PRICES AND INCOMES BILL

HC Deb 14 July 1966 vol 731 cc1742-863

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 (Ilford, North)

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 (Shipley)

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 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 (Bexley)

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.

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 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- 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 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 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 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 the society in which we start the whole policy. But we have to do it.

Mr. Nicholas Ridley (Cirencester and Tewkesbury)

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 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 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 (Horsham)

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.

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 (Mid-Bedfordshire)

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 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 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 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 (Horncastle)

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 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 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 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 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 (Barnet)

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 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 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 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 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, 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 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 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 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 (Buckingham)

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 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 (Easington)

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 (Manchester, Wythenshawe)

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 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 (Central Ayrshire)

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.

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 (Accrington)

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 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 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 (Tavistock)

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. 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 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.

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 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 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 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 (Stretford)

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 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 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- 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 (Louth)

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 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 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 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 these reasons, I believe that the Bill will fail and I shall vote against it.

6.40 p.m.

Mr. Frank Cousins (Nuneaton)

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 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 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 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.

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 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 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 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 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, 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 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.

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 (Stoke-on-Trent, South)

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 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 (Totnes)

It is a great pleasure to follow the right hon. Member 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 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 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. 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 (Billericay)

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 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 (Lewisham, North)

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 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 (Leeds, West)

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 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 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 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 (Derbyshire, North-East)

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.

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 (Lewes)

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- 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 (Liverpool, Walton)

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 (Oldbury and Halesowen)

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 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 (Chelmsford)

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 (Lewisham, West)

Why bother to introduce the Bill in that case?

Mr. Eric Ogden (Liverpool, West Derby)

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 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 (Yeovil)

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.

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 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 (Derbyshire, South-East)

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 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 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 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 (Roxburgh, Selkirk and Peebles)

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 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 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 (Portsmouth, Langstone)

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.

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 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 (Leicester, North-East)

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 (Cheadle)

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 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 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- 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 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 (Nottingham, South)

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 (Chelmsford)

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.

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.

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 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 (Newport)

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 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.

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 (Horsham)

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 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 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 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 (Enfield, West)

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 (Belfast, East)

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 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 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 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. 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 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.

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 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 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 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 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 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.