mr. Martenasked the Prime Minister whether he is satisfied that the post of Head of Defence Sales has been
    1714
    established in the most suitable Department; and if he will make a statement.
    The Prime Minister: Yes, Sir.
    Mr. Marten: Would the Prime Minister perhaps consider making one Minister responsible for co-ordinating policy statements on arms deals? Does he recall saying, on the one hand, that we were not, either directly or indirectly, supplying arms to the Vietnam war, while, on the other hand, very shortly afterwards he said that there had never been any restriction or conditions applying to arms supplied to Australia? Could he help us to clear up the confusion that exists about this matter?
    The Prime Minister: The position in regard to Australia is that we are traditionally one of her greatest suppliers of arms, although this would represent a very small proportion of the military deployment of arms in Vietnam, and it would be impracticable, on any arms which we send to Australia, to tag or label them,"Not to be used in Vietnam ".
    Mr. Powell: How does the right hon. Gentleman ensure, in accordance with his statement of 17th May, that arms do not indirectly reach Vietnam from this sources?
    The Prime Minister: We are not supplying them indirectly or directly to Vietnam. [Interruption.] If arms are required specifically for use in Vietnam, we do not supply them so far as Australia is concerned but, as I said, if we have a long and continuing contract for a particular type of arms, we could not put tags on them and say,"This particular part of this supply.…"— [Interruption.]
    Mr. Heath: Would the right hon. Gentleman answer two questions? First, are the Government differentiating in this matter between the supply of arms to Australia and New Zealand and supplies to the United States? Secondly, is the right hon. Gentleman really saying—and we should get to the bottom of this —that any request for arms is first examined to see whether they could be used in Vietnam and that, if the answer is"Yes ", they are not supplied, but that when the arms are supplied no condition

    1715
    is attached to them saying that they must not be used in Vietnam?
    The Prime Minister: The right hon. Gentleman has not quite got it right, and I would commend him to study the Answer I gave on Tuesday last. The position is that any shipments that are made, for example, to the United States —which the right hon. Gentleman mentioned—are made unconditionally—not treated like some of those shipments that both the previous Government and the present Government operated with other countries. Any shipments that are made are unconditional. But in the matter of the deciding whether a particular shipment should or should not be made we naturally have regard to our position as Co-Chairman, but since our American partners themselves understand our position as Co-Chairman, I do not see that any difficulties are likely to arise.
    Mr. Heath: Do I take it that that position does not apply to the Australians and that, if they wanted arms for Vietnam, they could have them?
    The Prime Minister: Of course, they are not involved. Our position is[HoN. MEMBERS:"Answer."] The answer is as I have said. The right hon. Gentleman will recognise that this is a very difficult subject which cannot be dealt with—[Interruption.]—unless hon. Members opposite really want us to run away from our responsibilities as Co-Chairman. One therefore has to have some restrictions and, inevitably, these restrictions are difficult, and are sometimes apparently anomalous to hon. Members opposite. We do not make any condition about sales to Australia. As I have said, the United States understand our position. They are using arms in a different way from the Australian fighting. They understand very well—rInterruptionj If the hon. Gentleman cannot understand this, they really do not understand the facts of the situation in Vietnam. That is our position, and I see no difficulties arising from it.
    Mr. Shinwell: Has my right hon. Friend received—[Interruption.]
    Mr. Speaker: Order. We are losing valuable Question Time.
    Mr. Shinwell: Has my right hon. Friend received any request from the Australian
    1716
    Government for arms that are intended to be used in Vietnam, and has he any information that arms supplied to Australia in recent years have been used in Vietnam?
    The Prime Minister: I have discussed this matter very fully with the Australian Prime Minister. He fully understands the position—[Interruption.] This is really not a laughing matter—[Interruption.] The Australians have not asked for any arms specifically for use in Vietnam but, as I say, if we are supplying continuing orders of, shall we say, small arms ammunition, we obviously could not say with the next lot,"This particular batch should not be used in Vietnam."
    Mr. Heath: But is the position that if the Australians ask for arms for Vietnam, they can have them, and that if the United States ask for arms for Vietnam, they cannot have them?
    The Prime Minister: The right hon. Gentleman always wants to get a difficult situation—[Interruption.] The position is that the Australians do not ask for arms specifically for Vietnam. We shall continue to supply our traditional supplies of arms to Australia. If there were a situation, for example, in which the Australians were asking for bombs for bombing North Vietnam—and that is the whole issue that has given rise to all these questions—we would have to consider our position as Co-Chairman, and the decisions in the Commonwealth Prime Ministers Conference.
    Sir Alec Douglas-Home: The right hon. Gentleman has twice now called in aid the position of the Co-Chairmanship. Of course, that is important, but have the Russians imposed any such restrictions from their side?
    The Prime Minister: No, Sir. I have said many times at Question Time, and I said it in the recent debate, that the fact that the Russians have supplied arms is not a reason why we should. I think that it is right, and it is the view of the Government, that in this respect we should take a more austere and responsible view of our position as Co-Chairman than the Russians do, and, apparently, than the right hon. Gentleman did when he was concerned.
    Mr. Molloy: Will my right hon. Friend acknowledge that this distasteful and

    1717
    execrable dialogue, entered into with such glee by the Conservative Members opposite, will not do much to help the gaining of peace in Vietnam, and will not enhance the status of this House?

    MINISTER OF HOUSING AND LOCAL GOVERNMENT (STATEMENT)
    Mr. Murtonasked the Prime Minister whether the official statements made by the Minister of Housing and Local Government about rising costs of houses in the television programme Division on 24th May, 1966, represents the policy of Her Majesty's Government.
    The Prime Minister: My right hon. Friend the Minister of Housing and Local Government made no statement of policy on 24th May about house building costs.
    Mr. Murton: Is it not a fact, however, that in this particular broadcast—[Interruption.]—the Minister of Housing and Local Government said categorically —[HON. MEMBERS:"Reading."]—that within the past five years—[Interruplion.] new house prices have never risen less than 8 per cent. annually—[Interruption.]—and that it has often been 10 per cent.—[HoN. MEMBERS:"Reading."]
    Mr. Speaker: Order. We are having too muc'f choir, and not enough solo.
    Mr. Murton: And will the Prime Minister agree that only once before 1964 did the annual rise reach 8 per cent.; and that it was only in 1965 that, for the first time, the historically high figure of 10 per cent. was ever reached? And, indeed, will prices not go even higher this year?
    The Prime Minister: I have read the statement made by my right hon. Friend. It was not about the policy of future house prices. What he said was that in the last five years there has never been a rise of less than 8 per cent. This is a historic fact and a continuing problem, and one with which we must deal.

    REFERENDUM
    Mr. John Leeasked the Prime Minister if he will introduce legislation to provide for the use of the referendum as part of British constitutional practice.
    The Prime Minister: No, Sir.
    Mr. Lee: Is my right hon. Friend aware that in the happily very unlikely event of this country being in a position to enter the Common Market, no machinery exists to enable the British people to end what Hugh Gaitskell called a thousand years of British history?
    The Prime Minister: The tradition for a considerable part of that thousand years is that decisions of great moment of this kind have to be taken by the elected Government of the day, responsible to this House. The constitutional position is that whatever this House decides in such a matter, or any other matter, is the right decision.

    PRIME MINISTER OF AUSTRALIA (DISCUSSIONS)
    Mr. makerasked the Prime Minister if he will make a statement about his recent discussions with the Prime Minister of Australia.
    The Prime Minister: I would refer the hon. Member to the Answers I gave on 12th July to similar Questions.
    Mr. Blaker: Will the right hon. Gentleman tell the House about a subject with which he did not then deal, and that is the Government's attitude towards negotiations for entering into the Common Market? Did he tell Mr. Holt that in those negotiations the British Government would insist on being free to buy food and raw materials in the cheapest market as we have done for a hundred years?
    The Prime Minister: It is not usual, of course, to give an account of everything discussed between Commonwealth Prime Ministers, but I was certainly able to give Mr. Holt a full statement on the present position, and on the relations described by my right hon. Friend this afternoon between Britain and the Commonwealth in respect of any future negotiations with the Common Market.

    PRIME MINISTER (VISIT TO WASHINGTON)
    Mr. Kenneth Lewisasked the Prime Minister whether, on his visit to Washington he will reaffirm to President Johnson his support for United States action in South Vietnam.
    The Prime Minister: President Johnson is already fully aware of the British Government's position and this was made clear in my statement on 29th June and again during the debate on Vietnam on 7th July.
    Mr. Lewis: Is it not time that the Prime Minister gave support to a very valuable ally before placating his Left wing in the Labour Party?
    The Prime Minister: I have nothing to add to the statement I made on that occasion, which the hon. Gentleman is capable of reading. I wish, however, that he and some other hon. Gentlemen opposite would realise the gravity and seriousness of the war in Vietnam, instead of adorning these debates and Questions with remarks of that kind.
    Mr. Winnick: Would it be possible for the Prime Minister to tell President Johnson that the greatest enthusiasm for continuing the bloodshed in Vietnam comes from the Tory Party in this country?
    The Prime Minister: I would not propose to say that to him, because I do not believe it to be true. I think that hon. Members in all parts are anxious to see this fighting come to an end. My only complaint about hon. Gentlemen opposite is not about their aims, or even the methods they suggest, but about their eternal frivolity when we deal with this subject.
    Sir T. Beamish: Is the Prime Minister aware that those who have seen most of war best understand its gravity and seriousness?
    The Prime Minister: Yes, Sir. I would feel that that question is incontestable. What, however, I also feel is that sometimes it would be better if we could discuss these Vietnam questions with the real gravity and seriousness that the horrible fighting in that country demands.
    Mr. Whitaker: Does my right hon. Friend recollect the very salutary corrective which the American Government gave to the British Conservative escapade at the time of Suez.
    The Prime Minister: Yes, Sir. That is going back a little in time, but no
    1720
    doubt one day we shall learn the truth of what happened in those times.
    Mr. Frank Mannasked the Prime Minister if he will discuss with President Johnson the matter of Great Britain's selling rockets, bombs, and other weapons to the United States of America, and also the reconsideration of the purchase of F111 bombers from the United States of America.
    The Prime Minister: I have nothing to add to the Answer I gave on the 23rd of June to a similar Question by the hon. Member for Bournemouth, West (Sir J. Eden).
    Mr. Allaun: But since our arms sales to America are proving small and since they appear to exclude sales of arms for use in Vietnam, and since our deficit last month was so big, how can we possibly afford to continue with purchases of £1,080 million of arms from America? Is it not crazy?
    The Prime Minister: So far as the F111 bomber purchase is concerned, this has been fully debated in the House. It is essential to defence policy and essential if we are to get defence costs down to the figure we have set as our target.
    Mr. Marten: In view of the problem raised by the hon. Member, would the Prime Minister consider perhaps selling some more Buccaneer fighters to South Africa?
    The Prime Minister: No, Sir.
    Mr. Paget: Is not the fact that we are wholly dependent on the Americans for nearly all our vital weapons a reason for making the suggestion that we should impose limits as to the use to which those weapons are put rather an unfortunate precedent from our point of view?
    The Prime Minister: When we undertook the Defence Review it was necessary, because of the very high cost of some of the aircraft projects we had inherited, to replace them by cheaper and earlier weapons that could be bought from the United States. This was approved by the House. I do not think that in any way it calls in question what I said earlier about the matter of arms supply in Vietnam.

BUSINESS OF THE HOUSE
Mr. Heath: May I ask the Leader of the House whether he will state the business of the House for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Herbert Bowden): Yes, Sir. The business for next week will be as follows:
MONDAY, 18TH JULY—:We shall ask the House to approve a timetable Motion for the remaining stages of the Selective Employment Payments Bill.
On the same day the Committee stage of the Bill itself will be put in place, so that if the House decides the Question on the:imetable Motion before 10 o'clock it would be possible to make progress on the Committee stage of the Bill.
TUESDAY, 19TH JULY—:Third Reading of the Finance Bill.
Remaining stages of the Malawi Republic Bill [Lords].
Motion on the Professions Supplementary to Medicine Order.
WEDNESDAY, 20TH JULY—:Remaining stages of the Industrial Development Bill.
THURSDAY, 21ST JULY—:Selective Employment Payments Bill.
Committee [First Allotted Day].
FRIDAY, 22ND JULY—:Private Members' Bills.
MONDAY, 25TH JULY—:The proposed business will be: Second Reading of the Iron and Steel Bill.
Mr. Heath: Is the Leader of the House aware that in guillotining the Selective Employment Payments Bill [Interruption.] —:let the right hon. Gentleman wait—:he is guillotining a Bill which affects every industry and firm in the country, 10 million people employed in them, 000 million being paid out, a Bill to which there are nearly 300 serious Amendments on the Notice Paper, many of them put down by the right hon. Gentleman's own supporters, and that there is no justification for trying to guillotine a Bill unless there is a shortage of time or deliberate obstruction in some part of the House? So far as this Bill is concerned we on this side of the House
1722
are prepared to go on sitting in order to give it proper consideration.
Is the right hon. Gentleman also aware that this is a Bill which you, Mr. Speaker, may find it necessary to certify as a Money Bill, in which case it will not be amendable in the House of Lords and will not have proper discussion in this House? Moreover, it will go against the spirit of every assurance which the Leader of the House has so far given on this Bill.
Let the Leader of the House be assured that this is a disgraceful action by the Government, who, because of their own incompetence, are turning more and more to authoritarian methods?
Mr. Shinwell: On a point of order. Is the right hon. Gentleman—[HoN. MEMBERS:"Sit down."] Is the right hon. Gentleman entitled to make a speech dealing with the merits of a particular piece of legislation when he is asking a business question? [Interruption.]
Mr. Speaker: Order. The noise is a little too much like the real guillotine noises. The right hon. Gentleman the Leader of the Opposition is perfectly in order, but he must not speak at too great length.
Mr. Heath: This is a matter, I think the whole House will agree, of the utmost importance. I ask the Leader of the House what precedent there is for guillotining a Bill of this kind in the House. I cannot find a single precedent for it. Let the right hon. Gentleman be assured that we shall fight this every inch of the way.
Mr. Bowden: It would probably be more appropriate to debate the timetable Motion on Monday, but may I reply to one or two points? There are four precedents for timetabling Finance Bills in the current century. There is also a precedent of a Conservative Government timetabling a Bill in 1952 before the Committee stage was started— [Interruption.]
Mr. Speaker: Order. We must hear each other on business questions.
Mr. Bowden: On this particular Bill, the Leader of the Opposition suggested that one reason for timetabling would be if there had been deliberate obstruction. I am not accusing the Opposition

1723
of deliberate obstruction, but there are 300 Amendments down to a 12-Clause Bill and many of those Amendments could undoubtedly be grouped in one or two debates.
When the timetable Motion is seen—we cannot debate it now; it will he tabled today by the Government—I think that the House will probably agree that we have done what I promised to do, provided adequate time. In fact, we are providing the amount of time which, according to The Times, the Opposition would require.
Mr. Heath: May I press the Leader of the House on this point? There is no precedent for guillotining a possible money Bill before the Committee stage has started. Will he confirm that'? Secondly, will he confirm that the time he is to give, three days in the Committee—
Mr. Speaker: We cannot debate the Guillotine now. The right hon. Member must do that on Monday.
Mr. Heath: The point is, Sir, whether, in his business statement for next week, the Leader of the House should include the proposal to have a day for the guillotine Motion. I submit that I am entitled to put the point that there is no precedent for his doing this in the statement of business for next week.
May I tell the right hon. Gentleman [HON. MEMBERS:"No."J May I ask him to bear in mind that there is no truth in the report that the Opposition are satisfied with three days in Committee and one day alone for Report and Third Reading? That is making a farce of Parliament.
Mr. Bowden: As I said earlier, perhaps we had better discuss the details when the Motion is before the House. As is usual, out of courtesy the Opposition have been given a copy of the Motion which is to he tabled today. It is unfair to the House as a whole to discuss the details of that Motion now.
Mr. Woodburn: Could the Leader of the House arrange for private circulation of the speeches to be delivered on Monday, which will be a repetition of the speeches which have been delivered on every guillotine Motion for 50 years,
1724
with all the synthetic indignation which is displayed on these occasions? If my suggestion were followed, it might save a day, thus providing an extra day for the Bill.
Mr. Bowden: I have already said that, if the House so wishes we can give some time to the Bill on Monday. This is a matter for the House. One learns on reading the debates which have taken place on timetable Motions over the years—there have been so many of them since 1877—that it is always the case that the Opposition of the day, whichever party is in opposition, shouts"gag"and opposes it.
Mr. Turton: Is the Leader of the House aware that the weakness of the guillotine procedure always is that important Amendments receive no adequate discussion? Therefore, will the right hon. Gentleman bear in mind, when he is drawing up his guillotine Motion, that there are very many quite different interests and industries involved and secure that they are not shut out from the discussion by the timetable Motion'?
Mr. Bowden: I will try to meet the House in this as far as is possible, within the number of days which the Government feel is adequate for the discussion. I think that we can come to some arrangement as to the division of time within that number of days.
Mr. Rankin: Is my right hon. Friend aware that some time ago we were promised a debate on the Brambell Report which, among other things, deals with new methods in farming? Could my right hon. Friend control the Leader of the Opposition so as to give us another half day to deal with this Report before the House rises?
Mr. Bowden: I have said on a number of occasions that, if it is possible to find time before the Summer Recess for a debate on the Brambell Report, I will do so. I understand that my right hon. Friend the Minister is likely to be replying to a Question on this very shortly.
Sir Harmar Nicholls: Is the Leader of the House aware that so many people will be affected by the Selective Employment Payments Bill that Parliament will be brought into disrepute if it is not adequately discussed? Will the right hon.

1725
Gentleman tell the House what happened at the consultations which we all know go on before business is announced? How many days were offered to the Opposition? What did they turn down?
Mr. Speaker: Order. This is really a matter for debate on Monday.
Sir Harmar Nicholls: Mr. Speaker, I submit that this does matter. [HoN. MEMBERS: "Oh."] May I put my point?
Mr. Speaker: I am not questioning the hon. Gentleman's right to submit that it does matter. I am suggesting that the time to debate issues like that is on Monday when the timetable Motion is before the House.
Sir Harmar Nicholls: I wanted to put to the Leader of the House that it is important, before the authoritarian device of the guillotine is brought in, to see whether the Opposition's offer of restraint is reasonable. The House should know that before we approach the guillotine debate on Monday.
Mr. Bowden: I am sure that, on reflection, the hon. Gentleman would agree with me that it would be quite unwise, in the interests of the House and of Parliament itself, ever to discuss across the Floor exchanges which have taken place through the usual channels.
Mr. Iain Macleod: Would the Leader of the House accept that the only reason—I have put this forward myself as Leader of House—for a timetable Motion is always shortage of time? Would the right hon. Gentleman take into account that we on this side of the House are prepared to sit in August, or in September—[HON. MEMBERS:"Or in the mornings?"] Yes, or in the mornings, or to come back earlier in October?
Mr. Sydney Silverman: On a point of order. Mr. Speaker. May I seek your guidance? How far is it in order this afternoon to discuss a timetable Motion which is not before us and which is to be moved next Monday?
Mr. Speaker: I wish the hon. Gentleman would let Mr. Speaker do the task for which he is appointed.
Mr. Iain Macleod: Since time for discussion is of the essence in this matter, since these repayments do not have to
1726
start until next February at the earliest, and because we are prepared to sit in any of the three months I have mentioned, will the Leader of the House change his mind at once about the necessity for this guillotine Motion?
Mr. Bowden: I am aware of the right hon. Gentleman's view. I do not know whether it is shared by the whole of his colleagues. [HON. MEMBERS:"Hear, hear."] Right hon. and hon. Members opposite cheer before they have heard me. The right hon. Gentleman is reported as saying that the Conservative Party is not interested in the Recess or holidays until September. That has been noted. We will, in fact, be sitting a very long way into August. There is no question whatever about that.
On the question of the importance of getting the Royal Assent to the Selective Employment Payments Bill, may I remind the right hon. Gentleman and the House as a whole that, if these repayments are to be made as early as we would like them to be made, the machinery and the administrative work has to be done in the Departments. Those responsible cannot begin that work until such time as they know how the Bill emerges after the Royal Assent.
Mr. Lubbock: Has the Leader of the House noticed Motion No. 132 on the Order Paper in the names of myself and a number of my hon. Friends, dealing with a question of privilege, namely, the relationship between the right hon. Member for Nuneaton (Mr. Cousins) and the Transport and General Workers' Union?
[That the matter of the contractual relationship between the Right honourable Member for Nuneaton and the Transport and General Workers' Union, controlling or limiting the member's complete independence and freedom of speech and stipulating that he shall act as the representative of that union in regard to certain matters to be transacted in Parliament, be referred to the Committee of Privileges.]
Is it not gravely unsatisfactory that an important question of privilege, which may affect right hon. and hon. Members on both sides of the House, should be left unresolved for an indefinite time because of a stupid and illogical rule about the time within which a privilege question can be raised?
Mr. Speaker: Order. The hon. Gentleman must put a business question.
Mr. Lubbock: Will the Leader of the House find at least half a day for a debate on this Motion?
Mr. Bowden: It is not for me to comment on whether the rule that a privilege question must be raised at the earliest possible opportunity is stupid. This is a matter that the Select Committee on Privileges, which is looking at this sort of question, can look at immediately. Four hon. Members have signed this Motion, so there does not seem to be a great deal of interest in the House in this matter.
Mr. John Hynd: In view of the considerable, and in some cases disturbing, developments in road and rail transport will my right hon. Friend give us an assurance that there will be a debate on transport as soon as possible?
Mr. Bowden: I cannot promise a debate before the Summer Recess, whenever that may be. My right hon. Friend the Minister of Transport will be making a statement or issuing a White Paper very shortly.
Mr. Peyton: Will the Leader of the House arrange for the Prime Minister to move the guillotine Motion on Monday next, as many of us feel that such a shabby proposal would come better from him than from anyone else?
Mr. Speaker: Sir Barnett Janner. [Interruption.]
Sir B. Janner rose—
Mr. Speaker: Order. We cannot debate, nor can business questions be dealt with, if there is shouting across the Floor of the House.
Sir B. Janner: May I ask my right hon. Friend again whether he will give attention to Motion No. 99, which stands in the names of more than 160 Members on both sides of the House, and of all shades of political opinion, in relation to the serious methods which are being adopted at present in Soviet Russia with regard to the Jewish minority which is not allowed to develop itself culturally or in a religious sense?
[That this House notes with concern the continuing difficulties confronting
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Jews in the Union of Soviet Socialist Republics, and calls upon Her Majesty's Government to use its good offices to secure for them the basic human rights afforded to other Soviet citizens.]
Would my right hon. Friend be good enough to give us an opportunity of debating this matter before the Recess?
Mr. Bowden: I have replied on this matter during business questions on one or two occasions. As I have said, there is great interest and sympathy in the whole House. I cannot promise time for debate, but my hon. Friend might avail himself of the opportunities on the Adjournment or on some other occasion—the Consolidated Fund Bill, perhaps.
Mr. Gibson-Watt: As the Government have decided to take time on Monday to guillotine the Selective Employment Payments Bill and the tax is so important to the disabled, the old and the part-time workers, in particular in Wales, will the Leader of the House say whether it is the Government's intention to give time for a debate on Wales before we rise for the Recess? Or is it to be shoved into the back end of the winter, near Christmas?
Mr. Bowden: It is our intention to provide the usual opportunities on the Floor of the House and upstairs in Committee for a discussion of Welsh affairs.
Mr. Michael Foot: In view of the statement of the right hon. Member for Enfield, West (Mr. lain Macleod) that he is ready, if not eager, to sit in the mornings to discuss the Selective Employment Payments Bill—[Hon. MEMBERS:"He did not say that."] He also said that he would be willing to sit in the mornings—can my right hon. Friend say whether the Motion on Monday can be amended to incorporate the right hon. Gentleman's offer?
Mr. Bowden: Yes, Sir. The Motion is capable of Amendment if anyone wishes to move an Amendment.
Sir D. Walker-Smith: Does the right hon. Gentleman appreciate that the effect of guillotining a Bill both as to Committee and Report stages is that a substantial amount of the provisions go on the Statute Book without detailed Parliamentary discussion? Does he recall

1729
that the guillotining of both stages was never done in Parliament until 1947, when it was introduced for the Transport Act and the Town and Country Planning Act, both of which Measures—
Mr. Speaker: Order. We are due to debate the guillotine Motion on Monday. This is the time for business questions.
Sir D. Walker-Smith: I appreciate that, Mr. Speaker. With respect, I was about to ask the right hon. Gentleman whether, in view of these very unsatisfactory precedents, he will change next Monday's business.
Mr. Bowden: Perhaps the right hon. and learned Gentleman would like me to add another precedent—the Transport Act, 1952, under a Conservative Administration.
Mr. Dickens: Will my right hon. Friend make arrangements to enable the House to have a full day's rebate on the economic situation before the Recess? Will he also bear in mind 12th August as a suitable date for right hon. and hon. Members opposite?
Mr. Bowden: If we were to choose 12th August, there might be a lot of grousing on that day. There is an opportunity to debate the economic situation on the Third Reading of the Finance Bill. in addition, if he catches your eye, Mr. Speaker, my right hon. Friend the Prime Minister is to make a statement today.
Mr. Stodart: In view of the Government's proposal to impose very heavy cuts in the subsidies given to the fishing fleet, with the heaviest falling on the smallest vessels, will we have ample time for debating the subject at a reasonable hour before the House rises?
Mr. Bowden: There will he the usual opportunities to debate fishing Orders before we rise for the Recess.
Mr. Binns: Is my right hon. Friend aware that, to hon. Members on this side of the House, a guillotine is just as distasteful as it is to many hon. Members opposite? Is he aware that we are quite prepared to consider starting the sittings of the House at 9 a.m. or 10 a.m. to try to give more Parliamentary time not only to business that hon. Members opposite
1730
want to discuss, but to business that many of us want to discuss?
Several Hon. Members rose—
Mr. Speaker: Order. Before I call the next hon. Member, I remind the House that we have an important debate ahead of us. Seventy hon. Members are trying to catch my eye for that debate.
Mr. G. Campbell: Does the Leader of the House realise that the S.E.T. is a matter, to use the Prime Minister's words, of gravity and seriousness for Scotland? Will he ensure, before putting down the guillotine Motion, that we have adequate time to discuss those areas where, on the Treasury's own estimates. the amount of tax to be paid per employee will be much greater than in manufacturing areas?
Mr. Bowden: The Selective Employment Payments Bill is not concerned with the raising of the taxation, but with the repayments.
Mr. Henig: Will my right hon. Friend confirm to hon. Members on this side of the House—[HON. MEMBERS:"Stand up."]
Mr. Speaker: Order. The House is forgetting itself a little.
Mr. Henig rose—
Mr. Woodburn: On a point of order Mr. Speaker. Is it not disgraceful that hon. Members with long experience should treat a new hon. Member with such discourtesy?
Mr. Speaker: I wish that the right hon. Gentleman would allow the Chair to control the House. That was the purpose of my intervention.
Mr. Henig: Will my right hon. Friend confirm to hon. Members on this side of the House that, if the guillotine Motion is passed by, say, 25 minutes to 4 o'clock on Monday afternoon, there will be one extra Parliamentary day available for discussing the Bill and that, if we go on discussing the Motion for several hours, those who wish to do so will be depriving the House of time to discuss the Bill?
Mr. Bowden: That is the position. If the Motion is approved early, there will, as I have said, be time until 10 o'clock that night for discussion of the Bill.
Mr. Edward M. Taylor: If the right hon. Gentleman is successful on Monday in saving Parliamentary time with this disgraceful Motion, can he at least promise that one day will be devoted to Motion No. 133, which deals with another iniquitous burden on Scotland and is signed by more than half the Scottish hon. Members in the House?
[That this House deplores the decision of British Railways' Scotish Region to impose a supplementary"control ticket" charge of 5s. on all persons travelling by train on certain Scottish routes during the local summer holiday period, particularly in so far as it has applied to passengers travelling in trains where there is surplus accommodation and also in trains where a sleeper reservation charge has already been paid, considers that this is an unfair burden on families who are forced through no fault of their own to take their holidays at this time and calls for the immediate removal of this unfair supplementaryy charge.]
Mr. Bowden: The hon. Gentleman had better await the timetable Motion.
Mr. English: Does not my right hon. Friend agree that there is something wrong with the procedure of the House when we are likely to spend a whole day on Monday discussing the timetabling of a Bill which both sides honestly wish to discuss? Will he not also agree that it is about time that we had a Standing Order timetabling timetable motions, as is the practice in other legislatures deriving from this one?
Mr. Bowden: That is a matter that the Select Committee on Procedure may perhaps look into. Indeed, I think that the Committee has already done some work on it.
Sir F. Bennett: Before the House rises for the Recess, can we have a debate on the question of the supply of arms to Australia, New Zealand and the United States for possible use in Vietnam, since the confusion on the issue in this House is shared by everyone in those countries as well?
Mr. Bowden: We have recently had a foreign affairs debate, but the Opposition have five opportunities to choose subjects for debate between now and the Recess.
Mr. Raphael Tuck: Is my right hon. Friend aware that there is a strong case for a Standing Order limiting the speeches of hon. Members to 10 or 15 minutes?
Mr. Patrick Jenkin: Before tabling the guillotine Motion, will the right hon. Gentleman consult the Chancellor of the Exchequer, who tabled 440 Amendments to last year's Finance Bill, when new taxes were hastily introduced? If the Selective Employment Payments Bill is not properly discussed, there will be chaos in many commercial and industrial enterprises.
Mr. Bowden: One cannot relate the happenings of last year to the completely different Bill of this year.
Mr. Winnick: Is my right hon. Friend aware that many of us are far less concerned about the guillotine Motion than about the fact that in the very important Second Reading debate which will take place later today only about half-a-dozen back-bench Members, from either side of the House, will be able to take part?
Mr. J. H. Osborn: In the interests of time and as it is vital that we should avoid discussing irrelevant Measures, in the interests of the economy as well as of the interests of time, will the Leader of the House consider not debating the Iron and Steel Bill on Monday week, but cancel it altogether?
Mr. Bowden: No, Sir. I have announced that the Second Reading of that Bill will be taken on Monday week, and that is the Government's intention.
Mr. Lipton: In view of one or two encouraging hints which he has dropped in the course of this afternoon, may we now take it from my right hon. Friend that, in response to popular request, the House will sit into the second or third week of August?
Mr. Bowden: Quite seriously, I would like to be able to offer the House, particularly those hon. Members who have children and who want to get away for the Recess, some firm dates, but I cannot possibly do so at the moment.
Mr. Gower: Will the right hon. Gentleman reconsider the guillotine Motion? In view of the lack of proportion between a whole day considering the time to be devoted to the Bill and only three days

1733
to be spent on the Bill itself, cannot he give one or two extra days to this most important Measure?
Mr. Bowden: The answer to that is that if the House would decide to give us the Motion in a half day, or less, we would have an additional half day to discuss the Bill.
Mr. John Wells: Is it right to have the Closure put at 10 o'clock tonight if there are 73 Members on the back benches who wish to speak?
Mr. Bowden: It is usual and normal for the Second Reading debate on a Bill to end at 10 o'clock.

ECONOMIC SITUATION
The Prime Minister (Mr. Harold Wilson): With permission, Mr. Speaker, I wish to make a statement.
The House will be aware that sterling has recently been under some pressure as a result of several abnormal factors predominant in which has been the seamen's strike. It was known that the seamen's strike would be costly to the country for as long as it lasted and the publication of the reserve figures for June, during the whole of which period the strike was in force, has had an unsettling effect abroad and wrong deductions have been drawn about Britain's long-term economic position from the price we had to pay in the short term.
The House will, however, be aware that this short-run price was something which we deliberately accepted from the outset, not least because of our determination to make the prices and incomes policy effective. The effects on sterling and on our long-run economic position had we taken any other course would undoubtedly have been serious and lasting.
At the same time, other short-run factors including a rise in import prices, particularly copper, have aggravated the temporary speculative strain on sterling.
I have repeatedly made it clear that the Government will not hesitate to take whatever measures we regard as necessary to ensure the balance of the economy, to strengthen our balance of payments and to maintain the strength of sterling.
1734
The House will be aware that Bank Rate has today been raised to 7 per cent. There were, of course, special and compelling reasons for this quite apart from the factors I have mentioned, reasons deriving from the fact that, owing to the growing shortage of liquidity, interest rates and central bank rates are rising all over the world particularly in Europe.
In addition, the Bank of England has this morning announced a further call from the clearing banks for special deposits, which will reduce bank liquidity by a further figure of nearly £100 million. This is, of course, in addition to the announcement by my right hon. Friend the Chancellor of the Exchequer two days ago about the limit of credit.
These short-run factors I have mentioned have, of course, been given their place in the Government's review of the state of the economy, particularly the prospects for the balance of payments. We have reviewed the internal situation including the deployment of resources and the state of pressure in the economy, the recent increase in imports, the movement of incomes and prices, the trend of demand, and also the rate of growth of overseas expenditure.
As the House knows, the effect of the tax measures, including the Finance Bill, together with the tight grip still maintained and now intensified on monetary policy, will have substantial disinflation.. ary effects later in the year. We believe, however, that further measures will be necessary both as regards the internal situation and overseas Government expenditure, and that these measures should be related to the broad economic strategy we have been following particularly with regard to the balance of payments.
This review is now proceeding and I intend to make a further statement in the House in the near future about the measures we shall propose which will have the effect of providing the restraint that is necessary in internal demand, public and private, particularly the redeployment of resources according to national priorities, and also the steps needed to make a substantial reduction in overseas Government expenditure which is running at a rate excessive in relation to our resources and is a major impediment to the restoration of balance in our overseas payments.

1735
I cannot anticipate the statement I intend to make, but it will be made in good time before the House adjourns for the Summer Recess. I can assure the House that when it is made it will be regarded as real further proof of our resolve and determination to balance our payments and to strengthen the pound at home and abroad. The statement I shall make will provide measures necessary for dealing with the longer-term problems we face since it is important not to allow the short-run factors such as the seamen's strike and its effect on monetary movement and on the trade balance to distort our position in its true perspective.
In the first five months of this year, which included the early days of the seamen's strike, British exports were running at a rate 9 per cent. higher than in the same months of last year and all the indications were and are that our exports would continue to rise at a substantial rate. It is on our export drive, and our determination to reinforce our export drive, that the achievement of our long-run economic and social aims and the maintenance of full employment and, equally, the strength of sterling and Britain, depend.
Mr. Heath: Is the Prime Minister aware that this announcement of further serious economic measures is in direct conflict with the guidance which was clearly given to the Press by the Government and the Treasury on Monday—that no further measures were required? Is he aware that it is wrong and foolish and will produce no response in the people of the country to blame the present position on the seamen's strike, or on the price of copper, or other short-term influences of that kind, because the present situation is due fundamentally to a complete lack of confidence at home and abroad in the Government's economic policies?
Is the Prime Minister aware that when he states that further measures are required that is obviously proved today, because the 7 per cent. Bank Rate had already been discounted, as is clearly to be seen from what has happened to sterling since the announcement of the Bank Rate change at midday, which makes the position more serious?
1736
Is the Prime Minister aware that the fact that he cannot announce these further measures today is further condemnation of the unpreparedness and incompetence of the Government? Is the Prime Minister aware that this situation will be remedied only when the Government tackle the fundamental problems of the country, which they have so far failed to do and which the Prime Minister gives no clear intention of tackling, and that the whole of the rest of the world recognises that? Is it not the plain fact that the Prime Minister fought the last election on a bogus prospectus and that now everybody knows it?
The Prime Minister: The right hon. Gentleman is quite wrong to say that it was not the seamen's strike and other short-run factors which caused these recent difficulties. As he will know, the economic situation was recovering rapidly up to the seamen's strike, sterling was strong and the reserves were improving immediately before the seamen's strike in May—[HON. MEMBERS:"Oh."] The reserves were improving in May before the seamen's strike. The position was getting stronger.
All of us knew that the seamen's strike —the right hon. Gentleman himself was very tough in saying that we must not go beyond the Pearson award—would involve a heavy cost. It was when the cost in terms of the gold and dollar reserves, gold and the convertible currency reserves, for the month of June, were published, that this trouble in sterling developed. This is very much related to and caused by the short-run effects of the seamen's strike.
Of course, it would be possible, in the face of this sterling position, to do as right hon. Gentlemen opposite did and come rushing to the House with panic measures irrelevant to the longterm needs which are being dealt with in this review. Of course, we could have put the brakes on and stopped the full employment policy. Of course we could, as they did, time after time, hold back for three years any further economic advance and attack the social services and the development areas.
Mr. Sheldon: While none of us can be very happy about the need to introduce further measures of the kind that my

1737
right hon. Friend has mentioned, would he say, first, whether the overseas expenditure that is to be reduced will be military or non-military, or both, and secondly, will he say what actions will be taken to make sure that the deflationary measures he takes do not have the effect on investment that so many have been forecasting?
The Prime Minister: I would ask my hon. Friend to await the statement which I hope to make very soon.
On the first point of my hon. Friend's question, I have just said that I think it right to take our time in getting measures related to a longer-term strategy rather than to bring in panic measures which, in the past, have always led to a grinding-down of investment.
Mr. Richard Wainwright: Will the Prime Minister say whether the measures he has in mind are calculated to take effect well before the intended effect of the Selective Employment Tax begins?
The Prime Minister: Yes. As I explained in my statement, that will take effect from the autumn onwards. We believe that it is necessary to make some impact even earlier than that, although many of the things we shall be proposing will take time to operate, particularly so far as exports are concerned.
Mr. Michael Foot: Will the Prime Minister assure the House that this review will involve fresh decisions about the defence burden that the country carries, both in Germany and east of Suez, a burden which is quite out of proportion to those borne by most other countries in Western Europe and one which is quite out of proportion to the other burdens that the nation has to carry?
The Prime Minister: I would ask my hon. Friend to await the statement. As he knows, and this was said in the Defence Review and emphasised repeatedly since, the commitments and roles that we have cannot go on imposing the very heavy burden on our resources which is the position at present. My right hon. Friend the Chancellor supplemented what had been said in the Defence Review on that question in his Budget speech in May.
Mr. Tapsell: Does not the Prime Minister realise that his refusal today
1738
to accept the fundamental nature of the problem facing our economy and his failure to spell out in detail what his Government intend to do to grapple with it will aggravate the problem?
The Prime Minister: The hon. Gentleman has his own opinions upon what is the fundamental problem. Perhaps he will tell us at some future date. We shall be very glad to hear from him.
It is right that I should at this stage inform the House that we intend to take further measures, which we consider to be necessary. It is also right that they should not come out, as so often happened in past years, over-hurriedly and without proper consideration of their real effects on the economy as a whole.
Mr. Tinn: In addition to the factors elucidated by the Prime Minister as underlying the weakness of the £, would he agree that the £ is particularly exposed by reason of its position as an international trading currency? In looking at a long-term solution will the Government be giving attention to this factor?
The Prime Minister: Of course, the fact that sterling is one of the great reserve currencies means that it is always exposed to winds which have nothing whatever to do with the internal situation, and which are quite apart from our trading position. This has happened time and time again under successive Governments. It is a fact that during the past few weeks the economic situation has been made very much tougher for everyone in Europe by the shortage of liquidity—which has now become very serious indeed and about which the whole House has expressed views in the past—by the shortage of Euro-dollars and by the rapid rise in interest rates in different parts of Europe. There cannot be any solution sought in any change in the position of sterling on the lines suggested by my hon. Friend.
Mr. Barber: Why will not the Prime Minister"come clean"at last and tell the House that the basic trouble is that he is stuck with an incompetent Chancellor of the Exchequer who, in turn, is saddled with a double-talking Prime Minister?
Several Hon. Members rose—
Mr. Speaker: Order. I must protect the business of the House.
The Clerk will now proceed to read the Orders of the Day.

BANK RATE
Mr. Bruce-Gardyne: On a point of Order, Mr. Speaker. I gave you notice earlier today that I wished to seek leave to move the Adjournment of the House under Standing Order No. 9. Is not the normal procedure that this is taken before the reading of the Orders of the Day?
Mr. Speaker: The hon. Gentleman may do so now.
Mr. Bruce-Gardyne: I beg to ask leave to move the Adjournment of the House to discuss a definite matter of urgent public importance, namely,
"the raising of Bank Rate to 7 per cent and the special deposits of the clearing banks."
I submit that this is indubitably a definite matter of public importance in that both the measures referred to were announced this morning will have major repercussions throughout the economy. I have taken the first opportunity open to me to raise this and I further submit that the urgency of this matter cannot be gainsaid. The effect of a 7 per cent. Bank Rate on the Government's housing problem, already sadly in arrears can only be disastrous—[Interruption.]
Mr. Speaker: Order. Noise makes for time wasting.
Mr. Bruce-Gardyne: —as the Building Societies Association has already given warning.
The gravity of the effect of a 7 per cent. Bank Rate, coupled with the doubling of the special deposits on industrial investment, upon company liquidity, can scarcely be exaggerated, particularly at a time when the Chancellor has already announced that the banks will not be allowed to exceed the existing limits on bank lending to finance the forced loan which will be exacted from them under the terms of the Finance Bill this autumn.
The announcement by the Leader of the House this afternoon of the imposition of the guillotine on the Committee stage of the Selective Employments Payments
1740
Bill will make it impossible for Members to discuss the effects of this latest vicious credit squeeze upon private industry at all.
Most urgent, I submit, is the implication of these measures as a symptom of the plight of the national economy and the balance of payments, and the extent to which the Bank of England has been forced to draw upon its international borrowing arrangements—
Mr. Speaker: Order. The hon. Gentleman cannot discuss the merits and argue the case that he is seeking to raise under Standing Order No. 9.
Mr. Bruce-Gardyne: I accept that, Sir. I was seeking to show that it was urgent because these borrowings by the Bank of England, during the last few days, have indicated the extreme severity and urgency of the economic crisis which the nation is facing.
I suggest that the measures announced today indicate that the point of national insolvency may not be very far off; and I cannot imagine a matter of greater urgency than that. Yet the Government propose as measures to deal with this situation only such irrelevancies as the Bill that we shall be discussing this afternoon and the nationalisation of steel.
For all these reasons, I hope that you will see fit to grant me permission to move the Adjournment of the House tinder Standing Order No. 9.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a definite matter of urgent public importance, namely,
"the raising of the bank rate to 7 per cent. and the doubling of special deposits of the clearing hanks."
I am grateful to the hon. Gentleman for being so courteous to inform me this morning that he proposed to seek to raise this matter and for outlining the case which he proposed to put.
The House will be aware of Questions and Answers given yesterday—HANSARD, 13th July, c. 1454—on the subject of Standing Order No. 9. I think that the House also recognises that the powers given to the Chair are circumscribed by

1741
the practice of the House and by Rulings given by my predecessors.
The present application falls within the same category as an application made on 1st December, 1931, which drew attention to
"the very heavy fall in the last 24 hours in the value of the pound ".—[OFFICIAL REPORT, 1St December. 1931; Vol. 260, c. 945.]
and the Government responsibility for the situation.
The present application also has a precedent on 28th February, 1935, when the financial situation and the falling value of the £ were claimed to be an urgent issue. Neither application succeeded because the Speaker of the day held that neither fell within the terms of the Standing Order. In the second instance, the Speaker said:
"… I do not dispute that it is urgent, but it is not one of those subjects that come under Standing Order No. 80. It might just as well be dealt with tomorrow as today."—[OFFICIAL REPORT, 28th February, 1935; Vol. 298, c. 1309.]
I cannot depart from these precedents. Therefore, I cannot put the hon. Member's application to the House.

ORDERS OF THE DAY

  PRICES AND INCOMES BILL
  Order for Second Reading read.
  Mr. Speaker: May I remind the House that 70 hon. and right hon. Members seek to catch my eye, among them apart from the Front Bench speakers, four Privy Councillors and three maiden speakers. I hope that all hon. and right hon. Gentlemen will co-operate in making their speeches as brief as possible so that I can call more speakers.
  4.20 p.m.
  The First Secretary of State and the Secretary of State for Economic Affairs (Mr. George Brown)rose—
  Mr. T. L. Iremonger: On a point of order. May I ask. Mr. Speaker, whether I am right in concluding that you are not calling the reasoned Amendment in my name
  That this House declines to give a Second Reading to a Bill which on examination proves to he mere window dressing to deceive international bankers into the belief that the Government is seriously attempting to tackle the real weakness of an economy in which inflation is sustained by low productivity due to wasteful use of labour in manufacturing industry, as encouraged by bad trade union leadership, and a Bill moreover which represents the first step down the slippery path of total socialistic control of processes which are best left to the moderate operation of the immutable laws of supply and demand.
  Mr. Speaker: I am sorry; I forgot to announce to the House that I have not selected the hon. Gentleman's Amendment. I have selected the Amendment in the name of the Leader of the Opposition.
  Mr. Geoffrey Hirst: Further to that point of order. I am, naturally, disappointed that you, Mr. Speaker, were not able to accept the Amendment in my name,
  That the Bill be read a Second time upon this day six months.
  I do not question your judgment, naturally, but I should like to seek your guidance. A number of hon. Members would have liked to have had the opportunity of expressing, either by voting or abstaining, their views on the Bill. I should like to ask you whether, in spite of the difficulties as far as I have been

  1743
  able to understand them, you see any way under our procedure whereby a vote is possible on the straight issue of the Bill.
  Mr. Speaker: The hon. Gentleman is old enough and experienced enough to know what will happen. I shall propose the Motion for the Second Reading of the Bill. After that the Opposition's Amendment will be moved, which seeks to take out some words and to put in others. I shall put the Question,"That the words proposed to be left out stand part of the Question." If it is accepted, the Second Reading is carried automatically. If hon. Members are not in favour of the Government Motion,"That the Bill be now read a Second time," or the Opposition's reasoned Amendment, they must abstain from voting on either.
  Mr. George Brown: I beg to move, That the Bill be now read a Second time.
  I am sure that most of us hope that we can now get to the subject of the Motion.
  I begin by saying how very glad I am that the right hon. Member for Barnet
  Mr. Edward Heath rose—
  Mr. Brown: One does not have to pretend to manners which one does not have.
  I was saying how very pleased I am that the right hon. Member for Barnet (Mr. Maudling) has been able to rearrange his personal affairs so that he can take the lead for his side in this debate. He will do as good a party job—this may be an understatement—as anybody on the Opposition Front Bench. However, unlike some members of that Bench, he knows the score. He knows the pitfalls, the difficulties and the crucial importance of the subject. He tried very hard to reach a point which certain of his right hon. Friends, including some of those who have signed the Motion, never wanted him to reach.
  I propose, if it is for the convenience of the House, first to give as I see it the background to and the philosophy which surrounds this problem, and deal as briefly as I can with some of the difficulties and criticisms with which we are faced. Then I will turn to consider the Bill.
  1744
  I ask the House to start its examination of this important Bill by recognising the essential problem which lies behind it. I am not sure that all Members of the House share this appreciation. The problem for any nation, whether democratic or totalitarian, whether a mixed economy, a capitalist economy or a wholly socialised economy, is how to combine full economic activity—meaning keeping at work all one's people who are able and willing to work and using all one's resources—with price stability and the avoidance of inflation.
  This is not a new problem. Every Government, including Governments whose members start this debate by jeering, has lived with this problem. Every Government has tried to find the answer to it. Right hon. Members opposite know the problem as well as we know it. It is not exclusive to us. In recent weeks I have seen not only responsible visitors—Ministers and others —from the United States who come here to discuss a problem which is a very great headache for them and which is about the same order, but a succession of Ministers of Economic Affairs and Ministers of Planning from Communist countries. I was encouraged to note that each Minister of Economic Affairs in a Communist country takes care also to be a deputy Prime Minister and a member of the presidium of his party. It seems to be a required protection for this occupational hazard.
  Each of these men come with the same problem. Each of them is moving from his existing economic organisational forms. Each of them is anxious to see how we tackle the same problem in a mixed economy with a social democratic Government. This is neither a new nor an exclusive problem. There are no easy answers to it. Some say,"Put less of your attention on incomes and prices and more on planning." But this is no answer. Getting the answer to the problem that I have just outlined is part of economic planning. One cannot economically plan unless one finds an answer to that problem. Those who say that are seeking an alibi—whether consciously or unconsciously is beside the point.
  There are others who say,"Concentrate more on getting productivity." That is no substitute. It is part of the

  1745
  same problem. Of course one needs more productivity. The whole point of economic planning presumes that one will get more productivity where one can, but that is no substitute for saying that the total of incomes must equate the total rise in productivity as a whole.
  Others say,"Let us have more competitiveness." That is no answer, that is no substitute; it is another part of the same problem. How does one become more competitive unless one solves the incomes and prices policy and relates incomes and prices to the rise in productivity? That also is merely trying to duck out from under the problem to which one does not have an answer.
  Some say,"Use more compulsion ", meaning have a"freeze ". Others say to me,"You are wrong because you are not using enough compulsion ". At any given moment—and I know that the right hon. Gentleman the Member for Barnet went through this once before —it must be a matter of judgment for any Minister as to how much compulsion one uses and how much one relies upon voluntary agreement.
  Like every other fallible man, I have all the prides and prejudices, and I like to think that I have got it about right, but I say to the House that the fact that I am being attacked today from the Opposition benches and by some of my own hon. Friends for going too far shows, in my mind, how far the House can be out of touch with the mood of the country.
  Were I being attacked today because the Government were not going far enough, I should feel vulnerable. I think that there is a case here. A lot of people would prefer, and are ready for, this to be taken further, for it to be imposed and made effective. I happen to have reasons why I do not want to do that, why I think that it is dangerous to do it. But that is what people are arguing about, not about the powers, such as they are, in the Bill for which I am under attack today.
  There is something in most of these criticisms. There is little in one of them, as I say, but there is something in most of the others. But to me the questions that are most important are how one makes a reality of the plan, how one raises productivity, how one gets more competi-
  1746
  tive, and the relation of that to the whole question of achieving price stability and getting the totality of our incomes into relation with what we are doing.
  Mr. Hirst rose—
  Mr. Brown: I have waited a long time. I shall try to be brief and I will make myself available if the House wishes me to answer questions later.
  However one answers any of those questions, whatever one's position on any of them, the major long-term problem remains, and neither by the Opposition Amendment nor by the Amendment tabled by some of my right hon. and hon. Friends, can one escape the major longterm problem to which we must try to find an answer.
  The Government start from one major preoccupation which I know that right hon. and hon. Gentlemen opposite do not share, and that is to get the highest possible degree of economic activity. [An HON. MEMBER:"Nonsense."] It may be nonsense in the view of the hon. Gentleman, but that is our view. I do not accept, and neither do my colleagues, that wasting resources or not using men is an answer to the problem. One can put factories out of use and put men off anybody's payroll, as the party opposite did every time that it had to face the problem, and one can then say that one has answered it, because one then deals only with the factories and the men who are actually at work.
  That happened because the party opposite preferred a bookkeeping answer to a real answer to a real problem. The problem remained just the same. That is why we, with the aid of all sides of industry and other sectors of the community, brought out the National Plan last year. That is why we set out to provide the way ahead for full activity over the years to 1970. That is why all our industrial policies have been pursued as they have —policies to modernise industry; to reorganise it; to bring it more into the mainstream of things; to get it concentrating more on the things that need to be done rather than on what it was doing; and policies to encourage the development of management in industry.
  That is why we have been doing those things, and when people say that we have not, or that they have not noticed it, I am most surprised. That is why those

  1747
  things are going on, and that is why we have all our regional policies. That is why no hon. Member from Scotland, the North-East or Wales can sit in the House today without knowing that the situation is totally different in his own region from what it was before we started.
  That is why there have been the tax changes to provide that concentration went on the things that needed to be done to keep the fullest economic activity going. That is why there was the changeover from tax allowances, for example, on investments that were not all that effective, to direct grants, which are much more certain, much more real, and much more quickly directed to what we want done. That is why all the work is going on in the"Little Neddies." [Interruption.] I always know when what I tell hon. Members is not agreeable because they then always want to move on to something else.
  That is why this work is going on, and that is why, when the hon. Member for Shipley (Mr. Hirst) has had his little political game in the House, in which people outside are so little interested, this work directed to really getting the answer to the problem is so important. That is why we have had all the scientific and technological work that has been going on through and with the Minister of Technology over the past 18 months, all directed to providing the very thing that we are asked to provide, to get higher productivity to get the answer to the problem.
  It is nonsense to say that it is not being done. It is being done. But, for all that, when one has done and is doing everything one can in that direction, a prices and incomes policy is still required, for one reason possibly more than any other. All that work, no matter how well done, no matter who does it, and no matter who claims the credit for it, is essentially long-term. All that pays its dividends and gives what one is seeking in the longer term, but one has somehow to hold the position while it is working out, and a prices and incomes policy is inescapable for that purpose as well as for others.
  People may say that they would not do this or that, that they would do it in a different way, and they may, perhaps, be right, but what is not open to anyone is to try to pretend that something like it
  1748
  need not be done and that whatever one does—the right hon. Member for Barnet knows this—involves almost all, if not all, the very same questions, problems and difficulties.
  Before turning to the Bill, I repeat the three constituents of the policy which it is intended to carry forward and reinforce, The first is productivity, to get an increasing rate of output per man, per machine and per hour. The second is to get price stability. The third is to relate all incomes in total to the productivity Growth.
  I tell the House frankly that, in my view, it is not enough to say that those whose productivity can be shown to have risen more, perhaps due to their efforts, perhaps due to their luck in working. in a capital intensive industry, perhaps due to a number of things, should be able to get more. It is true, of course, that they should, but there is a third party to any productivity bargain, and that third party is the people we speak for in the House: the nation, the consumer, the taxpayer. There must be room for them in any productivity bargain. Second, it is not enough to say that because one has at the same time to take care of all those, and there are very many, who cannot show that their productivity is rising in that way. If those who can are to get more, then one has to provide new bonuses or other payments and increases for those who cannot show it, and all the leapfrogging, the comparability process, which we have all been engaged in in our time simply kills the whole attempt to get stability and a prices and incomes policy.
  Nor is it enough simply to hold prices down for a long time. I have always taken the view, as the House knows, that the key to this problem almost certainly was in prices, both because prices are the key to profit margins which are being too easily earned and because prices, obviously, are the key to what people want in their pockets. But over a long period we did hold prices down. We held them down well below the level at which they had been running before we came in and before this policy got started. The trade union movement will forgive me for reminding it that, again and again during that period, I said that, unless we secured a breakthrough on the incomes side while we held prices down, the situation would

  1749
  become doubly difficult a bit later on. One of the arguments for the Bill, for this carrying on of the policy, I regret to say, is that holding prices down by itself did not ease the pressure sufficiently and, as has been said, in some degree distorted the pattern the wrong way. Therefore, although that is tremendously important and we must still hold prices down, and although we still believe that the key to the policy is that way round, I am bound to advise the House and, in particular, my hon. Friends that by itself, like so many of the others, it is not the answer to the problem.
  What we all agreed, in the House and in industry, in December 1964, was related to the Plan. People in the House and outside sometimes ask me about the norm, and the norm is obviously relevant to our discussions today. But the one thing a at management, unions and Government did not need to spend time discussing or arguing about was the norm. The no-m fixed itself. It does so at any moment of time. Once we have decided at what rate we think, with all the advice we have, productivity will rise, then we have fixed the rate at which incomes can rise. It is no use saying,"Should not the 3 per cent. be something different?" It must be related to the rise in productivity. That is how the norm came to be fixed. That is why we have been doing what we have over this past period, and that is why we had to struggle to get it within that kind of figure.
  But there is another feature of our prices and incomes policy which, if the right hon. Gentleman will forgive me, was not given the same prominence in his attempt. Not only has one to be relevant over all, but one has also to make an attempt to be just in particular cases. This is an exceedingly difficult double job because one starts off with a society which is itself based on unfair criteria. One is trying somehow to adjust the changes which people think they are entitled to have in an unfair society, and one is trying to adjust them by a different set of standards. When people say to me,"You have not managed all that well, have you, to get it socially just and socially fair over the first nine months or year ", my answer is that it is remarkable that we have done any degree of social justice, given the basis of
  1750
  the society in which we start the whole policy. But we have to do it.
  Mr. Nicholas Ridley: The evidence seems to be that the low wage earner on about £9 a week has received much smaller increases than those above that level. How can the right hon. Gentleman call that social justice?
  Mr. Brown: So far, I have not called it that. I am trying to explain to the hon. Gentleman, whose gallant efforts on behalf of the £9-a-week man we have noted so much in the past—he obviously does not understand, though his right hon. Friend does—the difficulty of trying to bring this about. I am explaining to the House, and to my hon. Friends, that this is why we did not, as the right hon. Gentleman did, provide merely for a policy which, if accepted by both sides of industry—I recognise that in his case it was not—would have a chance to run, but we have tried also to make provision so that the lower paid, the unjustly treated, and those whose productivity could genuinely he shown to be greater, could be treated as special cases. Hence the criteria in paragraph 15 of the White Paper. Hence the way in which we have tried to ensure that the Board, the machinery we used, could look at cases under that head.
  It is said that some highly paid groups have got through. None has got through without having to face the same examination, the same judgment, that we are asking everyone else to be willing to face. If I am told that I ought now to have a new and different element in this White Paper and there ought to be a point, judged on salary or wages, over which there is a special hurdle to be surmounted which others do not have to face, I accept that as a valid piece of criticism. It is a constructive proposal. Industry and the Government can discuss whether one should be introduced, but so far no one has proposed that. The moment that we do, through this policy, a major change will be made in the basis on which our society works. It will mean saying to every member of my union who either works increasingly hard enough or more productively enough or is lucky enough to get over the figure which is picked, that he will either have to have it taken away from him or be

  1751
  taxed specially on it. In the same way it will mean telling every child of a trade unionist who becomes a teacher, a doctor, a lawyer or a scientist,"If this takes you into a higher salary group, you understand that there will be a special hurdle for you to get over."
  It may be right to do that in the interests of social justice, but we have a long way to go before it is accepted, even in our society, let alone in the country as a whole. However, it is a valid criticism. It is not a case for rejecting the policy, but a case for amending it and improving it.
  The other criticism which I hear is,"Have you succeeded?" The Opposition always put it as an assertion, saying that we have not. One of the difficulties is to quantify successes. I have before me a whole dossier of price cases, wages cases and salary cases where decisions have been made in accordance with policy and have been delayed in accordance with the policy. But there are a whole lot more where one does not know what would have happened had the policy not been in operation. It is a question to which there is not an answer. It is rather like the question, have you stopped beating your wife yet? There is no way in which an answer can be given to the question.
  All I can say is that there is, for those who will look at it, a very large and impressive list of cases where this has happened. The C.B.I. has it, the Central Office has it, and we have it. Two of our major jam-making companies who had given notice voluntarily under the early warning system that they were going to put up the prices of their jams and marmalades have been in discussion with the Government, and only today they have announced that, after discussions under the policy, they are not going to make the price increases and will hold prices stable for an indefinite period. That is always happening. Therefore, though I cannot quantify the successes—there is no way of answering that question—I assert that we have had a good deal more success than hon. Members opposite are willing to give credit for.
  It must also be remmebered that, for any trade union leader, the trade union world for good and historical reasons is
  1752
  a difficult one. It is a difficult role. I would not do any good at all to the policy or to them if, every time it happens, I were to emblazon abroad the fact that the leaders of a particular union, a particular sector or a particular industry, have decided to do this or that because of the policy. I might be pleased, and it might be statesmanlike of them, but it would also be used as a considerable handle against them in certain circumstances. Therefore, one's inability to quantify this is not the same as one's inability to know that it is happening.
  The T.U.C. is now exercising central examining, doing it voluntarily by acquiescence. How much would right hon. Gentlemen opposite have given to have had that in their day? How much easier it would have made their problems? How much did their attempts break down because they did not exist then?
  Mr. Peter Hordern: Is not the First Secretary making rather heavy weather of this? Is it not simply the fact that earnings rose by 9·6 per cent. last year, which is the largest increase for something like ten years? Is not that how it should be judged?
  Mr. Brown: If it were as simple as that, the failure would be as crashing as it always was when the party opposite was in office. The hon. Gentleman must do more than add up sums and try to think how it is done. That is why we are getting further down the road than the right hon. and hon. Gentlemen opposite got. [Interruption.] If right hon. and hon. Gentlemen opposite do not want to hear the case and if their best contribution to a problem which both sides of industry and most of the country outside know to be at the heart of our economic difficulties, is to say,"Well, stop there ", I am content. In that case, why put this Motion on the Order Paper? Why go through the motions of pretending to care if, as far as they are concerned, it does not matter at all? Every time that we come to discuss this in the House, that is exactly what right hon. and hon. Gentlemen opposite do. They find it a boring argument. They lose interest in it because they know that they could solve it ever so quickly were they in office. They would have 2 million people out of work inside three months.

  1753
  All that they would solve, as I said at the beginning of my speech, is the business of preventing people from having any bargaining power and from being able to buy goods in the shops. They would not solve the problem of how to keep our men, factories and machines at work, achieve stability, and prevent inflation. That is the problem to which we are addressing ourselves—[Interruption.] If the hon. Member for Manchester, Withington (Sir R. Cary) cannot cantain himself, he does not have to stay. But so long as he is here, I invite him to listen to the argument, disagree with it if he feels that he must, but take it into account.
  Mr. Stephen Hastings: On a point of order, Mr. Deputy Speaker. Mr. Speaker asked right hon. and hon. Members to keep their speeches concise, in view of the fact that there are 70-odd right hon. and hon. Members who wish to catch your eye. The First Secretary has been on his feet for more than half an hour. Do you think that you could persuade him now to come to his Bill?
  Mr. Deputy Speaker (Sir Eric Fletcher): This is not a point of order, and the debate is not expedited by bogus points of order.
  Mr. Brown: Having set out the background, as I see it, for those hon. Members who feel that it is important to have it in mind in order to discuss the Bill itself, I should like now to turn to the detailed provisions of the Bill.
  It is concerned with the policy, and it is the policy which is the more important of the two things. The Bill is in three parts. Part I is permanent and becomes operative when the Bill receives the Royal Assent. That puts the Board on to a permanent basis instead of being, as it currently is, a Royal Commission. It also gives it statutory powers, which clearly it needs, to call witnesses whether or not they wish to come and require them to give evidence. That is an essential power if we are to put the Board on a permanent basis and if it is to do its job.
  One thing I will give to right hon. and hon. Gentlemen opposite. At least they recognise that this is important, so that they cannot be opposing this part
  1754
  of the Bill, and I do not get the impression that anyone else is, either.
  Clause 2 gives the Government of the day power to refer price and income questions of all kinds to the Board. This means all kinds. It means salaries, wages, dividends, directors' fees, professional and other fees, rents, small businessmen's profits, all kinds of income from self-employment, as well as prices for goods and charges for services. There is no exception to the kind of income, the kind of charge, the kind of price, that may be referred.
  Clause 3 is a new provision. It was not in the Bill which we published in the last Parliament. It gives the Government power to make a standing reference to the Board, that is to say, to ask it to take a particular question and keep it under review, rather than just make ad hoc cases. I regard this as an important new step. It means that we can ask the Board to keep under review the general level of dividends, the general level of professional fees, or the pay of people who are remunerated from the Exchequer who have no other machinery for determining their pay.
  In view of that development, the Government would not consider it appropriate to set up any new independent bodies in the future for the sole purpose of advising on the pay of a particular group of public servants, or other people who are remunerated out of the Exchequer. This would apply both to special reviews of public servants' pay of the kind previously undertaken by Royal Commissions and departmental committees, and to continuing reviews of groups which have no other machinery for determining their pay of the kind now undertaken by the Standing Advisory Committee on the Higher Civil Service and by the Review Body on Doctors' and Dentists' Remuneration. These bodies will continue, but the Government will discuss with them and with the representatives of the Higher Civil Service arrangements for ensuring that in conducting their reviews both bodies have full regard to the incomes and prices policy.
  Part II differs from Part I in that it does not become operative on the receipt of the Royal Assent, nor does it stay operative even when it is first

  1755
  activated. It will come into operation only if a special Order is made, subject to affirmative Resolutions by both Houses, and after consultation—which I have specifically provided for in the Bill—with the T.U.C. and the C.B.I., and it will stay in operation only so long as that Order is repeated at 12 monthly intervals.
  This part of the Bill provides powers —and I know that this bothers a number of people—for the legal enforcement of ' early warning"arrangements on either a broad or a selective basis. The basis will be specified in the Order. It is not specified in the Bill. The Bill merely provides the power for this to be done. It provides for statutory notification, after this part of the Bill is made operative, after the subsidiary Order has been made applying it to a particular sector of proposed price increases, of awards, or settlements, 30 days before it is intended to put them into effect.
  I repeat that this does not apply to all industry. It will apply only to those sectors, those industries, those areas, which are specified in the subsidiary Order. In that area, 30 days' notice of an intention to implement a price increase, or a pay award, or a pay settlement, will be required. The reason for this—and I think that in the light of what I said earlier this stands out as the least we can do if we are trying to make the policy effective—is to give the Government an opportunity to consider the proposal against the national interest, and to discuss it informally with the parties concerned. The Government will then have the power, if they wish to exercise it, to refer it to the Board for examination, so it is not the Government acting as judge.
  If it is referred to the Board, on which at the moment there sit at least five people whose past has been associated with our movement, and with the experience that we understand very closely—[AN HON. MEMBER:"Which movement?"] The movement to which I belong, the trade union and labour movement. Hon. Gentlemen opposite know that if this policy is to be carried out it is important that our people, people whose experience I shared through so much of my life, should feel that a Board which is looking at this sort of question contains sufficient people who know our
  1756
  experience, who have shared it, to ensure that they will get a fair judgment when they go there. This is a very important issue, and it differs in this way from some previous bodies.
  If it is referred, the Bill enables us to require that there shall be a standstill on the proposal for a maximum of three months. In some other countries they call it a cooling-off period. In all countries they have to have something of this kind. It is a period during which there is no implementation while the thing is being considered, argued, and judged, and it prevents the policy being undermined by those who will not co-operate voluntarily.
  I should like to make it crystal clear that once that period of three months is over, or earlier if the Board has reported, the parties concerned will, under the provisions of the Bill, be left free to act on their own judgment. We obviously expect —as has happened in so many cases—that they will be influenced by the Board's findings, by the arguments put forward by the Board's representatives, but there is nothing in the Bill which places a ban on them then going on to do whatever they think they ought to do.
  We also require notification of claims and of other applications for improvements. Claims, however, are different from proposed settlements. Once a claim is notified, as it might have to be, there is no ban, no stop. The negotiations on the claim could proceed. The standstill would apply only if it were notified as a proposed settlement, and at that stage the Government thought that it ought to be looked at by some agency other than the two parties themselves. Thus, it does not impede, much less penalise, normal trade union activities during that period.
  I was reminded the other night that my active trade union experience is not all that recent. That is self-evident, but I know many people whose trade union experience is up to date, and I wonder how many of our people get their claims carried through in a maximum of four months from the day of making the claim to the day of settlement?
  Mr. Peter Tapsell rose—
  Mr. Brown: I shall listen to nearly the whole of the debate. I shall be available to answer questions at the end of it, or if I am not one of my hon. Frends will

  1757
  be and I think, therefore, that it would be better for me to finish this now.
  Part II also provides powers to require the notification of increases in dividends ad all other forms of company distribution. This, again, is a provision which did not appear in the February Bill. It will enable us to be sure that we get the information we need and that we can refer—on this side, too—in providing for the same standstill procedure to operate as in the other cases, because there is a considerable difference, as well as many practical difficulties, about doing this in the case of dividends. But our policy to refer and to know will enable us to operate the other policies which we have said we will operate. If dividends and/ or fees get out of line it is our intention to see that they, too, are brought into conformity with the policy, and by including them in this part of the Bill we ensure t1-.at we shall be able to do something about it in time.
  I know that there is one other matter that bothers many of my hon. Friends and, I suppose, other people—although there are not many other people; most of them are my friends, although some have different ways of showing it. That is quite true. The other point that worries some people is the question of penalities. When we decide to move over from a wholly voluntary system to one which has statutory enforcement, even though we leave the matter essentially to voluntary effort in the end—as we are doing here—it is necessary to provide for the case of somebody who insists that he will not abide by his obligations.
  Most of the obligations in the Bill fall upon employers. They must notify price increases, and they must defer price increases. They are responsible for notifying and observing temporary standstills in awards and settlements, and for notifying increases in company distributions. They will be liable to fines up to a maximum of £100 on summary conviction and £500 on indictment if they fail to observe a price or a pay standstill. Corporate bodies—this does not include trade unions —will be liable to unlimited fines.
  Both unions and employers are liable to notify claims, but we have provided that this responsibility can be discharged by either party, and if it is discharged by one party there is no obligation on the other. It can be discharged by any
  1758
  organisation acting on behalf of either party. The T.U.C. or an individual union can take over the liability so far as any of its constituents or any individual members are concerned. This protects the T.U.C.'s present arrangements for dealing with claims for affiliated unions. and ensures that they can be dovetailed into any statutory system if we ever bring one into effect.
  There is a penalty—and this is where the rub is—if any workers, or their representatives, in an area where the statutory obligation has been applied—and it is a highly selective process which will have to go over many Parliamentary hurdles before it is specifically applied—seek to induce an employer to break a temporary standstill on pay. We must provide for a penalty, but I repeat that it is not in respect of trade union activities; it is not for negotiating; it is not for agreeing, and it is not even, at the end of the day, for putting an award into force. The penalty applies only for seeking to induce somebody else to break a legal obligation which the law places upon him.
  I must remind the House that if we had not made this provision in this form trade unions would not have been protected from prosecution under the common law. Had they been prosecuted under the common law we would have been faced with the problem of unlimited damages and the question of criminal conspiracy. This provision—for which I am attacked on the ground that it is a new penalty on trade unions —ensures that trade unions retain their traditional protection in these cases.
  The Bill contains no provision for imprisonment except in the one case of improper disclosure of information. It is true that under the general law people who are convicted of an offence and do not pay their fines can be dealt with in one of a number of different ways, one being imprisonment, in order that they shall discharge their obligation. But that is a matter of general law and not this law.
  At the moment my right hon. Friend the Home Secretary is considering whether the general law requires to be amended so as to reduce the pressure on prisons, and in that connection he will consider the report of a Commission which has

  1759
  either just reported or is about to report on the subject. Any amendment that he makes in the general law will mean that anybody who offends under the general law will be dealt with in the terms of that amendment, and if he does not amend the law that question will not arise.
  Part III introduces another provision which was not in the earlier Bill. It provides that traders who agree together to implement a recommendation of the Board—for example, a recommendation to hold a price down, or to bring it down —shall not thereby run foul of the Restrictive Trade Practices Act, 1956, or have to register under that Act. This is something which can be provided only at the discretion of the President of the Board of Trade and the Secretary of State. It would be a ridiculous situation if, when people wanted to co-operate in the policy, the existing state of the law meant that they were in danger of having proceedings taken against them merely because they got together with us and decided to hold a price down.
  I think that I have answered the arguments that have been put up against the Bill. Those who are not in favour of the policy and those who think that we should have gone about it in some other way have a perfect right to reject the Bill. But to those who think that the policy ought to be made to work but that it should be operated voluntarily I say that they have no reason whatever to be afraid of the Bill.
  I could be open to attack for not going far enough; I cannot be open to attack for going too far. The Bill leaves the voluntary system wholly in operation. It leaves voluntary action at the end of the day wholly open. It strengthens the position of the Board—which most people accept—and it gives the nation an opportunity, if the voluntary system is not working, to ensure that it is made to work. In particular, it protects those who are working the voluntary system from being wrongly dealt with by a minority who might try to show them that it pays better not to co-operate.
  I do not repent of what I said when we became the Government and what I said at the beginning of my speech. If we are to answer the problems of this nation, which will be there whichever Government are in power, and are to do
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  it without wasting people and resources, an effective policy for productivity, prices and incomes is inescapable. It is not itself the only answer, but it is an inescapable part of the economic policies which provide the answer.
  I believe that the British people want jobs, and do not want to be stood down because we know no better way of managing the economy. I believe that the British people want more homes and more schools and want us to organise the use of our resources so that they can have them. They want a continual rise in the standard of living and a continued improvement in our social services. It is not part of my business in life to be in the mechanism which denies that on some other grounds.
  In my judgment, the policy and the Bill are essential if we are to do this. My own choice—others must answer for themselves—as a trade unionst, as a Socialist, as, I hope, someone who will be regarded as caring deeply for this country and its people, is that this policy has got to be made to work. I have moved the Second reading of the Bill because I believe that there is today in our nation a firm will to achieve our ambitions and to get out of our balance of payments difficulties, to get out of the economic problems which have bedevilled us for so long, and I believe that our people want to do it by their own efforts.
  I believe that this is part of the way in which we will enable them to do it. The opponents either of the policy or of the Bill have to do more than prove that it is difficult. They have to do more than just criticise what we are doing. They must try to be as equally constructive, precise and willing to face criticism as we have been in a field where, so far, nobody had had the answer.
  5.22 p.m.
  Mr. Reginald Maudling: I beg to move to leave out from"That"to the end of the Question and to add instead thereof:
  "this House, believing that price stability can only be achieved by a comprehensive economic policy which would include the sharpening of competition, the reform of trade union law and the removal of harmful restrictive practices, and accepting that a Productivity Prices and Incomes Board has a useful function in such a policy, declines to give a Second Reading to a Bill which makes no contribution to the solution of the serious problems facing the nation

  1761
  caused by the collapse of Her Majesty's Government's economic policy, and which introduces a measure of compulsion that will inevitably lead to State control of prices, wages, dividends, and to direction of labour."
  This debate takes place against the background of the Prime Minister's serious statement this afternoon. In moving the Amendment I shall have to deal not only with the contents of the Bill, but, as the right hon. Gentleman did, with the economic background. I will start with the Bill.
  As the First Secretary said, it is divided into two main parts, the first dealing with the statutory establishment of the Prices and Incomes Board. We accept, in our Amendment, that the Prices and Incomes Board has a useful function within a comprehensive economic policy. Therefore, we are clearly not opposed in principle to the statutory establishment of the Board, though we shall, of course, want to examine the provisions in detail. But when we come to the second part, we entirely reject that proposal. We are entirely opposed to this attitude and this method of tackling the problem. I will explain why.
  As the First Secretary made clear, there are three main things which this second half of the Bill does. First, it provides for a notification and"freezing"system for price and wage increases, a three-month period of standstill. Second, it provides for a compulsory warning of impending pay claims. Third, it imposes the statutory need to notify the Board of a decision to increase a dividend.
  The second and third of these are just eyewash. There is no other way of describing them. Pay claims are not put forward in secret, but with a great deal of publicity. As the right hon. Gentleman knows, the Ministry of Labour always has very good information of pay claims in force and pay claims impending, when they are important ones. I am sure that it is not the intention of the Government to spread their activities over every tiny, insignificant pay claim. As for dividends, the right hon. Gentleman knows that, in all quoted companies, the decision of a board of directors to make an increased dividend or to make any payment at all has to be notified to the Stock Exchange at once and published. Therefore, in both these cases, there will
  1762
  be no addition to the information already available to the Government.
  This means that the only effective provision in this part of the Bill is that providing for a compulsory period of"freeze"in prices and wages, if the Government wish to have them referred to the Board. It is meaningful, therefore, only if the information and the co-operation required for the Government's policy will not be available on a voluntary basis. The Bill, as the right hon. Gentleman said, can only delay the implementation either of price increases or of a wage settlement. We regard reference to the Prices and Incomes Board as useful in many cases. But the Government must demonstrate—and the right hon. Gentleman has not demonstrated—the purposes of the Board cannot be served in practice without this compulsion, without these legal penalties and fines.
  Who does he think would refuse to cooperate? Who can he say, if any, from his experience, are likely to refuse to cooperate? Why will not the new powers in Part I of the Bill not suffice for his purpose? After all,"volunteering"accompanied by a threat of compulsion is a familiar, but very odd, form of volunteering. What have the Government gained, therefore, for the risk which is taken in the Bill? It is a very big risk. The risk of introducing compulsion in these matters is very big indeed.
  I beg the right hon. Gentleman—who, as always, spoke with great sincerity—to recognise, also, that we on this side and, I think, other Members on his side of the House and many responsible and thoughtful people throughout the country, are extremely perturbed and alarmed at the prospect of the introduction of compulsion in this respect. We think that it is wrong in principle in peacetime. It may be required in a great national emergency. Then, of course, individual rights have to be over-ridden by the urgent demands of the State, but special provision has to be made. But to introduce a system of this kind as a normal, peacetime feature of our society is certainly wrong in practice and is bound to set us on a slippery slope.
  We feel this very strongly and I must say that some of the things which the right hon. Gentleman said this afternoon have only strengthened my fear. I want

  1763
  to examine with care what he actually said. It appeared to me on more than one occasion that he was hinting very strongly at further legislation, further compulsion. In what he said about the notification of dividends, for example, and in other things, he was clearly in danger of putting himself on this slippery slope down to more and more compulsion.
  It is bound to happen, for this reason. The right hon. Gentleman wants to do this, he says, on a voluntary basis, but once one departs from that, once this compulsory element is introduced, one will not get the same results on a voluntary basis. One is in danger of undermining or destroying the spirit of voluntary co-operation which we must try to foster in this field. If this happens, as I believe it will, it is bound to lead to further compulsion. If the voluntary co-operation fails, the Government will go further—not merely compulsory notificacation, but compulsory enforcement of the decisions of the Prices and Incomes Board.
  There will be compulsory settlements of wage claims and compulsory checks on the level of prices. This is bound to lead down the slope to a complete Socialist State in this country. It is a little whimsical that the opposition to this process comes from the most Socialist members of the party opposite.
  This is our serious objection in fundamental principle to the Bill—that no case has been made out for compulsion, that compulsion should never be introduced without overwhelming arguments, that in practice the introduction of compulsion will destroy the voluntary pinciple and will, therefore, lead the Government step by step, as they themselves appear to envisage, down the road to complete control of the economy, wages and prices alike.
  The other objection we have to the Bill is that it has been diverting the attention of the Government from the real curent economic problem as the Prime Minister recognised, almost for the first time, today—of getting the balance of supply and demand in the economy right. Unless the balance of supply and demand is right, no incomes policy can work. The pressures are bound to grow and
  1764
  the First Secretary will find this inevitable.
  As the right hon. Gentleman mentioned, I have always been a supporter of the concept of an incomes policy the conscious effort on the part of Government to influence the economy and to keep the rise in incomes and productivity in line. The purpose of this is mainly to ensure the most rapid rise possible in real wages. We in this party fundamentally believe in a high-wage, low-cost economy. As a part of achieving this, an incomes policy can be of great service, but it must be against the right background. It has not been against the right background under this Government, and that is why I say to the First Secretary that his incomes policy has collapsed. [HON. MEMBERS:" No."] I regret to say that, but it is true. I am sorry to say it, because I see the consequences of this failure on the whole country.
  To prove what I say, the right hon. Gentleman need only look at the figures for earnings in Britain. Consider the figures from the O.E.C.D. of increased labour costs per unit of manufacture. Between 1961–63 it went up by 1 per cent. a year. Last year it went up by 5·5 per cent. There could not be more significant proof of the complete collapse of his policy.
  This has been seen in the measures taken by the Chancellor in this period of Labour government—additional taxation amounting to hundreds of millions of pounds, a credit squeeze more prolonged and intense than this country has ever seen—all of this washed away by the tide of demand flowing through gaping holes in the right hon. Gentleman's policy. If one realises that total personal income, disposable income, is over £20,000 million a year, one realises that an additional 1 per cent. increase in incomes means more than £200 million of additional purchasing power. It is, therefore, difficult for the Chancellor, for all his taxation and credit restrictions, to block those gaps.
  We need to look at the British economic problem as a whole, short-term and long-term. The short-term problem has always been bedevilled by two factors. The first is the exposed position of sterling as a reserve currency,

  1765
  with greater responsibilities than assets—an historic fact since the war—and the second is the tendency for wages to rise faster than productivity in an expansion. The long-term problem is different. It is to increase efficiency and productivity by higher investment and to remove the barriers to efficient output in industry.
  What is the relation of an incomes policy in this context? Clearly, as I said, it is no substitute for efficient economic management. However, it has a part to play in ensuring that expansion can go ahead without inflation proceeding—to ensure that when wage levels, income levels, are settled, it is not done by the brute force of industrial bargaining power alone but with the maximum reference to what is fair and just and to what is needed in the interest of expansion and an efficient economy.
  It is sometimes overlooked that this problem of an incomes policy is basically a problem of monopoly—a problem that arises from the fact that whereas monopolies of capital are restrained by law, the monopoly power of the trade unions can be exercised with no legal inhibitions whatever.
  If, therefore, the Government adopted a policy of saying,"Carry on. Use your strength to the utmost," the effect would be that the weakest would go to the wall, costs would continue to rise and the result would be severe deflation which would fall on the shoulders of everyone, including the trade union members themselves.
  There are certain basic facts about rising incomes which, once again, the First Secretary has partly neglected. It can come either from"cost push"or"demand pull ". Rising prices occur because there is too much money about, or because the sheer costs of production rise, and this applies particularly to income costs. The other great distinction to draw is between wage rates and wage drift. I do not think that anyone has yet found a method of tackling the problem of wage drift through an incomes policy, or through the Prices and Incomes Board. And yet, in the increased earnings in the last recorded 12 months of nearly 10 per cent., well over 2 per cent. came from wage drift and not from wage rates.
  Thirdly, I do not believe that a proper realisation exists in the Government of
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  the difference between wages and salaries on the one hand, and profits, on the other. Of course, the same principles must apply to both and I wish that the right hon. Gentleman would not consistently distort what the National Incomes Commission was established to do by the previous Conservative Government. I wonder whether the right hon. Gentleman perhaps regrets the attitude taken by his hon. Friends—I remember it, not bitterly, but certainly with regret-in deliberately setting out to stop the National Incomes Commission from working. The right hon. Gentleman said that there were no trade union members on it. Why not? The answer is because the trade unions would not co-operate with the National Incomes Commission— [Interruption.] — because they were encouraged not to cooperate and—
  Mr. George Brown indicated dissent.
  Mr. Maudling: —because the right hon. Gentleman told them, and others, quite wrongly, that the Commission would deal only with wages and would not concern itself with profits and dividends. [HON. MEMBERS:"Hear, hear."' Hon. Gentleman opposite who say"Hear, hear"should read the White Paper establishing the National Incomes Commission, and then go away and repent.
  The Government's policy on incomes has been wrong because, first, the First Secretary thought that it would be an easy thing to achieve. It was only a short time after the 1964 election that the right hon. Gentleman announced that he had done so much more than we had been able to do, that he actually had a prices and incomes policy in existence. Its existence has not been very effective. We warned the right hon. Gentleman that signatures on a piece of paper represented only the beginning of what would be a long, hard road. The right hon. Gentleman expected too easily to establish a prices and incomes policy. Further, he expected too much of it. He expected it to carry all the burdens of economic management. The right hon. Gentleman has concentrated too much on prices and not enough on costs.
  The First Secretary has made some reference to this, but the fundamental point is that if the Government keep prices down while costs are rising the result is disaster on two grounds. The

  1767
  first is that the sharp narrowing of profit margins is bound to cut back investment and, secondly, that if incomes are rising and prices are steady this increases the problem of inflation and our balance of payments get that much worse. This is one of the major errors that has been made—too much detailed interference, too much attempt in detail, to settle matters that cannot be settled in this way.
  Possibly, most of all, the emphasis has been put too much on restraint and not enough on productivity. As the right hon. Gentleman said, productivity is not entirely the answer, but it is a far bigger part of the answer than he and his colleagues have been able to establish up to now. The real need in the long-term is, in particular, economic management, competition, more investment and the abolition of restrictive practices. The Government are moving away from all these things. They have moved away from encouraging more competition and they have definitely devalued the incentives to new investment.
  When I hear the right hon. Gentleman referring to what the Government have done for the North of England, Scotland and Wales, I must ask him to look at the figures. The situation was transformed, above all, by our free depreciation scheme, which hon. Gentlemen opposite abolished. Ask industry which system it prefers. I assure the right hon. Gentleman that he would get a dusty answer. The Bill makes no contribution to any of these long-term problems and that is one of the main reasons why we condemn it.
  I come to the short-term economic problem and its origin, because this is the context in which we must set about debating an incomes policy. Clearly, the short-term problem arises from excess demand, and there can be no doubt about that. It reflects itself in rising costs, bottlenecks in production and lengthening delivery dates. When recently abroad I was shown more and more evidence of British orders being lost because of lengthening delivery dates. Chemical and industrial plant and all kinds of industries are being affected because excess demand makes our delivery dates longer than those of our competitors. There is an acute shortage
  1768
  of labour. That, as everyone knows, does not make for good management-labour relations. It does not make for stability in industry. It does not encourage the best and most responsible attitude to work in this country.
  Finally, excess demand reflects itself very clearly in the balance of payments, where the most acutely worrying factor is the failure of imports to fall as the Government thought they would. The biggest cause of this excess demand has been the rise in incomes which has happened very extensively in the last 18 months. I am sure that the Minister would agree that when the Government took over from us, though there were some special problems in some areas and in a limited number of industries, there was no undue pressure on resources calling for action. I know that the right hon. Gentleman will not disagree with that, because it was in his own White Paper.
  The situation has now changed. It is a situation of excess demand, where measure after measure by the Chancellor of the Exchequer has been swept away by the rising tide of income. What is now needed is a restoration of confidence here and abroad in the ability of the Government to manage the economy. Secondly, what is needed, and as I gather we may at last get in the near future, are some measures to restrain demand and, in particular, consumer demand. We must act in such a way as not to discourage investment—
  Mr. Robert Maxwell: Is it not the fact that in the recurrent bouts of balance-of-payment problems we have had, Governments—both Opposition and ourselves—which have put on the brake and deflated, only found themselves later hurting the economy by stifling growth? Is it not also true that we have reached the stage today when, even if we did deflate in the harshest possible sense, we would not be capable of restoring confidence?
  Hon. Members: Oh.
  Mr. Maudling: It is always worth while to give way to the hon. Member. I do not know whether he heard the Prime Minister's statement this afternoon. Perhaps he does not realise that the Prime Minister has just announced that the

  1769
  Government are planning major new measures to deflate both public and private demand at home.
  To restore confidence we must first have consistency from the Government. We have had the extraordinary inconsistency of the Prime Minister's statement today with the story a few days ago that no new mini-Budget was contemplated; the extraordinary inconsistency of the Chancellor of the Exchequer, who never knows, in putting up the Bank Rate, whether he wants to affect the domestic economy or not. The right hon. Gentleman has not made a statement today—:I hope that he will make one in this debate.
  We have the extraordinary inconsistency of the Chancellor of the Exchequer, who announced before the last election that he saw no need for major changes in taxation and who, after the election, introduced probably the most deflationary Budget that his House has ever seen. We have the extraordinary muddle about the tax on capital gains, arid the Corporation Tax, and the final absurdity of the Selective Employment Tax. All have done immense damage to confidence overseas, as we must recognise.
  As a final blow to confidence, we have the stupid decision to introduce the steel nationalisation Bill—
  Mr. E. Shinwell: What is the Opposition's policy?
  Mr. Maudling: The right hon. Gentleman need not worry.
  The first thing is to restore confidence and for that we want a Government prepared to think before they act, and then to act consistently. Secondly, as the Prime Minister has belatedly made clear, we need to reduce the level of demand in our economy. We must be quite clear about this—
  Mr. Alfred Morris: How many unemployed?
  Mr. Maudling: I shall deal with that gibe, because I expected it. It is a foolish cry, because reducing demand is what the Chancellor of the Exchequer has been trying to do for the last 18 months, and to reduce it even more is what the Prime Minister announced today he intends to do. How many unemployed does he think he will create? We really should
  1770
  not debate this issue on this silly sort of gibe— [Interruption.] No one wants to create unemployment, but it is a fact, as everyone realises—or almost everyone—that we cannot run the country efficiently or maintain living standards or mass employment if the real level of vacancies is so many times greater than the number of people available to fill them. The ratio is already a high one. The number of vacancies is much greater than the number of people available to fill them, and the figures published do not disclose anything like the total picture, because hundreds of thousands of vacancies are not notified to the Department—
  Mr. Archie Manuel rose—
  Mr. Maudling: I am sorry, but I cannot give way. I am in the middle of my argument.
  We have an overfull demand for labour. Therefore, we welcome the fact that the Prime Minister has at last announced some measures aimed at reducing the pressure of demand. We cannot base the whole thing on credit restriction. Bank Rate up to 7 per cent. only follows trends overseas. I do not see how the one per cent. special deposit will have a great influence when we already have a 105 per cent. restriction on bank lending. Coupling the operation of the Selective Employment Tax in the autumn with restriction of bank credit will be highly arbitrary.
  I cannot think of a more inefficient way of imposing a stop on the economy. It will fall most on manufacturing industries; distributors will put up their prices. In the meantime, the liquidity strain on the manufacturing industries will be very high, and it will be quite arbitrary, depending on what facilities companies can get in the banks. The burden will fall on the small man first, and could affect the farmer. Above all, it will affect investment. I thought that the right hon. Gentleman was opposing, if I heard him aright, provisions which would cut back on investment. He had better see what happens this winter. The possibilities are that there will be rising indirect taxation under the regulator, stiffening up the terms of hire-purchase credit, and cutting back of Government expenditure. The Prime Minister referred to them this afternoon.

  1771
  Is it really right, in the position disclosed by the Prime Minister, to spend large sums of money in subsidies to people who do not need them? Above all, is it really sensible to be planning to pay a large subsidy to manufacturers to employ more labour than they are already employing? Somewhere among a selection of these measures—and the Government must decide which, because they are the only ones who know exactly what measures are wanted—we need bold measures, and probably unpopular measures, but measures that will reduce consumption demand. The answer must be found to get us over the difficulties without crushing expansion and investment in this country. The Government inherited a situation of rapidly rising production and adequate reserves.
  I have explained why we oppose the Bill. If we thought that it would make a contribution to the country's real economic problems we would support it, but we do not. We think that it makes no contribution, and that it is offensive in principle to the whole structure of our society. We therefore hope that it will be rejected.
  5.50 p.m.
  Mr. Arthur Davidson: I thank you, Mr. Deputy Speaker, for calling me to make my maiden speech in this very important and in many ways historic debate. I could happily have forgone the undoubted privilege of having to make it after two such eminent speakers have adorned the Dispatch Boxes. I know that there are very many hon. Members on both sides of the House who want to make a contribution in this debate. I certainly shall not indulge in one of those long and philosophical discourses on what is or is not the ideal make-up of a maiden speech.
  What I should like to do, however, and I am sure hon. Members on both sides of the House would wish me to do it, is to pay a genuine tribute to my predecessor, Harry Hynd. He was a Member of this House for 21 years and represented Accrington for 16 of those years. I think that hon. Members will agree with me in the view that he won the respect of all parts of the House particularly for his skill and impartiality
  1772
  when sitting as a Chairman of Committee.
  May I also make reference to my constituency? Accrington is as dourly and defiantly a Lancashire industrial constituency as any to be found. Its history pays eloquent testimony to the need for the measures we are discussing today. For many years the creative genius and the skills of Lancashire revolutionised the cotton industry of this country. The country prospered, but Accrington and other Lancashire towns were rewarded with more than their share of unemployment and years of hardship and neglect.
  It is true that Accrington is now a prosperous, thriving industrial engineering town. We export the finest textile machinery in the world. But one does not need to be an economist to know that the fear and remembrance of unemployment still hangs thickly in the air of Lancashire. One of the reasons why I support an effective productivity prices and incomes policy is that it seems to me that the only alternative is the painful process of higher taxation, reduced investment and unemployment. This is an all too familiar pattern in Lancashire. It never succeeded in solving Lancashire's problems in the past and will not succeed in solving Lancashire's problems now.
  Everyone is familiar with the disease facing this nation. The word"inflation"is now part of the language of social chit-chat. Everyone talks about it and everyone knows what the causes of inflation are. It is equally true that everyone knows that there is no instant solution to the problem. But that is not a reason for any Government, let alone a Labour Government, to sit on the sidelines and watch the competing forces in our society fighting their private battles for supremacy. The only people who suffer as a result of those battles are the consumer, the housewife, and the man in the street.
  It is the duty of the Government to guide and lead those forces into a joint effort to achieve the three vital ingredients necessary in any remedy for economic recovery—maintenance of a stable general price level, the need to keep incomes in line with national output, and rising productivity. If we accept those principles we accept the Government prices and incomes policy. If we accept the

  1773
  prices and incomes policy of the Government, we cannot say,"Yes, we as a Government feel it is important to tell people these things, we as a Government think is important enough to set up a prices and incomes board and to institute an early warning system, but we do not think it important enough, or we have not got the courage, to put it on the Statute Book." If we accept the Government's income policy we must accept the measures which are detailed in this Bill.
  The right hon. Member for Barnet (Mr. Maudling) referred to restrictive practices. Of course, we on this side of the House are equally determined to rid this country of restrictive practices, but I remind the right hon. Member that restrictive practices are not confined to one side of industry. They are not confined to one class of the community. I speak as a member of a profession which over the years has not been exactly under-represented in this House. I can assure hon. Members—and other members of my profession would agree—that there are restrictive practices at the Bar, including the iniquitous two-thirds rule, which, if they existed on the shop floor, would have every leader writer in Fleet Street indulging in an orgy of invective.
  I thank this House for listening to me with such tolerance and patience. It was not perhaps the ideal occasion upon which to make a maiden speech. I can think of less controversial measures to which I have listened in this House, but for any maiden speaker this is a very important debate, a significant debate and a memorable debate in which to have intervened.
  5.58 p.m.
  Mr. Michael Heseltine: I was deeply aware of the regard in which my predecessor, Sir Henry Studholme, was held in this House. It is matched by the affection extended to him in the Tavistock Division. He represented that Division with great distinction for 23 years. I am particularly conscious, as I am honoured to rise for the first time to speak in this House, of the standards he set when he was a Member of Parliament.
  I know from what I have heard in this debate:hat we shall hear objections to the working of the Bill. We have heard some of them expressed by my right hon.
  1774
  Friend the Member for Barnet (Mr. Maudling). As a director of a company in the recruitment field, I saw something of these difficulties and I wish to make reference to them, but before I raise those questions I should like to raise what to me are questions which are fundamental not only to the Bill, but to the thinking of hon. Members on both sides of the House.
  I wish to ask what right the House has to assume that there is a concept of national interest to which each of us as citizens owes a prime obligation in the every-day conduct of our job or business. If such a claim can be made of us I ask whether the making of that claim will so stimulate our energies and talents that the country will derive the greatest benefit from our endeavours.
  There are two conditions which would be necessary to be fulfilled if we are to accept the concept of true national interest. The first condition is that it is capable of definition and that that definition must be acceptable not only to a political party, but to hon. Members on both sides of the House.
  The second is that all sections of the nation shall be expected to share in any sacrifice which might be required by serving the national interest. I believe that on these two counts the Bill is unacceptable. By keeping the economy in its present over-heated state, many hon. Members would believe that we are acting against what we would term to be the national interest. There is no consensus on this subject today.
  On the second point, only statutory control would enable the trade unions and the large industrial concerns to have the confidence that they were not embarking on an experiment from which the less controllable parts of the private sector would opt out. Even if the First Secretary were able to introduce legislation of the sort which would ensure control, I do not think that this would encourage on the part of each of us the sort of endeavours that the right hon. Gentleman would require. The First Secretary is concerned to involve the public in the problems facing the country. The overwhelming majority of the public are now aware—the First Secretary of State must take some of the credit for having educated them—that the only way

  1775
  in which the country can enjoy increasing benefits is if we can get faster growth.
  There are two other considerations which I ask the First Secretary to bear in mind. First, a policy of full employment does Rot mean that each one of us is entitled to expect that the same job will be available to us in the same place throughout our lives and industries cannot automatically expect Government protection from historical trends and from overseas competition. Secondly, the only way to extract the maximum effort from the majority of our citizens is to reward by financial incentive. Businessmen will respond to one thing, and one thing only—the opportunity to increase their salaries, their profits, and the capital value of their companies.
  If we wish, as I am sure we do, to enlist the nation's greatest efforts, tangible rewards must be placed within the reach of everyone. There is no doubt that the First Secretary is one of the most persuasive and eloquent members of the Government. He has gained remarkable success in persuading people to say that they agree with the targets he has set, but I urge him to realise that it is one thing to persuade people to say that they agree. It is quite another thing for those people to go away and carry out what they have said they agree with. If the First Secretary could be present at every management meeting, if he could stand behind all the retailers' counters, and if he could travel daily with the men going to work in Britain's factories, then I believe that in a short term such a policy would be credible. The fact is that such an idea is patently absurd and, therefore, an alternative solution is required.
  There can be few hon. Members who have not engaged in some negotiation which, in theory at least, would now fall within the purview of this legislation. There must be few who have not negotiated a salary increase, who have not evolved a pricing structure, or who have not disposed of capital in order to secure the maximum return. These are commonplace activities. I do not believe that behind the closed doors of human motivation considerations of the national interest weigh in the balance. I believe that it would be unhealthy if they did.
  1776
  There is involved in this discussion this afternoon an obligation as fundamental as any that we may owe to the nation. We have obligations to ourselves. There are many hon. Members on this side of the House who believe that we serve our community best by maximising the return on our own endeavours. Of course there are exceptions to every generalisation, but for the generalisation I would say that the community grows stronger where its members set out to maximise their earnings and where its companies strive to maximise their profits.
  It is the Government's duty to establish beyond any doubt what they consider the national interest to be and, once they have so defined the national interest, not to urge or to beg or to plead, but to legislate on behalf of that national interest. That must be the purpose of the Government. Responsibility for interpreting the national interest cannot be spread into every trade union conference room, into every board room, nor, indeed, into every private home. Surely it is the responsibility of us in the House to lead. If we surrender that right we shall fail in our obligations to those who have sent us here.
  There are many practical difficulties facing this legislation. I want to say something about the problems which confront anybody trying to hold or recruit salaried staff today. The shortage of skilled and trained management staff is acute. The temptations facing them to move from one job to another are intense. A small but significant group of these people are particularly tempted by the carrots dangled in front of them from America. I know of one occasion only this week when a telephone call out of the blue offered a man a 300 per cent. increase on the salary he was earning.
  Even the employee devoted to his own job cannot avoid the £8 million worth of recruitment advertising which will appear in the national press in 1966. Indeed, it is indicative of the problem that in 1961 recruitment advertising in the national Press amounted to £4,193,000. By 1965, the figure had more than doubled to £8,535,000. It is now widely accepted by employers that, to recruit a suitable candidate for middle management, the advertising costs alone in the national Press can exceed or amount to up to £250.
  I mentioned earlier the temptations on employees to seek increases by changing

  1777
  their jobs. These employees are sought by specialist registers which are prepared to distribute their names to company after company until they are offered another, and usually higher paid, job. Job changing, which is usually synonymous with an increase in salary, is increasing.
  It is further encouraged by the growth of employment agencies. Between 1956 and 1965 in the whole of the London County Council area licences were issued to 300 new employment agencies. This was an annual rate of 37. In the year ended 31st March, 1966, the Westminster City Council which took over most of the responsibilities in this respect from the London County Council, issued 93 licences to new employment agencies.
  The latest development of this activity in this country is the establishment of the professional head hunter. There is nothing new in companies making offers to employees of outside organisations, but I believe that it is a new practice new being established that lists of highly qualified, specialised staff are approached, without any indication of dissatisfaction on their part, and offered new jobs, often at a greatly increased salary.
  Against this background, the background which has built the job-changing market into a highly specialised operation, it s simply of no value to tell employers that they should try to hold their staff to a 3 per cent. or 4 per cent. norm, or even lower—the figure is now to be reduced. Employees often do not want to leave the companies that employ them; but they will not, as a general rule, remain with their employers if their salary scales fall below the national average. As we all know, every application for an increase in salary or for a new job is a special case for the person submitting it. Today, no employer can lightly refuse one of his good staff an increase in salary of £100 or £150, because he knows that the replacement will almost certainly be more expensive and probably not of so high a calibre.
  I have seen it argued that, although this section of the market cannot really be controlled by a prices and incomes policy, it is not a section which ought to concern us particularly because of its size. It is undoubtedly a fairly small market, but it is not obscure. What is happening in this market is an example
  1778
  to the majority of people in other sections of the community. The ripples spread out and the majority cannot be expected to accept readily a policy which they know does not apply to the minority.
  Further, although the highly volatile section of this market is probably restricted to the younger, more highly qualified personnel up to 40 years of age, this section of the salary market is the dynamic for a much larger market. Forty per cent. of employees are now salaried. Part of the 40 per cent. covers the public sector and is, therefore, theoretically, under Government control. But this sector is directly linked with the private sector because interchangeability of career patterns is considerable. One of the most thorough and accurate salary surveys is based on co-operative research between private sector companies and nationalised industries. No major industry can afford to develop the reputation that its pay scales have fallen behind those of other industries.
  There are further independent salary surveys caried out by recruitment agencies. These concentrate on people who are basically job changers and are, therefore, more likely to be bidding up the market. The purpose of the surveys is to enable companies to discover whether they are falling out of line with national trends. Throughout a given period, these surveys consider thousands of salary standards and the pattern of all new and usually rising levels of remuneration developments. The surveys are then distributed widely to personnel managers, encouraging them to bring their existing staff into line with the salaries being commanded by those changing their jobs.
  There is only one impression that one can see from the salary market. Under present conditions of demand for staff, it is in a totally uncontrollable state. There are so many employees and employers that any form of control that is not imposed and not seen to be imposed cannot work. The Bill substitutes statutory exhortation for Ministerial exhortation, but the force of that exhortation is no stronger.
  Indeed, I believe that we are acting out a charade, because by the time the Bill becomes law the measures that the Chancellor of the Exchequer has taken, and those he is to take, will have removed the need for the Bill. The Government

  1779
  have committed themselves to a policy of deflation and if the steps not taken up to now are not sufficient to raise the level of unemployment the Government will take further steps. I believe that they have accepted that as the policy they must pursue.
  In the short run, it is simply not necessary for hon. Members on this side of the House to answer the question,"What would you have done?" The Chancellor has answered it for us. The core of the problem is the need to pursue policies which can obtain growth on which the ability of the Government and the public to have a choice must be based. We need a major redeployment of our resources and to retrain labour. I accept that this means paying higher unemployment benefits in order to remove the fear of unemployment but we must inject a wider degree of competition and ask ourselves not what other industries we should nationalise but what nationalised industries can be denationalised. Above all, we must so adjust our taxation system that every citizen is encouraged to earn more.
  6.13 p.m.
  Dr. Ernest A. Davies: I rise in some trepidation as the third maiden speaker within an hour and I understand that I have the unusual privilege of having to congratulate the hon. Member for Tavistock (Mr. Michael Heseltine) on his maiden speech. This presents something of a difficulty, because, although I have met the hon. Gentleman occasionally in the Lobby, I have not the pleasure of his acquaintance, but I congratulate him on getting over the hurdle to which I am coming closer each moment.
  I must also pay tribute briefly to my predecessor, then Sir Samuel Storey. I appear as Member for Stretford and I think that many hon. Members will recall that my predecessor, Mr. Deputy Speaker, was the incumbent in that Chair in the position that you now hold when he was a Member of the House. He was in the House for a long time and served it with a distinction that was recognised by the honour it bestowed upon him. I have since heard with pleasure that he has been translated to another place and has recently taken his
  1780
  seat. Therefore, we have the happy situation of both victor and vanquished returning to Westminster.
  Now I want to make a few remarks actually upon the Bill. According to my notes, I am not in favour of the Amendment. But I am strongly in favour of the Bill, particularly of the provisions in Part I, because I think that, if they are to succeed they have to make—and will make—an impact on the people in that they will recognise that the real success of any incomes policy has to rest upon our willingness to accept self-discipline. That, the first part of the Bill makes clear. There are no coercive passages in it. It places the responsibility for sensible economic behaviour firmly on our shoulders, whether as individuals or as members of a group—as trade unionists, as consumers, as managers or any other kind of group.
  One of the duties and consequences of the activities of the Prices and Incomes Board will be to educate us in the economic facts of life. When each of us, in whatever section of the community we stand, like Oliver Twist asks for more, then, instead of being crushed by the big stick of unemployment which some of us and our fathers remember, we shall have to put a reasoned case—which is a much more civilised and sensible manner in which to tackle this problem.
  The reports of the Board will be exposing 1-o the public gaze financial matters which are at present not so exposed, particularly arrangements for determining prices. This will extend the principle of public accountability into the private sector of the economy on a much wider scale than hitherto and it will be entirely beneficial. Anyone Wr.doubts that should reflect on the salutary effect that public scrutiny has on the use of public funds both at local and national level. The distinction frequently drawn between public money and the public's money is an entirely arbitrary one and, as a result of the activity of the Board, under the Bill we see that distinction washed away.
  I applaud the way in which the Bill embodies the twin principles of personal responsibility and public accountability and I am glad that, in continuing to hammer home these ideas which my right hon. Friend the First Secretary of State

  1781
  has been advocating so vigorously in the last 18 months, he placed today greater emphasis on the Board's work on prices than has apparently reached the public, at any rate in my constituency.
  This aspect of the Board's activities has been somewhat obscured by the debates centreing around wages and salaries and the position of the unions. That is a great pity because, during the last 18 months, a great deal has been done which the housewives in particular will very much appreciate. Anyone who has looked recently at the ordinary grocery prices in the shops will see that they have been very steady over the last 18 months. If anyone cares to consult the June issue of Which? he will see that laid out for him.
  If we are to enlist the support of the general public for this policy—and it depends very much on the participation of the individual—my right hon. Friend should take every step he can to take the public into his confidence. Not everyone goes into Her Majesty's Stationery Office to buy reports; nor does everyone read White Papers—that is something of a professional risk. Perhaps my right hon. Friend might take some trouble to see that simplified and condensed versions of the Board's findings find their way into prominent position in our popular daily newspapers.
  I must confess that I am pleased that Part II of the Bill will not easily be brought into operation. Having supported the voluntary principle in the first part of the Bill, I should like the trade unions and other interested bodies to have the opportunity to formulate a voluntary scheme of early warning and standstill. On the other hand, having said that, I am convinced that if such a satisfactory scheme is not forthcoming, the First Secretary will have no alternative but to introduce Part II with all that that implies. It is quite clear that an early warning system is necessary for both prices and incomes and, equally, it is absolutely necessary to protect the Board from undue pressures while it is deliberating on references made to it.
  Several trade union branches in my constituency have expressed disquiet about the penalties included in the Bill to protect the Board during a standstill. I recognise that these provisions were bound to cause a certain amount of dis-
  1782
  quiet, but I have frequently found that members of those trade union branches, who otherwise give full support to the Government's prices and incomes policy in general, have come to believe in some curious way that the penalties are directed against them as trade unionists. That is not a fair reading of the Bill. If we are to have a Board to which references are made, it must be protected from undue influences while it is deliberating, whether those influences come from a manufacturer, a trade union, or other interested bodies, in a manner rather analogous to the way in which law courts are protected from undue influence while a matter is sub judice. The minority of my trade union colleagues who are upset about these provisions might regard that as one way of looking at this problem, which would put it into a better perspective than has been the case with some arguments which I have heard in the House and outside it.
  I welcome the Bill as part of the Government's general economic policy which aims at planned growth of income together with full employment. I am glad to have had the opportunity to support the Bill in the House and to have taken part in the debate.
  6.24 p.m.
  Sir Cyril Osborne: We have just listened to three excellent maiden speeches and it is my privilege to congratulate each of the three Members on having delivered them. I feel more nervous than they looked.
  The hon. Member for Accrington (Mr. Arthur Davidson) mentioned unemployment in Lancashire, about which I feel deeply, as I hope he will remember. Only those who have been unemployed know what it means. It is most important that in this affluent society we should be aware of the horrors of unemployment, and I hope that he will keep preaching that theme, not only on behalf of his constituents, but on behalf of the workers of the whole country.
  My hon. Friend the Member for Tavistock (Mr. Michael Heseltine) spoke so fluently and so well that I envied him, after 21 years of practising in the House. What I liked about his speech was his straightforward advocacy of the principles of free capitalism and the rewards for work and risk. I hope that we shall hear

  1783
  a lot more from him on that principle in which I believe myself.
  The hon. Member for Stretford (Dr. Ernest A. Davies), who took the place of your predecessor, Mr. Deputy Speaker, pleaded for self-restraint by everyone to make this policy succeed. On both sides of the House we have to accept that without that we cannot have a free society. I hope that all three hon. Members will accept my warmest congratulations and those of the whole House on their maiden speeches.
  I have supported an incomes and prices policy for more than 20 years. I believe that some such policy is inevitable. I supported Sir Stafford Cripps in 1949 when he had a similar policy which, for two years at least, held down prices, dividends and wages. Over the last 10 years, at my party's conferences and in the House, I have advocated statutory control of prices, rents, dividends and all forms of private income as a package deal in exchange for an equal freeze of wages and salaries. For that, I still plead and I will accept statutory power behind it.
  But, having said that, I absolutely reject the Bill as being irrelevant to the economic blizzard which I believe to be about to sweep the whole of the capitalist world. [HON. MEMBERS:"0h."] Hon. Members need not react like that, because after hearing the Prime Minister's statement this afternoon, warning of what is to happen, I am certain that a blizzard is about to sweep this country and I fear that it may be something of the 1931 type and that there will be a crisis of confidence throughout the whole capitalist world.
  I believe that the Bill cannot succeed for one simple reason: it does not have the wholehearted support of the trade union movement. Unless such a Bill has that support, it cannot succeed. I do not believe that this policy can succeed whichever party introduces it and that we cannot, as an alternative, go back to what some hon. Members on both sides of the House would advocate, which is a free-for-all for wages and profits. I reject that utterly.
  We cannot go back to the bad old days when the economic machine was allowed to grind its way out regardless
  1784
  of the social consequences of its actions. We cannot, as it were, disinter the remains of Lord Shaftesbury and wipe out the old Factory Acts and send boys up chimneys to sweep chimneys and drive women and children down the coal mines. The nation's social conscience would not stand for a free for all, and I do not care who advocates it. There must be some political control of the economic machine, although I think that the Bill is the wrong way to do it.
  I do not accept the cowardly way out of our present economic difficulties of allowing 2½ per cent. inflation year by year. That robs the best of our people and turns the National Savings Movement into one gigantic fraud. The right hon. Gentleman the Member for Easington (Mr. Shinwell), whom I regard as the Father of the House, asked across the Floor,"What will you do? ". I would like to answer that for myself, even though I am not entitled to speak for my party.
  Mr. Shinwell: This is the first time in all my experience of the hon. Gentleman that I have ever been able to agree with him. He wants to adopt more drastic measures. I agree with every word that he says. What I cannot understand is, if he wants to adopt drastic measures why he does not support the Bill.
  Sir C. Osborne: I have tried to explain. The Bill cannot succeed unless the trade unions support it, and the right hon. Gentleman the Member for Nuneaton (Mr. Cousins) can confirm that the trade union movement will not support the Bill. The Bill will nibble at things and will be overtaken by the tragic economic events which will sweep the country.
  These are the things which I would try to do if I were Prime Minister. First of all, I would abolish the Department of Economic Affairs. After all, it was only created as a consolation prize for the First Secretary. I would put economic affairs back to where they belong, under the Treasury, which knows how to deal with these problems and is better equipped to do so. Since the right hon. Gentleman the First Secretary is present I will tell him that the second thing that I would do would be to send him back to his own trade union, together with the right hon. Gentleman the Member for Nuneaton, to see which of them can win over

  1785
  the loyalty of their vast union to this policy.
  Unless one or the other succeeds in doing this the rest of the unions will be for or against the proposal. The most important thing that the right hon. Gentleman the First Secretary could do would be to resign his seat and return to his union. While he and the right hon. Gentleman the Member for Nuneaton are about it, they should try to teach the trade unionists, as we ought to try to teach the capitalists of the country, that none of us has the divine right to a higher standard of living every year, whether we earn it or not.
  I would increase to 50 per cent. the deposit paid on all hire-purchase agreements, I would halve the time allowed to pay for goods bought under them, and I would increase the rate of tax so as drastically to reduce the demand on the home market.
  Fourthly, I would impose quotas—[Interruption.] Please listen. I have been asked what I would do. I would impose quotas on all imports of manufactured and semi-manufactured goods coming into the country, especially from countries which persistently have an unfavourable trade balance with this country.
  Fifthly, I would restrict, if not completely abolish, all bank credit cards and all easy Corms of credit finance which encourage people to spend money. Sixthly —and hon. Gentlemen had better listen to this—I would cut all Government spending in the nationalised industries by 10 per cent. and reduce the staff by the same amount, making each Department responsible for its own economies. If we were to take that degree of spending out of the domestic market it would make a vast difference to our economy.
  My seventh measure, and this would be unpopular, would be to cut M.P.s' and Ministers' salaries by 20 per cent. as an example to the rest of the country. The right hon. Gentleman the Member for Belper (Mr. George Brown) gave himself a rise of nearly £100 a week and other hon. Members gave themselves a rise of nearly £35 a week. Then the right hon. Gentleman goes to the poorest paid worker and says that an extra 10s. a week on their wages will break the country.
  Mr. George Brown: This may be a part of the hon. Gentleman's argument, but it must, in all honesty, be put fairly. The hon. Gentleman was a party to a decision in the last Parliament but one that we should take this matter out of our hands and refer it to an outside body and allow it to make the decision. That decision was then implemented, so that M.P.s did not give themselves a rise. So far as Ministers were concerned, we took the decision to refuse to take the increase offered at the time it was offered, and we are still receiving only half of the increase awarded by that outside body.
  Sir C. Osborne: If I gave the wrong impression I withdraw. All hon. Members accepted the increase and although the right hon. Gentleman only took half of what was awarded he still received nearly £100 more. If the country is to take any notice of this House, we have to set the example. [An HON. MEMBER:"What about directors?"] Eighthly, I would make conditions in the country such that the incompetent employer would not survive and the bankruptcy court would work overtime to get rid of that type of man. I would create conditions in which the unwilling worker would fear the sack and I would get rid of idleness and incompetence.
  My ninth measure would be to reduce direct taxation and increase indirect taxation, because unless there is an adequate carrot in the economic machine one will not get men to work to their utmost and do their best. Lastly, and this will please hon. Members opposite, I would bring the troops home from Germany and save £100 million a year. These are the things that I would do.
  An Hon. Member: What about the birch?
  Sir C. Osborne: Twenty-one years ago this country was the saviour of Europe. Everyone looked to us. The occupied and the beaten countries of Europe looked to us for guidance, inspiration and help. Today, we are the sick man of Europe. Others pity us, they are sorry for us and some despise us. Behind our economic troubles is a malaise of the spirit. At the moment, we have no leaders who can lead our people to make that greater effort of which they are capable. For

  1787
  these reasons, I believe that the Bill will fail and I shall vote against it.
  6.40 p.m.
  Mr. Frank Cousins: May I, first, congratulate the three maiden speakers on their speeches? Whether they will congratulate me on mine is another matter, but I want them to understand that I am also making my maiden speech from the back benches—a somewhat unnerving experience when one has had the job of standing nearer to you, Mr. Speaker, than I am now. I have listened with care to what the three maiden speakers have said. I think that each of their speeches was slightly controversial—probably mine will be, too. It is set against the background of the very serious statement made by the Prime Minister earlier today.
  My right hon. Friend said three things. The first was that we had to undertake an investigation of our economic affairs, and that this would be urgently done. It is rather late in the day for that to be regarded as priority No. 1. We have to consider the curtailment of our spending overseas, including some of our defence spending, which, I think all of us would accept, needs very close analysis. My right hon. Friend said that this position was aggravated on a short-term basis by the fact that we had to take a strong line over the seamen's dispute to ensure that the prices and incomes policy was maintained. I regard that as the most damaging of the three statements.
  I regard it as almost improper if we are saying that what we did in the dispute was to stand out in order to maintain the norm of a wage adjustment which was not the basis of the settlement. It was above the norm. The settlement was above the recommendation of the Pearson Committee, and, in my opinion, justifiably so. This is a group of people who needed it and they are still, to a very considerable degree, below the level of national seamen's wage rates in most of the other serious maritime nations of the world.
  I should like to say, in passing, that the right hon. Member for Barnet (Mr. Maudling) impressed me very much by suggesting that the adoption of the Bill was the introduction of slow Socialism. I re-read the Bill quickly to make sure
  1788
  that it was the same Bill as the one about which the right hon. Gentleman was talking. I did not find myself converted to the adoption of it because of its impending Socialist character. However, the right hon. Gentleman remedied matters later by referring to what he fancied would be an alternative. They were the old stock phrases which we hear from right hon. and hon. Members opposite, suggesting that we are giving the workers too much and should take away from them some of the social services which we regard as essential.
  I listened with a great deal of interest to my right hon. Friend and colleague the First Secretary of State. He gave an admirable exposition of the intentions behind the Bill, demonstrating clearly how he intends to work it voluntarily, and went to some great pains to tell us how he would work Part II when it becomes necessary. My criticism of the Bill—I will not spend too much time talking about the Bill—is that that is exactly the situation which will develop for us.
  May I deal with a point raised by the hon. Member for Louth (Sir C. Osborne). It is admirable to be told that he, too, is in favour of the incomes policy, and has been all the time. I have carried out a little bit of research into the activities of some hon. Members opposite in case any of them should want to challenge me on my stand in this matter. I do not know whether it is correct, but my information is that the hon. Gentleman's company gave itself an increase, through its directors, of 15 per cent. last year. I am also in favour of that kind of incomes policy.
  May I make it clear that I am not making a resignation speech, or I should have spoken earlier, but inevitably I am bound to talk about some of the factors which contributed to my resignation. Before doing so, I should like to say a personal"Thank you"to the many right hon. and hon. Members on both sides of the House who have both written and spoken to me expressing their sincere regret for the fact that I had to take this decision—men who, apparently, for the first time—on one side of the House, anyway—recognised that I was Minister of Technology and that I was doing a fairly good job of work. It is a comforting thought to be remembered for what you did after you have gone rather than to remember the criticisms when you were

  1789
  attempting to show the House that there was a job of work to be done—and it did not include marching from Aldermaston.
  Why did I have to take this step? I have a deep conviction that we are going the wrong way, that we are tackling the wrong problem. Therefore, we are bound to be using the wrong methods and finding the wrong solutions. I agree with the comment of my right hon. Friend the First Secretary that every one of the aspects of this matter is only part of the total. I want to make it clear, so that there is no misunderstanding on either side of the House, that I regard the economic crisis which brought about the major problem as something which we inherited in 1964 from the Conservative Government. I know that right hon. and hon. Members opposite do not hold that view, but I do. I can demonstrate that if anyone wishes me to do so.
  The mistake which we are making is in assumimr, that our problem is to tackle an inflationary situation created by a wage cycle. I do not accept this. Ours is not a high-wage economy in any sense. Although we have all talked about the necessity of becoming a high-wage economy, we are not there. I hope to demonstrate that later.
  The second thing which is wrong is that we are confusing production and productivity. There are two distinctly different things. Politicians seem to have some difficulty in grasping this, but I am sure that industrialists do not. I do not know why industrialists who sit on either side of the House forget all that they know when they come here, but there is a considerable difference between an analysis of total production and an analysis of productivity. I will talk about that later.
  We are using the wrong methods because we are approaching the matter as though we had a different form of society. We are ignoring the fact that we do not have a controlled society and that we have not, in fact, something which the State can determine. We approached not only the last election, but the election in 1964, and the conferences of the party which determined the policy on which we went to the electorate on the basis of a planned economy—the planned growth of the economy.
  This included wages. We have gradually drifted unwittingly, and sometimes
  1790
  unknowingly, into an atmosphere in which we regard the possibility of a solution as being directly related to the ability to restrain wages. This is a wrong philosophy, and it has always been proved to be wrong. Right hon. and hon. Members opposite have tried it many times and have always failed.
  Another mistake we have made is that we have done too much guesswork. We talk rather loosely about productivity and production; but there are no figures. I was concerned with this matter when the right hon. Member for Barnet was Chairman of the N.E.D.C. I sat under the chairmanship of my right hon. Friend the Member for Belper (Mr. George Brown) on the N.E.D.C. I saw the type of planning we did. Perhaps the right hon. Gentleman will recall that on one occasion I said within the body of the N.E.D.C. that I could get more information from outside than I could get from inside. I could get better facts related to the growth prospects of some of the major companies through my position as General Secretary of the Transport and General Workers' Union, and before I became a member of tthe Government, than I could get from examining the books.
  As Minister of Technology, I set up a statistical department of my own to get some information on which I thought I might be able to rely. We have in the past said very clearly on both sides of the House—my right hon. Friends on the Front Bench have said this time and time again—that a new era of statistics is being created in order to have information upon which to make judgments about planned growth, a planned economy or anything else that needs forward thinking.
  If this is so, we must recognise that when you make declarations without them there is a possibility that you will be wrong. We say that productivity is not rising fast enough. We use the sibilant phrase,"Productivity is not rising as fast as wages ". Which productivity? Which wages? We should all look at the isolated cases. We should all see whether there is some work not being done, whether we are not getting the productivity. Nobody would know this better than the man who has been in the Ministry of Technology. I shall tell the House a little about this later.

  1791
  But the real issue in front of us is that our productivity in the areas where we should be considering it is not in any sense related to the kind of payments which are made. I do not want to be offensive to anybody who has had increases, and it ill becomes anybody to single them out, but there are lots of places where there have been high, very high, adjustments, and no intention to alter the pattern under which the adjustments are made. But that is not the fault of the trade unions.
  At Government level we deliberately held down some productivity. We took the heat off the building industry very deliberately, and I think that it was right and proper that we should take it to the stage where there was no excess demand for the industry's total facilities, with inflated payments having to be made. We cannot blame anybody for that: we did it deliberately. We cannot say,"Look, productivity has gone down ". We stopped it. We closed uneconomic mines in some areas, and there was strong criticism from some of my colleagues for doing so. It was said that coal production had gone down and wages had gone up. These facts are unrelated. We are using our wrong norms in our assessment of our problems.
  Inflation, as I see it, is determined by the real increases in purchasing power. I do not need to remind the Chancellor of the Exchequer that he has taken several steps over the past year and nine months designed to curb some of the inflationary tendencies. Most of them have been right, in my opinion. I suggested to my right hon. Friend on one occasion —I hope that it is not a breach of privilege to say this—that I was in favour of more direct taxation because the only way of getting people with high incomes into the group where they pay their share of the cost was to put on direct taxation and not indirect taxation.
  Let us talk of the real value of the money we have got. It is said that we got about 8 per cent. last year. The real value in increased purchasing power was just over I per cent., and this includes the high income groups who took some more on top of their existing money.
  I think that everybody favours the incomes policy. Most people favour this
  1792
  incomes policy provided that it does not apply to them. I have had the experience of being with the unions who have talked about their attitude towards the policy, and I have been with Ministers who have talked about their attitude towards it, too. Some rather curious decisions have come out of our intention to apply a balanced judgment on the amount of money that any particular group should get.
  We all know about the increase for the doctors. I have gone on record as saying that they should have an increase, but they should have it in the knowledge that they should plan their efficiency and productivity so that it means something, so that there will not again be the criticism in the House or in the working groups that they take the money and do nothing about efficiency. There is talk over the whole range of payment by results. There is payment, but no results. It is no good for us to accept that if they are in a group earning £2,000 and upwards people need the incentives of high wages and if they are earning less do not need the incentive of high wages.
  I do not know whether the judges considered an efficiency approach to the problems. I know that they got their money. I know that the generals did, also, and I think that they were entitled to an adjustment. They had been a long time without it. Ministers took one, and, as my right hon. Friend the Member for Belper (Mr. George Brown) said, it was only after a time that Ministers took half the adjustment proposed by an independent body.
  But this is not the issue. The issue is how I explain this kind of thing to the kind of people I represent in Nuneaton and in the Transport and General Workers' Union, when I talk about the intention of considering the responsibilities and consequences over the whole range. I am on record in many places as saying that I will not have wage restraint, whoever wraps it up and brings it to me in whatever kind of parcel. I have said this publicly, and I reaffirm my intention of resisting a wage restraint policy, which is what we are gradually getting to.
  Hon. Members will gather that I rather oppose the Bill. I oppose it on several counts. It does not tackle the question of total production. It does not tackle

  1793
  the question of anything that was in the Declaration of Intent. I know that my right hon. Friend the Member for Belper will forgive me for this, but I am sure that when he went to Brighton, and sold the story of the need for a declaration of intent on productivity, prices and incomes, it was one of the greatest achievements of his career—and he is a man of very considerable ability, let us all understand that.
  My right hon. Friend has believed in it, and waged the war, if that is the right phrase for it, of trying to make a policy of prices, productivity and incomes work. But the influences that have been brought to bear are not the ones he originally anticipated. It was assumed that there would be an energetic approach to the whole question of productivity, but we have had a limited, a scattered, a particular approach in various areas, and there has been a demand for payment for this.
  I suggest that the policy we have followed during the past two years has not done even what we are now saying it has done. It has not protected the lower-paid, it has not given them a new era to look forward to, it has been unselective in its responses, it has picked people out and they have been picked out on all sorts of queer criteria, perhaps because it was not opportune to contest the matter, that it was inexpedient to resist a particular claim, that there was a threat of what action they would take, and that they were not the right group to take it on. We cannot go on like that. We have to determine what it is that we are trying to do.
  What are we trying to do? We are trying to set up a Government agency, a National Board for Prices and Incomes, to fulfil a role it was never created for, and cannot possibly fulfil. The debate this afternoon frightens me even more than my discussions before, because it is apparently now likely to be the national wage regulating body over the whole range of our incomes. Sometimes T think that when we are talking about this we do not recognise what our society is. Our society is set, thank heavens, primarily on the voluntary basis. I say this as, I hope, a real social democrat. I know that I have been accused of all sorts of things, including totalitarian instincts. But, basically, I think that all
  1794
  people are entitled to assume that the power of the State will not be used to make them do things that collectively they disagree with.
  I have heard comments about the failure of the voluntary system and the need for the creation of Part II of the Bill. At the last election, I used a pamphlet provided by the Labour Party which spoke of how much progress had been made with the voluntary system. My right hon. Friend has gone round the country expressing the belief—he has reaffirmed it today—that anyone who assumed that we would get everything solved in a few months was absolutely crazy.
  All right. Why not go along with the voluntary part? Why not accept that we should divide the Bill into two parts? I think that there are problems with Part I. For example, one has to have definition on the question of legal entitlement to compel people to do things even in front of a Board of that kind. But these are debatable matters. Part II, on the other hand, I see no justification for at all. The Bill does not touch any of the problems which are dear to the hearts of people on this side of the House.
  What about the whole balance of payments situation? At least the hon. Member for Louth made a point, which I should have made if he had not, on the need for quotas. There is a much greater need for quotas and a much greater need to consider import saving prospects. There is a much greater need to consider how we can improve the production effort in this country.
  The Bill does not touch another basic principle. If you are to have controls, and if you assume that we want controls —I think that this is the only bit that the right hon. Member for Barnet got near to—there is a way to get them. Take into public ownership the major sections of industry. If this is the theme and purpose, I withdraw my opposition. I would say,"Go ahead with the Bill ", accepting that it includes the policy of public ownership within it. But it does not. Its main provision is to control the power and authority of the voluntary system which has been created by understanding between employers and employees on what wages should be.
  The Bill provides for sanctions. Sanctions are proposed at all levels, but this

  1795
  distracts us from the real problem which is the efficient use of manpower. Payment by results and productivity bonus schemes, in my opinion, are designed for the very object of making labour a dear commodity, one which has to be used carefully, which provides efficiency, making it available for the areas where there is such a pressing demand that inflationary situations are created in areas where it is not required. I say that with serious knowledge of what I am talking about as a trade union leader. I do not see that it can be good to have some of the"spiv"arrangements which are there just now.
  I have gone along with the theme of planned growth of incomes. I do not think that we can, in this modern society, walk away from it. But to be told, as I have been told by Minister colleagues and by articles in the Press, that the choice is between this pay policy and the dole leaves me stone cold. If this is the basis of our consideration of what our Government should be, that we have only the choice of a statutorily enforceable restriction on wage movements or the dole, we have failed. Where is our planned growth of incomes policy'? Where is our approach to modernisation'?
  What was the purpose of the Ministry of Technology. [Laughter.] I ask this deliberately, because the Prime Minister has said repeatedly that the purpose of the Ministry of Technology was to help to create modernisation in British industry, and modernisation means efficiency, greater output, and greater productivity in total. If the answer is that, if we do not have a wages policy, we shall have the dole, we had better look at our own approaches to these problems.
  I hope that as a result of this debate the Government will reconsider their Bill. I hope that they will reconsider it because one of the real needs is that we get away from the idea that we are in the inflationary system which has been suggested. I understand, Mr. Speaker, that it is quite proper for me to quote from a newspaper article. Mr. Paul Bareau, writing in the Sun on 24th January, made an observation about our position in both the production and wage tables. We were third from the bottom in percentage rise in wages from 1960 to 1965,
  1796
  with only two countries below us, Canada and America. We were right at the bottom in the production table. This is the sort of thing which makes nonsense of our assumption that the solution is to cut back on wages. Mr. Bareau goes on to say that these facts demonstrate that our need is to drive up production.
  Let is consider what we mean, if we are not careful, by some of the things we are saying. The wages policy will save us. All right. Let us accept it. Let us say that no one in future is to have more than 31 per cent., or let us say that no one is to have any more. What have we solved? We heard the Prime Minister today saying that we shall have to reconsider our whole attitude towards spending, both public and private. If this is so, the stopping of the wages adjustment cycle does not do anything. We need to get production up. We need to get our wage schemes related to payments by results.
  I do not know whether industrialists in the House will challenge this, but I think that it is clear to everyone that the cost per unit of production is the important thing, not the wage rate of the person doing it. If a man on a stamping machine steps up his output by 500 units an hour by a new process, and if those units are sold at ld. apiece, he will have to be given £1 an hour increase so that he may have half the value of what he is doing. But we do not do this. We recognise that the whole spread of production levels among all manufacturing industries in the drive which ought to take place will improve our total standard of living.
  Whether we like it or not, that is what the policy says. The policy says,"We want a bigger cake and the way to get the bigger cake is to control wage levels so that everybody gets a fair share ". How nice it would be. We shall have a different division of the same kind of cake. But I do not want a different division of the same kind of cake. I want a division of a larger cake. I want a division of it created by the direct association of employers and employees at the negotiating table in improving the efficiency of output.
  I am told that the Bill is not a very penal Bill. Of course, it is not very penal. Of course, you can get round to

  1797
  the stage of arguing that a union like the Transport and General Workers' Union could stand and face it. But I put it in a different setting entirely. I am bothered about the economic affairs of the country, not about whether we can make the Bill ineffective. I am bothered about whether this helps us to do the job. I say to my right hon. Friend, who was an officer of my union—he talked about"our union"earlier—that one of the things we have to remember when we are talking about penal clauses is that the very nature of our kind of trade union will be effectively damped if we have penal clauses which frighten men on the workshop floor.
  I will give an illustration. As many hon. Members know, I handled a major docks problem just before I came into the Government. There was a fear on the Saturady night that a set of negotiations wl-jch had gone on for many months had reached breaking point and that we would have a national dock strike. I never fancy a national dock strike, because it is a great tragedy for us, as the House will understand. At 10 o'clock that Saturday night, we resolved it. I had to go on television to broadcast to my own people to go back to work. They did not want to; they wanted to stop out to prove that they had taken the decision to come out. But they went hack to work, as the House knows.
  Just imagine having to tell them now, when we had got the solution, that we would have to refer it to the Prices and Incomes Board, that my right hon. Friend would have a look at it for a month and, if he thought so, for four months, and, if he agreed at the end, they would be paid. It would be ridiculous.
  Look at what happens in engineering negotiations. I have heard officers of the A.E.U. say that it takes 17 months anyway to get a claim through, so why worry about the other four months? In my view, the members of that organisation should worry about the 17 months, not about the other four. We want to speed up the processes of negotiation. We want to persuade the unions, the members of unions, that there is an urgency about this problem, not an urgency for restriction but an urgency for economic progress. If we do not do that, it really will not matter.
  1798
  I have been told that I ought not to worry about the Bill— after all, it is not such a bad Bill and everyone knows it will not work.
  Mr. Jack Ashley rose>—
  Mr. Cousins: No, I am sorry. I cannot give way to my hon. Friend.
  I am told that the Bill was not a big enough issue for me to resign on. How cynical can one become? In relation to the realities of life outside, how cynical can we become? The problem will not be resolved in this House. I am not concerned with whether the niceties of putting Amendments on the Order Paper mean that there is a problem about voting. I would not vote for the Conservative Amendment if it had been put down in the same terms as my own, for the very simple reason that you created the problem over there. We have not found the right solution, in my opinion, but I would certainly not think of giving it back to you—
  Mr. Speaker: Order. I am neutral.
  Mr. Cousins: Mr. Speaker, I certainly do not intend to give it back either to you or to right hon. and lion. Gentlemen opposite.
  I think that a lesson ought to be understood by us all. When I was at the Ministry of Technology I went among industrial firms and I tried to get an understanding of the intricacies of some of the sophisticated and scientifically based industries. I think that I created an atmosphere in which they believed that the Government were thinking of helping them forward. One of the lessons that we learned was the difference between good and bad firms. The difference between the best in some fields and the worst was a level seven times greater in the best. It was a common pattern in the good ones to have twice the production level of the bad ones. That had nothing to do with the Prices and Incomes Bill. It simply had to do with efficiency of operation.
  Who creates efficiency of operation? Efficient management seeking higher productivity and being prepared to pay for it; good investment policies, being prepared to think ahead; good Government action to encourage in every direction

  1799
  possible the creation of production. Those are the things that matter, and I say to my colleagues that right hon. and hon. Gentlemen opposite do not know how to do it.
  I suggest that one of the things that we have to recognise is a basically simple issue, and it is why I oppose the Bill. Very high profits are being taken out of industry. When we talk about the national interest, very often we find an employer standing between the worker and the national interest, taking out profits. That is the system under which we live. I am not grumbling about it; I am just recognising it.
  There is the reference to dividends. If it was not a tragic situation, it would be farcical. The reference to dividends is one where, after the directors have decided what dividend they will pay, they have to tell the Board. There is not even a reference to their holding it up or doing anything else about it. Of course, they can be subject to the scrutiny of public opinion. All I would say to that is, give my members £1 a week increase and let them be subject to the scrutiny of public opinion, too.
  I am asking my colleagues in the Government to recognise that I want to co-operate with them. In my letter to the Prime Minister I said that I was not finding the success that I had hoped for inside the Cabinet. I regretted having to leave. It was not a pleasant or easy decision to take, but I said that I wanted to go back to the place where at least I could play some part in helping to increase productivity, without which none of the things which we talk about will be meaningful at all.
  I would ask my right hon. and hon. Friends not to fritter away the most valuable asset that they have, one that does not belong, to right hon. and hon. Gentlemen opposite. I refer, of course, to the support of the men and women who make up the great British trade union movement, who helped to put them in and who will help maintain them. Given the chance, they will increase productivity. Let us encourage them to do so.
  7.15 p.m.
  Mr. Ray Mawby: It is a great pleasure to follow the right hon. Member
  1800
  for Nuneaton (Mr. Cousins) and to tell him that I am in agreement with many of the things which he said. The most important point that I must make clear, however, is that I do not agree with him when he suggests that the way to increase productivity and increase the national effort is by more widespread nationalisation of industry. There is evidence right across the board to show that that is not true.
  The other point to which we ought to pay particular attention is his remark a little earlier on when he was asked why he resigned on this issue and he said,"How cynical can one get?"He then went on to say that he would not support the Opposition Amendment even if it were in words that he himself had chosen. All I say is,"How cynical can he get? "
  This is a subject which requires not only more co-operation throughout industry but more co-operation, understanding and tolerance between hon. Members on both sides. This is something on which I believe we should concentrate. The fact that the right hon. Gentleman said that he would not support an Amendment with which he agreed if it were put down by a Conservative hon. Member suggests to me that the Opposition were badly advised to put down an Amendment at all. I believe that there are hon. Members on both sides who have a conscientious objection to some parts of this Bill. Each one objects for different reasons, but the fact that there is objection means that we should have left the House in a position where hon. Members could do more than simply make a gesture. If they felt sufficiently strongly against the Bill, they should be able to go into the Lobby and vote against it and, if they were in sufficient numbers, to defeat it. That is something which hon. Members opposite who have these conscientious objections ought to have been allowed to do.
  As it happens, our Amendment is ill-worded. It says what we meant to say but, when I have said that, it is really a long-winded way of saying that we disagree with the Bill. In view of that, I want to make my own position clear about the Amendment.
  No one in the House would deny the tremendous work which the right hon. Gentleman the First Secretary has done during the period that he has been a Minister. There is no doubt that all his

  1801
  efforts in working to achieve more voluntary co-operation and getting the various partners in industry together to sign the Declaration have resulted in a great move forward, though it is obvious that it has not achieved everything that he had hoped for. However, he has taken the bit between his teeth and has brought in a Bill which, for a number of reasons, I could not support. The right hon. Member for Nuneaton has given us his reasons why he cannot support it, either.
  The right hon. Gentleman said that Part I of the Bill would come into operation as soon as the Bill was given the Royal Assent, and that Part II would come into operation only after an affirmative Resolution had been passed by both Houses, Part I i5 a lot of eyewash, because already we have a Prices and Incomes Board. Already this Board has various matters sent to it. Already it can issue reports and make known to the public its views on prospective price increases or prospective wage increases. Therefore, all that we are doing is putting into pretty words in an Act of Parliament something that is happening now.
  Is the point of having Part I of the Bill, which does not take us any further at all, to provide a sort of bludgeon to hold over the heads of those who have made certain voluntary arrangements and say to them,"If you do not continue to do these things which we think are right and proper, we will put down an Order and bring in Part II "?
  If this is being used purely as a threat in the hope that it will bring about more voluntary consultations, I believe that the hope is ill-founded, because people cannot be expected to volunteer if they feel that if they do not they will be told to do it anyway. This is like someone in the Army being asked to volunteer for something knowing full well that if he does not he will be ordered to do it anyway. As I say, if this is the aim it is bound to fail.
  If, on the other hand, the Bill in its entirety is needed, why not bring the whole thing in together? It may be that those who drafted the Bill decided that it was important to maintain unity, if not in the whole of the Labour Party, certainly among Ministers. That may have been one of the reasons. Perhaps it was hoped that if the Bill was laid out in two parts the right hon. Member for Nuneaton
  1802
  would go along with the Government, and at least give the appearance of the Government Front Bench being solidly in support of the principles of the Bill. If that was the view, it was well founded, because, after all, the right hon. Member for Nuneaton has only just resigned.
  The Bill is different in only two respects from the one which was printed and issued long before the last election. First, there is an additional Clause which calls for rises in dividends to be declared and notified to the Board. Thus, if anything, this Bill should be more acceptable to the right hon. Member for Nuneaton than the last one. The only other difference is the insertion of a Clause which means that a directive can be given to the Board to keep certain prices and wages under continuous review, and to report from time to time.
  As far as I can see, those are the only two differences in the two Bills. The basic principle behind both Measures is the same. If the purpose of breaking this Bill into two parts was to maintain harmony, the Government may have felt that they were on a good wicket, because the right hon. Member for Nuneaton had gone along with them on the last Bill, and had fought the Election, if not on this issue, on a policy of which this formed part.
  One is therefore led to ask what has happened since then to cause hon. Gentlemen opposite to change their minds on this issue. If this Bill were violently different from the one which was available to everybody at the last election, I would not ask that question, but I believe that this is a matter on which hon. Gentlemen opposite should ponder seriously before they make a final decision on the Bill later tonight.
  One of my major objections to the Bill stems from these penalty provisions. It may well be argued by the right hon. Gentleman that the penalty provisions will operate only if a man—or a group of men—takes certain action within three months, or before the Board reports, and it means, therefore, that chaps have to be a little more patient. I think that anybody with experience of industry—and I bow to the right hon. Gentleman's vast experience here—knows that in many cases one cannot expect chaps to be patient for a week, let alone three months.

  1803
  They are involved in a dispute, and at a certain point they decide that it can be resolved by no means other than withdrawing their labour. The right hon. Gentleman said that if these chaps refuse to pay their fines, we need not worry too much about it, because there is little chance of these chaps going to gaol.
  Mr. Eric Moonman: I recognise the hon. Gentleman's vast experience of industry, but it might be more realistic if he were to refer to workers, employees, colleagues, or comrades. The word"chaps"is quite irrelevant and illogical to this side of the House.
  Mr. Mawby: If the hon. Gentleman, with his great knowledge, could prepare a list of the words that we ought to use when talking about something or other it would be very handy. A reference dictionary of terms that we should use would be very handy indeed, but until that is produced I shall talk of my colleagues of many years standing as chaps or blokes, or whatever comes to mind at the time, and I know that they will not think that I am trying to denigrate them. I hope, therefore, that the hon. Gentleman will prepare his list, and I shall consider it.
  The point of having to put off a wage claim for three months could mean that the men could be taken to court and fined, but, as the right hon. Gentleman said, there is no need to worry about this because there is the prospect of a change in the near future in the general law with regard to the treatment of people who do not pay fines.
  I have read in various newspapers—whether these are leaks or correspondents' views I do not know—that it is intended to do a great deal more about the attachment of wages for the non-payment of fines instead of imposing the normal prison sentence. If this is so, I shall oppose it even more than I do the present state of affairs, and I believe that many hon. Members will take the same view. From time to time Bills have been presented to us with a view to extending the principle of the attachment of earnings.
  We always treat them very seriously, because we believe that a case has to be proved beyond peradventure that this is the only way it can be done before we
  1804
  are prepared to grant an increase in the right to attach the earnings of an employed person. Therefore, it is cold comfort to say to men who might be involved in this sort of thing,"It is all right, chaps. You will not go to prison. We shall just stop it out of your wages."
  This is hitting at the basic freedom of men who, when they feel that there is no other way of pursuing their claim, withdraw their labour. It has always been a basic principle that where an individual has a right to withdraw his labour he can give notice to his employer, and if he does it in concert with a number of others he cannot be in breach of the law. The Bill drives a coach and horses through that principle.
  The other principle which must be borne in mind is that which is laid down in the Industrial Courts Act. Cases could arise in which a point was reached in negotiations where the trade union side had asked for a certain amount and the employers had offered a different amount, and there was deadlock. That deadlock might have been reported to the Court in the form of the two figures—one from the employers and one from the workers —and in the end an award might have been made which was acceptable.
  But both parties would have reported to the Prices and Income Board, and the Industrial Court might have proposed its settlement during the three months when the Board was considering whether the claim was above the norm for both sides. If it is going to be laid down from now on that on every occasion the Minister of Labour will not think it fit to refer matters to the Industrial Court, it is making a mockery of the legislation. In that case we might arrive at a situation in which, at the same time as the Prices and Incomes Board was deciding whether this was a proper settlement the Industrial Court had made an award. The situation would be absurd.
  Mr. Roland Moyle: Would not that problem be easily resolved by referring the Industrial Court's award to the National Board for Prices and Incomes? If this point were put to the T.U.C. they might well agree with it.
  Mr. Mawby: If the hon. Gentleman put that question to his right hon. Friend

  1805
  the Member for Nuneaton or to any civil servant he would get a very quick answer. If we are going to send the award of the Industrial Court to the Prices and Incomes Board why have an Industrial Court? Why not go straight to the Prices and Incomes Board and use it as a kind of arbitration body? I believe that these are the sorts of matters which are worrying the right hon. Member for Nuneaton. It is not a question of what the Bill provides but the implications which could automatically follow from it.
  I ask the Minister to say what he intends to do, and what changes are being proposed in relation to the 1919 Act, so that at least we can know where we stand, and whether the Prices and Incomes Board is also intended to be an alternative arbitration court. Many hon. Members wish to speak. I have made the points that I particularly wanted to make, and have tried to explain why I shall vote against the Bill.
  7.35 p.m
  Mr. Charles Pannell: I only want to say one thing to my right hon. Friend the Member for Nuneaton (Mr. Cousins). I had the impression that he had never enjoyed any speech in this House so much as the one he made today. In view of the great services that he has given to the trade union movement, we are at least glad that he will be with us for some time to come. He and I have this in common: we have both left the Government—for different reasons.
  This legislation was framed on certain assumptions that have become rather out-of-date according to what the Prime Minister said today. Between 1954 and 1964 output rose by less than 3 per cent. per annum; wages rose by about 6½ per cent., and the price level rose by 3 per cent., and in the same 10 years our share, by value, of world exports fell from 20 per cent. to 14 per cent. Whatever is said about the way we collect statistics, it cannot be denied that the statistics that I am using are at least comparable ones, whether or not the basis on which they were made is accurate.
  The National Plan speaks of a 25 per cent. increase in national output by 1970, but it is hardly likely to be realised that this calls for a yearly increase in productivity of 3·4 per cent. The idea of
  1806
  this legislation is to keep incomes in balance with productivity and consistent with stable prices. I do not think that my right hon. Friend the Member for Nuneaton objects to Part I. This is something upon which all hon. Members on this side of the House can agree, but today's news makes all this sound rather optimistic.
  After 21 months of this Government, it is no use harping on the dismal inheritance left to us by the other side—a deficit of £800 million. They stand condemned. We reminded the electorate of this at the last election, and we are here today because generally, the country recognised the basis of our charge. Now we must consider where we stand. The Opposition are not entitled to be critical or to whimper. If they had been faced with this problem in 1964 after the election, they would have solved it with unemployment and deflation.
  They may well point out that they maintained full employment for 13 years, but it should be remembered that they tended to do so at the end largely to win the General Election, and I know that my right hon. Friend the Prime Minister could never understand why a self-styled patriotic party could have postponed the General Election and the Dissolution after June, 1964, in view of the worsening trade position, which had been admitted in March of that year by the right hon. Member for Barnet (Mr. Maudling).
  One thing which all of us on this side ought to be grateful for, because we are all part of it, is the maintenance of full employment since this Government came to power. When people use the word"crisis ", whether in a national sense or in a party sense, I am little impressed. The word"crisis"went out of my vocabulary in 1931, which I surveyed from a plentitude of unemployment.
  I want to address myself mainly to my colleagues. We have shared in different ways the burdens of the same unrest in industrial activity. If I had to declare an interest, I would say that I joined my trade union in the year 1918, when I was 16 years old, and was a shop steward by the time I was 22, since when I have never ceased to be a member of the ruling classes.
  I would say to my hon. Friends who have their doubts at the end of the day—we use the word"comrade"rather

  1807
  loosely in our party—that they should affirm and really believe that the First Secretary of State is a comrade of theirs. He is one of whom we can be proud since we have been members of this Government. His advocacy of stable prices has not only paid political dividends but is well recognised in the country. We have also seen his tremendous labours in this job.
  I would ask my colleagues to recognise that the right hon. Member for Nuneaton who spoke so earnestly this afternoon was one of a Cabinet of 24. Whatever one may think of the other 23 individually, collectively they have as much intelligence and integrity and as good a record of service to the movement as anybody else. Consequently, a massive store of integrity and intelligence has been brought to bear on this matter.
  I ask hon. Members to believe, as Cromwell once asked the Lords of Convention, that they may be mistaken. The Cabinet is behind us. My right hon. Friend based his whole case, in the words he used to the Prime Minister, on the assertion that the proposals in the Bill have no part to play in finding a solution to our economic problems, which are so obviously caused by our inability to create the additional productivity required in those sectors of industry which could help the balance of payments. This is what I want to address myself to.
  First of all, we had better get an agreed definition of what we consider to be"productivity ". The word has degenerated into a cliché through its use by all those people who have never had a nodding acquaintance with industrial matters but who always lay down the law for the people on the factory floor."Productivity"means more work performed in the same time by fewer people: that is what we are talking about. It is not a woolly term like"management techniques"and"improved research"and all that gobbledegook and claptrap which we have heard so often.
  It means achieving more with less. Leaving aside for the moment any indictment of the employers—I have no doubt that anything said here this afternoon about employers was better said by me twenty years ago—I want to ask where the trades unions have stood in this
  1808
  matter of increased productivity. How do we react to, for instance, the things which are in issue between us, the problem, for instance, of diverting long-distance trains from road to rail in order to diminish the awful carnage on the roads and to make the railways profitable? Neither the Transport and General Workers' Union nor the N.U.R. could give a completely objective account of this.
  Somewhere along the line, the consumer has to be considered. We are all producers in our trade unions. The largest common denominator, however, is the consumer, and another word for the consumer is"constituent ". My right hon. Friend the Minister of Transport, who is a Left-winger, if the term means anything, found the N.U.R. decision on liner trains incomprehensible. What about the sorry story of the docks? I do not want to go further into that but if my right hon. Friend the Member for Nuneaton had been here, we could have taken that subject up.
  Professor Allan Flanders has said that the motor industry is 15 per cent. overmanned and so is steel. There has been no adequate answer to the question of how the trades unions stand up, in a planned society under a Socialist Government, to problems of increased productivity—
  Mr. Thomas Swain: My right hon. Friend has criticised certain trade unions and inferred that they have not co-operated in the useful deployment of manpower. I notice that he has not used as an example the National Union of Mineworkers. It is a very good example of co-operation—in 1957 there were 780,000 men, now there are 430,000 men, there has not been one strike and we have averaged a 6 per cent. increase in output per man shift over the last twelve years.
  Mr. Pannell: Of course I have not mentioned the mineworkers. I cannot go through the whole gamut of industries. But I noticed that my hon. Friend has also signed the Amendment upon the Paper, so I presume that his intervention was an addendum to that. I am near enough to the Yorkshire coalfield[Interruptionl —I did not catch that last"crack"from a recumbent position.

  1809
  I am merely asking my hon. Friends to recognise that we are now moving towards the concept of full employment and that there is no question of massive unemployment. We are in the 1960's, not the 1930's. We are considering this in a context of a shortage of resources, in which a Labour Government, of all Governments, must plan. I shall be no party, either, to a policy which ensures that the results and the rewards of increased production shall be garnered only by those able to wage economic war in the most potent way. The A.E.U. is probably the most economically powerful trade union in the country—
  Colonel Sir Tufton Beamish: On a point of order. There seems to be a growing habit for right hon. and hon. Members above the Gangway to stand with their backs to the Chair and address what they call their"comrades"below the Gangway. Do you deprecate this as much as I do, Mr. Deputy Speaker?
  Mr. Deputy Speaker (Sir Sydney Irving): Every right hon. and hon. Gentleman must address the Chair.
  Mr. Pannell: I must apologise, Mr. Deputy Speaker. I was addressing my remarks to the more intelligent part of the Chamber—[Laughter.]
  Mr. Deputy Speaker: Order. I hope that the right hon. Gentleman does not exclude the Chair from that category.
  Mr. Pannell: You will know, Mr. Deputy Speaker, that I have had the pleasure, in my day, of presiding over meetings of which you were a member, and I have watched with interest and sympathy over the years your progress to the honourable office of Deputy Speaker.
  My hon. Friend the Member for Salford, West (Mr. Orme) and I are proud to be members of the A.E.U. and I know that my hon. Friend the Member for Dunbartonshire, East (Mr. Bence) will agree that the A.E.U. is the most powerful trade union in the country, if one is talking 'n terms of the ability to wield economic war. I am not in favour of any battle for the highly skilled if it results in the highly skilled getting all the advan-
  1810
  tages of increased production at the expense of the weakest going to the wall.
  In this context, it is worth while quoting what Mr. George Woodcock has said on this issue, although some of my hon. Friends, even those on the Left, will accept me as an authority rather than Mr. Woodcock. However, he said:
  "I'm all for productivity, but it cannot be the answer to your problem. People who say that it is give me the impression that either they don't understand the problem, or having understood it, they are still kidding themselves, or using it as a bolt hole to get out of the way."
  He went on:
  "An incomes policy is a good thing for the workers in a full employment society, which we have at the moment for practical purposes…I have lived through a period when we had as many as three million unemployed. I would rather have today's problems than go back to those problems."
  In a rather derisory comment about the Bill, he said:
  The choices are between a shoddy, shabby, compromising set of fiddles such as we are engaged in or a high level of unemployment."
  He would choose the first.
  Mr. Eric S. Heller: Would my right hon. Friend make it clear that Mr. Woodcock was not referring to the Bill but was talking about voluntary efforts through the T.U.C.? Is my right hon. Friend aware, for example, that Mr. Woodcock also said:
  "It is my own view here and now that the things the Government seeks to do, so far as they can be done, can be done better by voluntary methods than by legislation".
  Mr. Pannell: I know Mr. Woodcock said that, but he also said that if he had to choose beween the two he would, broadly speaking, prefer this Bill as against massive unemployment. Mr. Woodcock is not yet Prime Minister and it is not his choice. It is, of course, this sovereign House of Commons which makes that choice.
  Mr. John Horner: Surely Mr. Woodcock was saying that if he had the choice he would prefer the voluntary system as opposed to the Bill. The choice was not between the Bill and mass unemployment.
  Mr. Pannell: I am quoting from the Sunday Times. As Mr. Woodcock also

  1811
  made remarks which cast some reflections on other people, I will not read all of what he said. In any case, perhaps my hon. Friend read a report of Mr. Woodcock's speech in another newspaper.
  I take it that my hon. Friends generally accept Part I of the Bill. Because of my long association with local government, I was interested the other day to note how much of the things we talk about have a labour element. Without giving a great number of statistics, I will merely mention that almost 35 per cent. of local government spending goes in wages and salaries through price fixing machinery which is completely outside the control of the elected members of those authorities. I looked up the figures for the Borough of Bexley, in which I live—and one part of which misrepresents us—and I found that the figure was 36·5 per cent. I recall a Conservative chairman of a Finance Committee saying—
  Mr. Deputy Speaker: I am sorry to interrupt the right hon. Member in the midst of an interesting argument, but I hope that he will address the Chair.
  Mr. Pannell: As I was saying—
  Mr. Norman St. John-Stevas: Get on.
  Mr. Pannell: I do not know why the hon. Member for Chelmsford (Mr. St. John-Stevas), who does not have even a nodding acquaintance with this subject, should seek to take over the responsibilities of the Chair. Probably 70 per cent. of all things done by local authorities which are affected by the burden of rates are fixed by wage fixing machinery or collective agreements which are outside their control.
  We are largely arguing about Part II of the Bill. Having read it with great care I suggest, with my native suspicion, that one would be hard pressed indeed to be caught under it. One would have to be an extreme sort of martyr to be caught by it. Indeed, one would have to struggle to be pulled up under it.
  Mr. James Dickens: Why bother to introduce the Bill in that case?
  Mr. Eric Ogden: On a point of order. You will be aware, Mr. Deputy Speaker, that only 65 minutes is available for back benchers to speak, and since about 60 hon. Members wish to speak—meaning that if we all spoke we would have a little over one minute each—might I ask you to ask hon. Members not to make interventions while other hon. Members are speaking, so making their speeches longer?
  Mr. Deputy Speaker: Order. That is not a point of order, but I must remind hon. Members that there is a shortage of time for this debate.
  Mr. Pannell: Hon. Members cannot have it both ways. They cannot sign a Motion and then say that the Measure to which the Motion refers is thoroughly innocuous.
  Mr. Dickens: I did not say that.
  Mr. Pannell: My right hon. Friend the Member for Nuneaton has not fully seized the Parliamentary obstacles that exist to the Bill. If one considers that under Part II there must be an Order in Council approved by both Houses of Parliament, with a debate on each Order, and then there must be detailed statements and Orders before anything can happen in regard to early warning notification, and if one adds to that the fact that the Government must consult representative bodies on both sides of industry, one sees that there are stiff hurdles indeed which must be overcome.
  Thus, the Bill will be brought in only, in effect, when the voluntary system has, if not broken down, then has certainly been openly defied and, at the end of the day, the trade unions will have their sanctions within their branches. No one can read the A.E.U. rule book without understanding these things. Every union has its own sanctions, with proper machinery, and we are, therefore, dealing with something that is of benefit to the community.
  Remembering that all this machinery lapses after one year, I suggest that there is nothing in the Bill which interferes with the principle of claims by voluntary bargaining. This was best put by the First Secretary, when he said that when one considered the long time that wages claims took, why people should object to being asked to pause for four weeks

  1813
  got him down. That is why I say that hon. Members have tended to overstrain this matter.
  In conclusion—[HON. MEMBERS:"Hear, hear."] For the sake of the record I should mention that it is Conservative hon. Members, not my hon. Friends, who are saying,"Hear, hear ", because I have been making sense, even if hon. Gentlemen opposite do not under-opposite stand it. I hoped hon. Gentlemen opposite could understand these things, but it seems that I can give them neither knowledge nor understanding.
  As long as Britain is economically weak, it has little power in the world. As long as the £ is suspect, Britain has little hope of being accepted into the European Economic Community. I am not saying that. The Times stated it. We boggle because we are too hard up to go ahead with E.L.D.O. to the full extent, because of action we must take over the aircraft industry and even because of the great schemes for hospital modernisation which we want to achieve.
  Bearing in mind the Motion which appeared on the Notice Paper in connection with Vietnam, we must accept that all these things, including Anglo-American relations and our balance of payments difficulty, must be considered as a whole. The Americans will not be deflected by a debtor. Only from a position of economic strength can we have a viable foreign policy, and it is no use people grumbling if we are not prepared to do something about it. The whole future of our policy and of the country depends on our capacity to stand on our own feet and get up from our knees. That is what this debate is all about.
  8.0 p.m.
  Mr. John Peyton: I do not intend to follow the right hon. Member for Leeds, West (Mr. C. Pannell) at any length. He seems to have been conducting at some length a kind of amicable teach-in for his hon. and right hon. Friends. He taught them the meaning of some very simple words, and I hope they feel that they have benefited from it. I da not know whether he detected the thrill of alarm and horror in this Chamber when he gave us the news that the whole Cabinet was behind this Bill —it had not occurred to us before that it was anywhere else.
  1814
  It must have been galling for the right hon. Gentleman to have to leave the trade union palm to his right hon. Friend the Member for Nuneaton (Mr. Cousins). I am sorry that the right hon. Member for Nuneaton is not now present, but in his absence I would say that he is not the first person who has found his natural eloquence somewhat inhibited by the Treasury Box. I am sure that we all enjoyed his very eloquent speech.
  I would add that the right hon. Gentleman let fall one or two remarks which at least implied that there might be things under the carpet. For instance, we would like to know what he meant by his reference to the building industry, and what he had in mind when he spoke of groups too tough to deal with. was impressed by what he said about productivity. His reference to a larger cake was very welcome, but it was regrettable that, having made much of the necessity to let wages go up to produce the larger cake, he did not say how he would reduce restrictions in any area for which he has responsibility and interest.
  The First Secretary said that he would he here for most of the time and listen to the arguments, but so far he has done remarkably little of that. He spoke at some length at the beginning of the debate, and just when we were all feeling that there was some deep hostility towards us we realised again that he is a man of courage and heart, and has a way of winning affection even among his opponents, when he suddenly included us among his friends—
  Mr. George Brown: Charity is the right word.
  Mr. Peyton: He spoke very shortly about the Bill itself, but I take this Measure very seriously. He spoke of all the policies the Government had for doing a whole lot of things for industry by way of modernisation, organisation and the rest, but I rather doubt whether any Government, even one including the right hon. Gentleman, can be competent to take on this massive task, which has to be performed by other people. I am not at all certain that massive Government activity of this kind does not do far more harm than good.
  The right hon. Gentleman ended his speech with a list of the things he said the English people want. That is all very right and proper, but he would be doing

  1815
  them a better service if he made clear to them what they must do to get these things. It is no use talking of what the people want. It is for the Government to stress what must be done to get these things and to emphasise that we all have to make a contribution.
  I believe this to be a very bad Bill, and I will tell the First Secretary why I think so. It is a specious Measure, because it far too plausibly makes the assumption that it can achieve something. I agree entirely with the right hon. Member for Nuneaton that this Bill will not succeed. Next, it is a pernicious Bill because of the powers it incorporates in itself and confers upon Ministers. I particularly call attention to paragraph 13 of Schedule 1, which says in effect that the Board shall have the same powers of eliciting information as are possessed by the High Court. I am surprised that more notice has not been taken of that sort of thing, because we would do very ill so lightly to equate a tribunal of this kind with the High Court, give it equal powers and—
  Mr. George Brown: Is the hon. Gentleman aware that that is common to all tribunals and to all those set up during his party's tenure of office?
  Mr. Peyton: The Minister is talking of a rather different tribunal. This tribunal has immense powers of interference, not only with individual industries but with individual companies and with individuals. We are taking a great risk in setting up an instrument with excessive powers which is far too closely related to the Executive.
  I believe that the Bill is menacing in the threat it holds for the future. I ask the right hon. Gentleman to accept that I am being completely wholehearted when I say that it is highly unlikely that any Government which set out on a course of action on which they later find it wrong to have embarked, will turn back on their tracks. Its members being human, they will say instead,"We have not gone far enough. We did not realise it at the time, but we must take greater powers." This Bill is specious, pernicious and menacing, and has no place in a free society.
  I should like to say a word to my right hon. Friend on the Front Bench—
  Mr. George Brown: Which one?
  Mr. Peyton: I have undertaken to speak briefly—and I need not remind the right hon. Gentleman of the way in which he responded to the invitation to hon. Members to make brief speeches.
  I want to tell my right hon. Friend that I believe the Opposition were mistaken in putting down a reasoned Amend ment. The Amendment should have shown clear and uncompromising hostility to the Bill, and in those circumstances we would have done well, practically and in principle, just to have voted against it.
  The First Secretary and his Friends have all along proceeded on the basis that we have two choices—we have the Bill or we have massive deflation and unemployment. I believe that to be an utterly bogus choice. The Bill is not a choice at all. It will not achieve anything and other measures will be called for—indeed, we have been told so by the Prime Minister today— [Interruption.] I can tell the right hon. Gentleman that one of my memories of the House of Commons will be of an endless stream of sedentary interruptions from him.
  Mr. George Brown: The hon. Member said that he thought my words in which I said that it was a choice between this or that were wrong. All I invited him to do was to give his third choice.
  Mr. Peyton: The choice which the right hon. Gentleman has offered us is an entirely bogus one, and he knows it. His right hon. Friend now has to embark on a policy of deflation, and he knows that also. The Prime Minister said this at the Box today. Unless he was just heralding one more of his anticlimaxes and one more non-event, we are to expect that action will follow. It does not always follow, and we may be wrong in expecting that. To suggest that this Bill is one of the easy, painless ways out of our economic difficulties, is to practise a confidence trick which is not even worthy of this Government.
  With great respect to those who have long experience of the trade union movement in this House, we have the spectacle here and in the country of the lumbering old thing, so like Low's carthorse, which appears to have learned terribly little except how to keep telling others to get up to date.
  8.12 p.m.
  Mr. Trevor Park: I am very pleased to be called tonight, because I am one who signed the Amendment whose principal sponsor was my right hon. Friend the Member for Nuneaton (Mr. Cousins) who addressed the House so eloquently and forcefully earlier this afternoon.
  I regret that the archaic procedure of the House prevents us from being able to give full force to the views expressed in that Amendment at the end of the debate tonight. The opinion expressed in it that the Bill should be rejected is a point of view held by wide circles in the trade union and labour movements and, also, I believe, in the country as a whole.
  This Bill is both wrong in its principle and will be ineffective in its operation. First, I wish to mark out clearly the common ground which the Government and those who signed the Amendment to which I have referred share. We both accept that a planned approach to incomes and production is necessary. We accept that the right of the Government and of the Prices and Incomes Board to express their views publicly on the effects of wage or price movement on the total health of the economy. We accept the need for voluntary action along agreed lines by trade unions, by employers, by the Government and by the nation as a whole. We accept that the Government have made considerable progress over the last 18 months in securing a general acceptance of the principles of a voluntary incomes policy.
  But we go on to say that the Bill far from inducing the attitude of voluntary co-operation which is necessary, far from fostering and helping to develop that attitude, will create widespread industrial bitterness and discontent. It is for that reason that we believe it to be wrong in principle. The Bill is intended to implement an incomes policy which events have proved to be socially unjust. The invidious distinction between the treatment of doctors, judges and Members of Parliament, on the one hand, and of railwaymen and seamen, on the other, is a shameful act coming from a Government and a party who profess to believe in Socialism and in ironing out the social inequalities of present-day society. By attempting to reinforce with legal restraints an incomes policy which itself
  1818
  is unjust the Government are falling down on the job not only which the Labour movement expects them to do, but the job for which the electors put them in their position of authority.
  By introducing restraints on free collective bargaining they interfere with basic trade union rights which are essential in a free society. By failing to take equally strong action against dividends and profits as are taken against wages, the Bill condemns the very principles on which it claims to be based. For these reasons, I am opposed to the principles of the Bill.
  I have said that I hope to show, also, why I take the view that the Bill will be ineffective in its operations except in those very conditions of deflation and unemployment which the First Secretary states it is the intention of the Bill to prevent. In conditions of labour shortage, in conditions of a healthy and developing economy, I do not believe that legal restraints of any kind can be successful in preventing the competitive bidding for labour by employers.
  Whatever legal restraints the Government care to introduce employers who are in need of scarce labour will discover ways of making technical adjustments in incentive schemes, will discover ways of extending welfare and fringe benefits and methods perhaps may go to the limits of dismissing employees one day and taking them on the following day at higher rates all of which will defeat the purposes of this Bill.
  The First Secretary and the Government will be able to do nothing whatsoever under the terms of the Bill to prevent this happening. Once the Prices and Incomes Board has issued a report there is nothing to prevent the contents of that report being completely ignored both by the employers and the trade unions concerned if they feel that it is in their economic interests to do so. We shall find an increasing number of retrospective wage and salary increases taking place directly as a result of this enactment.
  I say to the Government as forcefully as I can that once they begin to take the path of legal restraint and legal enactment contained in the Measure which is before us they will find that they are continually pushed further and further along that

  1819
  road. They will find that in the end the only way in which they can achieve their object—which I believe a wrong object, anyway—will be to replace the whole free collective bargaining system by a system of compulsory arbitration whose roots have grown in authoritarian and not democratic countries.
  There is another factor which no hon. Member has yet mentioned. In a mixed economy, where the rate of profitability differs tremendously from one industry to another, it is almost impossible to induce a uniform approach to wage rates. If one takes, for instance, the 300 leading companies of the country one finds that over the last two years 39 of them made a net profit based on capital employed of 25 per cent. or over. Fourteen made a net profit of 3 per cent. or under. Five made actual losses. The profits range of these 300 companies varied from a plus figure of 45 per cent. to a minus figure of 7 per cent.
  The significance of these statistics is that companies which make high profits and which can afford to do so will always, to retain a skilled labour force and to prevent a high rate of turnover amongst their workers, be looking for ways in which they can provide incentives and increases of one form or another.
  The total and the final effect of the Bill will be, on the one hand, to cause bitterness and discontent between the Government, the trade union movement and some employers, and, on the other, to propel the Government in a direction in which, being as charitable as I can, I believe that the Government do not wish to go. To attempt to control wage movement in a mixed economy with such variations of profitability is like trying to play cricket on a pitch of cobble stones. The ball can be guaranteed to hit something, but rarely will it hit the wicket.
  The Bill is wrong in principle. It will be ineffective in its operations. I accept that the Government have a problem to deal with. I accept that the problem cannot be ignored. If, in the last 18 months, the Government had devoted their attention and emphasis to taking the steps needed to increase productivity, if they had devoted the priority which it deserved to setting up the national production conference which was referred
  1820
  to in our election manifesto and to establishing production committees at every level of industry, they would have taken far more positive steps to solve our economic problems than are contained in the Bill.
  I must in all seriousness warn the First Secretary of State and the Government Front Bench that, if the Bill is given a Second Reading tonight, as it will be, it is far from being the end of the story. I and those who share my point of view on this question will fight for basic Amendments and for the removal of penal Clauses in Committee and on Report. We shall reserve the attitude we intend to adopt on Third Reading.
  The Bill strikes a blow at basic freedoms in a democratic society. It is a Measure which threatens to cause widespread bitterness and unrest among the labour movement. It is a Measure which is totally irrelevant to the solution of our economic problems. Let it be known that some of us at least on this side of the House repudiate it, and repudiate it completely.
  8.24 p.m.
  Mr. David Steel: I agree with much of what the hon. Member for Derbyshire, South-East (Mr. Park) has said. Both he and the right hon. Member for Nuneaton (Mr. Cousins) were guilty of self-contradiction in that they said, on the one hand, that the Bill is a threat to the freedoms of our society and that it introduces severe measures of compulsion, and, on the other, that at the end of the four-month period, when the National Board for Prices and Incomes reports, either the employers or the unions might reject the Report. They cannot have it both ways.
  I believe that the Bill is not a brilliant Measure. It is a very modest Measure. I do not believe that it has all the threats of compulsion and the slippery slope behind it which are detailed in the Opposition's Amendment. For that reason, if for no other, we on this bench oppose the Opposition Amendment and support the Government on the Bill.
  The Amendment speaks of
  "State control of prices, wages, dividends. and…. direction of labour."
  This harks back to the old idea of finding Socialism under the bed, the sort of

  1821
  activity which I should have thought we might well leave to the Prime Minister in times of national crisis.
  The part of the Bill about which my Party is concerned is Clause 24, which has certain dangers, exempting from the the effects of the Restrictive Trades Practices Act certain trade agreements which might be arrived at to meet the requirement of the National Board for Prices and Incomes.
  I can see the legal necessity for this, but it has many dangers in it. If a variety of manufacturers came together and sought a price agreement to meet the requirements of the National Board, that agreement could become permanent. When it was agreed that there should be an increase in the price of the commodity, it could be a flat range increase, making the price agreement a permanent feature. This is a real danger and we shall want assurances about the effect of the Clause.
  Most of the speeches have been concentrated not so much on the Bill itself as on the Government's prices and incomes policy as a whole, and I think rightly so. The Liberal Party is less happy about the general tenor of the policy than it is with the Bill. In particular, we have two basic doubts about the direction in which the Government are moving.
  First, I believe that, despite all the genuine efforts of the First Secretary of State in preaching the cause of a prices and incomes policy, the impression has none the less got abroad that this is a negative, restricting policy and that large wage increases are something which the Government think are bad and which they are determined to stop. I know that this is not really the intention of the policy, but it is the effect of the policy as understood by most people. It is essential that this negative aspect of the policy be removed and that the Government change course to a more positive direction.
  We have not got too high a wage structure. We have too low a wage structure. Some figures were given earlier—I have some others—about the comparative hourly average wage earnings in this country with some of our European industrial competitors. Taking 100 as the British index figure in 1953, the average
  1822
  hourly wage earnings ten years later were in Britain 178, but in Italy 198, in France 231, and in West Germany, 209.
  Mr. Ian Lloyd: The question of the relative wage in this country and that in other countries should be dealt with more seriously. The United States had had a guide lines policy which has conspicuously failed for a considerable time. The wage levels in that country are the highest in the world. They are not relevant to the argument whether an incomes policy works. This is a question of ends and means, not of relative wage levels.
  Mr. Steel: I think that they are relevant. Many of our industries which depend on a low wage structure of labour find themselves competing with industries in other countries with a high wage structure. The situation arises of the manufacturer who, calculating the cost of investing in new machinery as against the cost of retaining labour, finds that it does not pay to instal the new machinery. But it does pay his competitors so that in the end, we are left with more uncompetitive industries.
  Sweden is often cited as an example of a good prices and incomes policy. Last year, wage levels rose there by over 10 per cent. I therefore reject the impression given by the Government—I do not know whether or not it is intended—that the important thing is to keep wage increases down to 3 per cent. to 31 per cent. a year. One aspect of the Government's policy which has often been overlooked is that minimum earnings in this country are too low. When a previous Liberal Government introduced trade boards to 'establish minimum earnings it was a major breakthrough in policy. But minimum earnings were established then at roughly three-quarters of average earnings. Now, however, minimum earnings have slipped to just over 50 per cent. of average earnings. There is a big gap between the minimum earning level and the average wage level. By saying,"If we can get production up in a firm by 20 per cent. in a year there is nothing wrong with wage increases in that firm of 10 per cent.", the Government would be putting forward a positive and encouraging policy which would have much more success.

  1823
  The second basic objection and doubt that we have about the Government's projection of their policy centres on the emphasis usually put on the wrong part of the Declaration of Intent. The Declaration refers to"productivity, prices and incomes ". It is the first word that is usually left out. We talk about a prices and incomes policy and the question of productivity has disappeared. What we hear from the Government is about their prices and incomes policy, with productivity only occasionally mentioned. Instead, it should be a"productivity"policy in which prices and incomes are mentioned.
  The Minister of State, Department of Economic Affairs (Mr. Austen Albu): This is frequently said. I remind the hon. Gentleman that the prices and incomes are controversial, but that productivity is not a controversial subject. Productivity, therefore, hardly gets a mention in the Press.
  Mr. Steel: That is true, but I believe that the Government have not sufficiently tried to project it in positive terms. They have not put in their policy the required emphasis on productivity. Indeed, in speeches on this side of the House today, hon. Members have been decrying the fact that wage levels last year rose 9 per cent. There is nothing wrong with that. What is wrong is that productivity did not rise.
  If we keep harping on the negative aspect of keeping wages down we are emphasising the wrong point of the policy. I believe that there are no Government plans for promoting productivity plant bargaining. Yet we have had one major success-in the Fairfield shipyard on the Clyde. This was an example of what can be done. Management and unions came together to end out-dated demarcation practices and made productivity agreements. It is a splendid example of what we should be doing. It has had a great effect on the shipbuilding industry and other firms are following suit. Why did it happen, however? Because Fairfields went"bust"and not because of any planned foresight by the Government in their economic policy.
  What is lacking is the co-operative effort of management and unions throughout British industry, encouraged by the Government, which could enable us to
  1824
  scrap restrictive practices, make industry more efficient and get higher productivity. It is that element that is lacking in the Government's policy. I was interested to read a report on Sunday that the Labour Party is setting up a study group to investigate the success of co-determination schemes in Yugoslavia and West Germany. What did it do during all those years in opposition, when it could have had hundreds of study groups? This is precisely the direction in which right hon. Members opposite should have been going when they came to office. If the study group leads to further"pinching"of Liberal clothes, we shall be delighted, because we believe that this would be one way of encouraging productivity throughout British industry.
  The fact remains that wage negotiations —and this is where the policy has failed —are still conducted on the basis of rises in the cost of living and what other people are getting. Basically, they are not negotiated on the basis of increased production.
  Another major failing among those who are inclined to defy the productivity, prices and incomes policy is that they seem to think that it should be able to work in the short term, that it is somehow relevant to the balance of payments situation month by month. The First Secretary does not attempt to say this in defence of his policy, and it is a mistake among those who criticise it for not having succeeded in this direction.
  If we are to tackle the deep-seated problem of our balance of payments, a much swifter method is to take a basic political decision about our commitments east of Suez. The Treasury missed an opportunity when it could have introduced a payroll tax which could have been used to encourage managerial efficiency and promote regional policies. Instead, it settled for the Selective Employment Tax.
  We cannot introduce over night a rational wage structure and sort out anomalies left to us by various generations and reconcile an easy labour market with low unemployment and change the whole climate of negotiation. This policy must be a long-term policy and it must be embarked on with a far wider emphasis on the positive aspects of productivity rather than those in the rather modest Bill now before us.
  8.36 p.m.
  Mr. Tom Bradley: I support the Bill because I can see no acceptable alternative to dealing with the inflation which has plagued our economy over the last 20 years. It is the third definite attempt by a Government since the war to give effect to an incomes policy.
  In 1948, we had Sir Stafford Cripps advocating the acceptance of a White Paper entitled,"Personal Incomes, Costs and Prices ". Concurrently with that White Paper was issued a T.U.C. pamphlet entitled,"Real Wages ". Those were both well-intentioned documents and the intriguing feature of both was that their language was almost identical to that used in various White Papers and T.U.C. documents on the same problem which have been issued in the last two years.
  The language is the same. It is only the dimensions of the problem which are different. We are left to wonder whether, if we had persevered, how many years ago it would have been that we would have had an economy impregnable to the pressures at present operating on the £.
  Next, we had the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), who imposed a wages pause, which was actually a wages freeze, with such callous indiscrimination that it caused great injustice throughout the country and particularly to those in public service occupations, notably the nurses and the probation officers.
  Dr. M. P. Winstanley rose—
  Mr. Bradley: I cannot give way. We reached a tacit gentlemen's agreement a short while ago to speed up our speeches and not accede to interruptions so that more hon. Members might have the opportunity to speak.
  We then had the much despised National Incomes Commission. Now we have my right hon. Friend the First Secretary, whose policy from the outset has been much better conceived. He did not fall into the error of any of his predecessors of seeking to impose his policy from the top. All the way through he has patiently and painstakenly sought the co-operation of both sides of industry. At every stage he has consulted the Trades Union Congress and the Confederation of
  1826
  British Industry, seeking all the time to meet their objections and to come to terms as far as possible with the points of difficulty which they have raised. Nobody has done more to alert industry and the country to the dangers inherent in our economic situation.
  My right hon. Friend knows as well as anybody else that no incomes policy can possibly work without the co-operation of the trade unions. That is absolutely essential in a democracy like ours. I feel that many of my hon. Friends who have spoken with such vigour, at times almost with venom, from these benches would have been better employed in serving the party they represent in this House in using their trade union contacts to better purpose, persuading our trade union colleagues of the virtues and justice of the Bill.
  We had two conferences last year, a conference of union executives at the Central Hall on 30th April and another at the T.U.C. The Government's policy and the T.U.C. reports and documents outlining that policy were overwhelmingly endorsed by the delegates. I believe that the Declaration of Intent was never meant to be a meaningless piece of paper and that those who signed it should not now run away from the obligations to which they are committed.
  There has been one theme running through this debate. Hardly anyone has denied the need for a policy for the orderly growth of incomes, because it is a simple fact, which almost everyone accepts, that unless money income can be kept in line with real output prices are bound to rise. I accept that the cost of imports and Government tax changes can play a part in rising prices, but the most important factor in price increases is the rate of growth of money incomes.
  As trade unionists, we have always demanded that we should have a Government wedded to the twin principles of full employment and economic expansion. We have such a Government, but the precious possession of full employment means that one has in society an inherent tendency to inflation and rising costs. Apart from an incomes policy there is only one solution in those circumstances. It is not nationalisation or competition, it is the creation of unemployment. Do any of us really want that? We have spent a lifetime preparing and planning our economy

  1827
  so that it would never return to the desolation of the inter-war years.
  We have achieved a basis for permanent full employment which can only be endangered if we turn our backs on the sort of policy that is now being put forward. Of course, we do not want rising prices, either. Gallop polls conducted on this subject have shown that almost 75 per cent. to 80 per cent. of the housewives in the country put stable prices first on their list of priorities. Rising prices have two consequences—the economy becomes uncompetitive and there is a deterioration in our balance of payments position.
  In addition, it has grave social effects on pensioners and on the lowest-paid workers in the community, whose relative position has declined in recent years under this situation. As a trade union negotiator, I want to see that the increases I help to get for the people I represent are really worth the paper percentage applied to them. I want to remind my trade union friends who disagree with me that it is an illusion to imagine that, if one is so successful, because one is strong industrially, and obtains a 9 per cent. or 10 per cent. increase, one is really 10 per cent. better off, because it is certain that there will be more to pay out.
  I have never viewed as responsible trade union leadership the practice whereby one ploughs on using one's power to achieve successful and high incomes increases. That has a detrimental effect on the rest of industry and the smaller unions operating within it. The effect on the service industries of such practices, of unions using their militancy and power to force through highly successful wage increases, can be very serious.
  I remind my trade union friends that successful trade union negotiations and bargaining very often have nothing to do with militancy or power, but depend very largely on the industry in which one is operating. All my trade union negotiations have to be conducted for the people employed on the railways against a background of financial stringency and in an industry in which one cannot measure increases in productivity. We do not make traffic; we move it. It is, there-
  1828
  fore, extremely difficult to force through settlements comparable with those achieved in other sectors of industry which are much more profitable.
  I beg my trade union friends to realise, if they are Socialists especially, that there are wider consequences to the application of trade union power in our economy. I recognise that we are a long way from the Swedish system. In Sweden, there is a theory of trade unionism that some people hold back in certain years while others go forward. But we can patiently work towards this system, and the Bill will be a useful start in that direction.
  It is a sad fact that some of the most violent critics of the Bill are the same people who have vociferously over the years asked for more planning and control. They want Socialist planning everywhere except for incomes, where apparently the worst principles of capitalism should apply. It is very instructive and interesting that in the debate my right hon. Friend the Member for Nuneaton (Mr. Cousins) and my hon. Friend the Member for Derbyshire, South-East (Mr. Park) drew cheers from the Opposition for expressing 19th century laissez-faire ideas. It is argued by some of these people that what is wrong is not incomes rising too fast, but output rising too slowly to match it.
  This sounds very attractive, but one cannot turn productivity on like a tap. These things take time. I agree that much of industry is inefficient and that labour is badly distributed. But to change all this means the introduction of new techniques in industry and an end to old bad habits. A host of new agreements will have to be negotiated between management and men. This will necessarily take a good deal of time. Meanwhile, we need this policy. I hope that the existing voluntary system will continue and that the trade unions will accept their responsibilities and that it will never be necessary to invoke Part II of the Bill. But even the voluntary system is under suspicion by some of my hon. Friends.
  I am perhaps the only Member of the House who has appeared before the Prices and Incomes Board in support of a wages or salaries application on behalf of a trade union. In November, 1965, I supported an application for a greater increase in the remuneration of the people

  1829
  whom I represent than the railways were prepared to pay. I never found any deep-seated hostility by the Board to the principle of wage demands. I found not prejudice but a readiness to get at all the facts with scrupulous fairness.
  In the end, the Board recommended I 1 per cent. more than the railways' final offer of that time. This justifies the Board's existence. It is prepared to look fairly arid sympathetically at the position of the minority group of workers in industry who had suffered by comparison with the rest of industry in their wage demands. The real value of the Board as opposed to the National Incomes Commission set up by the Opposition when they were in power is that it does not conduct a post-mortem operation, but, in addition to making recommendations, indicates guidelines for the future.
  From my own experience, in addition to recommending a 5 per cent. increase for railway salaried workers, the Board indicated for us in the industry a pattern by which we could link pay with productivity. Talks are now proceeding on the basis of the Prices and Incomes Board Report on my industry. Given cooperation in the talks, I am certain that it will prove of very great value to the industry generally and to the people whom I am privileged to represent.
  The only trade unions which need to fear the Board are those with a poor case, that is to say, those whose members are not lower paid or those that are reluctant to reach productivity agreements. Under the Bill, the Board is given terms for the provision of an early warning system. This has given rise to all the agitation and resentment that has been expressed by some of my hon. Friends tonight.
  It is because of this provision that the Bill has become one of the most misrepresented and misunderstood Government Bills for many years. I remind my hon. Friends that the Board does not have the statutory right of enforcement. It has not got it now, and it will not have it under the Bill. When my hon. Friend the Member for Derbyshire, South-East talks about the Bill meaning restraint on collective bargaining, he cannot have read it. It does not in any way interfere with the normal processes of collective bargaining, either before the Board reports or afterwards.
  Mr. George H. Perry: You wait.
  Mr. Bradley: I am prepared to wait, because I have confidence in my own Government.
  I have confidence in what the Government are telling us and confidence in the trade union movement, and I believe that the Bill does not infringe our traditional methods of negotiation. There is nothing in it which prevents claims being made or free negotiations taking place. At the very worst, there is a standstill of three months in applying settlements. Some negotiating machinery already consume that amount of time and far more, and my experience on the railways has been that we submit claims in April and conclude them at Christmas.
  I should be very happy if I thought that every time we notified a demand for an increase we would get a recommendation after three months and a settlement following that, and this is the case with many industries which take far longer to process their claims than the three months stand still period in the Bill. Once that period has elapsed the p.irties are free to act on their own judgment, and what has been said by some of my hon. Friends is not right.
  If, as I believe, the incomes policy that we have today,—and if it is continued under the authority of the Bill—is the only alternative to unemployment, it is a very small price to pay. All the anguish and hard words that are being used about the Bill are as nothing compared to what would be said outside closed factory gates in two years' time if we wreck the policy.
  The policy is well worth supporting, because there are only three choices before the nation at present: inflation leading to devaluation; deflation leading to chronic unemployment; or an incomes policy which gives us the only chance of stability.
  I hope that the House, industry and the country will give it every support.
  8.59 p.m.
  Mr. Norman St. John-Stevas: I am compelled by the lateness of the hour to put my case in a nutshell. There are two indictments against the Bill. First, it is economically irrelevant. Second, it is a threat to our free society. These indictments are not inconsistent.

  1831
  It is irrelevant for two reasons. First, it has come too late after all the compromises and struggles behind the scenes, which have at last been brought into the light of day by the resignation of the right hon. Member for Nuneaton (Mr. Cousins).
  Second, the provisions are inadequate in themselves. When all is said and done, what does it amount to? The delays on pay awards will be a maximum of four months. All this will do will be to encourage unions to put in their claims earlier. Dividend increases are to be notified to the Chancellor. This will save him looking at the requisite pages of the Financial Times.
  If pay awards are made or if dividends go up and the Board disapproves, what then? What can it do? The First Secretary of State was at great pains, devoting most of his speech to it, to show how ineffective in practice the Bill will be. But it is this very inadequacy of the Bill which arouses alarm and the suspicion of many of us on this side that it represents a threat to liberty. The Government having played this inadequate card at this moment, will have no course open to them but compulsion. They will be compelled to turn the Prices and Incomes Board into a kind of viceregal body which will be responsible to no one, when, in fact, responsibility for the economic and financial policy of the country should rest with this House and the Government who are answerable to it.
  We have been asked about our own policies. They have become clear during the debate. [HoN. MENDERS"Unemployment."] No, not unemployment. That was repudiated by my right hon. Friend the Member for Barnet (Mr. Maudling). We see as a solution to our economic problems a productivity drive, an increase in competition, and the development of a high-wage high-efficiency economy. We would combine that with root and branch trade union reform. How much this is needed we can see from the most recent piece of news from the trade unions, namely, the attitude of the National Union of Railwaymen to liner trains. This was described by the Minister of Transport as shortsighted. We could describe it in rather stronger terms, as blind folly.
  1832
  The responsibility for the economic situation in which we find ourselves today does not rest with the Opposition. It rests with the Government. Two years have passed, two wasted years of what the right hon. Member for Nuneaton called"sloganising and cliché thinking ". Instead of taking advantage of the loans we have had from abroad to put our economy in order, the Government, led by the Prime Minister, the First Secretary of State and the Chancellor, have drugged themselves with this nostrum of an incomes policy.
  "On many occasions ",
  said the right hon. Member for Nuneaton when he made his resignation statement in the Daily Mail,
  "I have talked with the Prime Minister and with senior Cabinet colleagues, but, frankly, I have been getting nowhere."
  We will get nowhere until we make a break once and for all with the verbiage and nonsense which is the Government's substitute for economic policy, of which we had a particularly large dose in the First Secretary's speech today. Until we get way from this generalised approach and concentrate on detailed and effective policies to put our economy to rights, we shall have little hope of correcting the basic weaknesses which are sapping our economic strength.
  The policies we have put forward are for the long term. But what of the short term? Nothing is left now but deflation. That should be clear. The operation of the Selective Employment Tax, the denial of bank facilities to those who need to borrow, which was probed out of the Chancellor by my hon. Friend the Member for Horsham (Mr. Hordern), the 7 per cent. Bank Rate, the doubling of the special deposits, and the unspecified means hinted at today by the Prime Minister, all amount to a massive dose of deflation.
  It was extraordinary of the Prime Minister who, presumably, is endeavouring to restore confidence in the economy, to make the kind of vague statement that he did today when he said that unspecified measures were to be taken in the future. Clearly, he did not know what measures he should take.
  It is not Opposition policy to set out a deflationary programme for the economy, but it is clearly required now by the

  1833
  harsh economic facts of life. The Government have squandered two years, and we must now pay the price.
  Rejecting the Bill, therefore, is not an end. It is not an answer to our economic problems. It is merely a means. Until we do so, we shall not get to grips with the fundamental weaknesses in our economy and we shall be unable to put them right.
  9.0 p.m.
  Mr. Roy Hughes: The country is faced with serious economic difficulties, and most of them can be attributed to 13 years of government by right hon. and hon. Gentlemen opposite. After listening to them today, one has the impression that they have not improved on the economic principles enunciated by Adam Smith a century or two ago.
  The question which we need to ask ourselves is whether the Bill, if and when it becomes law, will help us to solve those economic difficulties. Speaking for myself, I have certain doubts about it. It is suggested in what are usually reliable journals in this country that the principal purpose of the Bill is to allay the fears and anxieties of foreign bankers. I would like my hon. Friend the Under-Secretary to give us some assurances on that point when he winds up the debate.
  I welcome the concession that has now come from my right hon. Friend the First Secretary that trade unionists are not to be put in gaol if they transgress. That is a step forward. However, if there is a delay in implementing a settlement and, however reluctantly, trade unionists resort to some form of militant action, they can be fined. What is more, the idea is being mooted that the fines should be collected by managements from the pay packets of the workers concerned. I suggest that that would be a most dangerous course of action, and it would be particularly humiliating to the shop stewards—that much maligned section of the community—the vast bulk of whom are playing such a magnificent part in the industrial life of our country.
  In addition, the Bill would have the effect of restricting the bargaining power of trade unionists. In turn, that would
  1834
  have the effect of encouraging non-unionism, and I bear in mind here the fact that only 50 per cent. of the people eligible for membership actually belong to trade unions at the present time.
  This legislation has been"sold"to large sections of the trade union movement on the basis that it will help the lower-paid worker. In practice, that has not happened, and there is no means of providing for it. After all, a fair incomes policy should be based on removing existing anomalies. We have the classic case of the seamen. Here was an under-privileged section of the community looking for its place in the sun and trying to catch up with the not particularly handsome rewards already received by its counterparts in Denmark, Sweden and Western Germany. Yet at the outset they were told,"You are breaching the dykes of the Government's incomes policy ". A great opportunity was missed, and one is left with the impression that what has developed is not an incomes policy, but a policy of wage restraint.
  Moreover, the Government can with some justification be accused of pursuing one policy for the professional classes, and another for the lower-paid workers. The judges and the doctors are obvious cases which spring to mind. Bear in mind, too, that some of the awards granted to these professional people have been bigger than the take-home pay of many ordinary trade unionists. Instead of removing anomalies, the policy seems to be based on the idea that the present distribution of incomes is broadly right. I cannot accept this proposition.
  Part II of the Bill will impede the main job facing the country, which is how to get output and productivity moving ahead rapidly. Britain is not a high-wage economy. In fact, it is a low one, so low that overtime and extra jobs are needed to provide millions of people with the money that they need to pay their weekly bills. Our wage increases lag behind those of other countries, but the problem is that our output lags even further behind, and this, of course, is what pushes prices up. The effect of holding back wages tends to delay modernisation, because low wages create a disincentive to invest in labour-saving devices.

  1835
  The principal answer to the country's economic difficulties is increased productivity. This can best be obtained by more horsepower at the elbow of the worker so that more can be produced and with less effort. I need no reminding that this is essentially a long-term answer. Why not encourage more productivity agreements? After all, additional pay in the packet is still one of the greatest incentives for increased productivity.
  Again, tackle the question of overtime working, which is probably the greatest iniquity in the industrial life of this country at the present time. Thousands of man-hours are wasted each week on so-called overtime working. I would have thought that the considerable talent and energy of both the First Secretary and the Minister of Labour would be better spent in pursuing this sort of objective, rather than in pursuing the more negative aspects of the Bill.
  There should be much more stringent controls on exports, and above all, we should cut defence expenditure. When looking at the economic history of this country in the inter-war years, one is reminded that during that period we were so wealthy as a nation that at times we could afford several millions of people unemployed. Now it appears, when we are told that we are near bankruptcy, that we can afford to spend more than £2,000 million a year on armaments. This does not make sense to me.
  Low, the famous cartoonist, has been referred to in this debate. The hon. Gentleman stole my thunder, so to speak. Low portrayed the trade union movement as a big carthorse, and I am reminded of the old saying that one can drive a willing horse. In this sense, would it not be better for the Government to secure the full and wholehearted co-operation of the trade union movement in helping to solve Britain's economic problems? The Bill in its present form will not do that.
  I forecast that when the history of this Labour Administration is written the Bill will be known as the irrelevant Bill. It will do little to solve the nation's economic problems, but will cause bitterness and strife in industry. I say to the Government,"Take it back for further consideration."
  Mr. Ogden: On a point of order. Mr. Deputy-Speaker, you will know that it is the custom and practice in this House that on occasions such as this the time between 9 and 10 o'clock is given to Front Bench speakers. This was the reason why the hon. Member for Chelmsford (Mr. St. John-Stevas) sat down at 9 o'clock. Rumour has it that in this debate the time for the Front Bench speakers will begin at 9.25 p.m. If so, should not the House know this?
  Mr. Deputy Speaker: I think that the hon. Gentleman would do better to leave it to the Chair to allocate the time.
  Mr. Ogden: Further to that point of order—
  Mr. Deputy Speaker: There is little time left. I hope that the hon. Member will leave some time for speakers who have been waiting to be called.
  9.11 p.m.
  Mr. Peter Hordern: I am sure that the hon. Gentleman the Member for Liverpool, West Derby (Mr. Ogden) would not wish to deprive me of what few minutes are left. This has been an historic debate, certainly in this year and this Parliament. We have heard some dramatic announcements from the Treasury Bench and from the Cabinet about their proposals to correct the economy, and we have had warnings of the future actions which they propose to take—actions which are quite unspecific. We have also had a major speech from the right hon. Member for Nuneaton (Mr. Cousins), strongly supported by many of his hon. Friends.
  Many of my hon. Friends agree with his description and analysis of what is wrong with the Bill. We agree with every word he said about that. It cannot conceivably work. It is worth while reminding the House of the genesis of the Bill. It is a very sordid story. It originated not as part of the productivity arrangements; it was produced as a result of backstage negotiations almost exactly a year ago.
  On 27th July last year the Chancellor introduced his July measures—a further batch of deflationary measures—and the following day sterling was strong at 2791. Just before the Recess, on 5th August, the Prime Minister set off for the Scilly Isles. If we can believe the newspaper

  1837
  reports—at any rate, the report in the Sunday Times, which hon. Members must admit has the ring of truth about it—the Prime Minister was alleged, after an interview with the then Governor of the Bank of England and after talking to the First Secretary, to have told his right hon. Friend to examine what further progress could be made in strengthening his incomes policy.
  The First Secretary was in Nice, and back from Nice came this policy and further alarms and excursions occurred, with conferences with the C.B.I. and T.U.C. Everybody knows what a dramatic part the First Secretary played in the T.U.C. conference at Brighton. All this action was used as the Government's reply to the sterling crisis, but it was a"phoney"reply.
  Everybody in this debate, on both sides, has said that there are many loopholes, to put it at its lowest. Those who have argued most strongly against it have pointed out the absurdity of it and the inequities of its proposals. I wish to deal with one general aspect. I suggest that every hon. Member must have felt that such a Bill was forthcoming. It was always in the Government's mind.
  I made a special visit to the Netherlands earlier this year to see how their system works. They have had a very restrictive prices and incomes policy ever since the war, yet their circumstances are entirely different. They have had no strikes since the war. Nevertheless, despite the most restrictive prices and incomes policy, even when it was working there was a black market and a grey market in wages, and finally, in 1964, the system broke down completely and there was a wage increase of 18 per cent. and a further increase of 11 per cent. last year—this in a country where really good relations existed between trade unions and employers. How such a system could possibly work in this country I cannot imagine. Every hon. Member knows by what he reads in the Press and sees in his constituency how inconceivable it is that a prices and incomes policy could work here.
  How, for example, are we to measure the worth of a mini-car as a fringe benefit to an employee who has managed to attract the greatest number of workers into his factory? Another case which it is
  1838
  impossible to measure is that in my own constituency, in Crawley, of a schoolgirl of 19 who set up an employment agency with six other girls who hired their secretarial services to employers for £12 a week; and three weeks later offered their services to another employer for £15 a week. How can a prices and incomes policy work when that happens?
  The Bill is entirely inappropriate in the way in which it attempts to deal with dividends. Anyone who knows anything about dividend distribution recognises that when a board of directors decides to declare a dividend it has to do so immediately the decision is taken. That has always been the case. The Bill provides no penalty for that, but it does provide that such a dividend decision must be looked at from a base year and that base year is under the selection of the Department of Economic Affairs. We shall certainly want to examine this proposal carefully in Committee.
  A further absurdity of the Bill relates to script issues. It demonstrates the ignorance of the party opposite on all matters concerned with dividends and with the financial workings of the economy. This is the worst commentary on this aspect of the Bill. It was introduced as a cure for a state of affairs on which it could not conceivably have any effect. Yet it is bound to cause further damage if it is implemented. Furthermore, when, as it deserves, the Bill fails in its objectives, further measures of restriction will undoubtedly be taken. Everyone knows this to be true.
  More and more centralised control will occur and the direction of the economy will be taken more and more into the hands of the Department of Economic Affairs and of the Government. The reason for this miserable Bill is the complete failure of the Government to control the level of demand. That in itself originates from the Prime Minister's fatal mistake in dividing the direction and control of the economy between the First Secretary and the Chancellor of the Exchequer. This is the root cause of all the troubles.
  A further example of the absurdity and of what is even now their misunderstanding of the economic situation was shown when the Prime Minister announced today that the Government were considering further measures. What kind of

  1839
  impression did that make on foreign holders of sterling? The Government do not even know the state of the economy or whether these measures will be necessary or not. This is the position of the country.
  We on this side know that the Government are entirely responsible for the present economic situation and that the Bill will not only not help, but will be disastrous for our economy.
  9.19 p.m.
  Mr. Iain Macleod: There is nothing special about the hour of 9 o'clock other than convention. By agreement with the Government Front Bench we have tried to restrict our speeches as much as possible for the convenience of hon. Members so that a few more at least could speak in the debate. I hope the House will understand if, as a result, I push ahead fairly swiftly.
  I should like to congratulate the three maiden speakers we have heard—the hon. Members for Accrington (Mr. Arthur Davidson) and Stretford (Dr. Ernest A. Davies) and my hon. Friend the Member for Tavistock (Mr. Michael Heseltine). All three followed predecessors who were well known and respected on both sides of the House. It was good to hear the tributes which they paid.
  This inevitably has been at least as much an economic debate as a debate about the Bill, partly because of the Prime Minister's grave statement this afternoon and partly because, certainly on the benches opposite, the dialogue went along the benches rather than across the Floor of the House. I hope very much that when we hear the Prime Minister's full statement hon. Gentlemen opposite will remember one phrase from the speech of the right hon. Member for Nuneaton (Mr. Cousins), when he said that he thought that the Government were going the wrong way, for the truth of this matter is a simple and sad one—
  Mr. Stanley R. McMaster: On a point of order. Is it in order, at 9.20 p.m., at the end of the Second Reading of a major Bill, for not one senior Government Member to be present?
  Mr. Speaker: Order. The hon. Member's right hon. Friend will not be grateful for that interruption, which is not a point of order.
  Mr. Macleod: It is not in order, but it is discourteous. A day or two ago, on the City page of The Times, it was stated:
  "There is now a growing feeling in the City and beyond that the Chancellor may have to take further steps—and soon—to throttle back home demand ".
  Later, it stated:
  "The entire Budget was based on the premise that the various deflationary measures would take time to work through and that the economy would be all right until the autumn ".
  We know that that is not so, and from this side of the House during the Budget, in the Budget debates, on Second Reading of the Finance Bill and time and again, we have said that it was an extremely dangerous policy to do nothing until the autumn and then to take out a vast interest-free loan, which is the sole feature of the Budget.
  The Chancellor took a different view and thought that he could ride on the reserves until S.E.T. came to his rescue in the autumn. In July last year the Chancellor gambled by not taking action. He gambled and he lost. We were bailed out by the central banks all over the world. This time, once more, he has gambled. He has lost. But this time nobody can bail us out except ourselves, and this is the importance of the package which the Prime Minister is going to announce.
  I ask the First Secretary to please say to the Prime Minister,"Make this statement soon. Announce this package soon"for this is a crisis of confidence, as all crises are, and we have been basically in this crisis of confidence ever since November, 1964. [HoN. MEMBERS:"No."] Yes, we have. It was very sad indeed to hear this afternoon the beginnings of the old soft shoe shuffle from the Prime Minister as he announced measures that have already been discounted by the market and, therefore, will have no effect—and the right hon. Gentleman said that he did not know and was not ready to say what further measures are required.
  I therefore urge the First Secretary to plead with the Prime Minister to do it soon—and this time please can we have no double-talk to accompany it? Do it

  1841
  and say it, and mean it if there is no other way; and indeed I do not believe that there is any other hope.
  In this context, one sentence in the resignation letter of the right hon. Member for Nuneaton of 5th July—
  Hon. Members: Where is he?
  Mr. Macleod: I must get on. I do not know where the right hon. Gentleman is, and I do not want to use what little time is available in asking where he is.
  In his resignation letter the right hon. Gentleman said:
  "That attitude"—
  of Treasury control—
  "cannot help us in a drive towards expansion of demand and has obviously driven us to the position where our international monetary transactions have been based on assurances of our intention to restrict internal demand ".
  Let those on the Government benches have no doubt about it. It is the intention of the Government, declared to our creditors—and this Bill may well be part of the price—to restrict internal demand, with all the consequences for employment that will flow from that.
  That is why I want once more to make a plea that I made immediately after the Budget. I think the events of the last day or two have lent urgency to it, so perhaps I may now repeat what I then said. I said:
  "…I very much hope that we shall soon have a debate on the whole situation and our attitude towards unemployment, because politicians are so inhibited from discussing unemployment that we very rarely do this in the House. Yet it is not possible to understand the way the economy is going unless one discusses openly the level of unemployment.…"
  I went on:
  "In short, we need—and perhaps at his leisure the Prime Minister will consider this —a new White Paper, a new 1944 White Paper, on unemployment, because the old thoughts and fears of pre-war years are now completely out of date and it would be a good thing if, in modern circumstances, we could see if we could redefine our attitude towards unemployment."—[OFFICIAL REPORT. 4th May, 1966; Vol. 727, c. 1644.]
  I really believe that this is a vital necessity for the House of Commons as a whole.
  We know the original Beveridge assumption of 8 per cent. as full employment in a free society. With various
  1842
  qualifications, he revised it to 3 per cent. We know what Mr. Gaitskell put forward as the target-3 per cent. at the seasonal peak and 2 per cent. overall. We know that the reality of full employment in those years, even taking account. for example, of the coal crisis in 1947–48 and January and February in the winter of 1963—is not the 2 million unemployed that the First Secretary hurled across the Floor of the House, or one million—we only reached that in one week of the coal crisis I have mentioned.
  The difference in achievement between the two parties in power is statistically negligible, and we know it in our more straightforward moments when talking about unemployment. Can we then not say that full employment is here, and here to stay, and that fear has gone with it? If we can do that, perhaps we can so redefine our attitude towards unemployment as to enable us to approach all these problems with memories of the last few years with us rather than the memories of the inter-war years which led to the Beveridge theories.
  I believe that in our present economic position—which I am afraid I think is very serious indeed—this Bill is entirely irrelevant. This is partly because of its eyewash—:and we know this. Part I is unimportant. My right hon. Friend the Member for Barnet (Mr. Maudling) referred to some of the items; to what is said about distribution and dividends. Clause 12 says that in seven days one has to know what the decisions of the directors are. The truth is that one knows already within seven hours, because these decisions are notified at once.
  Wage claims obviously cannot all be notified, because there are tens of thousands of them and the system would be drowned, but there is an early warning system in St. James's Square. The Minister of Labour has on his desk all the time, and so must the First Secretary, a schedule showing every single wage claim of importance, with the date it originated and with comments on its progress. We all know what happens. We all know that in the Whitsun and other conferences this routine goes forward, and that the formulation of it is as carefully worked out as a minuet.
  All that will happen as a result of the Bill—and this is one of the reasons why the Declaration of Intent failed a year

  1843
  ago—is that people will expedite the process, taking the four months into account, just as they pushed forward their claims all the faster a year ago because they feared that this Bill, or similar action, would come from the Government. So this Bill is at its best a jest, and if the First Secretary had heard some of the speeches of some of his hon. Friends he would recognise it.
  The right hon. Gentleman was. very proud of the support he got from the C.B.I. and the T.U.C. a year ago. What do they say about this Bill? Mr. John Davies, Director General of the C.B.I., said:
  "The C.B.I. has always regarded this ' early warning' Bill as irrelevant to the real problems of incomes policy. It is not lack of information which is permitting inflationary increases."
  The Secretary-General of the T.U.C., Mr. George Woodcock, said:
  "I think this present Bill is neither here nor there, but I object to it as the start of a road that, I think, will end in disaster."
  That is exactly what the Amendment which we are putting before the House tonight says.
  We are not really concerned with the Second Reading of this Bill. We are concerned with the failure of a policy. We are concerned with the failure of the First Secretary's policy. This is the funeral service rather than the Second Reading with which we are concerned at present.
  The First Secretary comforted himself with a bunch of figures he has to show that here and there an odd case has crept somewhere round about the norm, that here and there perhaps some attitudes may have been changed, some claim may not have been pushed forward because of the admittedly hard work and passionate belief—for which I have always given him credit—in his policies which he has shown. But the reality is what we must look at. The reality is quite simple.
  The rise in average weekly earnings—[Interruption.] Could the First Secretary follow this for the moment? The rise in average weekly earnings on Ministry of Labour figures for the most recent year, from April, 1965, to April, 1966, showed an increase of 9.5 per cent. The increase of retail prices has been climbing ever since October, 1964, at a level of something over 5 per cent. a year.
  1844
  Production was 1 per cent. up over the last quarter of last year and stagnant in comparison with a year ago.
  That is the reality of the incomes policy which we are discussing. That is the reality of the Government's proposals that come before us tonight. In other words, as the Economist put it on 2nd July this year:
  "In the first five months of this year more people in Britain pushed up their earnings more steeply for less work than at any time since 1960. This is what it is all about. This is what has happened to the incomes policy."
  Whatever may have been its origin, if the Parliamentary Secretary is to reply I should like him to take up the quotation I read from the resignation letter of the right hon. Member for Nuneaton and tell us, was this a pledge to our creditors, and exactly how far—if it was—did that particular promise go?
  I said that I would speak only for a quarter of an hour and cram this into the time for debate. We have moved a reasoned Amendment, but, whether one moves a reasoned Amendment or votes straight against the Bill, there is only one vote on that subject. I understood the point of view of the right hon. Member for Nuneaton when he said that he would not vote for a Tory Amendment even if we enshrined his own words in it. That is not perhaps very good House of Commons practice, but I understand exactly what he meant. There will, in fact, be another vote tonight, and perhaps I should mention this to the House.
  Immediately after the Second Reading we shall move from this bench that this Bill should be taken on the Floor of the House in Committee. That is something on which, whatever hon. Members feel, we can vote. The one thing we want is to give the fullest possible publicity to this Bill for those who hold very widely different points of view, as indeed we do on these benches, towards it. When we move that Motion, the right hon. Member will not be under that particular disability. He might even join us, or at least abstain. I believe it is necessary to bring this Bill to the Floor of the House and so to expose and, therefore, destroy with publicity what is a miserable, a useless and friendless Bill.
  9.35 p.m.
  The Under-Secretary of State for Economic Affairs (Mr. William Rodgers): We are now reaching the end of what

  1845
  has been a valuable and interesting debate. I am only sorry that I have not been able to hear all the contributions which have been made. As the right hon. Member for Enfield, West (Mr. lain Macleod) said, it seemed to us right on an occasion of this importance that as many back-bench Members as possible should be enabled to speak. That is why it seemed to me desirable to limit my reply, even if it meant, as a result, that I might be unable to deal with all the points of detail which have been raised during the course of the debate.
  I have said that I have not heard all the speeches, but it has been my good fortune to hear three maiden speeches. Many maiden speeches are good, and they have merit in themselves, but I think it fair to say that not all of them are also relevant to the subject of the debate. The great virtue of today's maiden speeches was not only that they were good in themselves, but that they were relevant to the Bill. We heard from the hon. Member for Tavistock (Mr. Michael Heseltine) a fluent and well-informed speech which was a model of its kind. We heard from my hon. Friends the Members for Accrington (Mr. Arthur Davidson) and Stretford (Dr. Ernest A. Davies) admirably-argued speeches.
  I must confess that my delight was the greater because they were in support of the Government. I thought that they made some exceedingly shrewd and powerful points indeed, which, I hope, have been noted on both sides of the House. I shall welcome their participation in our debates at any time, even if, on occasion, they might find themselves in the unhappy, and I believe untenable, position of being critics of the Government.
  The right hon. Members for Barnet (Mr. Maudling) and Enfield, West sought to widen the debate into a general one on economic policy. It is right when we are discussing a specific piece of legislation that I at least should stick pretty closely to the subject which the House has before it today. Three points, and three points only, are at issue today. The first is the principle of a policy for productivity prices and incomes. The second is the question of how it has been applied, particularly since April last year. The third concerns the Bill itself.
  1846
  On the first point, it seems clear now that there is a large degree of unanimity about the need for a policy. Critics have failed today, as they have failed before, to produce a constructive alternative to it. In the last resort what matters is not whether there may be faults in the policy or faults in the Bill, but whether it is the best possible course we can follow to deal with the situation which confronts us. If the critics expect to carry weight and to persuade others, they must demonstrate that there is a coherent and constructive alternative to the attempt which the Government are making.
  A number of hon. Members have made very interesting speeches on the problem of productivity. Nobody would dispute that productivity is exceedingly important. As I shall say again later, productivity is, after all, an integral part of this policy and has been since the beginning when it was formulated and endorsed by the Government.
  Rising productivity is still something that we must hope to achieve over a relatively long period. We cannot change the structure of industry nor, least of all, can we change attitudes in industry overnight. But, while we are dealing with a long-term problem, time is not on our side and it is unrealistic to say that we should rely on productivity and forget about the prices and incomes side of the policy.
  The second point about productivity which has already been well taken, but which I should repeat, is that while it is true that, in many industries, it is possible to relate increases in wages to increases in productivity, there is a very large sector of industry, involving many people, where there is not this simple relationship which enables wage claims to be based on a productivity agreement or the promise of such an agreement.
  If we were to put all the emphasis on productivity and say,"Let us forget about the norm and only consider increases in relation to productivity ", we should be neglecting to deal with that very large body of people with whom many of us on this side of the House are very deeply concerned.
  I am not saying, and the Government have never said, that this policy is a panacea. It is not the whole solution to our economic problems, but it is part

  1847
  of the solution and we cannot get away from that. Nor is it possible to say that this is a policy for today which will be superseded when we succeed on the productivity side. Even if it could be argued that we had time on our side, it is not the case that, at some time in future, we should be able to forget about prices and incomes and say that we had got on to the productivity escalator and, therefore, nothing else mattered.
  A continuing campaign for higher productivity and a policy for prices and incomes will remain complementary. They are not alternatives. It is also clear that whatever we may do on productivity cannot possibly show results in the short term—and the short-term problem is inescapable. What I am saying—and it is right that I should issue a warning—is that while higher productivity could mean a higher norm, with wage settlements above 3½per cent. then being tolerable, it could not mean an end to the need for an incomes policy. The link between incomes, prices and productivity is a permanent fact of economic life, whatever the circumstances with which we are dealing.
  As my right hon. Friend the First Secretary of State said, in fully planned economies like those of Eastern Europe the control of prices and profitability involves control of wages. There is no free collective bargaining. There is no opportunity at the end of the day to make up one's mind about where one wants to settle irrespective of what anyone else may have said about one's settlement. That is the position in the so-called fully planned economies.
  In such countries, there is a wage fund. which is what is left after taxation and profits for reinvestment have been deducted. There is no way of maintaining growth except by fixing wages at the level which productivity allows—and even then improvements in productivity can be passed on in lower prices or increased investment without any improvement in wages. The same is true, of course, of economies where so-called free enterprise is a great deal more unrestrained than here.
  I emphasise again what my right hon. Friend said—that, when considering the effect of increases in productivity, let us
  1848
  not assume that it is only the workers in industry who are entitled to some of the product of that increase. Some of it, we hope, will be passed on to the consumer in stable and, one might believe, sometimes lower prices.
  The plain fact is—and this is the crucial issue tonight—that in every country, whatever its political system and whatever its economic health, full employment requires a firm relationship between the growth of incomes and the growth of productivity. There are simply no two ways about it.
  I turn now to the second matter which has been under discussion today—the application of the policy, particularly since April of last year. I am frankly ready to agree that there may have been times when it has seemed that the policy has been applied in a rough and ready way. I admit—and this is a very important part of the argument for the policy—that we have not yet fashioned a perfect and faultless instrument. We are still feeling our way.
  If hon. Members opposite agree with the right hon. Member for Enfield, West that the policy is a jest, they are entitled to say so and to behave as though they believe that to be the case. But there are many people in the country who will watch the debate today, including my constituents in Stockton-on-Tees in the North-East, who will not regard this policy as a jest and who believe that a serious debate about it and acceptance of it is an essential part of ensuring that we do not return to the position of four years ago when men were walking the streets of my constituency because there were no jobs for them to go to.
  I have been to my constituency on many occasions and asked constituents,"Which do you prefer? Do you want to take the Government's policy for prices and incomes seriously, whatever its imperfections, or are you prepared to forget all about it and to opt for the circumstances which we found only four years ago?"I know what they say. They say that it is not a jest, that this is not a subject for entertainment, that it matters to them, to their livelihoods and to their families. That is why I say that the issues which we are debating today are of the greatest importance.
  I very much welcome what was said by my hon. Friend the Member for Stretford and my hon. Friend the Member for

  1849
  Leicester, North-East (Mr. Bradley) in praise of the work of the Prices and Incomes Board. Of course, the immediate impact of its reports is important, but we should not judge the Board's success only by the immediate impact of what it says. In the long run, the Board ought to be judged by the extent to which its reports have influence on the structure and efficiency of whole parts of British industry. The Board is not concerned, as some hon. Members sometimes suggest, only with prices or only with incomes, but also with the policy as a whole, with industrial efficiency and all aspects of productivity.
  I am fully aware that some of my hon. Friends have been concerned about the impact of the policy on lower-paid workers. All I can say is that this concern is shared by myself, by my right hon. Friend and by all members of the Government. We have provided in paragraph 15 of the White Paper for precisely those circumstances to which some hon. Gentlemen are drawing attention. It seems to be a symptom of the confidence of many lower-paid workers in the Board that last weekend trade unions representing a group of about 600,000 workers in municipal employment felt it desirable to ask for a reference to the Board, because they felt that the Board would consider their claim fully and look intelligently and helpfully at the whole structure of the industry.
  Mr. Park rose—
  Mr. Rodgers: No, I will not give way. I have cut my speech considerably to allow hon. Gentlemen to contribute to the main part of the debate and I want to finish what I have to say.
  Some of those who have been doubtful about the events of the last 18 months, and are properly, and I emphasise properly, concerned with the lower-paid workers, ought to remember when we are considering the alternatives, that if we are to go back to what we had before 1964, during the preceding 10 years the position of many lower paid workers got relatively worse.
  This was the situation without a policy. Even if we had no other defence tonight at least we could say that we are trying to provide an alternative to a situation under which many lower paid workers
  1850
  did not improve their position, but became relatively worse off. In a debate such as this, and under the circumstances in which it takes place, we have been talking to a considerable extent about the productivity side and about wages. But, as the First Secretary has said on many occasions, we are operating on prices as well.
  We achieved a large measure of success between April of last year, when the policy was finalised, and the end of 1965. Even at present in many respects we are succeeding in checking price increases in a way which is consistent with policy. It is true that we cannot operate on incomes without operating on prices. But we cannot operate on prices without operating on incomes as well. This relationship works in both directions and it is no good saying,"Let us go for what we can get now and wait for price stability ". That is the way to create a condition of continuing inflation, where we never catch up with ourselves and the real value of wages which people earn falls.
  There are a number of points in the Bill upon which I would have been happy to have gone into in detail had there been time. The first part of the Bill is permissive, containing elaborate safeguards, and there have to be two more debates in the House before it becomes operative in any sphere. If any of my hon. Friends have doubts about it, this is not their last opportunity to take a bite out of the cherry. Very rightly we have said that this is a central and important question and it ought to be debated in public in this House. It deserves the attention of hon. Members. Before Part II operates there will be plenty of opportunities for discussion.
  I hope that the House will forgive me for making this point again, but the Bill as it stands requires a notification of dividends and dividends can be referred for consideration to the Board. Let nobody say that it works on wages or on prices, but not on unearned incomes. I say,"The Bill is there: read it if you have any doubt about the way in which it is intended to operate on dividends as well."
  Thirdly, may I make it clear again that there is opportunity in the normal way for negotiations to continue during

  1851
  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 of the Government's attitude and what the Bill says in this respect.
  I have not been clear during the debate exactly what is the Opposition's view. The right hon. Member for Barnet wanted it both ways. He was in favour of the policy, but did not want to strengthen it. He said that it was failing, but praised the voluntary system which is working at the present time. In the end, we have to opt. We have to say that this policy is worth while, whatever imperfections there may be, that there is no alternative and that it deserves to be supported, or we must throw it out of the window and rely on the old measures with which we are all familiar, but to which nobody on this side of the House is prepared to return.
  The easiest thing for us to do would be to abandon the policy and to return to the circumstances which we knew before. We could wash our hands. We could shed all the trouble which the policy has involved. We could allow events to take their course. But this would be an approach to the policy lacking in courage and it would not be compatible with our obligations to the country and with the commitment we have in the National Plan and of attempting to fulfil the ambitions and hopes of a very large part of this nation.
  This is an important, necessary and urgent Bill. For most of us, it is not
  a laughing matter. It represents a landmark in the evolution of a responsible approach to planning in a free society. It is, of course, the Government's Bill and it is the Government's job to carry it through. But, in the last resort, it will depend for its success, not only on acceptance in the House tonight, but on a wide measure of consent among the public. I believe that it will win a wide measure of approval as its purpose becomes increasingly understood and the absence of an alternative becomes clear to all.
  Even if some hon. Members opposite are not clear on this, it is apparent to me that the nation knows that bold and new initiatives are essential which will, in turn, involve far-reaching changes in attitude if we are ever to emerge from the dark tunnel of economic stagnation. This is an essential Bill. It is part of the Government's total strategy. I am sure that, whatever may be said in the House, it will be approved in the country and regarded as a bold and courageous step to deal with the problems which the country as a whole recognises and wants this Government to tackle.
  Mr. Alan Fitch (Lord Commissioner of the Treasury)rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly, That the words proposed to be left out stand part of the Question:
  The House divided: Ayes 340, Noes 236.

  Division No. 120.]

  AYES

  [10.0 p.m.

  Abse, Leo

  Bidwell, Sydney

  Butler, Herbert (Hackney, C.)

  Albu, Austen

  Binns, John

  Butler, Mrs. Joyce (Wood Green)

  Allaun, Frank (Salford, E.)

  Bishop, E. S.

  Callaghan, Rt. Hn. James

  Alldritt, Walter

  Blackburn, F.

  Cant, R. B.

  Allen, Scholefield

  Boardman, H.

  Carmichael, Neil

  Anderson, Donald

  Booth, Albert

  Carter-Jones, Lewis

  Archer, Peter

  Boston, Terence

  Castle, Rt. Hn. Barbara

  Armstrong, Ernest

  Bottomley, Rt. Hn. Arthur

  Chapman, Donald

  Ashley, Jack

  Bowden, Rt. Hn. Herbert

  Coe, Denis

  Atkins, Ronald (Preston, N.)

  Boyden, James

  Coleman, Donald

  Atkinson, Norman (Tottenham)

  Braddock, Mrs. E. M.

  Concannon, J. D.

  Bacon, Rt. Hn. Alice

  Bradley, Tom

  Conlan, Bernard

  Bagier, Gordon A. T.

  Bray, Dr. Jeremy

  Corbet, Mrs. Freda

  Barnes, Michael

  Brooks, Edwin

  Cousins, Rt. Hn. Frank

  Barnett, Joel

  Broughton, Dr. A. D. D.

  Craddock, George (Bradford, S.)

  Baxter, William

  Brown, Rt. Hn. George (Belper)

  Crawshaw, Richard

  Beaney, Alan

  Brown, Hugh D. (G'gow, Provan)

  Cronin, John

  Bellenger, Rt. Hn. F. J.

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

  Crosland, Rt. Hn. Anthony

  Bence, Cyril

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

  Crossman, Rt. Hn. Richard

  Benn, Rt. Hn. Anthony Wedgwood

  Buchan, Norman

  Cullen, Mrs. Alice

  Bennett, James (G'gow, Bridgeton)

  Buchanan, Richard (G'gow, Sp'burn)

  Dalyell, Tam

  Darling, Rt. Hn. George

  Hughes, Roy (Newport)

  Oswald, Thomas

  Davidson, Arthur (Accrington)

  Hunter, Adam

  Owen, Dr. David (P'ymouth, S'tn)

  Davidson, James(Aberdeenshire, W.)

  Hynd, John

  Owen, Will (Morpeth)

  Davies, Dr. Ernest (Stretford)

  Irvine, A. J. (Edge Hill)

  Padley, Walter

  Davies, G. Elfed (Rhondda, E.)

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

  Page, Derek (King's Lynn)

  Davies, Ednyfed Hudson (Conway)

  Jackson, Peter M. (High Peak)

  Paget, R. T.

  Davies, Harold (Leek)

  Janner, Sir Barnett

  Palmer, Arthur

  Davies, Ifor (Gower)

  Jay, Rt. Hn. Douglas

  Pannell, Rt. Hn. Charles

  Davies, Robert (Cambridge)

  Jeger, George (Goole)

  Park, Trevor

  Delargy, Hugh

  Jenkins, Hugh (Putney)

  Parker, John (Dagenham)

  Dell, Edmund

  Jenkins, Rt. Hn. Roy (Stechford)

  Parkin, Ben (Paddington, N.)

  Dempsey, James

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

  Parkyn, Brian (Bedford)

  Dewar, Donald

  Jones, Dan (Burnley)

  Pearson, Arthur (Pontypridd)

  Diamond, Rt. Hn. John

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

  Peart, Rt. Hn. Fred

  Dickens, James

  Jones, J. Idwal (Wrexham)

  Pentland, Norman

  Dobson, Ray

  Judd, Frank

  Perry, Ernest G. (Battersea, S.)

  Doig, Peter

  Kelley, Richard

  Perry, George H. (Nottingham, S.)

  Donnelly, Desmond

  Kenyon, Clifford

  Prentice, Rt. Hn. R. E.

  Driberg, Tom

  Kerr, Mrs. Anne (R'ter & Chatham)

  Price, Christopher (Perry Barr)

  Dunn, James A.

  Kerr, Dr. David (W'worth, Central)

  Price, Thomas (Westhoughton)

  Dunnett, Jack

  Kerr, Russell (Feltham)

  Price, William (Rugby)

  Dunwoody, Mrs. Gwyneth (Exeter)

  Leadbitter, Ted

  Probert, Arthur

  Eadie, Alex

  Ledger, Ron

  Pursey, Cmdr. Harry

  Edelman, Maurice

  Lee, Rt. Hn. Frederick (Newton)

  Randall, Harry

  Edwards, Robert (Bilston)

  Lee, Rt. Hn. Jennie (Cannock)

  Rankin, John

  Edwards, William (Merioneth)

  Lee, John (Reading)

  Redhead, Edward

  Ellis, John

  Lestor, Miss Joan

  Rees, Merlyn

  English, Michael

  Lever, Harold (Cheetham)

  Reynolds, G. W.

  Ennals, David

  Lever, L. M. (Ardwick)

  Rhodes, Geoffrey

  Ensor, David

  Lewis, Arthur (W. Ham, N.)

  Richard, Ivor

  Evans, Albert (Islington, S.W.)

  Lewis, Ron (Carlisle)

  Roberts, Albert (Normanton)

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

  Lipton, Marcus

  Roberts, Goronwy (Caernarvon)

  Fernyhough, E.

  Lomas, Kenneth

  Roberts, Gw'lym (Bedfordshire, S.)

  Finch, Harold

  Loughlin, Charles

  Robertson, John (Paisley)

  Fitch, Alan (Wigan)

  Luard, Evan

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

  Fletcher, Raymond (Ilkeston)

  Lubbock, Eric

  Robinson, W. O. J. (Walth'stow, E.)

  Fletcher, Ted (Darlington)

  Lyons, Edward (Bradford, E.)

  Rodgers, William (Stockton)

  Floud, Bernard

  Mahon, Dr. J. Dickson

  Roebuck, Roy

  Foley, Maurice

  McBride, Neil

  Rose, Paul

  Foot, Sir Dingle (Ipswich)

  McCann, John

  Ross, Rt. Hn. William

  Foot, Michael (Ebbw Vale)

  MacColl, James

  Rowland, Christopher (Meriden)

  Ford, Ben

  MacDermot, Niall

  Rowlands, E. (Cardiff, N.)

  Forrester, John

  Macdonald, A. H.

  Ryan, John

  Fowler, Gerry

  McGuire, Michael

  Shaw, Arnold (Ilford, S.)

  Fraser, John (Norwood)

  McKay, Mrs. Margaret

  Sheldon, Robert

  Fraser, Rt Hn. Tom (Hamilton)

  Mackenzie, Gregor (Rutherglen)

  Shinwell, Rt. Hn. E.

  Freeson, Reginald

  Mackie, John

  Shore, Peter (Stepney)

  Galpern, Sir Myer

  Mackintosh, John P.

  Short,Rt.Hn.Edward(N'c'tle-u-Tyne)

  Gardner, A J.

  Maclennan, Robert

  Short, Mrs. Renée (W'hampton, N.E.)

  Garrett, W. E.

  McMillan, Tom (Glasgow, C.)

  Silkin, John (Deptford)

  Garrow, Alex

  McNamara, J. Kevin

  Silkin, S. C. (Dulwich)

  Ginsburg, David

  MacPherson, Malcolm

  Silverman, Julius (Aston)

  Gordon Walker, Rt. Hn. P. C.

  Mahon, Peter (Preston, S.)

  Silverman, Sydney (Nelson)

  Gourlay, Harry

  Mahon, Simon (Bootle)

  Skeffington, Arthur

  Gray, Dr. Hugh (Yarmouth)

  Mallalieu, E. L. (Brigg)

  Slater, Joseph

  Gregory, Arnold

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

  Small, William

  Griffiths, David (Rother Valley)

  Manuel, Archie

  Snow, Julian

  Griffiths, Rt. Hn. James (Llanelly)

  Mapp, Charles

  Spriggs, Leslie

  Griffiths, Will (Exchange)

  Marquand, David

  Steel, David (Roxburgh)

  Hamilton, James (Bothwell)

  Marsh, Rt. Hn. Richard

  Steele, Thomas (Dunbartonshire, W.)

  Hamilton, William (Fife, W.)

  Mason, Roy

  Stewart, Rt. Hn. Michael

  Hamling, William

  Maxwell, Robert

  Stonehouse, John

  Hannan, William

  Mayhew, Christopher

  Summerskill, Hn. Dr. Shirley

  Harper, Joseph

  Mellish, Robert

  Swain, Thomas

  Harrison, Walter (Wakefield)

  Millan, Bruce

  Swingler, Stephen

  Hart, Mrs. Judith

  Miller, Dr. M. S.

  Symonds, J. B.

  Haseldine, Norman

  Mitchell, R. C. (S'th'pton, Test)

  Taverne, Dick

  Hattersley, Roy

  Molloy, William

  Thomas, George (Cardiff, W.)

  Haze11, Bert

  Moonman, Eric

  Thomas, Iorwerth (Rhondda, W.)

  Heffer, Erie S.

  Morgan, Elystan (Cardiganshire)

  Thomson, Rt. Hn. George

  Henig, Stanley

  Morris, Alfred (Wythenshawe)

  Thornton, Ernest

  Herbison, Rt. Hn. Margaret

  Morris, Charles R. (Openshaw)

  Thorpe, Jeremy

  Hobden, Dennis (Brighton, K'town)

  Moyle, Roland

  Tinn, James

  Hooley, Frank

  Mulley, Rt. Hn. Frederick

  Tomney, Frank

  Hooson, Emlyn

  Murray, Albert

  Tuck, Raphael

  Horner, John

  Newens, Stan

  Urwin, T. W.

  Houghton, Rt. Hn. Douglas

  Noel-Baker, Francis (Swindon)

  Varley, Eric G.

  Howarth, Harry (Wellingborough)

  Noel-Baker, Rt. Hn. Philip(Derby, S.)

  Wainwright, Edwin (Dearne Valley)

  Howarth, Robert (Bolton, E.)

  Norwood, Christopher

  Wainwright, Richard (Colne Valley)

  Howell, Denis (Small Heath)

  Oakes, Gordon

  Walden, Brian (All Saints)

  Howie, W.

  Ogden, Eric

  Walker, Harold (Doncaster)

  Hoy, James

  O'Malley, Brian

  Wallace, George

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Oram, Albert E.

  Watkins, David (Consett)

  Hughes, Emrys (Ayrshire, S.)

  Orbach, Maurice

  Weitzman, David

  Hughes, Hector (Aberdeen, N.)

  Orme, Stanley

  Wellbeloved, James

  Williams, Clifford (Abertillery)

  Woodburn, Rt. Hn. A.

  Wells, William (Walsall, N.)

  Williams, Mrs. Shirley (Hitchin)

  Woof, Robert

  Whitaker, Ben

  Williams, W. T. (Warrington)

  Wyatt, Woodrow

  White, Mrs. Eirene

  Willis, George (Edinburgh, E.)

  Yates, Victor

  Whitlock, William

  Wilson, Rt. Hn. Harold (Huyton)

  Zilliacus, K.

  Wigg, Rt. Hn. George

  Wilson, William (Coventry, S.)

  TELLERS FOR THE AYES:

  Willey, Rt. Hn. Frederick

  Winnick, David

  Mr. Lawson and Mr. Grey.

  Williams, Alan (Swansea, W.)

  Winstaniey, Dr. M. P.

  Williams, Alan Lee (Homchurch)

  Winterbottom, R. E.

  NOES

  Alison, Michael (Barkston Ash)

  Galbraith, Hn. T. G.

  Macmillan, Maurice (Farnham)

  Allason, James (Hemel Hempstead)

  Gibson-Watt, David

  Maddan, Martin

  Astor, John

  Giles, Rear-Adm. Morgan

  Maginnis, John E.

  Atkins, Humphrey (M't'n & M'd'n)

  Gilmour, Ian (Norfolk, C.)

  Marten, Neil

  Awdry, Daniel

  Gilmour, Sir John (Fife, E.)

  Mathew, Robert

  Baker, W. H. K.

  Glover, Sir Douglas

  Maude, Angus

  Balniel, Lord

  Glyn, Sir Richard

  Maudling, Rt. Hn. Reginald

  Barber, Rt. Hn. Anthony

  Godber, Rt. Hn. J. B.

  Mawby, Ray

  Batsford, Brian

  Goodhart, Philip

  Maxwell-Hyslop, R. J.

  Beamish, Col. Sir Tufton

  Goodhew, Victor

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

  Bell, Ronald

  Gower, Raymond

  Mills, Peter (Torrington)

  Bennett, Sir Frederic (Torquay)

  Grant, Anthony

  Mills, Stratton (Belfast, N.)

  Bennett, Dr. Reginald (Gos & Fhm)

  Grant-Ferris, R.

  Miscampbell, Norman

  Berry, Hn. Anthony

  Gresham Cooke, R.

  Mitchell, David (Basingstoke)

  Biffen, John

  Grieve, Percy

  Monro, Hector

  Birch, Rt. Hn. Nigel

  Griffiths, Eldon (Bury St. Edmunds)

  More, Jasper

  Black, Sir Cyril

  Gurden, Harold

  Morgan, W. C. (Denbigh)

  Blaker, Peter

  Hall, John (Wycombe)

  Morrison, Charles (Devizes)

  Body, Richard

  Hall-Davis, A. G. F.

  Mott-Radclyffe, Sir Charles

  Bossom, Sir Clive

  Hamilton, Michael (Salisbury)

  Munro-Lucas-Tooth, Sir Hugh

  Boyd-Carpenter, Rt. Hn. John

  Harris, Frederic (Croydon, N.W.)

  Murton, Oscar

  Boyle, Rt. Hn. Sir Edward

  Harris, Reader (Heston)

  Nabarro, Sir Gerald

  Braine, Bernard

  Harrison, Brian (Maldon)

  Neave, Airey

  Brinton, Sir Tatton

  Harrison, Col. Sir Harwood (Eye)

  Nicholls, Sir Harmar

  Bromley Davenport, Lt.Col.Sir Walter

  Harvie Anderson, Miss

  Noble, Rt. Hn. Michael

  Brown, Sir Edward (Bath)

  Hastings, Stephen

  Nott, John

  Bruce-Gardyne, J.

  Hawkins, Paul

  Onsiow, Cranley

  Bryan, Paul

  Hay, John

  Orr, Capt. L. P. S.

  Buck, Antony (Colchester)

  Heald, Rt. Hn. Sir Lionel

  Orr-Ewing, Sir Ian

  Bullus, Sir Eric

  Heath, Rt. Hn. Edward

  Osborn, John (Hallam)

  Burden, F. A.

  Heseltine, Michael

  Osborne, Sir Cyril (Louth)

  Campbell, Gordon

  Higgins, Terence L.

  Page, Graham (Crosby)

  Carlisle, Mark

  Hiley, Joseph

  Page, John (Harrow, W.)

  Carr, Rt. Hn. Robert

  Hill, J. E. B.

  Pearson, Sir Frank (Clitheroe)

  Cary, Sir Robert

  Hirst, Geoffrey

  Peel, John

  Channon, H. P. G.

  Hobson, Rt. Hn. Sir John

  Percival, Ian

  Chichester-Clark, R.

  Hogg, Rt. Hn. Quintin

  Peyton, John

  Clark, Henry

  Holland, Philip

  Pike, Miss Mervyn

  Clegg, Walter

  Hordern, Peter

  Pink, R. Bonner

  Cooke, Robert

  Hornby, Richard

  Pounder, Rafton

  Cooper-Key, Sir Neill

  Howell, David (Guildford)

  Powell, Rt. Hn. J. Enoch

  Cordle, John

  Hunt, John

  Price, David (Eastleigh)

  Corfield, F. V.

  Hutchison, Michael Clark

  Prior, J. M. L.

  Costain, A. P.

  Iremonger, T. L.

  Quennell, Miss J. M.

  Craddock, Sir Beresford (Spelthorne)

  Irvine, Bryant Godman (Rye)

  Ramsden, Rt. Hn. James

  Crawley, Aidan

  Jenkin, Patrick (Woodford)

  Rawlinson, Rt. Hn. Sir Peter

  Crouch, David

  Johnson Smith, C. (E. Grinstead)

  Rees-Davies, W. R.

  Crowder, F. P.

  Jones, Arthur (Northants, S.)

  Renton, Rt. Hn. Sir David

  Cunningham, Sir Knox

  Jonling, Michael

  Ridley, Hn. Nicholas

  Currie, G. B. H.

  Joseph, Rt. Hn. Sir Keith

  Ridsdale, Julian

  Dalkeith, Earl of

  Kaberry, Sir Donald

  Rippon, Rt. Hn. Geoffrey

  Dance, James

  Kerby, Capt. Henry

  Robson Brown, Sir William

  d'Avigdor-Goldsmid, Sir Henry

  Kershaw, Anthony

  Rodgers, Sir John (Sevenoaks)

  Dean, Paul (Somerset, N.)

  Kimball, Marcus

  Rossi, Hugh (Hornsey)

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

  King, Evelyn (Dorset, S.)

  Russell, Sir Ronald

  Dighy, Simon Wingfield

  Kitson, Timothy

  St. John-Stevas, Norman

  Dodds-Parker, Douglas

  Knight, Mrs. Jill

  Scott, Nicholas

  Doughty, Charles

  Lambton, Viscount

  Sharples, Richard

  Douglas-Home, Rt. Hn. Sir Alec

  Lancaster, Col. C. G.

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

  Drayson, G. B.

  Langford-Holt, Sir John

  Smith, John

  Du Cann, Rt. Hn. Edward

  Legge-Bourke, Sir Harry

  Stainton, Keith

  Eden, Sir John

  Lew's, Kenneth (Rutland)

  Stodart, Anthony

  Elliot, Capt. Walter (Carshalton)

  Lloyd, Rt.Hn Geoffrey(Sut'nC'dfield)

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

  Errington, Sir Eric

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

  Summers, Sir Spencer

  Eyre, Reginald

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Talbot, John E.

  Farr, John

  Longden, Gilbert

  Tapsell, Peter

  Fisher, Nigel

  Loveys, W. H.

  Taylor, Sir Charles (Eastbourne)

  Fletcher-Cooke, Charles

  McAdden, Sir Stephen

  Taylor, Edward M.(G'gow, Cathcart)

  Forrest, George

  MacArthur, Ian

  Taylor, Frank (Moss Side)

  Fortescue, Tim

  Maclean, Sir Fitzroy

  Teeling, Sir William

  Foster, Sir John

  Macleod, Rt. Hn. lain

  Temple, John M.

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

  McMaster, Stanley

  Thatcher, Mrs. Margaret

  Tilney, John

  Ward, Dame Irene

  Woodnutt, Mark

  Turton, Rt. Hn. R. H.

  Weatherill, Bernard

  Worsley, Marcus

  Van Strauhenzee, W. R.

  Webster, David

  Wylie, N. R.

  Vickers, Dame Joan

  Wells, John (Maidstone)

  Younger, Hn. George

  Walker, Peter (Worcester)

  Whitelaw, William

  TELLERS FOR THE NOES:

  Walker-Smith, Rt. Hn. Sir Derek

  Wills, Sir Gerald (Bridgwater)

  Mr. Pym and Mr. R. W. Elliott.

  Wall, Patrick

  Wolrige-Gordon, Patrick

  Walters, Dennis

  Wood, Rt. Hn. Richard

  Bill read a Second time.
  Motion made, and Question put, That the Bill be committed to a Committee of the whole House.—[Mr. Whitelaw.]
  The House divided: Ayes 242, Noes 333.

  Division No. 121.]

  AYES

  [10.14 p.m.

  Alison, Michael (Barkston Ash)

  Eyre, Reginald

  Knight, Mrs. Jill

  Allason, James (Hemel Hempstead)

  Farr, John

  Lambton, Vicount

  Astor, John

  Fisher, Nigel

  Lancaster, Col. G. C.

  Atkins, Humphrey (M't'n & M'd'n)

  Fletcher-Cooke, Charles

  Langford-Holt, Sir John

  Awdry, Daniel

  Forrest, George

  Legge-Bourke, Sir Harry

  Baker, W. H. K.

  Fortescue, Tim

  Lewis, Kenneth (Rutland)

  Balniel, Lord

  Foster, Sir John

  Lloyd, Rt. Hn. Geoffrey(Sut'nC'dfield)

  Barber, Rt. Hn. Anthony

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

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

  Batsford, Brian

  Galbraith, Hn. T. G.

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Beamish, Col. Sir Tufton

  Gibson-Watt, David

  Longden, Gilbert

  Bell, Ronald

  Giles, Rear-Adm. Morgan

  Loveys, W. H.

  Bennett, Sir Frederick (Torquay)

  Gilmour, Ian (Norfolk, C.)

  Lubbock, Eric

  Bennett, Dr. Reginald (Gos. & Fhm)

  Gilmour, Sir John (Fife, E.)

  McAdden, Sir Stephen

  Berry, Hn. Anthony

  Glover, Sir Douglas

  MacArthur, Ian

  Biffen, John

  Glyn, Sir Richard

  Maclean, Sir Fitzroy

  Birch, Rt. Hn. Nigel

  Godber, Rt. Hn. J. B.

  Macleod, Rt. Hn. Iain

  Black, Sir Cyril

  Goodhart, Philip

  McMaster, Stanley

  Blaker, Peter

  Goodhew, Victor

  Macmillan, Maurice (Farnham)

  Body, Richard

  Gower, Raymond

  Maddan, Martin

  Bossom, Sir Clive

  Grant, Anthony

  Maginnis, John E.

  Boyd-Carpenter, Rt. Hn. John

  Grant-Ferris, R.

  Marten, Neil

  Boyle, Rt. Hn. Sir Edward

  Gresham Cooke, R.

  Mathew, Robert

  Braine, Bernard

  Grieve, Percy

  Maude, Angus

  Brinton, Sir Tatton

  Griffiths, Eldon (Bury St. Edmunds)

  Maudling, Rt. Hn. Reginald

  Bromley-Davenport,Lt.Col.SirWalter

  Gurden, Harold

  Mawby, Ray

  Brown, Sir Edward (Bath)

  Hall, John (Wycombe)

  Maxwell-Hyslop, R. J.

  Bruce-Gardyne, J.

  Hall-Davis, A. G. F.

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

  Bryan, Paul

  Hamilton, Michael (Salisbury)

  Mills, Peter (Torrington)

  Buck, Antony (Colchester)

  Harris, Frederic (Croydon, N.W.)

  Mills, Stratton (Belfast, N.)

  Bullus, Sir Eric

  Harris, Reader (Heston)

  Miscampbell, Norman

  Burden, F. A.

  Harrison, Brian (Maldon)

  Mitchell, David (Basingstoke)

  Campbell, Gordon

  Harrison, Col. Sir Harwood (Eye)

  Monro, Hector

  Carlisle, Mark

  Harvie Anderson, Miss

  More, Jasper

  Carr, Rt. Hn. Robert

  Hastings, Stephen

  Morgan, W. G. (Denbigh)

  Cary, Sir Robert

  Hawkins, Paul

  Morrison, Charles (Devizes)

  Channon, H. P. G.

  Hay, John

  Mott-Radclyffe, Sir Charles

  Chichester-Clark, R.

  Heald, Rt. Hn. Sir Lionel

  Munro-Lucas-Tooth, Sir Hugh

  Clark, Henry

  Heath, Rt. Hn. Edward

  Murton, Oscar

  Clegg, Walter

  Heseltine, Michael

  Nabarro, Sir Gerald

  Cooke, Robert

  Higgins, Terence L.

  Neave, Airey

  Cooper-Key, Sir Neill

  Hiley, Joseph

  Nicholls, Sir Harmar

  Cordie, John

  Hill, J. E. B.

  Noble, Rt. Hn. Michael

  Corfield, F. V.

  Hirst, Geoffrey

  Nott, John

  Costain, A. P.

  Hobson, Rt. Hn. Sir John

  Onslow, Cranley

  Craddock, Sir Beresford (Spelthorne)

  Hogg, Rt. Hn. Quintin

  Orr, Capt. L. P. S.

  Crawley, Aldan

  Holland, Philip

  Orr-Ewing, Sir Ian

  Crouch, David

  Hooson, Emlyn

  Osborn, John (Hallam)

  Crowder, F. P.

  Hordern, Peter

  Osborne, Sir Cyril (Louth)

  Cunningham, Sir Knox

  Hornby, Richard

  Page, Graham (Crosby)

  Currie, G. B. H.

  Howell, David (Guildford)

  Page, John (Harrow, W.)

  Dalkeith, Earl of

  Hunt, John

  Pearson, Sir Frank (Clitheroe)

  Dance, James

  Hutchison, Michael Clark

  Peel, John

  Davidson,James(Aberdeenshire, W.)

  Iremonger, T. L.

  Percival, Ian

  d'Avigdor-Goldsmid, Sir Henry

  Irvine, Bryant Godman (Rye)

  Peyton, John

  Dean, Paul (Somerset, N.)

  Jenkin, Patrick (Woodford)

  Pike, Miss Mervyn

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

  Johnson Smith, G. (E. Grinstead)

  Pink, R. Bonner

  Digby, Simon Wingfield

  Jones, Arthur (Northants, S.)

  Pounder, Rafton

  Dodds-Parker, Douglas

  Jopling, Michael

  Powell, Rt. Hn. J. Enoch

  Doughty, Charles

  Joseph, Rt. Hn. Sir Keith

  Price, David (Eastleigh)

  Douglas-Home, Rt. Hn. Sir Alec

  Kaberry, Sir Donald

  Prior, J. M. L.

  Drayson, G. B.

  Kerby, Capt. Henry

  Quennell, Miss J. M.

  du Cann, Rt. Hn. Edward

  Kershaw, Anthony

  Ramsden, Rt. Hn. James

  Eden, Sir John

  Kimball, Marcus

  Rawlinson, Rt. Hn. Sir Peter

  Elliot Capt. W alter (Carshalton)

  King, Evelyn (Dorset, S.)

  Rees-Davies, W. R.

  Errington, Sir Eric

  Kitson, Timothy

  Renton, Rt. Hn. Sir David

  Ridley, Hn. Nicholas

  Talbot, John E.

  Walters, Dennis

  Ridsdale, Julian

  Tapsell, Peter

  Ward, Dame Irene

  Rippon, Rt. Hn. Geoffrey

  Taylor, Sir Charles (Eastbourne)

  Weatherill, Bernard

  Robson Brown, Sir William

  Taylor, Edward M.(G'gow, Cathcart)

  Webster, David

  Rodgers, Sir John (Sevenoaks)

  Taylor, Frank (Moss Side)

  Wells, John (Maidstone)

  Rossi, Hugh (Hornsey)

  Teeling, Sir William

  Whitelaw, William

  Russell, Sir Ronald

  Temple, John M.

  Wills, Sir Gerald (Bridgwater)

  St. John-Stevas, Norman

  Thatcher, Mrs. Margaret

  Winstanley, Dr. M. P.

  Scott, Nicholas

  Thorpe, Jeremy

  Wolrige-Gordon, Patrick

  Sharples, Richard

  Tilney, John

  Woodnutt, Mark

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

  Turton, Rt. Hn. R. H.

  Worsley, Marcus

  Smith, John

  van Straubenzee, W. R.

  Wylie, N. R.

  Stainton, Keith

  Vickers, Dame Joan

  Younger, Hn. George

  Steel, David (Roxburgh)

  Wainwright, Richard (Colne Valley)

  TELLERS FOR THE AYES:

  Stodart, Anthony

  Walker, Peter (Worcester)

  Mr. Pym and Mr. R. W. Elliott.

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

  Walker-Smith, Rt. Hn. Sir Derek

  Summers, Sir Spencer

  Wall, Patrick

  NOES

  Abse, Leo

  Davidson, Arthur (Accrington)

  Haseldine, Norman

  Albu, Austen

  Davies, Dr. Ernest (Stretford)

  Hattersley, Roy

  Allaun, Frank (Salford, E.)

  Davies, C. Elfed (Rhondda, E)

  Hazell, Bert

  Alldritt, Walter

  Davies, Ednyfed Hudson (Conway)

  Heffer, Eric S.

  Allen, Scholefield

  Davies, Harold (Leek)

  Henig, Stanley

  Anderson, Donald

  Davies, Iford (Gower)

  Herbison, Rt. Hn. Margaret

  Archer, Peter

  Davies, Robert (Cambridge)

  Hobden, Dennis (Brighton, K'town)

  Armstrong, Ernest

  Delargy, Hugh

  Hooley, Frank

  Ashley, Jack

  Dell, Edmund

  Horner, John

  Atkins, Ronald (Preton, N.)

  Dempsey, James

  Houghton, Rt. Hn. Douglas

  Atkinson, Norman (Tottenham)

  Dewar, Donald

  Howarth, Harry (Wellingborough)

  Bacon, Rt. Hn. Alice

  Diamond, Rt. Hn. John

  Howarth, Robert (Bolton, E.)

  Bagier, Gordon A. T.

  Dickens, James

  Howell, Denis (Small Heath)

  Barnes, Michael

  Dobson, Ray

  Howie, W.

  Barnett, Joel

  Doig, Peter

  Hoy, James

  Baxter, William

  Donnelly, Desmond

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Beaney, Alan

  Driberg, Tom

  Hughes, Emrys (Ayrshire, S.)

  Bellenger, Rt. Hn. F. J.

  Dunn, James A.

  Hughes, Hector (Aberdeen, N.)

  Bence, Cyril

  Dunnett, Jack

  Hughes, Roy (Newport)

  Benn, Rt. Hn. Anthony Wedgwood

  Dunwoody, Mrs. Gwyneth (Exeter)

  Hunter, Adam

  Bennett, James (G'gow, Bridgeton)

  Eadie, Alex

  Hynd, John

  Bidwell, Sydney

  Edelman, Maurice

  Irvine, A. J. (Edge Hill)

  Binns, John

  Edwards, Robert (Bilston)

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

  Bishop, E. S.

  Edwards, William (Merioneth)

  Jackson, Peter M. (High Peak)

  Blackburn, F.

  Ellis, John

  Janner, Sir Barnett

  Boardman, H.

  English, Michael

  Jay, Rt. Hn. Douglas

  Booth, Albert

  Ennals, David

  Jeger, George (Goole)

  Boston, Terence

  Ensor, David

  Jenkins, Hugh (Putney)

  Bottomley, Rt. Hn. Arthur

  Evans, Albert (Islington, S.W.)

  Jenkins, Rt. Hn. Roy (Stechford)

  Bowden, Rt. Hn. Herbert

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

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

  Boyden, James

  Fernyhough, E.

  Jones, Dan (Burnley)

  Braddock, Mrs. E. M.

  Finch, Harold

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

  Bradley, Tom

  Fitch, Alan (Wigan)

  Jones, J. Idwal (Wrexham)

  Bray, Dr. Jeremy

  Fletcher, Raymond (Ilkeston)

  Judd, Frank

  Brooks, Edwin

  Fletcher, Ted (Darlington)

  Kelley, Richard

  Broughton, Dr. A. D. D.

  Floud, Bernard

  Kenyon, Clifford

  Brown, Rt. Hn George (Belper)

  Foley, Maurice

  Kerr, Mrs. Anne (R'ter & Chatham)

  Brown, Hugh D. (G'gow, Provan)

  Foot, Sir Dingle (Ipswich)

  Kerr, Dr. David (W'worth, Central)

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

  Foot, Michael (Ebbw Vale)

  Kerr, Russell (Feltham)

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

  Ford, Ben

  Leadbitter, Ted

  Buchan, Norman

  Forrester, John

  Ledger, Ron

  Buchanan, Richard (G'gow, Sp'burn)

  Fowler, Gerry

  Lee, Rt. Hn. Frederick (Newton)

  Butler, Herbert (Hackney, C.)

  Fraser, John (Norwood)

  Lee, Rt. Hn. Jennie (Cannock)

  Butler, Mrs. Joyce (Wood Green)

  Fraser, Rt. Hn. Tom (Hamilton)

  Lee, John (Reading)

  Callaghan, Rt. Hn. James

  Freeson, Reginald

  Lestor, Miss Joan

  Cant, R. B.

  Galpern, Sir Myer

  Lever, Harold (Cheetham)

  Carmichael, Neil

  Gardner, A. J.

  Lever, L. M. (Ardwick)

  Carter-Jones, Lewis

  Garrett, W. E.

  Lewis, Arthur (W. Ham. N.)

  Castle, Hn. Barbara

  Garrow, Alex

  Lewis, Ron (Carlisle)

  Chapman, Donald

  Ginsburg, David

  Lipton, Marcus

  Coe, Denis

  Gordon-Walker, Rt. Hn. P. C.

  Lomas, Kenneth

  Coleman, Donald

  Gourlay, Harry

  Loughlin, Charles

  Concannon, J. D.

  Gray, Dr. Hugh (Yarmouth)

  Luard, Evan

  Conlan, Bernard

  Gregory, Arnold

  Lyons, Edward (Bradford, E.)

  Corbet, Mrs. Freda

  Griffiths, David (Rother Valley)

  Mabon, Dr. J. Dickson

  Cousins, Rt. Hn. Frank

  Griffiths, Rt. Hn. James (Llanelly)

  McBride, Neil

  Craddock, George (Bradford, S.)

  Griffiths, Will (Exchange)

  McCann, John

  Crawshaw, Richard

  Hamilton, James (Bothwell)

  MacColl, James

  Cronin, John

  Hamilton, William (Fife, W.)

  MacDermot, Niall

  Crosland, Rt. Hn. Anthony

  Hamling, William

  Macdonald, A. H.

  Crossman, Rt. Hn. Richard

  Hannan, William

  McGuire, Michael

  Cullen, Mrs. Alice

  Harper, Joseph

  McKay, Mrs. Margaret

  Dalyell, Tam

  Harrison, Walter (Wakefield)

  Mackenzie, Gregor (Rutherglen)

  Darling, Rt. Hn. George

  Hart, Mrs. Judith

  Mackie, John

  Parker, John (Dagenham)

  Spriggs, Leslie

  Mackintosh, John P.

  Parkin, Ben (Paddington, N.)

  Steele, Thomas (Dunbartonshire, W.)

  Maclennan, Robert

  Parkyn, Brian (Bedford)

  Stewart, Rt. Hn. Michael

  McMillan, Tom (Glasgow, C.)

  Pearson, Arthur (Pontypridd)

  Stonehouse, John

  McNamara, J. Kevin

  Peart, Rt. Hn. Fred

  Sumrnerskill, Hn. Dr. Shirley

  MacPherson, Malcolm

  Pentland, Norman

  Swain, Thomas

  Mahon, Peter (Preston, S.)

  Perry, Ernest G. (Battersea, S.)

  Swingler, Stephen

  Mahon, Simon (Bootle)

  Perry, George H. (Nottingham, S.)

  Symonds, J. B.

  Mallalieu, E. L. (Brigg)

  Prentice, Rt. Hn. R. E.

  Taverne, Dick

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

  Price, Christopher (Perry Barr)

  Thomas, George (Cardiff, W.)

  Manuel, Archie

  Price, Thomas (Westhoughton)

  Thomas, Iorwerth (Rhondda, W.)

  Mapp, Charles

  Price, William (Rugby)

  Thomson, Rt. Hn. George

  Marquand, David

  Probert, Arthur

  Thornton, Ernest

  Marsh, Rt. Hn. Richard

  Pursey, Cmdr. Harry

  Tinn, James

  Mason, Roy

  Randall, Harry

  Tomney, Frank

  Maxwell, Robert

  Rankin, John

  Tuck, Raphael

  Mayhew, Christopher

  Redhead, Edward

  Urwin, T. W.

  Mellish, Robert

  Rees, Merlyn

  Varley, Eric G.

  Millan, Bruce

  Reynolds, G. W.

  Wainwright, Edwin (Dearne Valley)

  Miller, Dr. M. S.

  Rhodes, Geoffrey

  Walden, Brian (Ali Saints)

  Mitchell, R. C. (S'th'pton, Test)

  Richard, Ivor

  Walker, Harold (Doncaster)

  Molloy, William

  Roberts, Albert (Normanton)

  Wallace, George

  Moonman, Eric

  Roberts, Goronwy (Caernarvon)

  Watkins, David (Consett)

  Morgan, Elystan (Cardiganshire)

  Roberts, Gwilym (Bedfordshire, S.)

  Weitzman, David

  Morris, Alfred (Wythenshawe)

  Robertson, John (Paisley)

  Wellbeloved, James

  Morris, Charles R. (Openshaw)

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

  Wells, William (Walsall, N.)

  Moyle, Roland

  Robinson, W. O. J.(Walth'stow, E.)

  Whitaker, Ben

  Mulley, Rt. Hn. Frederick

  Rodgers, William (Stockton)

  White, Mrs. Eirene

  Murray Albert

  Roebuck, Roy

  Whitlock, William

  Newens, Stan

  Rose, Paul

  Wigg, Rt. Hn. George

  Noel-Raker, Francis (Swindon)

  Ross, Rt Hn. William

  Willey, Rt. Hn. Frederick

  Noel-Baker, Rt. Hn. Philip (Derby.S.)

  Rowland, Christopher (Meriden)

  Williams, Alan (Swansea, W.)

  Norwood, Christopher

  Rowlands, E. (Cardiff, N.)

  Williams, Alan Lee (Hornchureh)

  Oakes, Gordon

  Ryan, John

  Williams, Clifford (Abertillery)

  Ogden, Eric

  Shaw, Arnold (Ilford, S.)

  Williams, Mrs. Shirley (Hitchin)

  O'Malley, Brian

  Sheldon, Robert

  Williams, W. T. (Warrington)

  Oram, Albert E.

  Shinwell, Rt. Hn. E.

  Willis, George (Edinbrugh, E.)

  Orbach, Maurice

  Shore, Peter (Stepney)

  Wilson, Rt. Hn. Harold (Huyton)

  Orme, Stanley

  Short, Rt. Hn. Edward(N'c'tle-u-Tyne)

  Wilson, William (Coventry, S.)

  Oswald, Thomas

  Short, Mrs. Renée (W'hampton, N.E.)

  Winnick, David

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

  Silkin, John (Deptford)

  Winterbottom, R. E.

  Owen, Wil (Morpeth)

  Silkin, S. C. (Dulwich)

  Woodburn, Rt. Hn. A.

  Padley, Walter

  Silverman, Julius (Aston)

  Woof, Robert

  Page, Derek (Kings Lynn)

  Silverman, Sydney (Nelson)

  Wyatt, Woodrow

  Paget, R. T.

  Skeffington, Arthur

  Yates, Victor

  Palmer, Arthur

  Slater, Joseph

  Zilliacus, K.

  Pannell, Rt. Hn. Charles

  Small, William

  TELLERS FOR THE NOES:

  Park, Trevor

  Snow, Julian

  Mr. Lawson and Mr. Grey.

  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  PRICES AND INCOMES [MONEY]

  [Queen's Recommendation signified]

  Considered in Committee under Standing Order No. 88 (Money Committees).

  [Sir ERIC FLETCHER in the Chair]

  Resolved,

  That for the purposes of any Act of the present Session to establish a National Board for Prices and Incomes, it is expedient to authorise the payment out of moneys provided by Parliament of remuneration, allowances and other payments to, for, or in respect of, members of that Board, payments to meet expenditure incurred by that Board, and any administrative expenses incurred by any Government department in consequence of the provisions of that Act.— [Mr. Fitch.]

  Resolution to be reported.

  Report to be received Tomorrow.

  Fish (Diseases)
  10.27 p.m.
  Mr. Marcus Kimball: I beg to move,
  That the Diseases of Fish Order 1966, a draft of which was laid before this House on 16th June, be not presented to Her Majesty.
  I am conscious of the green bag behind your Chair, Mr. Speaker. At the beginning of the debate, it might have been appropriate if it had been used for one of its mythical purposes on this occasion. I hope that you will never have to inspect it for columnaris disease.
  I think that we are all anxious to have a debate on the spread of this salmon disease, to that we can try to clear up some of the misunderstandings and rumours which are now current. There is at present a very serious outbreak of the disease in Southern Ireland and it is spreading rapidly round the east coast. It started in the Blackwater, went on to the Liffey, and it is said the disease has now been reported from the Boyne, in Ulster.
  The disease was described by the Chairman of the British Field Sports Society's Fishery Committee in a B.B.C. broadcast from the Nation Wildlife Exhibition in May as the"myxamatosis of salmon ". Now, as a result of evidence given by Dr. Margaret Brown, the biologist of the Fishmonger's Company at a representative meeting of the British Field Sports Society, the Salmon and Trout Association and the Fishmongers' Company, the disease has proved to be columnaris. Two types of columnaris bacteria have been isolated and I think that I am correct in saying that the Ministry's research workers have infected two rainbow trout with this bacteria and have produced some of the symptoms of the disease.
  There are authoritative reports in existence showing that the disease has already been found in Southern Irish waters, not only in salmon but in bass, mullet, roach, pike, eels and brown trout. On this evidence, which is also accepted in this week's Field, I do not think that the House can accept the discussion and the report of the Scottish District Salmon Fishery Boards of 11th July, which said that the disease had not been proved.
  1864
  This is one of the most dangerous attitudes possible.
  We also suffer from the fact that the Government of Southern Ireland themselves are doing everything they possibly can to play down the disease. They are playing it down because they are having a big tourist industry drive. One only has to look at the advertisements in the newspapers relating to fishing in Ireland.
  Another reason why they are playing it down is that the very best authorities believe that the disease originated in rainbow trout in the Irish Government's own fish hatchery, in Waterford, and, no doubt, many hon. Members have seen a brief which has been provided by some of the fishermen in the Waterford area. I think that everyone will agree that the Irish Government have not got a very good record for the preservation of their sporting rights and that their action leaves a lot to be desired.
  I believe that the growing concern of people in this country is shown by the fact that already, during the past week, two letters have appeared in The Times on the subject. The second letter, on 13th July, indicates the amount of rumour that is going about in this country. The letter referred to an outbreak of a similar disease in 1881 in Northern England and Southern Scotland, and suggested that because the 1881 disease jumped from Cumberland to Northumberland there was a very grave danger of the present fish disease in Southern Ireland being spread to the United Kingdom by cormorants and herons.
  The one piece of concrete evidence that we have got from the scientists, and on which everyone agrees, is that the disease cannot be spread on the legs of birds or through their insides. It also follows that if the disease cannot be spread on the legs of birds it cannot be spread by the fishing tackle of fishermen when they arrive back in this country after having fished in Ireland.
  I am grateful to the Joint Parliamentary Secretary for the historical note that he has placed in the Library on the question of the 1881 outbreak. I think that he will agree that there is great difficulty in comparing this outbreak of fish disease with the outbreak in 1881 because the methods of identifying and analysing

  1865
  the disease in 1881 are different from those which are used today.
  I would not want to be too scientific about this subject, but I should like to refer hon. Members to Mr. Speedy's book called the"Sport in the Highlands and Lowlands of Scotland," in which there is a ghastly description of a similar salmon disease on the Tweed in 1881. It is clear that salmon disease spread all round the country from Northern England to Central Scotland in 1881, getting to the North of Scotland in about 1890. What is important is that during the existence of that disease all net fishing on those rivers ceased, and many people were put out of employment.
  What is encouraging, and it is important that we realise it—is that in 10 years the good fishing conditions in those rivers returned. In fact, there was no evidence in the case of the 1881 outbreak of smolts and par getting the disease. The young stock seemed to be immune. The position today, in fact, is that the smolts and par seem to be immune from the disease.
  We are debating this Order at a time when many people say that the disease is on the wane, and that it is not quite so virulent and effective as it was earlier in the year. One correspondent to The Times claimed that he and his party had 90 clean fish with sea lice. But he was wrong. The disease, we now know, takes four days to incubate, and one is unlikely to get fish with sea lice which show obvious signs of the disease. The disease does not appear to thrive in warm water, but today's Field makes it clear that this must not be used as an excuse for people doing nothing about the spread of the disease. Scientific evidence shows that we can expect a more virulent outbreak of the disease in the autumn. That is why it is so important that we should have this Order now, although it does not go far enough.
  If the disease is going to spread, it will appear in the rivers which empty into the Bristol Channel and around the southwest coast of this country. The disease will get there by contaminated fish journeying round the south coast of Ireland. The diseased fish begin to run the rivers, feel wretched and find that they cannot go up river. They fall back into the estuaries, die there, and thus cause a
  1866
  high contamination of the disease in the estuaries.
  One of the tragedies of this disease is that it is not killed by salt water. So the fish die in the estuaries and the danger is that the fish, spurred on in the autumn —because the desires of nature are much stronger at that time of the year—may swim much more swiftly through the St. George's Channel, and arrive in our estuaries with the disease.
  There is no scientific evidence which would allow us, from this side, to demand a ban on the import of all sea trout, salmon and grilse from Southern Ireland. I know that the French Government have done it, but at present the scientific evidence available to us does not justify such a ban. However, there is still a danger because of the possibility of a fisherman bringing in a diseased fish.
  I trust, therefore, that the Minister will ensure that full publicity is given at all airports and ports of entry into the United Kingdom to people returning from Ireland so that they are informed about this disease, similar to when there is an outbreak of foot-and-mouth disease.
  There is a very remote chance of the disease entering the salmon rivers of this country because of some diseased fish being thrown away in our sewers, hut if the Minister agrees with the need for a terrific publicity drive and if he considers that he has sufficient powers to see that no ova and fry get into this country, we should prevent the disease from coming here. The Secretary of State for Scotland has acted, and has banned the import of ova and fry into Scotland. Is the Minister satisfied that the powers available to him are adequate?
  We must accept that the Order does not go far enough. That is the view of the Association of River Authorities. That Association, and all fishermen, are grateful to the Minister for the action he has taken so far, but that action, dealing with inspection and the banning of the import of ova and fry, is not enough. We already have in this country a large and healthy stock of fish up our rivers on the spawning grounds. All the spring and summer run are safely through and there is no sign of any disease.
  The river authorities and all concerned want the Minister to have power to make

  1867
  certain that if the disease appears in this country they will be able to protect the fish by the use of electrical barriers, although it would cost between £200 and £300 to put them into commercial production. These barriers would ensure that diseased fish did not reach the spawning grounds.
  Sir Edward Chadwych-Healey, in a letter to The Times on 8th July, pointed out, as Chairman of the Salmon and Trout Association, how fortunate it was that at rivers where barrages already existed, healthy fish could run those rivers. I appreciate that the idea of artificial barriers is against the advice which the Minister is receiving and that his advisers feel that one would get a concentration of fish below the barrier, so increasing the spread of the disease. But I urge the Minister, in the circumstances of this year, when two-thirds of the fish are safely through to the spawning grounds, to consider giving these powers to the river authorities. He should trust them.
  However, even if the Minister does not extend the Order, I assure him that some people will take this action themselves. I do not think that it is illegal to put up barriers across a river for scientific purposes, provided that nobody above the barrier complains. I know of many instances where the spawning grounds are owned by one person, and I know that owners will wish to protect their grounds in this way. I therefore hope that the hon. Gentleman will think again on this point.
  I thank the Under-Secretary for what he has done so far. My only object in moving this Motion is to make it quite clear that we do not feel that he has gone far enough. I hope, also, that we may have an assurance in relation to publicity about the disease at our ports of entry, and that he will ensure an enlarged programme of bacteriological sampling at markets. I conclude by hoping, as all fishermen hope, that we shall never see columnaris disease in England, Wales, or Scotland.
  10.41 p.m.
  Mr. Robert Maclennan: It would come as no surprise to many of my hon. Friends
  1868
  that the hon. Member for Gainsborough (Mr. Kimball) thought fit to castigate the Government of Ireland for not having a very good record in the preservation of sporting rights. May I assure my right hon. and hon. Friends that if this Government of ours are less than careful in the preservation of sporting rights they will meet with approval in those parts of the country where salmon fishing could provide a useful source of additional income, and where the preservation of sporting rights has inhibited the full use of this natural resource.
  I was somewhat surprised by the hon. Member in that I waited in vain for some declaration of his own pecuniary interest in the matter—[HoN. MEMBERS:"Oh."] I should have thought that even if it is not out of order, it is at least a discourtesy to the House not to disclose this interest.
  It is true that there is great concern for the future of the salmon industry, in particular arising from the continuance of the prohibition of drift netting and the Government's lengthy study of the Hunter Report.
  Mr. David Gibson-Watt: I would ask the hon. Member not to waste the time for this debate between now and 11.30. Everyone knows the interest of my hon. Friend the Member for Gains-borough (Mr. Kimball), as he is probably the greatest expert on this subject of any of us. If we are all to get up and say what our interest is, we shall waste time.
  Mr. Maclennan: I am not challenging the hon. Member's considerable knowledge, but merely drawing attention to the fact that he did not disclose his pecuniary interest.
  There is considerable concern in Scotland over the future of the salmon fishing industry. It stems partly from the matter we are now considering, but also from the failure of the Government to make some pronouncement on the Hunter Report, and more particularly for its extension—:
  Mr. Cranley Onslow: On a point of order, Mr. Deputy Speaker. Does the Hunter Report come within the rules of order in this debate?
  Mr. Deputy Speaker (Sir Eric Fletcher)I think that a passing reference to it is permissible, but I hope that the hon. Member will not develop the matter.
  Mr. Antony Buck: Is it in order, Mr. Deputy Speaker, for the hon. Member to cast aspersions on my hon. Friend the Member for Gains-borough (Mr. Kimball) by suggesting that he should have declared his pecuniary interest, and that in not doing so he has acted in a way inappropriate to the proceedingi of the House?
  Mr. Deputy Speaker: I have heard it done before.
  Mr. Buck: Was it in order then?
  Mr. Deputy Speaker: There are plenty of precedents for it.
  Mr. Maclennan: I hope to develop later the relevance of the Hunter Report to this very important question.
  The main difficulty about the disease and its proper treatment stems from our lack of certain scientific knowledge. This difficulty lies in the wrong history. The disease that is now known as columnaris was, we are led to believe by the 1881 Report, wrongly diagnosed as being caused by a fungus, but the better scientific opinion now is that it is caused by bacteria. There is no question that similar diseases has affected the salmon fishing in this country, as in Ireland, on a number of occasions. What is, perhaps, of significance is that however vigilant they may have been—and the records are far from complete—they have died out.
  In the present state of our scientific knowledge, therefore, I submit that the powers given to the Secretary of State for Scotland and to the Minister of Agriculture, Fisheries and Food for the control of this disease under the 1937 Act are quite adequate and go far enough. Indeed, there is a great division of opinion about the effectiveness of the method of control of the disease which was recommended by the hon. Member for Gainsborough.
  I refer, of course, to the electric gate technique. There are those, I am reliably informed, who consider that this technique wauld simply have the effect of
  1870
  spreading the disease among the fish which are trapped below the electric gate. In the absence of more conclusive evidence, it would be extremely unfortunate to institute any such technique.
  There are many scientific questions that remain to be answered. Among these are such questions as where the disease is contracted, how and in what conditions bacteria thrive and whether—it is not as clearly agreed as the hon. Member for Gainsborough suggested—cold water conditions are more hostile to this bacteria and its growth than warm water. All in all, we are in a state of lack of knowledge about this salmon disease.
  The difficulty of obtaining information about salmon diseases was made quite clear by the Hunter Report. In a pointed passage which, with your permission, Mr. Deputy Speaker, I will read, the Hunter Committee, which has in many ways pointed out the causes of many of the difficulties in salmon fishing without prescribing the cure, has laid the charge fairly and squarely against the proprietors for our lack of knowledge.
  The Hunter Committee pointed out that
  "Many salmon fishing proprietors show interest and good will when research projects are suggested, and are prepared to allow research to start, but they like to make informal arrangements and to reserve the right to withdraw the facilities. The result has been that after a project planned as a long-term investigation has been in operation for a few years, the scientists have been obliged to abandon it on account of the sale of the land or fishing rights, a disagreement with the proprietor, or an objection from some other proprietor on the river who thinks that the research is interfering with the runs of fish."
  In these circumstances, I can only urge my right hon. and hon. Friends to consider as a matter of urgency the possibility of acquiring publicly the rights over the salmon fishing rivers as a cure for this long-term problem.
  Mr. Deputy Speaker: Order. The hon. Member must confine his remarks to the question whether it is desirable to extend the Act of 1937 in the way proposed. He must not go beyond that.
  Mr. Maclennan: I would urge, as I did earlier, that the Act in the present state of scientific knowledge provides the Minister with as much power as he can usefully wield and that until the Minister,

  1871
  or, indeed, the State, has greater knowledge and greater control over the sporting facilities and salmon fisheries in general we cannot hope to extend our knowledge in this way.
  10.50 p.m.
  Mr. David Gibson-Watt: I shall not detain the House for long. I hope that the House will forgive me if I do not refer to the speech of the hon. Member for Caithness and Sutherland (Mr. Maclennan). Perhaps that is the kindest thing I could say about it.
  My hon. Friend the Member for Gains-borough (Mr. Kimball), who is an expert on this matter, has shown his knowledge tonight in the questions he has put to the Joint Parliamentary Secretary. This is a matter which affects not only Scotland, but also England and Wales, particularly the South-West of England and all the Welsh rivers. One of the reasons why the Welsh rivers are so vulnerable is that it is thought by some people that columnaris, whichever type of columnaris it may be, may very well be passed on by sewen or sea trout. These are not migratory fish as salmon are and it is thought that they go back and forwards across the Irish Sea and do a good deal of swimming round the estuaries. When the water gets colder in about October, it may well be that infection would take place.
  I hope that the Minister is taking this matter very seriously and that he will be able to tell us what action he is taking. This information will be welcomed by those who are interested in salmon fishing and, indeed, in other forms of fishing, too. It must not be forgotten that fishing is the second largest sport, next to soccer, in this country. A vast number of people in town and in country are interested in it. The rateable value of fishing rights is very large.
  Will the Joint Parliamentary Secretary tell us what is being done? Will he confirm what my hon. Friend the Member for Gainsborough said, namely, that those who are anxious about this, either in England, Scotland or Wales, are not exaggerating and that some Irish tourist magazines have been playing this matter down? Will the hon. Gentleman tell us whether the importation of ova and fry, which has been prohibited into
  1872
  Scotland, will also be stopped for England and Wales? What is happening at Billingsgate and other markets and at airports? What physical permissions will he be giving to river boards which are so anxious about the whole matter?
  I have intervened only because I put my name to the Prayer and I wished to make a short intervention because this matter affects Wales, whose rivers could well be the first to be hit if the columnaris disease were to come across the Irish Channel, which I sincerely hope it will not.
  10.53 p.m.
  Mr. Donald Dewar: Without wanting to tread on any of the ground which has already been trampled on by my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan), it is fair to say that, when subjects of this nature arise, it is likely that most hon. Members who wish to catch the eye of the Chair are motivated by either personal or constituency interests.
  Often in the future it may be that, if I speak on this kind of subject, I shall find myself separated from hon. Members opposite in that I shall be approaching the matter from a rather different viewpoint. Tonight, at least, it is pleasant, in one sense, to say that we are all very worried about a common threat to the salmon stocks in the part of Britain we represent.
  It is, perhaps rather unfortunate that this untypical unanimity is caused by such a serious matter. We all accept that columnaris is a real threat. Reference has already been made to the historical note which was left in the Library by the Minister. None of us wants to go back to the days, for example, when, according to that note, the Tweed lost in a four-year period 36.000 diseased fish. It is a horrific prospect.
  As I understand the matter, what we are discussing tonight is not any real opposition to the move by the Ministry, but merely a general feeling, possibly not very concrete, of dissatisfaction with the measures which have been suggested. In one sense at least, I find this unreasonable, because if there is one thing which comes out of all the briefs which most of us have read—I am sure that the

  1873
  hon. Member for Gainsborough (Mr. Kimball) will not object if I say that his speech was based largely on the brief of the British Field Sports Society, of which he is a prominent member—it is that the Ministry is extending the 1937 Act to deal with a disease which is very unspecific. We do not at the moment know whether we are proscribing the right thing. There is some doubt about it and I gather than some people in Ireland are still quarrelling about the matter. The Ministry is acting briskly and I do not see what more it could usefully do.
  The hon. Member for Gainsborough spoke of a publicity campaign. I would have no objection to that. He said that it is possible for the disease to be brought over on fishing tackle. I do not know whether the society of which he is a member would disagree with that. Whether there is more information about that I do not know, but publicity would help. It might do something to stop the private importation of salmon, because, inevitably, people will catch salmon in Ireland and post it home to be poached for tea. It seems that we are nibbling at the problem. I do not think the hon. Member has been able to suggest anything which would strike at the problem more than the Ministry can in present circumstances. I think that the Ministry has gone as far as it reasonably can go.
  The Irish Government are proscribing the export of live fish and dead fish are being most carefully inspected. I do not see the case for a double mechanism of inspection, which would mean a lot of trouble and expense. If the Minister can assure us that the work is done properly in Ireland I would be prepared to let the matter rest and accept that assurance. I hesitate to quarrel or disagree, or even to attempt to comment on what has been said by the hon. Member for Gainsborough about allowing screens to be placed in rivers, because I cannot pretend to have great experience of that. The Minister, I think, believes that it might lead to a great concentration of fish below the screen where infected fish might be more dangerous and they might be forced into neighbouring streams. If the Ministry has good technical advice which is firm, it is right to reject the suggestions which have been put forward.
  1874
  Under the 1937 Act there are certain powers. I want an assurance that the Ministry will not hesitate to use those powers if necessary. If the disease turns up here it would be compulsorily notifiable. Then I hope the Ministry would not hesitate to use its powers. I do not think that there would be any hesitation, but I should like to have that emphasised by the Minister. I hope that research will go on and will be intensified. Much research goes on in my constituency. I hope that we shall get to know more about the origins of the disease and how it is carried, because without that information we cannot reach a proper conclusion. We cannot wait for that until columnaris comes across the Irish Sea, but I do not think anything has been suggested tonight which would allow us seriously to criticise the steps taken by the Ministry.
  Much has been said about the Hunter Report. A great deal can be done in co-ordinating private effort to preserve fishing grounds and too much has been allowed to go by default. Let us by all means make sure that the Ministry keeps up to the mark, but let us also put our own houses in order and ensure that everything is being done in the private sector as well.
  11.0 p.m.
  Mr. Peter Mills: I want to say how concerned I am about the disease and its possible effects in the fishing rivers. If the disease spread to the South-West it would be disastrous not only for fishermen, but also for a large part of the holiday industry. I make no bones about bringing up the problem and how it might affect the South-West and, in particular, my constituency. I say this not just as a constituency point, or for publicity, but because I understand that the rivers and estuaries in my constituency would probably be the first in this country to be infected by the disease if it came from Southern Ireland.
  I understand that the Gulf Stream flows around the southern tip of Ireland, up the Bristol Channel and up the Tor and the Torridge, and so on. I believe that we are, as it were, in the front line and that the disease could easily land upon our shores in the West Country first. In my constituency, we have the very fine salmon rivers Tor, Torridge and,

  1875
  next door, the Teign. if these, particularly the Tor and the Torridge, were infected, it would have very considerable effect upon our holiday industry and, indeed, upon the netsmen at Appledore, who earn a reasonable living from catching fish.
  Many hundreds of visitors come to the South-West each year to catch salmon and it is of considerable financial benefit to us. Thus, I am very concerned that we should treat this threat as very serious. I hope that the Minister is watching the situation very closely in the South-West because, as I have said, we should probably be the first area to be infected by the disease. Are Ministry officials watching the situation closely in the Tor and the Torridge? Are special precautions being taken because of the danger there?
  What happens when a fisherman, either a netsman or a rodsman, catches an infected fish? What does he do? Does he dig a hole and bury it? Or does he send it to the nearest Ministry office? What are the practical details? It is important to know what the Minister wants us to do.
  I do not think that the Order goes far enough. I hope that special precautions will be taken in the South-West. We are very concerned about the situation and we hope and pray that this dreadful disease will never infect the shores of the South-West or any other part of the country.
  11.4 p.m.
  Mr. Patrick Wall: My hon. Friend the Member for Gains-borough (Mr. Kimball) ably described the effect of the disease in Irish waters and the House will wish to join in an expression of sympathy with Irish sportsmen in their difficulties. We are equally united in our desire to help prevent the spread of the disease to rivers in this country.
  The object of this debate is to publicise the danger to our rivers, to find out from the Minister if all possible preventative action has been taken and to ascertain whether sufficient powers are available to the authorities concerned to enable them to take immediate action in the event of the detection of this disease in our rivers.
  1876
  I turn at once to the action taken. The Irish Government have already instituted special inspections of dead salmon and coarse fish prior to export. Does the Minister believe that this control is adequate and is there full cooperation and information coming in from Eire and Northern Ireland?
  Mr. Onslow: On that point, perhaps the Minister could confirm that the inspectors appointed by the Irish Government are experts on fish and not on poultry.
  Mr. Wall: To deal with our own coun try and our responsibilities. I understand that the Minister has given advice to river authorities to seek the co-operation of riparian owners, so that they can immediately remove and destroy any diseased fish discovered. Is he satisfied —would the Parliamentary Secretary pay attention?
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): If my hon. Friend wants to have a word with me it would only be polite for him to do so.
  Mr. Wall: Would the Parliamentary Secretary confirm that the power exists for a river authority to remove and destroy dead fish and is that power adequate?
  In dealing with future action, I will not follow the remarks of the hon. Gentleman the Member for Caithness and Sutherland (Mr. Maclennan) who, quite rightly, called for long-term research We believe that this problem is an immediate one and must be dealt with immediately. It will not be solved now or in the future by the nationalisation of fishing.
  The spread of this disease can only be detected by dead fish in the river; in other words, one gets no warning. It is dormant in the summer months. Can the Parliamentary Secretary say whether the river authorities have the power to erect these barriers in the lower reaches of the river to prevent the diseased fish which tend to congregate in the estuaries moving upriver? Can he say whether his Ministry is prepared to register and inspect hatcheries? This point has already been raised. It is suggested, on good authority, that this disease actually

  1877
  started in a Government hatchery. Are we quite certain that this cannot happen in our country?
  Mr. Hoy: I think that the hon. Gentleman had better make it clear that when he said a Government hatchery it was not a British Government hatchery.
  Mr. Wall: That is quite right. It was an Irish Government hatchery. I am asking whether we have the power to register and inspect and whether there will be registration and inspection of hatcheries in this country so that what unfortunately happened in Ireland cannot happen here. Is the Parliamentary Secretary satisfied that the inspection of dead fish exported from Ireland is satisfactory or should it be repeated here, in markets such as Billingsgate? Is he considering a control on the imports of dead fish if we have a spread of this disease?
  Is the hon. Gentleman satisfied that this debate, and the action taken by the Ministry, has given sufficient publicity to these dangers? Is it comparable with the publicity always given to foot-and-mouth disease? Are airports and ports of entry covered? Are sportsmen from Ireland warned to make sure that their fishing tackle is properly disinfected? In short, have we taken all the precautionary and preventive measures that we can, and is he satisfied that all those concerned with rivers have sufficient authority to take immediate action if the disease is discovered?
  11.9 p.m.
  The Joint Parliamentary Secretary to the Minister of Agriculture, Fisheries and Food (Mr. James Hoy): I greatly welcome this debate because it has allowed us fully to ventilate all the feelings that we have on this issue. All hon. Members who have spoken have expressed concern at the seriousness of this disease, and we have been urged to take measures against it. I want to make it perfectly clear that their concern is shared by my right hon. Friend and by the Secretary of State for Scotland. We appreciate that this disease is serious and we accept that we must take all safeguarding action possible.
  I hope to be able to assure the House that we are losing no time in doing
  1878
  this. First of all, may I say a word about co-operation with the Irish authorities. It is a great help to be working in close co-operation with them. This particularly applies to the scientific investigation into the cause and nature of the disease, where the Irish fish scientists and our own are working on a concerted programme. This co-operation has been at the invitation of the Irish Department, and I think it right to acknowledge that this evening.
  I am sure, too, that all connected with fishing in Great Britain—and not only the anglers who fish in Ireland—will be fully sympathetic with the Irish authorities in their efforts to contend with the disease. They have recently told us that 13 rivers in the South-West, South and East of Ireland, from the Shannon to the Liffey, are at present affected, and five of these have been affected for the first time this year.
  However, in reply to the hon. Member for Gainsborough (Mr. Kimball), our information is that up to Monday, which might be a prophetic date, the Boyne had not been affected.
  No salmon smolts have been found affected, and careful checks have been made into this. Contrary to what the hon. Member said, only one species of coarse fish has so far been affected there. I thought that he would be grateful for that information, which is a little to the good.
  Mr. Onslow: Could the Minister say whether sea bass have been found to be affected?
  Mr. Hoy: All I am saying is that our knowledge is that only one species of coarse fish has been affected.
  Sir Hugh Lucas-Tooth (Hendon, South): Can the Minister say which species of coarse fish?
  Mr. Hoy: It was roach, one of those mentioned by the hon. Member for Gainsborough.
  I think that I should now outline the action which we have already taken. I am grateful to the hon. Member for Gainsborough for his thanks to the Ministry for what it has already done. In the spring of this year, it became clear that the disease was spreading and that it was necessary to take seriously the risk

  1879
  that the disease might get over here. British fishing bodies let us know this spring of their serious concern about the disease, and made a number of suggestions. I am glad to acknowledge the help we have received from them.
  Before this, our own scientists had been kept informed about the effects of the disease by the Irish scientists and we were, therefore, in a position to take action. We at once approached the Irish authorities about measures to prevent the disease from spreading here. We thought it possible that the disease might be communicated by bacteria surviving in dead salmon, although we rated this risk very much lower than that of communication by natural means, in particular by live infected fish entering British rivers.
  The Irish authorities had already instituted stringent measures to prevent the diseased salmon from being exported from Ireland. Commercial exports of salmon from Ireland are all from licensed premises, and systematic inspection of those premises had already been instituted. In addition, no salmon may be sent out of Ireland through the post. The Irish were thus able to give us considerable reassurance on this point. As for live fish, imports of live salmon and trout are banned by statute.
  Mr. Onslow: The Minister will know that I was in the South-West of Ireland at Whitsun, and went to see him on my return and told him that I had brought a fish back by air without inspection. Does he know whether this loophole has yet been closed?
  Mr. Hoy: I did meet the hon. Gentleman and discuss this with him, and perhaps he will wait and hear what I have to say in reply.
  We added a ban on the import from Ireland of all other live fish and of ova. Northern Ireland has done the same. In addition, both Fisheries Departments sent out circular letters to river authorities in England and Wales and to district boards in Scotland, giving advance warning of the symptoms of the disease and recommending what action should be taken if suspect fish appeared in British waters. Any suspect salmon are examined. None has been found to be suffering from the disease.
  1880
  Both Departments at once set on foot urgent work to identify and name the disease. That was essential, since the present Order could not be made until it had been done. As a result, we have been able to identify the disease as columnaris disease. Even now, our knowledge as to the cause of the disease is not complete, as my hon. Friends have said. We now believe that other bacterial organisms are involved in concert with the columnaris organism. More work is necessary before the full nature of the cause can be established. So far as our present knowledge goes, we are satisfied that we have been right in identifying the disease as columnaris, and that has enabled us to make the Order.
  The Order will apply to columnaris disease in Great Britain the provisions in the Diseases of Fish Act 1937 which relate to the control of infectious fish disease. As the Act stands, these provisions in the Act only apply to one disease, furunculosis. However, the Act enables the provisions to be applied to other diseases by an Order in Council.
  The powers which the Order will provide are these. River authorities and district boards in Scotland must notify the presence of the disease at once. The Minister can then declare the area to be infected, publishing the fact that he is doing so. On an area being declared infected, the authorities may, on authorisation by the Minister, then remove any infected fish from any waters and destroy them. In doing so, they may use methods which would normally be illegal.
  In addition, the authorities may, in advance of an area being declared infected, remove and destroy any dead and dying fish that they suspect. There will also be powers to stop movement of live fish, fish eggs and fish food out of any infected area, and the inspectors of the two Departments may enter and inspect any hatchery or trout farm. I think that clears up a point which was raised. They will have power to inspect both hatcheries and trout farms. That is perfectly clear.
  I must stress the importance of the power to remove diseased fish from the rivers and destroy them. Dead and dying fish are a dangerous source of infection. The power to remove and destroy

  1881
  fish has already been found useful by river authorities in dealing with furunculosis disease, and the Irish authorities have been relying on this method in Ireland.
  It will be seen that what we have sought to do has been to anticipate many of the problems, and we are grateful for the tribute which has been paid to the Department, not only by hon. Members but even by The Field itself, which commended us for the promptitude with which we had acted.
  I was asked by the hon. Member for Hereford (Mr. Gibson-Watt) if imports of ova and fry to England and Wales had been stopped. The answer is that they have; this means that the ban applies to the country as a whole.
  The hon. Member for Gainsborough said something that was not quite right. He said that people who owned spawning grounds can block up rivers. I must tell him that the answer is that they cannot. Under the Salmon and Freshwater Fisheries Act 1923, all barriers are illegal unless a special Order is applied for and issued by us. All I can say is that anyone who reads what the hon. Gentleman said had better not follow his advice, or he will find himself in trouble. But if they want to do anything of this kind, they may apply to us.
  The hon. Member for Torrington (Mr. Peter Mills) asked me about river authorities, and I have to tell him that all river authorities, including the Devon River Authority, have been made aware of the symptoms and have been alerted. They are aware of the action required, namely, to take all suspect fish to the nearest public health laboratory.
  The hon. Member for Haltemprice (Mr. Wall) mentioned the training of inspectors. Inspectors are going to do the job, and they have all been trained, not only in this work, but to recognise the diseases of fish.
  The next point that was raised, and it is an important one, was the question of the trout farm on the River Waterville. It is true that some scientists have been there and have reported that they regard this place as suspect. The farm has been mentioned as a possible primary source of infection, and I have been asked whether representations have
  1882
  been made to the Irish authorities about it.
  The hon. Member for Woking (Mr. Onslow) first raised this with me when he came to see me, and it has been raised tonight by the hon. Gentleman. I have communicated with the Irish Minister about this place, and I ask the House to await the result of this correspondence, because it is not complete. I shall be glad to find a means of notifying the result to the House later, when I have any further information.
  The blocking of rivers was dealt with, and the hon. Gentleman said that this has fairly wide agreement, but he knows as well as I do that there are differences of opinion about this method. It is suggested that local fishing authorities should be empowered to block off tributaries in order to provide clear areas where, if a river became infected, healthy fish could spawn.
  This is a proposal which will require very careful consideration, because there is clearly a division of opinion among the fishing interests on whether this is desirable. The difference is not only between Governments or between Government Departments; fishing interests differ on this. While it apparently has the support of most of the leading fishery bodies in England and Wales, the Association of Scottish Salmon District Fishery Boards has represented against it.
  The Minister of State, Scottish Office (Mr. George Willis): Very strongly.
  Mr. Hoy: As my hon. Friend says, it has done so very strongly, so before we can come to any conclusion we must see whether it is biologically sound and technically feasible. We must also take into account the financial implications. These are matters which are being investigated.
  The hon. Gentleman spoke about cost. I am told that it is rather expensive. While certain people owning part of the river might be willing for it to be done, the hon. Gentleman knows as well as I do that it can have repercussions on some other owners. This is one of the things of which we have to take cognisance, and I hope that people will not too willingly accept the hon. Gentleman's suggestion. I think that it has to be treated carefully.
  The other point that was raised was about advice to anglers returning from

  1883
  Ireland, and this is important. We have been giving consideration to what more publicity we can give. As I told the hon. Member who led the deputation which came to see me, we have done everything in our power to make the facts known. There has been a suggestion that if we had put up a notice at every airport, warning people about the dangers, it would have been helpful. I will consider this, but, on the whole, I do not think that it would make a great contribution to solving the problem, because people returning from holiday are not likely to want to read notices concerning their bringing back fish with their holiday gear. Nevertheless, I agree that the matter is important.
  I also regard it as important that anglers returning from Ireland should disinfect their clothing and tackle. This is a possible way in which the disease could be carried into this country from Ireland. We have given advice to this effect to all the angling bodies, and this advice has also appeared in the angling Press. We are considering following this up by similar advice about anglers bringing back salmon from Ireland which they may have caught there.
  I now turn to the point made by the hon. Member for Woking, who confessed that he was one of the culprits—if that is the right word.
  Mr. Onslow: It was a clean fish.
  Mr. Hoy: It was a clean fish, and we hope that other people bringing fish back will make sure that they are clean and not diseased. We do not want to prevent people who have been fishing from bringing back clean fish, like the salmon which the hon. Member caught—at least, I think he caught it; he certainly brought it back. We hope that other people will take this precaution, and that all anglers will pay attention to the advice that we have issued.
  It has been suggested that we and the Irish authorities should institute special action under both these heads, but we take the view that only individual anglers can act effectively. I prefer to act through advice. We hope that people will respond to all that has been done.
  I hope that I have been able to assure hon. Members that we have taken all the necessary action. Right from the begin-
  1884
  ning, we have acted very speedily and have been in touch with every body that has made representations about this. We shall obviously keep a watchful eye on the question. In reply to my hon. Friend the Member for Aberdeen, South (Mr. Dewar), I can give the assurance that not only do we take the matter seriously, but will use all the powers available to us to see that we can cope with any threat if the disease should arise here. I hope that it will not, but we shall take every possible preventive action.
  With those assurances, I hope that I have been able to show the House that we have dealt with the problem seriously and expeditiously, and that we are prepared to take further action if necessary. In the circumstances, the hon. Member for Gainsborough may want to seek your permission, Mr. Deputy Speaker, and that of the House, to withdraw the Motion.
  Mr. Kimball: In view of the Minister's reply, I beg to ask leave to withdraw the Motion.
  Motion, by leave, withdrawn.

  BRITISH TRANSPORT HOTELS (COMPULSORY SERVICE CHARGE)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Whitlock.]
  11.29 p.m.
  Mr. John Rankin: I beg to draw the attention of the House to the decision of British Railways to impose a compulsory service charge of 12½ per cent. on all bills at its hotels. I raised this matter in the House on 29th June this year. In reply to my Question the Minister said:
  "What is happening is a rationalisation by which British Transport Hotels are coming into line with the general practice in hotels today."—[Orricint. REPORT, 29th June, 1966; Vol. 730, c. 1785.]
  I do not find any evidence of this so-called general practice. In some hotels which I have visited the suggested charge is 5 per cent. It is not compulsory, and if the guest so chooses, he may continue using the old method of giving a tip, the amount of which is within his own discretion. In other hotels the charge is 10 per cent., and again it is not compulsory. But British Transport hotels

  1885
  head the list, with a compulsory charge of 12½ per cent.
  In my view, there is no legal sanction which permits this alleged general practice. It can be achieved only with the consent of the Minister of Transport so far as British Transport hotels are concerned. In any event, British Transport hotels made no such claim as that put forward by my hon. Friend for this imposition when he replied to me on 29th June, because in the Press statement which was issued it was explained that the charge was imposed to enable better wages to be paid to the staffs. British Transport did not want to raise its price level directly because I assume it would then have been sent to the Prices and Incomes Board where 3½ per cent. is more popular than 12½-, per cent. Nor must one rule out the possibility that, because of its Government attachment, an indirect increase in prices would be more tolerable than a direct one.
  But if the precedent set by this publicly-owned service organisation is approved by the Minister of Transport, how can it be reconciled with what this House has done tonight in giving a Second Reading to the Prices and Incomes Bill? If, as my hon. Friend said in his reply to me, there is no illegality involved, then every service industry in Britain can follow the practice of the railway hotels. They can put up their service charges, not their prices, and smile at the provisions of the Bill which we have debated today.
  I did not suggest in my Question that the 12½ per cent. increase was illegal. I asked my hon. Friend what legal sanction permitted these charges to become compulsory. Will he tell me now under what legal ruling he is acting in imposing the charges against which I am protesting? So far as I understand, they are a custom which has grown out of the system of tipping which we ourselves in 1945 abolished in the House of Commons because we believed that it was an evil system. In its place, we established a living wage for our employees. Will my hon. Friend say that we got worse service in our dining rooms because of that action? We did not require to take legislative action to abolish the old system in the Members' Dining Room, and while, in my view, no legal
  1886
  issue arises in this matter, a pernicious development is most certainly involved.
  My hon. Friend's Department is proving, through a recent decision by British Rail, that the hotels' example will spread. Indeed, it is spreading now. Today every holidaymaker leaving Glasgow must pay a tax or service charge of 5s., merely to have the right to travel on publicly owned railway trains after having bought tickets and paid the publicly advertised fares for the journeys they propose to take. It should be noted that those people, who are travelling by sleeper and who have already paid a reservation charge, will also be required to pay a travel tax of 5s. which, perhaps, will be raised to 7s. 6d. for window seats next year if my right hon. Friend does not have a close look in the meantime at the organisational side of the Scottish Region.
  The idea that the numbers travelling on a particular day can be assessed by putting an iniquitous poll tax on each traveller is so archaic that it obviously conceals another purpose. For a good many years the Glasgow holiday crowds have been handled without any trouble by the use of free travel tickets. There was no necessity to change this system. But the Scottish Region needs the money, and this is the way it is seeking to get it. It cannot raise its fares because this would drive more people on to the buses, and it would make itself unpopular with the Secretary of State for Economic Affairs, whose consent it would need for such action. Does my right hon. Friend regard this attempt to sidetrack his efforts to get price increases related to productivity as fair?
  Whether we describe a rise in price as a service charge or a control tax, a rise by any other name will be just as severe in its impact on the purses of the people who travel in their hundreds of thousands from the City of Glasgow for a well-earned fortnight's holiday. In addition, it will not help the Government to achieve the policy which they are following and which earlier tonight received the approval of the House.
  11.40 p.m.
  Mr. Edward M. Taylor: I am grateful to the hon. Member for Glasgow, Govan (Mr. Rankin) for showing his customary

  1887
  courtesy in allowing an hon. Member who has listened to his remarks an opportunity to intervene in the debate.
  I add my full support to what he has said about the control tickets. It is only fair to tell the Minister that in Scotland at the present time there is a feeling of what might be described as a real desperation on the part of the public that, no matter who protests or what public feeling is about what appears to be an indefensible, iniquitous imposition of a holiday tax, nothing is done, and no reasonable answer or explanation is given by British Railways in Scotland.
  Here is another case, as with the 12½ per cent. charge in the hotels where British Railways appear to be considering themselves immune from public criticism. Here is an extra charge introduced solely in Scotland. We ask why it is solely in Scotland. There is no apparent answer. Here is a charge that has been condemned universally by the Scottish Press, by the Scottish Tourist Board, by the Dundee magistrates, and condemned in a Motion signed by half the Members of this House from all parties who represent Scottish constituencies.
  What more, precisely, can we do to get this iniquitous holiday tax removed? What precisely should we do? What further avenue is there for public concern to be shown? If Parliament can do nothing about this, if the Minister, as we are told, can really do nothing about it, there is something very wrong with the system. We hope that in this case the Minister can intervene, if not by a general direction, if that is possible, at least by speaking to British Railways about it—and, if that cannot be done, then, as the hon. Gentleman has suggested, by referring the whole matter to the Prices and Incomes Board.
  The whole point is that for the sake of the railways, on which we depend so much, we must preserve public good will. How precisely can we hope to maintain public good will if we have measures like this, apparently condemned by all and, in this case, applying to those who, through no fault of their own, are forced to take their holidays at the recognised holiday period. What kind of people are they? They work in the factories and
  1888
  the workshops, which close during the normal summer period. It seems indefensible that these people, going with their families on holiday, should have this extra burden—and particularly that it should be applied only in Scotland.
  This is a genuine grievance, We are concerned about the tax itself, but more about the fact that, despite all the public protests, and all the clamour, and all the arguments that this tax is apparently illogical and indefensible, we do not have a clear answer from British Railways. Hon. Members representing these constituents, the Minister, the Press, the Tourist Board—no one appears to have any power at all to do anything. This is a sadly wrong state of affairs, something must be done about it, and I wholeheartedly back the comments so ably made by the hon. Member for Govan.
  11.44 p.m.
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler): I fully appreciate the anxieties of my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) and the ponnts he has made. I hope to be able to clarify some of the matters to which he has drawn attention, and to answer the criticisms of the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor).
  I must first make it quite clear that these are managerial decisions made by British Railways. We must be quite clear in this House that it is as a result of the proceedings of Parliament that national boards have been established to run publicly-owned industries and services; and that as a result of the proceedings and debates in this House it was decided that they should be given a reasonable measure of freedom to make commercial day-to-day decisions. The matters to which my hon. Friend has drawn attention are day-to-day decisions by the Scottish Region of British Railways. The Scottish Region has not had the sanction of the Minister of Transport. It did not require the sanction of the Minister of Transport.
  My right hon. Friend is anxious not to keep interfering with matters of management of the British Railways Board, or, indeed, of any other nationalised industry. We want to give them a proper remit with proper terms

  1889
  of reference about how we want our national railways to be run, and to tell them to get on with the job. Therefore, what I say tonight is based upon information which I have received from the Railways Board and the management as to the reasons lying behind these decisions. I hope that I can thereby clarify the matter for my hon. Friend, the hon. Member for Cathcart and the public and get it into perspective.
  First, the 12½ per cent. service charge. British Transport Hotels is a wholly-owned subsidiary of British Railways. Its job, on the general principles laid down about nationally-owned industries, is to manage the business and provide the service for the customers. It has decided that in place of the voluntary tipping system it should introduce the service charge, which I am informed, is now becoming general thoughout the hotel industry. I say this because of the criticism made by my hon. Friend.
  I have taken advice from the British Travel and Holidays Association and am told that the majority of our hotels, including many of the best known, now operate, in place of the voluntary tipping system, the compulsory service charge. In regard to the point raised by my hon. Friend about legal sanction, there is no question of legality arising here because this is a matter of a voluntary contract between British Transport Hotels and the parties who use its service. There is no legal objection, therefore, to the inclusion of a service charge at a certain rate in the terms of any contract.
  What are the economics of this? I am told by the Railways Board that the yield of the voluntary tipping system was £650,000 a year. The expected yield from the compulsory service charge of 12½ per cent. which is now being applied is £1 million a year. Its aim and purpose, as was the case of the voluntary tipping system, is to enable British Transport Hotels to pay more to the staff, and the staff in this case are amongst the lowest paid in the railway industry.
  My hon. Friend asked what amount of price increase this represents. Let us take the annual turnover of British Transport Hotels, including the receipts from
  1890
  voluntary tips in the past. It amounted annually to about £10,150,000. Therefore, if the service charge is expressed as a percentage of that figure, it amounts to a price rise of the order of 3 per cent.
  As I have said, this has been done by British Transport Hotels, as many other hotels have done it, because it is becoming general to charge something between a 10 and 15 per cent. service charge in place of the tips, and the money will be used to benefit the staff. The staff in this case have not had any wage increase this year. The revenue that is raised from the imposition of this charge is to provide for a better living standard for the staff, which will now be guaranteed to them by means of the service charge instead of its depending upon the customers' generosity. That is why this charge has had to be raised, and those are the answers to the criticisms by my hon. Friend on the ground of legality and the extent of the price rise.
  I turn to the question of the so-called seat control charge, which has been mentioned to me by a number of hon. Members. I have made a point of studying some of the criticisms in the Scottish Press about this position. As my hon. Friend has said, British Railways Scottish Region has this year introduced a system of making a 5s. charge, which it calls a seat control charge, levied on certain sections of railway users at certain times and in certain places, which, I know, has provoked widespread criticism in Scotland.
  I again want to put the matter into perspective on the basis of the information given to me by the British Railways Board. The 5s. control charge is introduced this year for only nine days in the year and at seven Scottish stations. The charge is introduced because of past experience of the crush which has occurred amongst those who are making for the most popular holiday resorts. On these nine designated days the charge is applied to all who travel from the seven designated stations, whatever kinds of trains they use.
  The purpose is to avoid having standing passengers on the trains. The tickets are issued to ensure that not more passengers are admitted to the platforms than there are seats on the train. Therefore, the control ticket is introduced for

  1891
  the purpose of guaranteeing a seat somewhere on the train—not a specified seat, which is obtained by making the specified reservation. These tickets ensure that there is a seat somewhere on the train for every passenger who enters the platform. I am informed that the system has been in operation in the Scottish Region on certain days in previous years, but without the imposition of any extra charge.
  What is the purpose of introducing the extra charge? Let me be perfectly frank, on the basis of the information given to me by the Scottish Region. It is to discourage people from using what have hitherto been the most popular trains, in the hope of spreading the passengers over a greater number of trains. It is to introduce a disincentive to people to require space which has previously been inadequate, the demand having caused in the past a crush of standing passengers on certain days on certain trains. It was hoped that, to avoid the extra scharge, people would make their demand for train travel on other days.
  Mr. Rankin: I realise that my hon. Friend has a brief and that he must follow it. He will understand that in Scotland the great mass of the people who are travelling today made their holiday arrangements long ago, before any 5s. tax was imposed. Therefore, his argument is just not relevant to the case which has been put to him tonight.
  Mr. Swingler: That sounds a very fair point. As my hon. Friend rightly says, I am speaking from a brief, from information supplied to me during the course of today. I wanted the most up-to-date information from the Scottish Region. I am informed that the proposal to introduce this charge for the tickets, whch previously had been issued without charge, was given wide publicity throughout Scotland in February of this year so that people should be precisely forewarned that now, on these nine days at these seven stations, they might expect to be confronted with the demand for 5s. for a seat control ticket so that British Railways in Scotland could organise travel in this way. This is the information I am given about the purpose of the
  1892
  system. I am putting it to the House as fairly as I can. The purpose is to try to provide greater comfort on trains by avoiding having passengers crowded in the corridors and ensuring that no more passengers get on to the platform than there are seats available on the train. Quite deliberately it was to introduce a financial disincentive to people to travel on certain days by certain trains by making it a little more expensive for them to do so.
  I was about to give a modest crumb of comfort to my hon. Friend. I am so informed—this may be of interest throughout Scotland—that the imposition of this charge is experimental. It has been introduced experimentally by British Railways for this year precisely in order that they may examine what effectiveness this has in achieving the purpose of exercising control over the number of passengers going on to the platform for certain trains. The Railways Board will be examining the practical results and criticisms made and will take a decision for the future on the basis of that experience.
  It is quite understandable that the introduction of such a system should meet with a substantial volume of criticism just as it is usual that announcements made on railway platforms or in the Press at certain times of the year are taken notice of only at the time when people come up against them and against the charges. Whatever hon. Members may think of the merits and demerits of the system, the intention of the railway management to try to get a better spread of traffic and to ensure a higher standard of comfort on the trains for those travelling to and from most popular holiday resorts, is an intention which should be applauded. It is quite right that the management should experiment with different ways and means of trying to influence the choice of times and dates for travel to and from resorts and to avoid the terrible crushes and discomforts on trains experienced by so many people, especially those with large families when going on holiday.
  I reiterate that these are decisions of the national railway management. My hon. Friend rightly said that they are decisions of the Scottish Region. On the basis of things with which they want to

  1893
  experiment in order to judge the results, I am sure that they will take note—
  The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY
  1894
  SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at one minute to Twelve o'clock.