Commons Sitting of 30 January 1969

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  WALES

    Llantrisant (Development)
    Sir B. Rhys Williamsasked the Secretary of State for Wales whether he has considered the Buchanan Report on the future development of Llantrisant; and if he will make a statement.
    The Minister of State, Welsh Office (Mrs. Eirene White): My right hon. Friend has not yet received the report of his consultants, but expects to do so within the next month.
    Sir B. Rhys Williams: Does the Minister appreciate that the people of Llantrisant have been living in a climate of great uncertainty about the future for a number of years? May we hear when we can expect a firm decision to be taken about the Buchanan Report?
    Mrs. White: The hon. Gentleman will appreciate that my right hon. Friend will have to consider the Report when it is presented to him and will have to undertake very wide consultations before reaching a firm conclusion upon it.

    Road Improvements (Wrexham)
    Mr. J. Idwal Jonesasked the Secretary of State for Wales whether the A.483 road between Wrexham and its junction with the A.5 near Chirk is included in the list of roads to be improved in North Wales.
    The Under-Secretary of State for Wales (Mr. Ifor Davies): Yes, sir. Work on a Wrexham bypass should start at the end of 1970 and smaller improvements south of Wrexham should start this year.
    Mr. Jones: I thank my hon. Friend for that reassuring reply, but may I ask whether special consideration will be given to the section of the road near the disused Wynnstay Colliery?
    Mr. Davies: Yes. A road widening and realignment scheme at Wynnstay Colliery is already included. The proposal that I have mentioned will be prepared this year.

    Heads of Valleys Road (Industrial Development)
    Mr. Fred Evansasked the Secretary of State for Wales whether he has studied the memorandum submitted to him by the hon. Member for Caerphilly on industrial development along the Heads of the Valleys road; and what action he proposes to take in this matter.
    Mrs. White: My right hon. Friend has studied the memorandum and when he sees the proposals in their final form will consult my right hon. Friend the President of the Board of Trade about any further action which it may be desirable to take.
    Mr. Evans: Is the Minister aware that an extremely serious situation is developing in the upper part of the Rhymny Valley? Is she also aware that one colliery employing 680 men closed before Christmas, that one of the very few factories in the area employing 280 people is due to close in February, and that a further colliery employing 1,100 men is threatened with imminent closure? Will the Minister, in the circumstances, please pay close attention to this or any other scheme which may be submitted to ameliorate the situation?
    Mrs. White: My right hon. Friend is, of course, concerned about the difficulties which have been mentioned by my hon. Friend and for that reason he is anxious to have the final proposals submitted to him.

    Prince of Wales (Investiture)
    Mr. Emrys Hughesasked the Secretary of State for Wales what arrangements he is making to provide programmes and other information regarding the Investiture of the Prince of Wales in the Welsh language.
    The Secretary of State for Wales (Mr. George Thomas): All publications in connection with the Investiture ceremony for which I have any responsibility will be in both English and Welsh.
    Mr. Hughes: Does this not mean spending a lot of money? Is my right hon. Friend aware that most intelligent Welsh people can read English? Can he confirm the forecast of these arrangements and programmes, that the Prince of Wales is expected to make a speech in Welsh and that he will be sent to Aberystwyth University for a crash course in Welsh? Is not this too much of a strain both on the Prince and on the public?
    Mr. Thomas: With respect, His Royal Highness will be far more likely to make a speech in Welsh than my hon. Friend will ever be.
    Mr. Emrys Hughesasked the Secretary of State for Wales how many letters he has received with offers of financial contributions to the cost to public funds of the Investiture at Caernarvon.
    Mr. George Thomas: None, Sir. But many people are giving their valuable services without any financial reward. If my hon. Friend wishes to make a financial contribution I shall of course be pleased to hear from him.
    Mr. Hughes: Is my right hon. Friend aware that this enthusiasm for the Investiture that he imagines exists in Wales is not reflected in cash, and that we would like to see more money contributed by Wales, because no advantage is being given to other parts of the country? Further, is he aware that he underestimates my capacity for telling him in forcible language—in Welsh—what I think of him?
    Mr. Thomas: I should be interested to hear that. Perhaps my hon. Friend will have the opportunity to tell me one day. As for the first part of his question, he left Wales so long ago that he is quite out of touch. He does not realise that local authorities, who are the representatives of the people of Wales—
    Mr. Hughes: Let them pay.
    Mr. Thomas:—are spending a considerable amount, with the good will of
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    their people, for the celebrations in connection with the Investiture.
    Mr. Gibson-Watt: Will not the right hon. Gentleman accept that this is the first time that hon. Members on this side of the House have ever heard a Socialist equating enthusiasm with the word "cash" as the hon. Member has.

    Newport-Worcester Trunk Road
    Mr. Andersonasked the Secretary of State for Wales what action he proposes to relieve the traffic pressure through Usk in the interim period between the Raglan-Usk stage and Usk-Coldra stage of the Newport-Worcester trunk road.
    Mr. Ifor Davies: My right hon. Friend does not expect an unacceptably high flow of additional traffic to be generated through Usk and foresees no need for special measures in the town.
    Mr. Anderson: Does my hon. Friend accept that the inhabitants of this delightful market town are already choked and deafened by the fumes and noise of the existing volume of traffic passing along the main street? Is this not bound to increase as a result of the opening of the next stage of the Newport-Worcester trunk road?
    Mr. Davies: In the event of any serious congestion, the matter will be closely examined.
    Mr. Andersonasked the Secretary of State for Wales how he proposes to meet the increased volume of traffic in the Abergavenny to Raglan road following the forecast completion of the Newport-Worcester trunk road in 1971.
    Mr. Ifor Davies: My right hon. Friend expects the road to handle the traffic without undue difficulty, though, as my hon. Friend was told on 14th November last, preliminary plans for an improved road have been prepared.—[Vol. 773, c. 1267.]
    Mr. Anderson: Does my hon. Friend accept that the bottleneck caused by this obvious missing link on the A40 is bound to impede the increasingly successful industrial policy of the Welsh Office on the Heads of the Valleys road?
    Mr. Davies: I would emphasise to my hon. Friend that it would be a great mistake to create the impression among industrialists considering coming to Wales that there is likely to be any serious or prolonged congestion on this road. The road will, of course, be improved as soon as possible.

    Government Establishments (South Wales)
    Mr. Gowerasked the Secretary of State for Wales (1) what steps he is taking to encourage more transfers into Wales of parts of the administration of various Government Departments and State boards; and to what extent he will encourage such transfers to Cardiff, Swansea, Newport and Barry, respectively;
    (2) whether, in view of the fact that the exclusion of Barry and district from the Welsh Development Area hinders efforts being made to promote industrial expansion at Barry, he will take steps to ensure that Barry shall have a reasonable share of office employment created by future transfers into Wales of parts of the administration of Government Departments and State boards.
    Mrs. White: Since 1964 a number of important decisions have been taken to locate Government establishments in South Wales. The jobs which will arise in Cardiff as a result of these decisions will be open to Barry residents since Barry is in the Cardiff travel-to-work area. In reaching decisions on the dispersal of Government offices the needs of Wales, including Barry, will continue to be taken into account, along with the needs of the rest of the country.
    Mr. Gower: Owing to the development area policy making it difficult for new industries to be brought to the Barry, Cardiff and Newport areas, and causing some firms to consider leaving these areas, will the hon. Lady take doubly into account the great necessity of bringing alternative employment to these areas, perhaps in the form of office employment?
    Mrs. White: As the hon. Member will be aware, the fact that Newport and Cardiff are not development areas has not precluded the siting there of very important and large Government offices.
    Mr. Roy Hughes: Does my hon. Friend appreciate that the people of South Wales realise that it is only since this Government have been in office that these measures of devolution have been encouraged—especially in Newport? We are very grateful for the decision to site the Census Office there, which, when completed, will employ about 2,000 people.
    Mrs. White: We are very glad to have some signs of appreciation. As my right hon. Friend made clear when he replied not long ago to my hon. Friend the Member for Brecon and Radnor (Mr. Tudor Watkins), a large dispersal of Government establishments is contemplated to South Wales.
    Mr. Gibson-Watt: With respect to the hon. Lady, she has not answered the question that my hon. Friend put. Whatever the past may have been under this Government or any other Government, can she say what steps the Secretary of State is taking to encourage more transfers to South Wales, especially with regard to what he has lately said about the drawing of industry into the development areas?
    Mrs. White: We are always on the lookout for possible fresh dispersal to Wales. One cannot say precisely what until the decisions have been taken, but a number of decisions have been made and also announced.
    Mr. Anderson: May I ask my hon. Friend not to neglect the claims of Cwmbran, where office development in that case would be as a result of public investment?
    Mrs. White: We are well aware of the desire for more office development in Cwmbran and are carefully considering it.

    Forestry Commission (Employees)
    Mr. William Edwardsasked the Secretary of State for Wales what is the number of workers employed by the Forestry Commission in Wales; and what percentage of these are clerical, administrative, professional and supervisory staff, respectively.
    Mr. If or Davies: Of 2,215 persons employed at 31st December, 417, or less than 20 per cent. were in non-industrial grades.
    Mr. Edwards: Is my hon. Friend aware that real concern is felt by those who are employed as non-administrative workers with the Forestry Commission about the way in which the Commission in Wales is being managed? In order that they may express their concern to my hon. Friend, will he meet a delegation from this side of the House to discuss the matter?
    Mr. Davies: We are well aware of the concern that is felt. I shall be glad to meet any delegation to discuss the matter.
    Mr. Gower: Can the Minister give any reason why the Forestry Commission does not have a very great appeal to Welsh people in terms of employment—in other words, why a lot of foresters seem to come from other parts of the United Kingdom? Is there any way in which the Commission can be made more attractive to the Welsh people?
    Mr. Davies: The rundown that is taking place is due to new techniques and greater mechanisation. That is why we are encouraging as far as possible those we can employ. This is a fact that we have to face.

    Blaenau Ffestiniog
    Mr. William Edwardsasked the Secretary of State for Wales if he will revisit the Blaenau Ffestiniog area to assess its development potential and to discuss development and housing problems with the local authority.
    Mrs. White: My right hon. Friend has no immediate plans to visit the Blaenau Ffestiniog area but he will certainly consider doing so when time permits. In the meantime he will look into any problems affecting the area which my hon. Friend or the local authorities may wish to bring to his attention.
    Mr. Edwards: Is my right hon. Friend aware that although Government policy in Mid-Wales generally has been very successful, there are some areas, like Blaenau Ffestiniog, that have special problems which can be identified with the problem of certain mining valleys in South Wales, and that it would be appreciated by the people of Blaenau Ffestinicg if the Secretary of State were to come to the area so that he could appreciate the problems for himself?
    Mrs. White: I know that my right hon. Friend is well aware of the special difficulties in this district. When he will be able to come is a matter to be carefully considered.

    Local Authority Mortgages
    Mr. Alec Jonesasked the Secretary of State for Wales what is the estimated sum of money to be spent by local authorities in Wales for mortgages for house purchases this year; and how it compares with previous years.
    Mr. Gibson-Wattasked the Secretary of State for Wales what was the total grant for mortgages advanced to local authorities in Wales in each of the last three years; and what is the total planned for the forthcoming year.
    Mr. George Thomas: The estimated sum to be advanced by local authorities in the financial year 1968–69 is £6·8 million and in the forthcoming year, £3 million, subject to review in six months' time. Local authorities advanced £6·8 million in 1967–68 and £9·6 million in 1966–67.
    The Government do not give giants towards the cost of these advances.
    Mr. Jones: Will my right hon. Friend bear in mind, when allocating this diminishing sum of money, that in some areas—particularly the older industrial areas—people desirous of buying their own houses are far more dependent on local authority mortgages because of the reluctance of building societies to loan money?
    Mr. Thomas: I am aware of the difficulty to which my hon. Friend refers and I hope that local authorities will pay special attention to older property, with the resources at their command.
    Mr. Gibson-Watt: I recognise the seriousness of this matter generally, but will the right hon. Gentleman be able to publish a list of those Welsh local authorities which have no further mortgage moneys available to them for house purchase for 1969?
    Mr. Thomas: I am not sure whether the hon. Member is pressing me to increase the amount that should be

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    available. I will consider his request, bearing in mind—as I trust he will—that public expenditure must be controlled.

    Migration and Unemployment
    Mr. Gwynfor Evansasked the Secretary of State for Wales what plans he has to reduce the growing migration from Wales, and the growing unemployment including hidden unemployment, in Wales.
    Mr. George Thomas: There is no evidence that migration from Wales is growing, and the published statistics show that there is an encouraging downward trend in the seasonably adjusted unemployment figures. I attribute this to the success of the Government's policies.
    Mr. Evans: Is the Minister aware that he has given no answer to the Question, which asked what were his plans? In any case the Government's policy is utterly inadequate. In view of the absolute drop of 39,000 in the number of jobs for men between 1964 and 1968, and the fact that the low activity rate in Wales is dropping still further, giving a hidden unemployment of about 200,000, is he aware that if migration continues at the present rate we shall have lost 1 million of the people of Wales in a quarter of a century?
    Mr. Thomas: That is a lot of poppycock. The hon. Member thrives on grievances and tries to create them.
    Mrs. Ewing: Answer the question.
    Mr. Thomas: I am answering the question—and I do not need any help from Scotland. The hon. Member should know that last year 7,000 more people were found jobs in Wales than in the year before. Everything that is encouraging to the rest of Wales is discouraging to the hon. Member.
    Mr. William Edwards: Is my right hon. Friend aware that one of the ways in which migration can be stopped and the trend reversed is by the development of new towns and the building up of existing towns in Wales, and that when that is being done in various localities by Government policy it is always opposed by the party opposite?
    Mr. Thomas: I accept what my hon. Friend says about the advantage of new towns and growth areas, but I must discount
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    this strange idea of migration from Wales. The argument of the hon. Member for Carmarthen (Mr. Gwynfor Evans) is not founded on fact.
    Mr. Hooson: But would the right hon. Gentleman bear in mind the great importance of providing employment opportunities for young technologists and scientists, and that there is great concern in Wales because there is no employment opportunity at that level, and the importance, therefore, of having research and development establishments set up in Wales?
    Mr. Thomas: I am ever mindful of the need of opportunities for our young technologists and am glad to tell the House that the new industry which is coming to Wales considerably increased that opportunity during the past six months. It is modern, soundly-based industry, which will give greater opportunity to our young people, and I want more.

    Welsh Books (Publication)
    Mr. Gwynfor Evansasked the Secretary of State for Wales what plans he has for increasing the financial assistance given to publishing books in the Welsh language.
    Mr. George Thomas: The financial assistance given by the Government to help the publication of books in the Welsh language was increased by 50 per cent. in 1966 and I have no immediate plans for a further increase.
    Mr. Evans: Is the right hon. Gentleman aware that it is still a miserably small sum, no bigger than the sum given by the Government to assist a very wealthy brewery company to rebuild a public house in Swansea, and that this shows how low in the Government's priorities are the language and literature of Wales?
    Mr. Thomas: Once again, I am sorry to have to be the one to correct the hon. Gentleman, but it so happens that the amount is four times the help which was given in the instance to which he refers. He has not yet brought one correct fact before the House.
    Mr. Anderson: To assist the House, could my right hon. Friend give the comparable figure of Welsh Office assistance

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    to books published in the English language?
    Mr. Thomas: It would not be very large.

    Welsh Tourist Board
    Mr. Gibson-Wattasked the Secretary of State for Wales what plans he has for giving a further grant to the Welsh Tourist Board in 1969.
    Mr. Ifor Davies: My right hon. Friend is at present considering this matter taking account of the Government's proposals for a new statutory organisation for tourism.
    Mr. Gibson-Watt: With respect, that does not answer my Question. Has the hon. Gentleman seen reports that the Welsh Tourist Board is at present, in the short-term, running out of funds in this important year? What are the Government's plans for coping with this problem?
    Mr. Davies: The Government have already announced plans on tourism; they were announced by the President of the Board of Trade recently, and my hon. Friend must await the Bill which will shortly be brought forward. No Government have done more for tourism in Wales than the present Government, who have recognised it as an important industry. I am sure that I carry the hon. Gentleman with me when I pay a warm tribute to the present Board, under the leadership of Mr. D. J. Davies, for what it has already achieved.
    Mr. William Edwards: But is not my hon. Friend aware that the situation is that the Welsh Tourist Board must either get the new statutory powers this year or more cash this year?
    Mr. Davies: The answer is, of course, as I have said, that the new Board will be appointed this year, and the whole matter will be then considered.
    Mr. Gower: But will the hon. Gentleman take into account the fact that Mr. D. J. Davies has said that the financial position of the Board is really desperate? Surely there is power for the Welsh Office to help the Board at this stage before legislation?
    Mr. Davies: Yes, I am aware of what Mr. Davies has said, but I want to pay tribute, as he himself has done, to what the local authorities have done. A great deal can be done by local authorities. It is for them to continue to support the Board in the interests of their own areas.
    Mr. Gibson-Watt: Could the hon. Gentleman pay further attention to one part of my Question? Admittedly, we shall have to wait for legislation in the long term, but what do the Government intend to do in the short term, in view of the comments which the hon. Gentleman admits?
    Mr. Davies: The research grant which the Government gave three years ago is continuing. It has been a valuable contribution to the Board, which has produced, as a result, some excellent literature which cannot be bettered by that of any part of the United Kingdom.

  EDUCATION AND SCIENCE

    Teachers
    Mr. Danceasked the Secretary of State for Education and Science whether he is satisfied that posts will be available for the increased number of people qualifying as teachers; whether it is estimated that the provision of new schools and the reduction in the size of classes will keep pace with the increase in the number of people entering the teaching profession; and if he will make a statement.
    The Secretary of State for Education and Science (Mr. Edward Short): I refer the hon. Member to my reply to the hon. Member for Cambridge (Mr. Lane) on 5th December last. As to the second part of the Question, I do not think that accommodation problems will prevent authorities from making good use of the extra teachers.—[Vol. 774, c. 522–3.]
    Mr. Dance: Is the right hon. Gentleman aware that, in Bromsgrove, there is an excellent teacher training college and that recently many teachers came to my "surgery" and said that they were very perturbed and confused about the future of the profession?
    Mr. Short: The only confusion comes from people like the hon. Gentleman, who are deliberately spreading confusion, on

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    this matter. I have spelled this out in the clearest terms. If the local authorities employ all the teachers which they said that they were going to employ when they negotiated the rate support grant, all the 13,000 additional teachers in September will get jobs.
    Mr. Dance: On a point of order. In view of that very unsatisfactory reply, I beg to give notice that I will raise the matter as soon as possible.

    Scientific Satellites
    Mr. Martenasked the Secretary of State for Education and Science if he is satisfied with the overall economic return on expenditure on scientific satellites, and if he will make a statement.
    The Minister of State, Department of Education and Science (Mrs. Shirley Williams): Scientific satellites are flown for their scientific value and not for their economic return. There is, however, an incidental economic return in the potential which their design, development and production gives to United Kingdom industry when competing in international markets for space contracts.
    Mr. Marten: Is this not a very curious doctrine? Scientific satellites must throw back into the economy some benefit. Can we not have more details about the economic return which is obtained from these scientific probes into space? Could the hon. Lady look at this very seriously to see what the feed-back is to industry?
    Mrs. Williams: The hon. Member will appreciate that the reason for my Answer is that it is not altogether easy to quantify this. The actual expenditure is about £2¾ million on the whole of the British national scientific space programme. In particular, I would point to the contract which was won from E.S.R.O. as the prime contractors for one of their three space experiments, and we were important sub-contractors for two others. Also, we have, for the first time, launched a wholly British-made scientific space experiment in the shape of Ariel III.

    Swann Committee and Dainton Committee (Reports)
    Mr. Dalyellasked the Secretary of State for Education and Science (1) what systematic progress-chasing
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    he has done of the recommendations of the Swann Committee Report;
    (2) what systematic progress-chasing he has done of the recommendations of the Dainton Committee Report.
    Mr. Edward Short: These two Reports, raising many important and complex issues, have been and are being considered by a wide range of bodies in industry, science and education, by the Royal Society, the University Grants Committee and individual universities, by the C.B.I., the Research Councils, the Schools Council and others. The lively discussion continues. Appropriate action is being taken by such bodies as the Science Research Council in its postgraduate awards and by the Schools Council in its development programmes. My Department is in close touch with these efforts and with the continuing debate.
    Mr. Dalyell: Is my right hon. Friend aware that some of us very much agreed with his remark yesterday that higher education was consuming too much of its own product, but in these matters would it be possible for someone to lay out clearly what action has been taken, recommendation by recommendation, on these Reports? Much good work is being done, but could we be clearly told what is happening?
    Mr. Short: I should be happy to write to my hon. Friend on this. There is an impressive list of individual items on which action has been taken, but it is extremely important not to regard these Reports as a cut-and-dried blueprint for action. They are a contribution to thinking on a very important problem and that is the way to regard them.
    Sir E. Boyle: Is it not important that there should be a wide debate on these Reports, not just by way of speeches and memos circulated by the right hon. Gentleman, but also in the organisations and in publications like the Universities Quarterly and higher education journals? Will he give an undertaking that he will ensure reasonable liberty for officers of the Schools Council to put their views publicly so that there can be the widest possible exchange on these important subjects?
    Mr. Short: I certainly endorse what the right hon. Gentleman says. I do

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    not believe that I have any power to prevent officers of the Schools Council expressing their views on anything, and I should welcome an expression of views on this. Perhaps some of the most hopeful action is being taken in curriculum development in the improvement of science and mathematics teaching in schools. I am not sure whether this is not the most fruitful way of all to tackle the shortage of scientists and mathematicians,

    Deansfield High School, Wolverhampton
    Mrs. Renée Shortasked the Secretary of State for Education and Science when he will give approval for the work shops, music room and additional class rooms at Deansfield High School, Wolverhampton, to be completed.
    Mr. Edward Short: I am awaiting a reply from the authority to my letter about its reorganisation scheme before considering this building project further.
    Mrs. Short: Does my right hon. Friend recall that he opened this school in my constituency very recently and that the completion of the school should not be held back because of the plan which the local authority has sent in? Is he aware that we are anxious to get this work done and will he reconsider the mailer?
    Mr. Short: I recall opening the school, which is a splendid one for which I congratulate the local authority. I want to see how the completed project will fit into the long-term reorganisation scheme, and that is what I am waiting for now. The local authority received my letter—I understand that it did not receive the first copy and that a copy of the original was sent—and I am awaiting its reply.

    Secondary Reorganisation (Wolverhampton)
    Mrs. Renée Shortasked the Secretary of State for Education and Science what reply he has sent to the Wolver-hampton Education Committee about its proposals for the reorganisation of secondary education.
    Mr. Edward Short: I have told the authority that, although the proposed long-term pattern of all-through comprehensive
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    schools is satisfactory in principle, I cannot regard the plan, as a whole, as a fully adequate response to Circular 10/65 because it involves the prolonged retention of a degree of selection and assumes far more replacement building than is likely to be available. I have, therefore, asked the authority to reconsider these aspects of its scheme.
    Mrs. Short: Is my right hon. Friend aware that since the authority received his second letter a statement has been made by the chairman of the education committee to the effect that the authority is willing to have a head-on clash with the Government over this, which means, in effect, a declaration of war against the Government? Is he further aware that it has been suggested that if the authority does not get its way over the secondary reorganisation scheme, it intends to use some of the money allocated in this hard-won fight to get nursery classes in the area and to build the secondary schools which are likely to be affected by the refusal of the scheme? Will my right hon. Friend take urgent action on this issue?
    Mr. Short: The only report that I have seen is a cutting which I believe my hon. Friend sent to me some time ago. I have had no official word at all from the local authority about this matter and I therefore cannot comment on it. I would have thought that perhaps the most demonstrably true fact in contemporary politics is that the present Government do not shirk from head-on clashes with anybody.

    Secondary Reorganisation (Reading)
    Mr. van Straubenzeeasked the Secretary of State for Education and Science whether he will make a statement on the progress of his negotiations with Reading County Borough Council as to the reorganisation of secondary education in the town.
    Mr. Edward Short: As my right hon. Friend informed the House on 28th November last, the authority's education committee has reconstituted its working party on reorganisation. I have not yet been informed of its deliberations.
    Mr. van Straubenzee: Will the right hon. Gentleman use the opportunity of the interval to answer a simple question

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    which he has given the appearance so far of not being prepared to answer? Has he or has he not under present legislation any power to force on a local education authority a secondary reorganisation plan of which it disapproves? Will he answer "Yes" or "No"?
    Mr. Short: The hon. Gentleman has asked that question before. I answered it on a previous occasion.
    Hon. Members: Tell us again.

    Secondary Education (Colleges of Further Education)
    Mr. Christopher Priceasked the Secretary of State for Education and Science when he will introduce legislation to enable the final year of secondary education to be undertaken in colleges of further education.
    Mr. Edward Short: I have this issue under consideration but I am not yet ready to make a statement.
    Mr. Price: Is my right hon. Friend aware that although many of us wholeheartedly support the decision to raise the school leaving age to 16, a significant number of 15-year olds in our secondary schools conceive an intense distaste for the environment in the typical secondary school and would learn far more and far better in a college of further education? Would not he agree that it is now a matter of urgency that legislation should be introduced to make this possible?
    Mr. Short: I agree with my hon. Friend's conclusion but I do not agree with the premise that it is connected with the quality of some of our secondary schools. I am anxious to do this, but he will realise that it involves a great deal of consultation with a great many people. I hope that I shall be able to make an announcement on the matter shortly.

    Open University
    Mr. Christopher Priceasked the Secretary of State for Education and Science when a charter will be granted to the Open University.
    The Minister of State, Department of Education and Science (Miss Jennie Lee): It is hoped that the draft charter will be
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    submitted by the spring to Her Majesty in Council for approval.
    Mr. Price: When this charter is granted will the Minister of State persuade her right hon. Friend to issue a circular to local authorities asking them to cooperate with this university, particularly in the provision of local viewing centres, which they could do at very little extra marginal cost, in the premises which they already have in libraries and colleges and schools?
    Miss Lee: We have been very much encouraged by the good will and cooperation which we are receiving from local authorities and others who really understand the nature of this project. I assure my hon. Friend that other opportunities will be taken to give further publicity to this matter.
    Sir Knox Cunningham: Why is the money for this university not coming through the University Grants Committee?
    Miss Lee: Because this is an experimental university which will maintain the highest level of academic standard and which, at the same time, is using new media. We believe that it is proper that it should be initiated in this fashion.
    Sir E. Boyle: Would the right hon. Lady answer two questions? First, if there is to be a circular, would she undertake that considerably more precise details of the costing be included in it than we have had hitherto; and, secondly, is she aware that, with the best will in the world, local authorities are extremely perplexed due to the severe limitations on their money and the fact that they must provide for many other essential services?
    Miss Lee: The right hon. Gentleman will be aware that in some quarters the cost of this project has been grossly exaggerated. For the sake of accuracy, I will repeat some relevant figures. The 1968–69 estimate is £0·4 million. For 1969–70 it is £1½ million to £2 million, and for the working year 1970–71 it is £3·5 million to £4 million. Every opportunity is being taken by the present planning committee, the vice-chancellor and all others who are working on this scheme to see that the most accurate and up-to-date information, financial and otherwise, is given to all concerned, including the local authorities.

    Further Education (Costs)
    Mr. J. E. B. Hillasked the Secretary of State for Education and Science why his Department has made a reduction in local authorities' forecasts of the increased costs of teachers' salaries and of other costs in further education by approximately £17 million in 1969–70 and £23 million in 1970–71.
    Mr. Edward Short: In my view, the local authorities' forecasts of expenditure on further education for rate support grant purposes were related to a rise in student numbers out of line with recent trends, and implied an increase in costs per student going beyond what we can afford in present circumstances.
    Mr. Hill: Has not the Secretary of State failed to take into account the fact that even if the trend in student numbers may not be rising all that steeply, the trend in the cost of further education—the trend to take more expensive courses—is rising very steeply and that this is an element which, in looking only at numbers, he has failed to take into account?
    Mr. Short: I am grateful to the hon. Gentleman for raising this matter, because it gives me an opportunity to make it clear that I sincerely believe that the local authorities overestimated the increases. They were suggesting that there would be an increase of 13 per cent. in the first year and 20 per cent. in the second. My officials estimated that there would be an increase of 9 per cent. in the first year and 14 per cent. in the next. That was the first difference.
    The second difference was about the additional amount that would have to be spent per student. They thought that it would be 3 per cent. and we said that it would be about 1½ per cent. The third factor was the fact that we felt that more progress should be made on implementing the Pilkington Report. Those were the only three issues which arose in the sphere of further education.
    Mr. Christopher Price: Will my right hon. Friend pay particular attention to this problem of further education remembering that, as opposed to his control over primary and secondary education,
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    he has very little control over local authorities which choose, perhaps for other reasons, to dismiss teachers in mid-career?
    Mr. Short: I agree, but this works in the opposite direction, too. I am sure that many local authorities do not really understand the staffing position in their colleges. The Pilkington Report suggested that the staffing was, in many respects, over-generous. We have made some progress in this matter and all that I am asking local authorities to do in the next year and the year after that is to make a little more progress.

    Educational Buildings (Repairs and Maintenance)
    Mr. J. E. B. Hillasked the Secretary of State for Education and Science if he will give details of the advice he is giving local authorities on the postponing of repairs and maintenance of educational buildings and grounds as a measure of educational economy.
    Mr. Edward Short: I have given no such advice.
    Mr. Hill: Is it not clear that to get anywhere near the restrictions required by the Secretary of State, local education authorities have, on their education expenditure, been forced to cut much of their care and maintenance work for this year? Is it not piling up trouble for future years if, as a result of his policy, the only course open to them is to go on cutting maintenance in the following year as well?
    Mr. Short: The hon. Gentleman is wrong again. One of the assumptions on which the rate support grant settlement was reached was that the standard of repair and maintenance over the next two years would be at about the same level as at present.
    Mr. Hill
    Mr. Short: The hon. Gentleman need not shake his head. I was involved in the negotiations and I assure him that this was one of the assumptions.
    Perhaps the hon. Gentleman would care to tell the House how much, in addition to the education bill, he would add for this purpose? I assure him that we are keeping a close tally on all the

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    additions to public expenditure which are being suggested by hon. Gentlemen opposite.

    East Anglia (Regional Arts Association)
    Mr. Channonasked the Secretary of State for Education and Science what progress has been made, with the assistance of his Department, with the formation of an East Anglian Regional Arts Association.
    Miss Jennie Lee: Two meetings were arranged by interested parties at Bury St. Edmunds in 1967 to discuss the formation of an association, and some questions raised were examined in 1968 by chief officers of county and borough councils. In consultation with my Department, the Arts Council hopes to convene a meeting this summer to see whether there is sufficient support to enable an association to be launched next year.

    St. Mary's Junior Roman Catholic School, Warwick
    Mr. Dudley Smithasked the Secretary of State for Education and Science if he is aware that some 80 infant and junior pupils at the St. Mary's Junior Roman Catholic School, Warwick, have to be accommodated in a small, narrow cloakroom for half-an-hour daily while their classrooms are being prepared for the serving of school dinners, and cleared afterwards; and what proposals he has for including improvements to this school in the building programme with a view to ending the overcrowded conditions.
    Mr. Edward Short: I am aware of the difficulties in this school. I understand that the authority expects the number of children in the area to grow and I shall be happy to reconsider the case for a new school when the authority submits a new proposal.
    Mr. Smith: I thank the right hon. Gentleman for that Answer. Would not he agree that it is remarkable in this day and age that these black hole of Calcutta conditions should be allowed to exist, even if only for a few more months?
    Mr. Short: There are thousands of old schools throughout the country which should have been demolished many years ago.

    Arts Council Staff (Pensions)
    Mr. Channonasked the Secretary of State for Education and Science if he will seek to ensure that the pensions of the staff of the Arts Council are brought up to parity with the pensions of other civil servants of equivalent grades.
    Miss Jennie Lee: The staff of the Arts Council are not civil servants. Their superannuation scheme, though otherwise broadly equivalent to the Civil Service scheme, is contributory. I am, however, prepared to consider sympathetically whether this difference between the two schemes could be adjusted, provided that it can be shown that the staff are in other respects analogous to civil servants.
    Mr. Channon: Would not the right hon. Lady agree that it is an astonishing anomaly, brought to light by the Arts Council's Report, that this situation should exist? Is she aware that anything she can do to help in this matter would be much appreciated?
    Miss Lee: I have had no official representations from the Arts Council on this matter, although I know that there is some concern about it. We will certainly sympathetically consider what we can do if there is any feeling of injustice.

    Post-graduate Student Awards
    Mr. Pardoeasked the Secretary of State for Education and Science if he will now raise the amount which a post graduate with a grant from his Department, the Science Research Council, or the Social Science Research Council, is allowed to earn before any deductions are made from his grant.
    Mrs. Shirley Williams: No, Sir, but I will consider this proposal when postgraduate student awards are next reviewed.
    Mr. Pardoe: Can the hon. Lady say exactly what the cost would be of doing this, bearing in mind the fact that most of the postgraduates concerned would be

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    careful to ensure—indeed, are already careful to do this—that they do not earn above the limit?
    Mrs. Williams: I cannot answer my hon. Friends supplementary question because the three groups of regulations—and this applies to the Department of Education and Science as well as the two Research Councils—have just been brought into line and allow for an additional increase in the earnings of those who teach in school or university.
    Mr. Pardoeasked the Secretary of State for Education and Science if he will make it a condition of grants from the Science Research Council to post-graduate students that they should do part-time teaching in the senior schools near their universities.
    Mrs. Shirley Williams: This brings me to the rest of the Question.
    I welcome any help that postgraduate students can give to the schools. The Science Research Council regulations now allow students to supplement awards by undertaking teaching in schools for up to one day a week. I do not consider that this should be made compulsory.
    Mr. Pardoe: Is the Minister aware that this was a specific recommendation of the Appointments Board which, if implemented, would substantially help to overcome the shortage of science teachers in schools?
    Mrs. Williams: The difficulty is that some of the award holders are not near schools. A further difficulty is that there is some evidence, from earlier experiments, to show that those compelled to do teaching do not make very good teachers. Nevertheless, we will look at this matter closely at the next review.

    Archaeological Material (Exports)
    Mr. Straussasked the Secretary of State for Education and Science whether, in view of the fact that a definition of British archaeological material has now been agreed by the Departments concerned, he will now, in order to safeguard Great Britain's archaeological heritage, make the same exemption from the £2,000 limit of the export of such material as already holds for manuscripts, documents and archives.
    Miss Jennie Lee: I understand that no definition of British archaeological material has yet been agreed by the Departments concerned; therefore no change in existing arrangements seems appropriate, but I am very ready to consider any evidence I receive of serious loss from present practices.
    Mr. Strauss: I am grateful for that Answer. Is my right hon. Friend aware that at a meeting between her Department and the Customs in April, 1968, attended by the British Museums' Association, a formula was agreed, subject to any legal loopholes arising? Will she look into the matter to see if this formula can be adopted?
    Miss Lee: My information is that agreement has not yet been reached and that we cannot suggest action until agreement is concluded.

    School Children (Employment)
    Dame Irene Wardasked the Secretary of State for Education and Science whether he has considered the report made by Tynemouth teachers on the employment out of school hours of school children and the effect on their capacity to learn, a copy of which is in his possession; and if he will give consideration to setting up a general inquiry on similar lines to ascertain the national facts on this matter.
    Mr. Edward Short: I received the report only two days ago. I am considering it in consultation with my right hon. Friend the Secretary of State for the Home Department and will inform the hon. Lady when we have reached conclusions.
    Dame Irene Ward: I thank the right hon. Gentleman for that statement. Is he aware that, certainly in the North of England, people will look forward eagerly to a pronouncement by him and that we hope that it will be in the direction of dealing with this somewhat out-of-date practice?

    ECONOMIC SITUATION
    Mr. Bruce-Gardyneasked the Prime Minister what plans he has for making a Ministerial broadcast on the state of the economy.
    The Prime Minister (Mr. Harold Wilson): None at present, Sir. All the facts and statistics relating to the nation's economic situation are available to the broadcasting authorities.
    Mr. Bruce-Gardyne: Nevertheless, now that the Prime Minister is on speaking terms with the B.B.C.—presumably not for very long—does he not owe it to the country to explain the extent to which it is the Government's intention to balance the books by selling off the underlying assets in the form of British companies to American companies? Can he assure us that the next time he addresses us on this subject, he will avoid another fit of the miracles?
    The Prime Minister: I have never been other than on speaking terms with the B.B.C, and did a number of broadcasts last year. On the second point, I answered a Question on Tuesday about this. If the hon. Gentleman is unhappy about the question of take-over bids from abroad, and would like my right hon. Friend the Chancellor of the Exchequer to use powers, which the hon. Gentleman opposed the Government having, then I am prepared to put that suggestion to him.
    Mr. Cant: Would my right hon. Friend remind hon. Members opposite of the large number of articles, highly favourable to the Government's economic efforts, which are appearing in the Right-wing newspapers, such as the Financial Times, and the most wonderful glossy magazines, like The Director, and Management Today? Surely further broadcasts would be superfluous.
    The Prime Minister: I am not responsible for what appears in any newspapers.
    Mr. Ridsdale: When the right hon. Gentleman makes another Ministerial broadcast, would he say what he is doing to prevent British industry being bought too cheaply from abroad? Is not one way of preventing this to stop attacking British capital and British savings over here?
    The Prime Minister: That seems a little illogical. If the hon. Gentleman is suggesting that people are denigrating British firms, it is rather difficult to
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    understand why he finds that there is such keenness to buy them from abroad. I answered a question on this in a broadcast on "Panorama" last week, I think. I would be prepared to send a copy of that to the hon. Gentleman, if I am right in that remembrance.

    CHANCELLOR OF THE EXCHEQUER (SPEECH)
    Mr. Ridleyasked the Prime Minister whether the public speech of the Chancellor of the Exchequer at Eston on 8th December about the state of the economy represents Government policy.
    The Prime Minister: Yes, Sir.
    Mr. Ridley: Will the Prime Minister ask the Chancellor to refrain from talking about "export-led spurts" and "steady improvements" until they actually take place? Is he further aware that the news that both he and the Chancellor were not to resign, which the Chancellor gave in that speech, was a body blow to sterling?
    The Prime Minister: My right hon. Friend was replying to certain rumours in the City the previous Friday that we were to resign, which involved a very serious loss of confidence in sterling. It was only—[Interruption]—that was what the City Editors said was the reason for the decline in sterling following these rumours. The hon. Gentleman would be glad to have noticed that, when the rumours were no longer believed, sterling began to recover from that moment.
    As to the question of export-led booms and spurts, the hon. Gentleman will no doubt use his influence to put across the fact that there was an increase of between 4 per cent. and 5 per cent. in production last year, and 7 per cent. in productivity, and that since the increase in export volume was 11 per cent. over that period, the phrase used by my right hon. Friend seems to have been justified.

    NASSAU AGREEMENT
    Mr. Martenasked the Prime Minister if he is satisfied with the co-ordination between the Foreign and Commonwealth Office and the Ministry of

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    Defence over the question of renegotiating the Nassau Agreement; and if he will make a statement.
    The Prime Minister: Yes, Sir.
    Mr. Marten: In view of the uncertainty and the unsettled state of the world today, is it not time that the Government said—and, frankly, I believe that the country would accept it—that it was no longer their policy to try to renegotiate the Nassau Agreement?
    The Prime Minister: No, Sir. In May, 1967, I informed the President of the United States that it was our intention, at the appropriate time, to carry through the renegotiation. Of course, this depends on progress made on this question in N.A.T.O. The hon. Gentleman will, I think, have been glad to hear of the establishment of the Nuclear Planning Group, and progress is being made there. We must wait to see how that works out before it is time for the bilateral negotiations following it up.

    NIGERIA
    Mr. Ridleyasked the Prime Minister if he will arrange to visit Nigeria.
    The Prime Minister: As the hon. gentleman will be aware, I have been in close personal touch with the Head of the Federal Military Government in Nigeria, through the usual diplomatic channels and successive Ministerial visits, and in addition have had the benefit of a number of talks with the head of the Nigerian delegation to the Comomnwealth Prime Ministers' Meeting earlier this month.
    Mr. Ridley: Will the Government not stop supplying arms to Nigeria for the most unpleasant reason that they wish to influence events there? Is he aware that this smacks of a sort of neocolonialism which comes very ill from the Government?
    The Prime Minister: If the hon. Gentleman ponders that question, he will feel that he fails to do justice to the situation, which has been debated very fully in this House just before Christmas. He will recognise that, if this country, as the principal arms supplier throughout the history—including colonial days and after—had decided, when a civil war broke out, that that was the moment to stop
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    supplying arms, it would not have been a move towards neutrality, it would have been a hostile act towards a Commonwealth country.
    Mr. Hugh Fraser: Surely the Prime Minister will correct the record in so far as, after the Commonwealth Conference, he said that the Biafrans were not prepared to negotiate? Is it not perfectly clear now from Press communications from Biafra that they are prepared to negotiate?
    The Prime Minister: I am glad that the right hon. Gentleman has given me that opportunity. It is the case that they have said that they are prepared to negotiate, although they have laid down their own very stringent terms, namely, prior recognition of their nationhood, as they call it. What I said last week—and I am glad to have this chance to correct it—was when I was trying to refer to the position in the week of the Commonwealth Prime Ministers' Conference, when they refused to meet unconditionally with Chief Awolowo. What I said certainly gave the wrong impression, and I am glad to have the chance of making it clear.
    Mr. Heffer: Can my right hon. Friend tell us whether he has had an opportunity of looking into the question of the use of "Enugu Palm" by the Federal Nigerian Government for the transportation of Federal troops from Lagos to Port Harcourt? Would he say whether the Government intend to make quite clear to the Nigerian Federal Government that the requisitioning of our ships in this way should not be carried through?
    The Prime Minister: I have had an opportunity of studying this matter and, as my hon. Friend knows, my right hon. Friend the Foreign and Commonwealth Secretary has been into it very thoroughly. I fully support the answer which my right hon. Friend has sent to my hon. Friend.

    PRESIDENT NIXON (MEETING)
    Mr. Juddasked the Prime Minister when he plans to meet the President of the United States of America.
    Mr. Molloyasked the Prime Minister when he proposes to meet President Nixon to discuss the Vietnam issue and other problems threatening world peace.
    The Prime Minister: I have nothing at present to add to what I said in reply to Questions by the hon. Member for Worcestershire, South (Sir G. Nabarro) on 21st January, and the hon. Members for Banbury (Mr. Marten) and mid-Bedfordshire (Mr. Hastings) on 23rd January.—[Vol. 776; c. 633.]
    Mr. Judd: In view of the sober remarks by the President of the United States about the significance of the Middle East crisis for world peace, can my right hon. Friend assure us that Britain stands by her position, as declared in the November, 1967, resolution, and that we will argue to the United States that, to find a solution, it is absolutely essential to understand the position of both sides?
    The Prime Minister: Yes, Sir. It is certainly the case that we stand fully behind, and have always stood fully behind, the resolution which we moved in the Security Council in November, 1967. All the efforts of my right hon. Friend and, indeed, of the whole Government, have been directed to securing that the resolution is accepted by all concerned and that, through the leadership of the Jarring Mission, it becomes a reality on the lines which we have always indicated. There is no need to wait for any Ministerial or any other Government meeting on this, because we have our continuing contacts with the United Nations generally on this question.
    Mr. Molloy: Is the Prime Minister aware that, at his very first Press conference, the President of the United States inferred that there might be a possibility of arriving at a cease-fire and ending this ridiculous and unseemly war on the basis of the 1954 Agreements? If my right hon. Friend should be visiting the President, will he convey to him the desirability of getting back to this stage so that ballots can take the place of bullets?
    The Prime Minister: The whole House will agree, and I am sure that my hon. Friend will, that the most helpful means of achieving a cease-fire and a permanent, honourable and lasting settlement, must rest on the negotiations which have now actively begun in Paris, and the wishes for success of everyone in this House will go to those conducting negotiations.
    Sir R. Cary: May I ask the Prime Minister, arising out of Question No. 5, whether he is free to ask the President if he would care to visit us here?
    The Prime Minister: Certainly, in any communication between two friendly countries, this could be proposed. One must, in all these matters, consult the convenience of a President who has just taken office, who has a great deal of work to do and a great deal of machinery to establish in his conduct of Government business, before putting on a President the difficulties of such an invitation, the difficulties of leaving his own country. He must be free to decide about it. He knows, as his predecessor knew, that a visit by the President of the United States—himself or his predecessor—would always be very welcome in this country.
    Mr. Biggs-Davison: Does the right hon. Gentleman really think that it is a matter of urgency for him to visit the United States? Is this not becoming rather a matter of form, that British Prime Ministers must always be going over to Washington? Having regard to the last question from this side of the House, and bearing in mind the successive visits by the Head of the State here, and the Heads of Government here, would it not be very nice if we could welcome President Nixon to this country?
    The Prime Minister: It would be very nice, indeed. The practice which has been followed, by myself and my two predecessors, and, indeed, earlier than that, has been for regular and frequent visits and discussions. On a number of occasions, these meetings take place outside either Britain or the United States. Of my last four discussions with President Johnson, two took place outside the United States or Britain, one in Australia and one in Germany. The convenience of all concerned must be sought in making the appropriate arrangements.
    Mr. Walden: Will my right hon. Friend bear in mind that many of us think it is urgent that he sees the President of the United States? Is he aware that, although we understand that he must discuss the very important matters of Vietnam and the Middle East, there is also the urgent matter of monetary reform, on which the American Administration appear now to be formulating policy?

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    Will he be sure to stress how important it is for us and for them that this period of calm that we have should not be taken to be a solution to the problem?
    The Prime Minister: The matters for discussion between the British Government and the new American Government are not one or two or three, but very many. This will be done at the proper time. As to the monetary question. I am satisfied that there are adequate arrangements, adequate machinery, for discussions between Britain and the United States and, indeed, between Britain and all our partners in trying to get whatever improvements may be needed into the world monetary situation. Of course, I should be happy to discuss that, among other things, with President Nixon, but I have no reason to think that the Americans are not fully aware of the views of Her Majesty's Government, and the House as a whole, on these matters.

    DEPARTMENT OF ECONOMIC AFFAIRS
    Mr. Biffenasked the Prime Minister if, in view of the major rôle now being undertaken by the National Economic Development Council in the preparation of the new National Plan, he will abolish the Department of Economic Affairs.
    The Prime Minister: The draft planning document which has been discussed in the National Economic Development Council was prepared by the Department of Economic Affairs in close consultation with other Government departments and with the National Economic Development Office. On the future of the Department of Economic Affairs, I would refer to what I said in the debate on the Fulton Report on 21st November.
    Mr. Biffen: Is the right hon. Gentleman aware that his obvious reluctance to give an affirmative answer to this Question leaves us with the uneasy suspicion that he regards the Department of Economic Affairs as one of the success stories of the Labour Government?
    The Prime Minister: The hon. Gentleman obviously has not studied what I said in the debate on the Fulton Report.
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    There was no reluctance to give an answer. I gave an answer at some considerable length on this. I understand from the hon. Gentleman's pronunciamento and his support of a certain right hon. Gentleman, whom we do not often see on his side of the House, that he is so opposed to all economic planning, even to the intervention which was undertaken by the previous Conservative Government, that I would naturally not expect him to appreciate the virtues of the Department of Economic Affairs.
    Mr. Dickens: Has my right hon. Friend's attention been drawn to the recent speech made by Mr. Catherwood, the Director-General of N.E.D.C, to the effect that company mergers can be highly damaging to the interests of the British economy? Should not the D.E.A. look into this matter and prepare a White Paper on the Government's attitude to company mergers?
    The Prime Minister: My hon. Friend will recognise that I am not responsible for the speeches of Mr. Catherwood. I have a great respect for them, but I think that it is very important, equally, that I should respect his independence as a servant of N.E.D.C. and not as an officer of the Government. He is, therefore, free to make these pronouncements. He is, nevertheless, absolutely right to say that individual mergers can either be very good or very bad or can have neutral effects. [Interruption.] I knew that the hon. Member for whatever Northern Ireland constituency it is would not understand that one. It was too intellectual for him.
    Sir Knox Cunningham: Cheap.
    The Prime Minister: It has been the whole policy of successive Governments right from the introduction of the monopolies legislation in 1948 that mergers can be good or bad and that we need machinery for examining possible harm arising from the creation of monopoly power. We are certainly not saying that all are good or that all are bad. We say that some have to be examined.
    Mr. David Howell: Reverting to the Question, is it not true that there are now at least nine Departments and agencies involving themselves in the Government's economic and industrial policy? Is it not

    1527
    time that studies were made of the functions of all these bodies, with a view to increasing the efficiency, or at least reducing the inefficiency, of the present Government?
    The Prime Minister: These matters have been reviewed very carefully. These bodies have important functions to perform. The hon. Gentleman will know the number of mergers and the number of reductions of Ministries which have taken place under the present Government, including some in the economics sphere which we have wound up.

IRAQ (PUBLIC EXECUTIONS)
Mr. Shinwell Mr. Shinwell (by Private Notice) asked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on the official representations made by Her Majesty's Government on the public executions by the Iraqi Government.
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Michael Stewart): As was made clear in the statement issued on 28th January, Her Majesty's Government could make no formal intervention, since all those involved in the trial appeared to be Iraqi citizens. We did, however, take the question up informally with the Iraqi Government on humanitarian grounds, urging clemency and pointing out the effect on Iraq's reputation abroad.
We very much regret that the Iraqi Government did not show clemency.
Mr. Shinwell: I am grateful to my right hon. Friend for that reply and for the action already taken by him on behalf of the Government, but is it not possible to take further action in concert with some of the countries with which we are more closely associated—such as India, Pakistan and Canada? At the same time, would it not be advisable if, in addition to the representations made by Her Majesty's Government, we had a contribution from the House—perhaps from the Leader of the Opposition and the Leader of the Liberal Party—to show that there is a unanimous feeling in the House of regret—[HON. MEMBERS: "Horror."]—at the public executions which have taken place?
Mr. Stewart: I am urgently considering what action we could take on
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humanitarian grounds to help those still awaiting trial on what is in Iraq a capital offence. I think that the House will have noted the second part of what my right hon. Friend said.
Mr. Wood: Is the Secretary of State aware that the whole country shared the shock at this news and that we would, therefore, want to be associated with the representations which he has already made? Can he say anything about the possibility of the four-Power talks which have been suggested to discuss the future in this part of the world?
Mr. Stewart: That takes the question rather wider. I do not think that I can say anything useful today on that question.
Mr. Thorpe: Does the right hon. Gentleman agree that there are few things more revolting to civilised opinion than secret trials followed by public executions? Since there are many of the accused who are still in jeopardy, will he consider suggesting that the International Commission of Jurists, to which we are affiliated through the organisation "Justice", of which right hon. and hon. Members in all parts of the House are members, might immediately send observers to the trials currently taking place?
Mr. Stewart: The House will have heard what has been said on behalf of both Opposition parties. In a matter like this it is open for distinguished bodies of private people and extra-governmental activity to express themselves. As I said to my right hon. Friend the Member for Easington (Mr. Shinwell), I am urgently considering what the Government can usefully do on humanitarian grounds.
Mr. Colin Jackson: Has the Foreign Secretary seen a number of letters in the newspapers which indicate that Arab people themselves have deeply regretted and deplored this action in Baghdad? Does not my right hon. Friend agree that this action in Iraq makes a settlement infinitely more difficult?
Mr. Stewart: Yes, I have seen those letters. They are one encouraging sign in what is a dark situation. Indeed, one of the great evils of what has happened is that it is an example of the rising tide of savagery in the Middle East, which makes the achievement of a settlement so necessary in everyone's interest.
Sir Ian Orr-Ewing: Will the Secretary of State consider not only the four Powers sending a commission, but that we might sponsor a resolution at the United Nations asking that a United Nations Commission should look into the position of Jewish people in Arab countries, as the Arabs have asked that the United Nations should be allowed to look into the position of Arab people in Israel? It would be quite fair that this should be promptly investigated. This might do something to prevent the spread of what is a vicious and terrible racialist course of action.
Mr. Stewart: This, again, is a rather wider question. The two propositions put by the hon. Gentleman are not quite parallel. The position of Arabs in Arab territory now occupied by Israel would not be exactly parallel to the position of Jews in Arab territories. I do not think that an investigation like that could be carried out without the co-operation of the countries concerned.
Mr. Hooley: Does not the Foreign Secretary agree that this latest barbarism underscores the absolute urgency of action being taken by the permanent members of the Security Council to put into effect the unanimous decision taken by the Council in November 1967?
Mr. Stewart: Yes, Sir. It must not be thought, because there has not been a formal meeting on this subject of the permanent members, that either we or others of them have been idle. We have been in constant touch with the Governments concerned urging on them the courses of action which we hope will bring about a settlement.
As I have told the House before, although I believe that the four Powers can encourage and help, the will of the parties concerned to reach agreement will be an essential requirement of any settlement. I hope that as instances of slaughter and cruelty multiply the parties concerned will realise the frightful alternative that faces them if they do not decide to reach a settlement.
Sir D. Walker-Smith: Can the House understand from the Secretary of State's reply to the question asked by the right hon. Gentleman the Leader of the Liberal Party that, if an application is made by "Justice", or by the International Commission
1530
of Jurists, of which "Justice" is a British branch, to send observers to any subsequent trials, Her Majesty's Government will make representations to the Iraq Government to help ensure that such observers are given the facilities to enable them to discharge that function?
Mr. Stewart: I do not want to commit myself on what is at present a hypothetical question. I will, however, very sympathetically consider that.
Mr. Orbach: Will the Foreign Secretary make representations to whatever quarter may be appropriate about the 220 heads of Jewish families who have been detained in Egypt since 1967 before anything untoward happens to any of those individuals?
Mr. Stewart: There is anxiety about Jewish people throughout the Middle East at the present time. But I draw my hon. Friend's attention to what was said by one of my hon. Friends earlier as to the attitude of other Arab countries towards this incident.
Sir A. V. Harvey: Will the right hon. Gentleman use his ingenuity to try to have this matter raised at the United Nations under the question of human rights, bearing in mind that, if the Israelis "knock off" a few civilian aircraft without loss of life the matter is immediately raised at the United Nations in New York? Why is it so one-sided?
Mr. Stewart: If one looks at the whole record of this matter, I do not think that it can be said to be one-sided. But there is one thing which stands out from this incident and other incidents, namely, the imperative necessity for the parties themselves to realise that they have far more to gain from a settlement than from holding on to any particular advantage or bargaining position which they may have at the moment.

POST OFFICE (DISPUTE)
Mr. Bryan Mr. Bryan (by Private Notice) asked the Postmaster-General if he will make a statement on the Post Office dispute.
The Postmaster-General (Mr. John Stonehouse): As the House knows, the strike of overseas telegraphists, which began on 20th January, has been extended by the Union of Post Office Workers to a ban on overtime by all its

1531
members at the beginning of this week and to a complete withdrawal of labour in the major cities throughout the course of today.
The effect on the telecommunications services has been very much as I predicted. In the overseas services the non-operation of the telegraph message and manually operated telex services has led to some congestion in the automatic services. But this has not caused serious dislocation. The ban on overtime has not worsened the position in the overseas services significantly, and the effect on the inland services has been slight.
The effect of today's strike is more considerable. The number of staff reporting for duty in the telephone service has varied from a very few in some places to nearly 100 per cent. elsewhere, in all the 19 affected towns a skeleton service is being maintained in most switch rooms and a service of better quality in some. The 999 service has been maintained in operation throughout. The inland telegram service is virtually closed. In the 18 provincial towns affected by the strike a skeleton service is being given. Outside the 19 affected areas the inland telephone operator and telegram services are functioning with little disturbance.
Today, the overseas automatic telex and telephone services are working normally and the overseas operator telephone service is handling reasonably successfully all the traffic which it has given to it, mainly from the Metropolis.
In the cities where postal workers are on strike today there will be a massive backlog of mail by tomorrow.
To give priority to really urgent mail, I have, therefore, decided that from start of business tomorrow the inland second-class letter service, that is, the 4d. service, will be suspended, and also the inland printed paper service for packets between 1½ and 2 lb. In addition, regional directors are authorised to refuse at their discretion to accept local parcels, and large batches of first-class, that is, 5d. mail, newspapers and periodicals.
I am giving regional directors similar discretion to maintain or reopen services internal to their regions, or with neighbouring regions by arrangement, as circumstances permit.
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Information about local restrictions and services will be made available in the towns concerned.
For the time being, I am not imposing any restriction on the overseas services.
I hope that these measures will be successful in keeping the urgent mail flowing reasonably well. Second-class mail already in the pipeline will in some cases, unfortunately, be subject to heavy delay.
On the actual negotiations, I have nothing to add to the statement which I made in the House on Monday evening. I repeat what I have told the House before, that I greatly regret this escalation of the dispute and the great inconvenience which it is causing to our customers.
Mr. Bryan: Is the right hon. Gentleman aware that his statement about the suspension of the second-class mail will be received with utter dismay, and that many will regard it as a continuation of his effort to force more and more people into the first-class stream?
Secondly, does he realise that his statement shows clearly that the situation will change not only from day to day, but from place to place? Will he, therefore, give an assurance that detailed announcements of the immediate local situation will be released daily in the various areas?
Thirdly, has the Postmaster-General been able to do anything about the promise which he made in the debate last Monday, that he would look into the possibility of special arrangements for medicines and pharmaceuticals?
Fourthly, on the question of the dispute and the negotiations themselves, does the right hon. Gentleman recall that, in the Post Office debate on Monday night, he described two new proposals which he had made to the union that afternoon? Has he received an official reply to those proposals?
Mr. Stonehouse: I do not agree that the public will treat my statement with dismay. They recognise that this is a very serious strike indeed, and that it is the responsibility of the Post Office to maintain priority for really urgent mail. I have made the decision to encourage our customers not to use the mail services for lower priority mail.

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On the second point, I shall arrange that in each of the provincial towns as well as in London there will be statements made about the position. If any relaxation can be made as regards mail or parcels which can be accepted, a daily report will be provided.
On the third point, I have arranged that urgent medical supplies, with the proper label affixed, will be accepted for delivery.
Regrettably, the union has advised us that it cannot accept referring the dispute to another form of arbitration which we proposed to it on Monday. We very much regret that the union has not responded to this reasonable proposal.
Mr. Dobson: I heard the latter part of my right hon. Friend's statement with some astonishment—[HON. MEMBERS: "Hear, hear."]—shared, I believe, by many of my hon. Friends, that no conciliatory measures were proposed by the Government at this stage. Is he aware that, when the negotiations broke down in the early part of Monday evening, the union officials left knowing, and telling the Government officials present, that they could not accept the proposals which were being offered to them of alternative arbitration proceedings?
Will my right hon. Friend now take it from me—I warn him carefully of this—that there is a possibility of still further escalation and still further delays, which this union, with all its proud traditions, does not want to see? It wants to have a return to properly negotiated productivity bargaining at the local level, which is all that it is asking of my right hon. Friend.
Mr. Stonehouse: The Government have made very reasonable proposals to the union. They have offered a 5 per cent. pay award from last July and an additional 2 per cent. which would come into operation as soon as an agreed productivity arrangement could be made effective. This is in line with the other arrangements which have been made for the other grades which the union represents.
Furthermore, we have agreed that the 2 per cent. part of the package will be subjected to a post hoc revaluation in the light of experience, so that if it is, in fact, worth more, the union will get
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more. I think that this is a very fair proposal. It would have been most unwise to have responded to the sort of threats we have had during this week. I think that the Government's position on this strike has been very clear and has been right.
Mr. Bessell: Is it correct, as the union has said, that it has offered to accept the 5 per cent. increase backdated to the beginning of July and to negotiate the 2 per cent.? If that is the case, is it not a grave dereliction of duty by the Postmaster-General not to have accepted that offer?
Mr. Stonehouse: I have been constantly pressed in the House about the inadequate overseas telegraph service. I want that service to be improved. It can be improved if productivity measures are introduced. It is essential, under the Government's prices and incomes criteria, that wage increases should be allowed when associated with genuine, copper-bottomed productivity increases.
The Government have, therefore, insisted that the package, including productivity improvements, must be accepted by the union. This will help us to improve the service, which I have recognised to need improvement, and where obvious productivity improvements can be brought into effect.
Mr. Tomney: Will the Postmaster-General now state categorically and with as much honesty as he is capable of—[HON. MEMBERS: "Withdraw."]—whether in private he has admitted to the Union of Post Office Workers that the settlement is just and that only the Cabinet is preventing a settlement? If 14½ per cent. is good enough for the tally workers on the dockside, what is wrong with this just claim for the Post Office workers?
Mr. Stonehouse: I have no need to repeat the statement which I made in the House on Monday night. I fully endorse the Government's line of negotiation with the union and I have publicly and privately asked the union to accept the suggestions which we have made.
Mr. Stratton Mills: Will the right hon. Gentleman consider accepting second-class mail after the arrears of mail arising from today's stoppage have been cleared, rather than, as he appears to be

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doing, refusing to accept it for the complete duration of the overtime ban?
Mr. Stonehouse: Of course, I will consider what relaxation we can have, but I am concerned that we should deal with the tremendous backlog of mail which is being caused not only by today's stoppage, but by the ban on overtime which we have experienced since the beginning of this week. We want to clear the urgent mail and then, if we can clear the congestion, we shall certainly consider accepting more mail.
Mr. Orme: Is the Postmaster-General aware that the response of the Post Office workers to today's strike call is an indication of the injustice they feel about the manner in which the Government are treating them? Why should two classes of workers be created by the prices and incomes policy? How does he expect to get away with imposing upon them a productivity deal to which they are not genuinely a party and which is a negation of collective bargaining?
Mr. Stonehouse: There must be agreement and agreement implies that each side has a point of view. The Government's point of view, which is reasonable, is that the 2 per cent. is the appropriate figure, but we have offered to have this reviewed in the light of experience. I do not think that anything could be fairer than that and it certainly corresponds with the agreements which we have reached with the rest of the grades for which I am responsible.
Sir R. Cary: Is the Postmaster-General aware that almost the entire switchboard staff of the Palace of Westminster reported for duty this morning? Will he convey our thanks to them?
Mr. Stonehouse: I am sure that the observations made in this Chamber will be made known to those concerned.
Mr. George Jeger: If everyone who now sends his mail by 4d. mail sticks on a 5d. stamp, how will that reduce the number of letters and the amount of overtime required to deal with them?
Mr. Stonehouse: That is a perfectly appropriate question and it helps me to make this point. We want members of
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the public and business houses in particular who use second-class mail for circularising less important material to hold it back until the strike is over, or until the congestion has been reduced, so that the Post Office can give priority to customers who choose the first-class mail as being appropriate to the material they post.
I believe that the action which I have announced today will encourage at least the big posters to hold back their mail until the Post Office has dealt with the congestion.
Mr. Sharples: Can the right hon. Gentleman be a little clearer about the 4d. mail already in the pipeline? Is it to be insisted that this mail is to be virtually held back by the Post Office and, if so, why was this information not included in the expensive advertisements which have appeared in the Press?
Mr. Stonehouse: We shall not deliberately hold back the mail; we do not believe in doing that. We will deal with the 5d. mail as a priority because we believe that we owe that to the customers, but we will deal with the 4d. mail in the pipeline as soon as we can.
Mr. John Mendelson: Will the Postmaster-General tell the House, as he has not yet done in all these exchanges, why the Government are refusing to give him authority to apply to this group of workpeople the procedure which was applied to the railwaymen—that they should agree to an interim increase and then, in private negotiations over the next three or four months, deal with the problems of productivity? Is not this refusal a sign of the rigidity of the incomes policy leading to dangerous madness and dislocation? Why can he not apply that procedure and then reach agreement in three or four months' time?
Mr. Stonehouse: I am sure that my right hon. Friend the First Secretary will take note of the wider policy question which has just been raised. However, in these negotiations we have offered the union an arbitration procedure and we have not even insisted on the Civil Service arbitration procedure if the union does not want to have that. This could be set up very quickly and it could no doubt produce an interim report which would certainly help to bring the dispute to an end.
Mr. Bryan: Why is the right hon. Gentleman to discontinue the 4d. mail, the second-class mail, in country areas where local post is quite unaffected, or should he unaffected, by the strikes in the big towns?
Mr. Stonehouse: As I have said, if it is possible to accept local 4d. mail regional directors will have the authority to do so. However, much of the 4d. mail posted in country areas is destined for delivery in the major towns which have been seriously affected by today's stoppage and which will be increasingly affected by the ban on extra hours which we have been experiencing this week. Furthermore, we face a stoppage on Sunday which will add to the congestion.
Mr. Raphael Tuck: Does the Postmaster-General appreciate that the overseas telegraph operators are alleging that the 2 per cent. offered has not been properly costed but has been only estimated? Is he aware that if he will only agree to the 5 per cent. which all other Post Office workers have received, the union representatives will get round the table and have this figure properly costed and will agree to the result? Why is the Ministerial committee being so thickheaded as to stop this, something for which the right hon. Gentleman has to "carry the can"?
Mr. Stonehouse: I have already made clear that we accept the point made by the union that the 2 per cent. is an estimated amount. Therefore, we have conceded that during the course of time there will be a post hoc revaluation. If, in the light of experience, it is worth more than 2 per cent.—if it is worth 3 per cent.—the union will receive it. We believe that, for productivity reasons, this must be tied to the 5 per cent.
Sir D. Walker-Smith: Will the right hon. Gentleman identify the powers under which, by executive action, he suspends an important part of the postal services of the community and say whether he is acting subject to any—and, if so, what—Parliamentary control? Will he also define more precisely his reference to the large packets of 5d. mail, which are also subject to the threat of interference, and say what notice, if any, people posting such mail will receive of such interference?
Mr. Stonehouse: I am advised that in this exceptional position, it is perfectly legal for these temporary restrictions to be imposed. There is no weight limit on first-class mail. There is a size limit. We are accepting first-class mail up to any weight within a particular size.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. We must move on.
Mr. Heath: May I ask the Postmaster-General to tell us the power under which he is acting and on which he has received legal advice?
Mr. Stonehouse: I will, of course, consider whether a further statement can be made about this—[HON. MEMBERS: "Answer the question."]—I will—but I am advised that I am fully entitled to impose temporary restrictions in the light of the exceptional circumstances with which we have to deal. This is an operational restriction. It is not a complete ban on mails. If it were a complete ban on mails, it could, possibly, be construed as being out with my powers; but it is not a complete ban and, therefore, I am advised that it is acceptable.
Mr. Heath: Has the Postmaster-General come to the House and made this announcement without checking for himself that he has the authority and without being able to tell the House what that authority is? This is just not good enough.
Mr. Stonehouse: I have no reason to believe that the powers that I am exercising in running this service are in any way illegal.
Mr. Heffer: On a point of order. I seek to move, Mr. Speaker, the Adjournment of the House under Standing Order No. 9—
Mr. Speaker: Order. This is not the moment to make an application under Standing Order No. 9. There will be a later stage in the proceedings when the hon. Member can make such an application.
Mr. Gresham Cooke: On a point of order. Should not the Postmaster-General come back at 7 o'clock this evening to tell us what his powers are?
Mr. Speaker: That is not a point of order for the Chair.

BUSINESS OF THE HOUSE
Mr. Heath: May I ask the Leader of the House whether he will state the business of the House for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): Yes, Sir. The business for next week will be as follows:
MONDAY, 3RD FEBRUARY—Second Reading of the Parliament (No. 2) Bill.
Prayer on the Dawley New Towns (Designation) Amendment (Telford) Order.
TUESDAY, 4TH FEBRUARY—Second Reading of the Consolidated Fund Bill.
WEDNESDAY, 5TH FEBRUARY—Remaining stages of the Consolidated Fund Bill which, under Standing Order No. 89, will be formal.
Second Reading of the Administration of Justice Bill [Lords], and of the Genocide Bill [Lords].
And, if there is time, the remaining stages of the New Towns Bill.
THURSDAY, 6TH FEBRUARY—Supply [8th Allotted day].
Debate on Home Ownership and the Land Commission, which will arise on an Opposition Motion. Motion on the Anti-Dumping Duty (No. 2) Order.
FRIDAY, 7TH FEBRUARY—Private Members' Bills.
MONDAY, 10TH FEBRUARY—Second Reading of the Housing Bill.
Mr. Heath: Can the right hon. Gentleman now give us the date of the debate which the Government will have on their White Paper on Industrial Relations?
Mr. Peart: I am sorry, I cannot give the date at this stage.
Mr. Speaker: Mr. Hector Hughes.
Mr. Hector Hughes Mr. Hector Hughes rose—
Mr. Heath Mr. Heath rose—
Mr. Speaker: Order. Mr. Heath.
Mr. William Hamilton: On a point of order. I distinctly heard you, Mr. Speaker, call my hon. and learned Friend
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the Member for Aberdeen, North (Mr. Hector Hughes). The practice of calling the Leader of the House every time he rises is becoming intolerable.
Mr. Speaker: Order. It is a long-term practice of the Chair to call the Leader of the Opposition when he rises.
Mr. Hamilton: Further to the point of order. With due respect, it is not the continual practice of the Chair to do this. [HON. MEMBERS: "Oh."] You may recollect, Mr. Speaker—I recollect—that Mr. Speaker Clifton Brown, many years ago, chastised Mr. Winston Churchill, as he then was, for seeking to take the kind of advantage that the Leader of the Opposition is seeking to take.
Mr. Speaker: I have no recollection of the incident to which the hon. Member refers. Mr. Heath.
Mr. Heath: May I press the Leader of the House about my question, because he has already acknowledged that we should have a debate of that kind at an early date? Will he, therefore, give urgent consideration to this matter and be able to tell us next week the date on which we can have the debate?
Mr. Peart: I thought that there should be adequate time for hon. Members to have consultations and make up their minds about the details of the White Paper. I realise that this is an important matter, but I cannot give a precise date.
Mr. Hector Hughes: Will my right hon. Friend the Leader of the House find time for all or any of the four Motions which I have on the Order Paper, and all of which are of urgent public importance? They are Nos. 111, 112—
Mr. Speaker: Order. The hon. and learned Member can ask for time for only one of them.
Mr. Hughes: I am drawing the attention of the Leader of the House to the particular Motions for which I am asking him to give time. They are—
Mr. Speaker: Order. The hon. and learned Member did not hear. He may ask for time for one of them. He must choose.
Mr. Hughes: There is one with particular reference to Scottish unemployment, which is very important to the people of Scotland.
[That this House is shocked by the unnecessary and untimely threat by British Railways to close the railway locomotive works at Inverurie thereby increasing unemployment in North-East Scotland, increasing the already injurious trend south of workers and their families, the further concentration of workers and population in South-West Scotland and requests the Government to set up a Royal Commission to devise means of spreading population and industry and employment more evenly throughout Scotland, of improving communications between Northern Scotland and Europe and the United States of America and thereby increasing British export trade and Scottish prosperity and happiness.]
Mr. Peart: I am aware of the enthusiasm of my hon. and learned Friend in these matters and the way he pleads his case; but I cannot find time for a debate next week.
Dame Irene Ward: Will the Leader of the House consider having two days to deal with the old Ministry of Health and new Ministry of Social Security Questions, because as a result of the amalgamation the situation today is that we are shutting down on the opportunity of back-bench Members to put Questions on the humanities, and this is against democracy? Will the right hon. Gentleman please try to arrange that we shall have a proper opportunity to deal with these matters?
Mr. Peart: The hon. Lady has put her case. As she knows, the question of the roster is arranged in consultation with the Opposition. If there were evidence of a general desire for change, there would be no difficulty about discussing it.
Mr. Murray: May we ask for a rearrangement of the business to enable us to have a debate on immigration, so that we can at last get a straightforward statement from the Leader of the Opposition?
Mr. Peart: I cannot alter the business for that.
Mr. Lubbock: Is the right hon. Gentleman aware that the Conservative Opposition have been very unoriginal in
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their choice of subject for the Supply day next Thursday, when they have chosen to debate home ownership and the Land Commission, in view of the fact that the Second Reading of the Housing Bill is to take place the following Monday?
Will the right hon. Gentleman consult the Conservative Opposition with a view to seeing that some of the other important subjects mentioned by the Leader of the Opposition, including industrial relations, the raising of the school-leaving age, the grave shortage of staff in hospitals and earnings-related retirement benefits are discussed?
Mr. Speaker: Order. Again, the hon. Member may ask for only one, and I doubt whether he can ask for one on the Opposition's day.
Mr. Peart: The hon. Gentleman must appreciate that it is for the Opposition to choose the subject for debate on Supply days. I cannot interfere.
Mr. Dickens: Since the salaries and services made available to hon. Members are now inferior in every respect to those made available by virtually every other assembly in the world, would my right hon. Friend arrange for an early debate on both matters?
Mr. Peart: I recognise the importance of this subject to the House. I agree with my hon. Friend. There will not be time next week for a debate, but I note what he says.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that there is a lot of business ahead of us.
Mrs. Ewing: Has the right hon. Gentleman found a solution to the problem which I raised with him in December, namely, the curious-seeming anomaly by which members of the Press have access to information, statements and Answers to Questions sometimes an hour or more before hon. Members? I say this wishing not to restrict members of the Press, but to improve the availability of information to Members in my position.
Mr. Peart: I should have thought that the present arrangements were convenient for the Press and hon. Members. The hon. Lady raised one matter recently and

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I took immediate action on it. If she has further points to raise, I will gladly talk to her about them.
Mr. Peyton: Could the right hon. Gentleman go a little further than he did in his reply to my right hon. Friend the Leader of the Opposition? Surely the merits of the proposals of the right hon. Lady the First Secretary of State on industrial relations require that the Government should name an early date for their discussion.
Mr. Peart: I cannot add to what I said to the Leader of the Opposition.
Sir R. Cary: Will there be an early debate on the reorganisation of the ports, in spite of the fact that the Bill on them belongs to next Session?
Mr. Peart: A White Paper has been published by the Minister of Transport. Time should be afforded for a debate on this important matter, but I cannot be precise about a date for its discussion.
Colonel Lancaster: Has the right hon. Gentleman's attention been drawn to the report that the Chancellor of the Exchequer is to address a private meeting of the Labour Party this afternoon on matters affecting the Select Committee on Nationalised Industries?
Mr. Peart: I should have thought that a private meeting, whether of the 1922 Committee or of the Parliamentary Labour Party, was not a matter for me at Business question time.
Mr. Scott-Hopkins: Can the right hon. Gentleman say when we shall have news of the introduction of the increases in Service pensions, mentioned by the Paymaster General this week?
Mr. Peart: I shall have discussions with the Minister about that matter. I cannot go into detail now.
Mr. Biggs-Davison: Did the right hon. Gentleman entirely disregard the representations made from different quarters of the House that a one-day debate is entirely inadequate for the Parliament (No. 2) Bill, which is a grave constitutional Measure? Why are we to have only a one-day debate on Second Reading?
Mr. Peart: I did not disregard the representations. I represented the views of the House to colleagues; I always do. There is no question of being discourteous. A precedent for this is the Second Reading of the Parliament Bill, 1949, which was allotted one day. I remind the hon. Gentleman that we shall be taking the Committee stage of the Bill on the Floor of the House.
Mr. Dudley Smith: Now that all our constituents have had the opportunity of experiencing British Standard Time, would the right hon. Gentleman consider providing time for a debate so that its working can be fully examined?
Mr. Peart: I have had representations made to me on this subject. I understand the feelings on it and its effect, particularly in Northern areas. But no time can be allotted for debating it at present.
Sir H. Legge-Bourke: Is the right hon. Gentleman aware that his answer to my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster) can only lead us to suppose that he is unable to deny that the Chancellor of the Exchequer is to discuss a matter concerning a Select Committee with a separate party in the House?
Is the right hon. Gentleman further aware that concern is building up in the House at the Government's treatment of Select Committees? Not only are Departments getting slower and slower in commenting on Select Committee reports, but the right hon. Gentleman himself is becoming loath to give proper consideration to the reports, so that the Committees are unable to do the job which they were set up to do, namely, to keep a careful watch on the Executive.
Mr. Peart: That is not a matter for next week's business. As Leader of the House, I am anxious, as I have stressed, to make the Select Committees work effectively. What the hon. Gentleman has referred to is another matter. It would be wrong to go into detail now, but when the opportunity comes I hope to be able to deal with it.
Mr. Gurden: Is not the Leader of the House seized of the urgency of dealing with the matters mentioned by my right hon. Friend the Leader of the Opposition in his speech on immigration? Cannot

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they be dealt with next week, particularly in view of the marriages of convenience which take place to avoid the law?
Mr. Peart: Those matters could have been dealt with on Thursday, which is a Supply day.
Rear-Admiral Morgan Giles: As Post Offices in the Winchester area have been refusing parcels since Tuesday of this week, and as the Postmaster-General was unable to give legal chapter and verse for his statement today, will the Leader of the House arrange for an early debate on the practice of government by Ministerial edict?
Mr. Peart: I will convey the hon. and gallant Gentleman's views to my right hon. Friend the Postmaster-General.
Mr. Crouch: Will the Leader of the House bear in mind the points raised by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) and my hon. and gallant Friend the Member for South Fylde (Colonel Lancaster)? There is considerable concern in the House about the fact that the Leader of the House is apparently allowing priority to be given to the discussion of Select Commitees in a private party meeting rather than in this Chamber. Would the right hon. Gentleman comment on this issue and give us time to debate it?
Mr. Peart: That is nothing to do with next week's business. I give an assurance that I do not reveal to a private meeting anything which I have not revealed previously to the House.
Mr. Heath: Does not the right hon. Gentleman realise that this is the only occasion on which the House has an opportunity to discuss continuing questions such as Select Committees? Are we to understand, as I think is the case, that the Chancellor of the Exchequer is to discuss this afternoon with hon. Members opposite alone the terms of reference of the Select Committee on Nationalised Industries? If so, is not this a most undesirable development?
Is it not proper to discuss the terms of reference with the members of the Select Committee taken from all parties in the House? This is a constitutional question for which the Leader of the House is responsible. Will he therefore
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get the Chancellor of the Exchequer, if he wishes to discuss the terms of reference for the Bank of England inquiry, to discuss them with the Select Committee as a whole?
Mr. Peart: I cannot accept what the right hon. Gentleman has said. In any case, what happens at a private meeting does not concern next week's business.
Mr. Jopling: May we expect a statement to be made next week on the results of the negotiations on the bacon sharing agreement? If so, would the right hon. Gentleman ensure that the Minister makes the statement rather than adopts the recent practice of making important announcements in a way in which he cannot be questioned by the House?
Mr. Peart: As a former Minister of Agriculture, I accept that the bacon sharing agreement is important. I will convey the hon. Gentleman's views to my right hon. Friend.
Mr. C. Pannell: On a point of order. How does what is to happen at a party meeting this afternoon concern next week's business? In any case, anybody who has studied this subject knows that there are plenty of precedents, while hon. Members opposite were in office, of Ministers discussing in advance—[HON. MEMBERS: "Name one."] The leaks in The Times. The Leader of the House knows nothing about these things. This is a bit of constitutional humbug.
Mr. Speaker: In the second part of what he has said, the right hon. Gentleman expressed—[Interruption] The right hon. Gentleman has put a point of order to the Chair.
Mr. Pannell: I am sorry, Mr. Speaker.
Mr. Speaker: The second part of what the right hon. Gentleman said was in answer to the arguments advanced by hon. Members on the Opposition benches. On the point of order itself, it has been in order during business questions to ask questions concerning the structure and working of the new Select Committees.
Mr. Alison: Does the Leader of the House appreciate that what goes on in private meetings in the Palace of Westminster is very often of great public

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interest? Would he not agree that to maintain the all-party character—
Mr. Speaker: Order. We cannot discuss at Business Question time the general issue of what goes on in private meetings. What has been raised this afternoon is the interest of the Leader of the House in the structure, constitution and functions of Select Committees.
Mr. Alison: May I slightly alter my question and ask the Leader of the House to do something which I know he could do, and that is, to maintain the all-party character of the Select Committee, as I know that he is concerned to do, will he secure a dispensation for one or two moderate Members, such as myself and my hon. Friend the Member for South Fylde (Colonel Lancaster), to attend the private meeting?
Mr. Peart: If I may reply, perhaps I would be prepared, also, to consider an invitation to address the 1922 Committee.

AGRICULTURAL WORKERS (PAY)
The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Barbara Castle): With permission, Mr. Speaker, I should like to make a statement on the pay of agricultural workers.
The Government have received the Report from the National Board for Prices and Incomes on the Pay of Agricultural Workers in England and Wales; this has been published this afternoon. The conclusion reached by the Board is that agricultural workers may be distinguished in two respects from most other workers.
First, there are many more low-paid workers in agriculture than in other industries. Indeed, the Board states:
"Agricultural workers are by a fair margin the lowest-paid body of workers of significant size in the country."
Because of this, the provision in the Government's White Paper on Productivity, Prices and Incomes Policy that would allow an above-ceiling increase to low-paid workers as part of a wider settlement which is within the ceiling cannot be of benefit to them.
In the second place, the Board points out that, although this is an industry in
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which productivity has been rising steadily for many years, it is hardly possible to envisage the conclusion of a productivity agreement by the Agricultural Wages Board, because working practices are not regulated centrally but are determined day by day on individual farms. The combination of these factors puts agricultural workers in a quite exceptional position.
The Board concludes that the award of 17s. is outside the terms of the Government's White Paper, but it goes on to suggest that the Government should consider whether a special exception to the requirements of the White Paper ought to be made in this case.
Finally, the Board suggests that if the Government are prepared to make an exception in this way, they have the means to ensure, through the Price Review procedure, that the interests of the community are safeguarded. In making decisions following Annual Farm Price Reviews, the Government already take into account all relevant considerations, including the industry's gain in efficiency and cost increases and will do so at the coming Review.
I wish to inform the House that, in the light of the Report, the Government do not propose to take any action to delay the implementation of the Agricultural Wages Board Award.
Mr. R. Carr: Will the right hon. Lady tell the House why she needs all this complicated procedure to tell the Government such elementary common sense? Secondly, is she aware that the whole House will welcome the fact that at least on one matter common sense has prevailed?
Mrs. Castle: I am glad that the right hon. Gentleman recognises that the policy which the Government are operating, contrary to the impression that he has tried to give in the past, has plenty of room for the operation of common sense.
The answer to the right hon. Gentleman's question is that if a prices and incomes policy is to be operated, it can do so only on the basis of consistency of treatment between one group and another and that, therefore, if it is desirable to go outside the criteria of the White Paper,

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it is obviously essential that the basis on which this is done should be assessed and approved by the Prices and Incomes Board.
Mr. Hazell: On behalf of the farm workers, may I thank my right hon. Friend for the statement which she has made, which will be received with pleasure by those employed on the land?
May I ask my right hon. Friend why the award to the agricultural workers was referred to the National Board for Prices and Incomes when the tally clerks' award of £2 8s. was not so referred, particularly bearing in mind the rising output and the ever increasing productivity of the workers and their very low wage rates?
Mrs. Castle: If my hon. Friend will read the Report of the Prices and Incomes Board, which is now available, he will see that this exercise has greatly helped the cause of the agricultural workers and has indicated how their position can be safeguarded in the future.
Mr. Prior: Is not the Minister aware that what has happened is that the agricultural workers are now fed up with the Government, who have done immense harm to the agricultural industry? Is it not an apt comment on the Government's performance that they have had to take the advice of the Prices and Incomes Board to tell them something which everyone else in the country knew already?
Mrs. Castle: Far from the agricultural workers' being fed up with the findings of the Prices and Incomes Board, they are certain to welcome the findings, as my hon. Friend has done. I repeat, if we are to have variations from the policy of the White Paper, it is important that the basis of that should be spelled out by the Board so that we can see that the incomes policy is operated consistently.
Mr. Mackintosh: While thanking my right hon. Friend for her statement, may I ask what percentage of industrial wages the new level of agricultural wages will represent, and whether she will accept the N.E.D.C. Report finding that, unless this be 80 per cent., the outflow from agriculture would be at such level that the Government's expansion target could not be achieved?
Mrs. Castle: My hon. Friend will find all the relevant figures in the Report. The Report makes it clear that, if the ceiling increase of 3½ per cent. had been applied in this case, then the agricultural workers' position would have been relatively deteriorating in relation to other workers, and this is the direct opposite of the intention of the prices and incomes policy.
Mr. Stodart: Is the right hon. Lady aware of the real resentment that was felt among the farm-working community at the reference to the Prices and Incomes Board, in view of the way in which the tally clerks' case was not so referred, and of the great loyalty of these low-paid workers and their enthusiasm for their jobs?
Mrs. Castle: I cannot accept for a moment that there is a great sense of resentment against having their claim and their case objectively assessed. Now that the Report is published, the agricultural workers will see that all the points which they put forward have been dealt with justly.
Dr. John Dunwoody: I assure my right hon. Friend that her statement this afternoon will be widely welcomed in rural areas as moving at least one step towards giving farmworkers fair shares. Will she assure the House that she will take the P.I.B. Report into account when dealing with the problems of other lowly-paid sections of industry?
Mrs. Castle: We have to deal with all cases on their merits. It is not possible to generalise. This is why the work of the Prices and Incomes Board, and the examinations which it makes, are so useful in enabling us to distinguish the needs of particular groups, since we have to take into account not only wage rates but earnings and other factors in each industry.
Mr. Heath: May I ask the right hon. Lady about the suspicious sentence from the Prices and Incomes Board's recommendations which she quoted with approval, that, in granting this increase as an exceptional case, the Government have power to safeguard the community in the Price Review? Does this mean that it will be the farmers who will have to meet this cost, or can she give the House a firm assurance that the farmers will be

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recompensed in full for the additional wage increase?
Mrs. Castle: The right hon. Gentleman will be able to read the full reference in the Report, but, as he would be the first to appreciate, questions on the Price Review are for the Minister of Agriculture and not for me.
Mr. David Steel: Is the right hon. Lady aware that we on this bench welcome this long overdue award? Since it applies to England and Wales, may I ask whether the principles which she has outlined will in future apply in Scotland?
Mrs. Castle: When the hon. Gentleman speaks of a long overdue award, I should point out to him that the award was due to come into operation on 3rd February. There has been no delay. Its operation will take place on the original date. The Scottish Agricultural Wages Board has not published any proposals for an increase in pay. Hours of work were reduced last year, and I understand that a pay claim has recently been submitted to the Board and the Government will consider any proposals if and when they are made.
Mr. Paget: Reverting to the question put by the Leader of the Opposition, will my right hon. Friend make it quite clear that this wage increase will be considered at the Price Review pari passu and on the same basis as all other increases in agricultural costs? If that is left in the air, there will be great trouble.
Mrs. Castle: I think that the House fully appreciates that matters concerning the Price Review are for my right hon. Friend the Minister of Agriculture and not for me. Questions on it should be addressed to him.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. We must move on.

CONSOLIDATED FUND BILL DEBATES (BALLOT)
Mr. Speaker: I have a brief statement to make which I hope will be helpful to hon. Members.
I note that the debate on the Second Reading of the Consolidated Fund Bill is to take place next Tuesday, 4th February.
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I would remind hon. Members that they may hand in to my office their names and the topics that they wish to raise between now and 10 o'clock on Monday morning, 3rd February.
The ballot will be as last time, for names plus topics, and not just names. Any hon. Member may hand in only his own name and topic. I will put up the result of the ballot at about lunch-time on Monday.
Perhaps I should take the opportunity to remind the House that this first Consolidated Fund Bill of the year embraces Supplementary Estimates only and not the whole sphere of administration, so that it is of limited scope, and that the topics raised in Tuesday's debate must be within the scope of the Supplementary Estimates.

POST OFFICE (DISPUTE)
Mr. Heffer: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the general dislocation and disruption of the postal services, including the temporary abandonment of second-class mail, which has arisen as the result of the deadlock in negotiations between the Union of Post Office Workers and the Postmaster-General."
I think that it can be agreed, Mr. Speaker, that we have a specific situation which concerns the current dislocation which applies today as a result of the statement by the Postmaster-General and will certainly apply during the next few days. I also think that we can agree that there are widespread consequences as a result of the statement made by the Postmaster-General this afternoon.
There are specific reasons, because we are dealing with a concrete situation that has been reported to this House.
As for public importance, I do not think that I need to make a long statement about that. It is obvious to the whole House and, I would have thought, to the whole country.
Therefore, I would ask that we have a debate on this issue now. If we, as a House of Commons, are to influence the conduct of the discussions and the future of our postal and telegraphic services,

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the House must have the right here and now to discuss this specific and important matter.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the general dislocation and disruption of the postal services, including the temporary abandonment of second-class mail, which has arisen as a result of the deadlock in negotiations between the Union of Post Office Workers and the Postmaster-General."
As the House knows, under the revised Standing Order No. 9, Mr. Speaker is directed to take into account the several factors set out in the Order, but to give no reasons for his decision.
I have given careful consideration to the representations which the hon. Gentleman has made and, indeed, to the Questions which preceded them, but I have to rule that the hon. Gentleman's submission does not fall within the provisions of the revised Standing Order and, therefore, I cannot submit his application to the House.
Sir D. Walker-Smith: Mr. Speaker, on a different aspect arising out of the same matter, I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the suspension by executive action, under no identified powers, of the second-class postal service".
Mr. Speaker, here, in the House of Commons, which has been the model of law, liberty and regard to constitutional practice the world over, no words of mine are necessary to stress either the importance or the urgency of the House taking into consideration an attempt by the
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Executive to act in an arbitrary way without identified legislative sanction.
Mr. Speaker: The right hon. and learned Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the suspension by executive action, under no identified powers, of the second-class postal service ",
I am satisfied that the matter raised by the right hon. and learned Gentleman is proper to be discussed under Standing Order No. 9. Does the right hon. and learned Gentleman have the leave of the House?
The leave of the House having been given—
Mr. Speaker: The Motion for the Adjournment of the House will now stand over until 7 o'clock tonight, when a debate on the matter will take place for three hours. This is provided for under the terms of the revised Standing Order No. 9.

ROYAL ASSENT
Mr. Speaker: I have to notify the House, in accordance with the Royal Assent Act, 1967, that the Queen has signified Her Royal Assent to the following Acts:

1. Electricity (Scotland) Act, 1969.

2. Local Government Grants (Social Need) Act, 1969.

3. St. Mary Hornsey Act, 1969.

NATIONAL THEATRE BILL
Referred to a Second Reading Committee.—[Mr. Peart.]
ORDERS OF THE DAY

  REDUNDANCY REBATES BILL
  Order for Second Reading read.
  4.40 p.m.
  The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley): I beg to move, That the Bill be now read a Second time.
  The Bill has one simple purpose and one major Clause. Its object is a revision of the rebates paid from the Redundancy Fund to employers who have made statutory payments to their redundant workers.
  The House will recall that, under the Redundancy Payments Act of 1965, employers (except in those occupations which are specifically excluded) are required to make payments to redundant workers with more than two years' service. Workers receive half a week's pay for each year of service between 18 and 21, one week's pay for each year of service between 22 and 40, and one-and-a-half weeks' pay for each year of service over 40, subject to a maximum of 20 years.
  The Redundancy Fund—financed by contributions levied from all employers—then pays the redundant worker's employer a rebate. The 1965 Act provides for a rebate of two-thirds of the payment for service under 41 and seven-ninths of the payment for service over 41. Clause 1 seeks to introduce a uniform rebate for all payments. It provides that the uniform rebate should be 50 per cent.
  As a result, the Fund's expenditure will be reduced by rather more than £17 million a year. Half of this is needed to meet anticipated deficits on a full year's working. The rest will go to repay the Fund's accrued deficit.
  This is the sixth occasion on which the House has debated the Redundancy Payment Scheme—and the Fund by which it is in part financed—since the original Bill became law in 1965. Inevitably, previous debates have been occasioned by the necessity to improve the finances of the Fund. During those debates, it was difficult to make more than a passing reference to the principles
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  of the parent Act. Today, it is essential that we do so. The aim of today's Bill is to make the Redundancy Fund solvent. But solvency must be achieved in a way that is consistent with the principles on which the scheme is based.
  Those principles are easily defined. The first is the provision of compensation for men who have lost their jobs. It is not a form of unemployment benefit paid in a lump sum. It is recompense for the disruption and uncertainty that redundancy must involve—even if another job is found immediately.
  Mr. Nicholas Ridley Mr. Nicholas Ridley (Cirencester and Tewkesbury) rose—
  Mr. Hattersley: It is a little early in my speech to give way to an hon. Member, but, since it is the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), I will give way to him.
  Mr. Ridley: I am grateful to the hon. Gentleman for giving way and for that flattering reference to me. Would he say why, in that case, the disruption is not equal, whether a man has worked in the same job for two years or 40 years? It seems a little odd to cut out those who have worked for only one year just because it is a short period, and not take account of what is an equal disruption.
  Mr. Hattersley: I will make three comments in reply to the hon. Gentleman. First, I did not intend to be flattering. Second, I would have thought that there was a clear disadvantage and a greater one for a man who has been in a job for 10 years to have to change than for a man who has worked in a job for only six or nine months. Third, if the hon. Gentleman wants to extend the provisions of the Bill, I hope that he will say so during the debate.
  I was saying that it is not a form of unemployment benefit paid in a lump sum. It is recompense for disruption. It compensates for the uncertainty and loss of security, for the necessity to adjust to new habits and attitudes, for the need to undergo retraining, all of which are more difficult for a man who has been accustomed to one job for a long time than for a man who has briefly been in one form of employment. In the Government's belief, it is an insurance against redundancy to which all workpeople are

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  entitled, although, until the Act was passed, it was one which was available only to a, very small fraction of the total labour force.
  The second principle is the encouragement of industrial change. The 1965 Bill was intended to promote the smooth and peaceful movement of workpeople from old contracting industries into new expanding firms and between firms, as their needs change. All the evidence suggests that it his had this effect. It was with this principle in mind that the current state of the Fund was examined.
  The House knows that outgoings from the Redundancy Fund have exceeded its income for almost two years. In July, when I asked the House to approve increases in contributions to the Fund, weekly outgoings were about £900,000. Income was little more than £650,000. By increasing the per capita contribution from l0d. for men and 5d. for women to 1s. 3d. for men and 7d. for women, weekly income was increased to about £1 million. But expenditure has so increased that it is now only a little less than that figure.
  We regard the difference between income and expenditure as far too narrow. This is particularly true in the light of the need to liquidate the Fund's overall deficit and the particular problems of forecasting its outgoings with any great accuracy.
  There are two distinct problems of estimation—to which I have drawn the attention of the House before as part of speeches which will no doubt be quoted not so much at me as against me as the afternoon wears on. First, the Fund's life, three years, is far too short to provide the sort of evidence on which actuarial forecasts can be based. Second, future expenditure is dependent on the relationship of four variables which determine the level of each individual payment. Certainly, outgoings from the Fund are not related only to the level of unemployment. That simply measures the unemployed register at any one time, not the number of men and women recently made redundant. Demands on the Fund are not even determined by the number of men and women made redundant during any one week or any one month. The payment they receive is dependent on age, length of service and
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  take-home pay. To make an accurate estimate of the Fund's future expenditure we should need to predict each one of these factors, as well as the total number of new redundancies at any one time.
  I give the House the same example as I quoted in July. Ten men with 15 years' service after the age of 40 earning £24 a week, would receive three times the redundancy pay made to 10 men under 40 with six years' service, earning about £20. There are so many variables that any prediction is bound to be approximate.
  It might be argued that the impossibility of making a totally accurate forecast places the Government under an obligation to make the levy sufficiently high to cover all eventualities. I argue quite the opposite. That view will not be shared by those who speak, as the hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) did last week, of industry having to "pay out again" because of the need to revise the levy. That is a view based on a misunderstanding of the nature of the Fund.
  The total outgoings from the Fund are determined by the entitlement of men and women made redundant. Since the scheme began the gross cost of payments has amounted to about £140 million. Apart from the Fund's borrowing, industry as a whole has paid that sum and, of course, will eventually repay the outstanding loan. In part, it has been paid by industry in general, via its contributions to the Fund and through the rebates from it. In part, it has been paid by individual employers in making individual payments to their redundant workers. But no matter what the levy might have been the cost to industry as a whole would have been exactly the same. If, in 1965, we had proposed a levy which, over the past three years had, without alteration, raised exactly the expenditure of the Fund, we might have been congratulated on the accuracy of our estimating. But the cost to industry would have been unchanged.
  What is more, we knew that, if we levied too little, temporary borrowing was possible up to a limit of £20 million, and that the deficits could then be repaid by future adjustments to the Fund and to the levy. If, however, we had levied too much, industry's money would have been

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  tied up as a surplus on the Fund. In our judgment, it was, therefore, right to operate on a minimum estimate. Certainly, industry wanted us to act in that way. As I told the House six months ago, in February, 1967, we intended to levy 1s. for each man and 6d. for each woman. It was at industry's request that we lowered the figure to l0d. and 5d. I have no doubt that we were right to respond to that suggestion.
  Though it is difficult to make predictions about the movements of those factors which will influence outgoings from the Fund in the future, it is possible to analyse the cause of past expenditure increases. The chief cause of persistently high expenditure is not the number of payments, but their average size. In the past two years the number of payments has remained pretty stable. The highest number of individual payments was made in November, 1967, and May, 1968; the lowest in July and September, 1967. There is no discernible pattern in their movement from month to month.
  There is, however, a very clear pattern to be found in the alteration in size of average payments. They have steadily and constantly increased. In the first half of 1967 individual payments averaged £193: the average rebate from the Fund was £144. By the second half of 1968 average payment was £245 and the average rebate £183.
  In part, this increase is the result of expanding earnings. The redundancy payment is based on the final week's wages, and as they increase so the payments increase. We calculate that about one-third of the rise is attributable to increases of this sort, but there are other less welcome causes. In part, the average rebate has gone up because the percentage of long-service workers in the total has increased—among them many workers over 40 receiving an increased payment calculated at 1½ weeks' pay for each year of service, as against the entitlement for the younger man of one week's pay. In 1963, the proportion of redundant workers over 40 was about 60 per cent. Last year, it was 70 per cent.
  We have no doubt that the increase is, at least in part, attributable to the operation of the Act. It is the enhanced payment that helps to account for the older
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  worker forming an increasing proportion of the total redundancies. When it is learnt that redundancies are to occur in a shop or factory, the older worker, anticipating a larger payment, is often willing to volunteer for redundancy.
  Too often this is a short-sighted choice. A suitable job will be more difficult to find for him than for his younger colleagues. He will accept training less readily. But the employer faced with inevitable redundancies has no reason to reject the older worker's offer of voluntary inclusion amongst them. The extra payment for the older worker is paid entirely by the Fund, and the individual employer makes no extra payment.
  Clause 1 aims at remedying this problem, at least in part. We cannot reduce the payment that the older man receives, for in our view this is the level of compensation needed to recompense him for the special problems he may face. We can, however, make the employer less willing to give him priority when redundancy lists are prepared. In future, the age weighting—an extra half week's pay for service over 40—will not be paid entirely by the Fund. The employer will receive rebates of the same proportion for older workers as he does for younger. The bigger the individual payment, the bigger will be the individual employer's contribution.
  Having decided on a uniform rebate, the Government were left to decide how great a proportion of the total payment that should be. That decision amounts to the question of how, within industry, redundancy should be financed. We could have asked for a higher contribution, spreading the cost amongst all firms. The Bill proposes the opposite. We are reducing the level of rebate from the Fund to 50 per cent. of all payments, and thus concentrating the cost of redundancy more heavily within the firms in which the redundancies occur.
  We made this choice for a variety of reasons. The smaller rebate, and the consequential higher cost to the individual firms, is certainly likely to encourage employers to concentrate their redundancies, when they come, amongst younger men with shorter service. This option will be open to all companies other than those completely closing down. It seems to be an option which they should be encouraged to take. For the firm going

  1561
  out of business this is not possible, but it is not inappropriate that other firms should pay less of the costs of their liquidation.
  For all those organisations which are closing down plant in one area to set up a concentrated business more successfully in another it does not seem unreasonable that such a process—intended as it is as a first step to more profitable working-should be financed increasingly by the companies themselves, not through the contribution to the Redundancy Fund of their competitors and other companies.
  On 26th April, 1965, my right hon. Friend the then Minister of Labour told the House that the basic idea of the Fund was to spread "the cost of redundancy over industry as a whole". That principle still holds good. All that we ask today is that the balance between the liability of the individual firm and the responsibility of industry as a whole should be slightly shifted. It is not inappropriate to point out that in October, 1963, right hon. Gentlemen opposite circulated a consultative document about the possibilities of a redundancy payment scheme which included the proposal that the individual company should be wholly responsible for the payment made to its redundant workpeople.
  We have always rejected that proposition, and still do. On 23rd July the right hon. Member for Mitcham (Mr. R. Carr) told the House that there was a case for seeing whether the balance of direct contribution claimed from the Fund Wets right. We have examined exactly that contention. The Bill suggests that it is not, and that the balance should therefore be slightly shifted.
  The hon. Member for Paddington, South (Mr. Scott) asked me a week ago about the widespread allegations, as he described them, of abuses of the scheme. I want to try to make more clear the relationship of those allegations to the problems we face today. Abuse in redundancy payments means two different things to two different sets of people. To the Government it means those occasions when an employee secures a payment and an employer secures a rebate to which he is not entitled under the rules of the Scheme. We have examined a sample of cases to see how often this happens, and have not found a single
  1562
  example of fraud. I am prepared to concede that with a scheme so complex and covering so many workers there will be isolated cases of fraud, but they are certainly insignificant in terms of the deficit we face today.
  Other allegations of abuse relate to something which is clearly not an accurate use of that term. They refer to men who, because of the expected size of their redundancy pay, volunteer to be made redundant when genuine redundancies must occur within their factory. This is not abuse, and it is in many ways a desirable operation of the Fund. The redundancy payments scheme has more than the negative virtues of relieving the shock to the worker when he is made redundant. It is intended to have the positive effect of influencing the worker's attitude to the point where he can see advantage in being dismissed from one job and taking up another.
  One element of criticism is, however, legitimate—the criticism about what are called anomalies. Some certainly exist. Perhaps the best example—certainly the most frequently quoted—is the situation in which employees of a television company which lost its franchise were eligible for payments even though they were immediately re-employed on virtually identical terms by the new franchise holder. The way in which the Act defines associated companies probably need modification. The Contracts of Employment Act specifies that continuity of service shall be provided during what is term "temporary cessation of work". This has a direct bearing on the Redundancy Payments Act. What is meant by the term in this context needs to be clarified.
  None of these anomalies materially affects the finances of the Fund, but as a matter of principle they need to be removed. We intend to begin early discussions on them with industry, and undertake to make what changes in the Act prove desirable and necessary after those discussions have been concluded.
  I wish, finally, to say something about the alternative approach to refinancing the Fund. One alternative, perhaps the obvious alternative, would have been to cut expenditure drastically by a reduction in payment to workers made redundant. The C.B.I, argued that, at least in part,

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  the deficit should be overcome in this way. It urged that the qualifying period should be extended from 2 to 3 years. This was in direct opposition to the views of the hon. Member for Cirencester and Tewkesbury (Mr. Ridley). The C.B.I. also urged that the enhanced payment to older workers should be deferred from the age of 41 to 51. The Government rejected this view entirely. No evidence has been supplied to us to suggest that the level of payment is too generous. It is difficult to put a precise figure on a payment which compensates a man for the loss of his job, but nothing has happened since 1965 to suggest that our original estimate was wrong. Certainly, the level of payment laid down in the Act has promoted frictionless redundancy in many industries. In our view, it would be reckless to risk losing the real industrial advantages by reducing the payment now.
  All that is really changed is that the Fund has run into increasing deficit through demands being concentrated too heavily on the larger benefits. This in itself is not an argument for changing levels of payment under the Act. We are presented with a choice. We could increase the levy yet again and leave unchanged the undesirable concentration of redundancy amongst older workers. Alternatively, we could share the cost of redundancy more evenly between employers as a whole and the individual employers who are incurring redundancies, at the same time reducing the incentive to some employers to sack older workers.
  The Government are in no doubt that the second alternative is the right course. It is an argument for encouraging redundancy to be concentrated amongst those workers who, because of their youth and number of years of service, are least likely to receive the largest payment. Concentration of redundancy among this group also has substantial and obvious social advantage.
  The proposals in the Bill preserve the finances of the Fund and maintain the objects of the parent Act. I commend the Bill to the House.
  5.2 p.m.
  Mr. Robert Carr: The purpose of the redundancy payments scheme,
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  the basis of our discussion today and the subject of the Bill, is very important. Effective action to reduce the fear of redundancy and to assist people, if redundancy unfortunately comes upon them, is valuable in human and social terms. That must be obvious to all. But it is also extremely valuable in economic terms.
  The more that experts, both in this country and overseas, look at our economic problems and the cause of our troubles, the more often we hear the diagnosis that one of our most urgent needs is to make better and more effective use of our manpower. That leads to talk of the need for redeployment. It has led the Prime Minister, for example, on a number of occasions, to justify certain Government policies in terms of the need for a shake-out in industry to get people moving from industries where there is more employment than is required to expanding industries with growth and export opportunities for the future.
  I am in little doubt that positive policies to increase mobility of labour are far more important to the health of our economy than repressive controls such, for example, as the statutory incomes policy. Therefore, I think that there is unanimous agreement on the importance of the purpose of the redundancy payments scheme which is dealt with in the Bill.
  The question is: does the present scheme, particularly as it would be amended by the Bill, achieve the purpose on which we are all agreed in the most effective and economic way possible? That is where the doubts are great and are increasing both in industry and, I think, among the public at large. I cannot help wondering, when I look at the benches opposite, whether the doubts are also increasing among supporters of the Government.
  Mr. David Mitchell: Where are they?
  Mr. Carr: When I came into this House in 1950 one thing we could be certain about was that whenever subjects concerning the welfare of workers were being discussed—it was certainly one thing that impressed me, and I mean this genuinely—Labour Members were

  1565
  notable for their presence whether their party was in power or in opposition. I am sorry to say that when we discuss these matters now, Labour Members are notable for their absence, even to support a Labour Government.
  The first thing that we should note about the Bill—[Interruption.] This is a Government Measure, brought in as a result of their crass incompetence. If my diagnosis is incorrect, I should have thought that the Under-Secretary would have expected, and received, more enthusiastic support from Labour back benchers. I leave the House and others to judge how enthusiastic is that support.
  The first thing that we should note about the Bill is that it adds another £17 million a year to the industrial costs of this country. I should not say that with certainty, because that is the estimate in the Bill, and estimates in this sphere by the Government have hardly been accurate in I he past.
  Last July, the most recent occasion on which we made an adjustment to the redundancy payments scheme, we were asked to approve measures which added £8½ million to our industrial costs. On that occasion the Under-Secretary said that, although he regretted it, it was, alter all, only about a tenth of 1 per cent. of the labour costs of the country. Now, only six months later, we are being asked to add £17 million, twice as much as we were asked to add last July, which, I suppose, is a fifth of 1 per cent. of the labour costs of the country. But, as we pointed out then, all these fractions add up.
  In this same period the Government, by direct action, have increased by 50 per cent. the burden of S.E.T. and have taken other taxation measures, all of which keep adding to our industrial costs. This is the way that the precious competitive advantage, which was the only justification for the heavy price of devaluation, is being whittled away by direct Government action.
  The Under-Secretary, towards the end of his remarks, talked about the possible alternatives. I think that, on balance, in a very awkward situation, the Government may have chosen the right alternative in not cutting payments to workers. But I think that the hon.
  1566
  Gentleman was showing less than his usual fairness when he said that employers wanted to cut the payments to workers. It was part of the package that they put forward, but I think that it should go on record in this House, lest the reports are inaccurate—and if they are, I am sure that the Minister will say so—that the Government took the initiative in suggesting to employers that this was one of the alternatives that they ought to consider.
  Am I not right that the Government wrote to the C.B.I, and other organisations towards the end of October positively suggesting to employers that they should, among other measures, consider the possibility of solving the problem by cutting payments to workers?
  Mr. Hattersley: The right hon. Gentleman has asked me a direct question, and since I am anxious as I hope he expects to be fair to both him and the C.B.I., I will answer it directly.
  The Government sent to a number of interested parties—basically the Trades Union Congress and the C.B.I.—an estimate of what they thought the savings from the Fund needed to be. We also sent a number of schemes explaining how those savings might be achieved. Certainly, I meant it in no pejorative way when I said that the alternative that the C.B.I, chose involved cutting benefits to the workers. I meant it in as positive a way as I know when I said that although that was the scheme it was not a scheme which was ever acceptable to the Government.
  Mr. Carr: I am grateful to the hon. Gentleman. The only criticism of that is that if this idea was never possibly acceptable to the Government why did they suggest to industry that they should consider it? I do not want to labour the point, because what the hon. Gentleman has said has at least made it clear that he was not accusing employers of taking the initative in bringing this possibility into consideration.
  The one thing which stands out is that neither industry nor the public have confidence that the scheme or the Bill will do the job efficiently and economically, and this lack of confidence has undoubtedly been greatly increased as the result of the Government's incompetence and bad management in dealing with the

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  scheme, and by their repeated patchings and mendings. In three years of this scheme's existence the Government have made no less than nine different proposals for the rates of contribution, the Fund's borrowing powers and, now, the scale of rebates.
  Contributions started in December, 1965, at 5d. for men and 2d. for women. Fourteen months later, in February, 1967, they were more than doubled, being raised to lid, for men and 5d. for women. In the Budget of 1968—a little more than a year later—it was proposed to raise the contributions to 1s. for men and 6d. for women, but before these proposals could be implemented the Government had to ask the House for yet a further increase, so that in the end the contributions were put up, last July, to 1s. 3d. for men and 7d. for women.
  Similarly, in December, 1965, the Fund's borrowing powers started with a limit of £8 million. In July 1967 this limit was raised to £12 million, in April, 1968, to £15 million, and, three months later—in July, 1968—to £20 million. Now the Fund is bust again. This record is a monumental example of incompetence, lack of foresight, lack of reasonably sound management and of blind, last-minute patching and mending. How can industry and the public have confidence in a scheme with such a record hanging round its neck? The Bill is just another botched job. It is not the considered outcome of a proper review. It is a last-minute, temporary resuscitation of a Fund which is about to drown.
  Even this Bill cannot be the end of the story. This is just a last-minute, eleventh-hour, patching and mending operation, such as we have had before. What is the cause of this trouble? It is obvious that the Government do not know and have not taken enough trouble to find out. They now talk about the difficulty—indeed, the near-impossibility—of forecasting. I agree that forecasting in this matter is immensely difficult. We can be generous and say that the difficulty of forecasting could be accepted as a reasonable excuse the first time things went wrong; but it becomes less of a reasonable excuse on each succeeding occasion. Yet the errors have got worse, and not better, and they have had to be corrected at more and more frequent intervals.
  1568
  Moreover, the excuse about the difficulty of forecasting is a recent one, because Ministers used to speak with relative certainty. I cannot refrain—and this will not surprise him—from quoting the Under-Secretary's own words on a number of occasions. I start with what he told the House on 24th July, 1967. He said:
  "My right hon. Friend believes that the £12 million ceiling will never be reached."—[OFFICIAL REPORT, 24th July, 1967; Vol. 751. c. 275.]
  That was only 18 months ago. There was no diffidence or uncertainty then. But that £12 million borrowing power ceiling was reached—and very quickly. Eighteen months later, the ceiling had to be increased to £15 million.
  Once again the Under-Secretary was full of certainty. On 4th April, 1968—less than a year ago—he told the House:
  "The new rate of contribution in September will make solvency permanent."—[OFFICIAL REPORT, 4th April, 1968; Vol. 762, c. 723.]
  Where was the difficulty of forecasting—or the uncertainty—there? That was less than a year ago.
  But only just over three months after that certainty, namely, 23rd July last year, the Government and the Under-Secretary once again had to ask the House for permission to increase the borrowing powers from £15 million to £20 million, and to recommend—indeed, they said that it was essential—that a further increase should be made in the contribution levels above those proposed as recently as April and which there had not been time to implement.
  But if the Government could not see it, other people could, and did. In the debate on 4th April last year, when the Under-Secretary was so certain about permanent solvency, my hon. Friend the Member for Harrow, West (Mr. John Page), wound up the debate for the Opposition, warned the Government, and said specifically to the Under-Secretary:
  "… does not he think that the Fund will be knocking on the door of £15 million within another eight months? I do not see why there should be a dramatic change in pattern …"—[OFFICIAL REPORT, 4th "April, 1968; Vol. 762, c. 707.]
  My hon. Friend was proved right within three months, and the Government once again were proved wrong.
  In the debate on 23rd July, 1968, we again warned the Government when we said that even in the context of the

  1569
  increased, contributions and increased borrowing power which the House was being asked to grant—and this was only six months ago—there was danger of further trouble. My hon. Friend the Member for Paddington, South (Mr. Scott), who opened the debate for the Opposition, then said:
  "We are absolutely at the limit of the borrowing powers. One wonders whether the Government ought not to be thinking of foreshadowing a new Act in the Gracious Speech for next Session, because it seems that the powers under the existing Act have been exhausted."—[OFFICIAL REPORT, 23rd July, 1968; Vol. 769, c. 365.]
  How right was my hon. Friend and how wrong, once again, were the Government! If they could not see, others could, and told the Government what they could see.
  No notice was taken of them. Once again we have the same last-minute emergency action, and the same botching. Once again I warn the Government that it will not last, and that further action will be needed. This is an appalling record, and the House ought not to allow it to go on. On merit, the Bill deserves to be thrown out as a censure on the Government for the incredible incompetence that they have shown in this matter over the last three years.
  That is what I should like to advise the House to do; the difficulty is that, without this Bill, the scheme will be bankrupt by March and the Government have nothing to put in its place—and, quite obviously, would not be able to find anything to put in its place in such a short time. Therefore, if we reject the Bill, we leave the country and those who will become redundant thereafter with no means of meeting this need, which is most important not only in human but in economic terms. However much I hate what is happening, I would regard that as irresponsible. Thus, however reluctantly, and almost only because the House has been blackmailed by the Government's past incompetence and present irresponsibility in bringing the Bill to the House only at the eleventh hour, I must advise my hon. Friends to let it go through.
  But I warn the Government that this is the last time that they can get away with it. I demand—I repeat the word "demand"—that they now put in hand a fundamental and searching review of the working of this scheme and that they
  1570
  publish a report of this review before the end of this year. I demand that that report should not only cover the financial aspect, but should include a considered judgment of the Tightness of the scheme in priniple and of its working in detail. I demand that the Government give an answer to that question tonight.
  I hope that the Government will not turn down that request. If there are good reasons for what has been happening, if this is, in spite of all the growing doubts, the best way of meeting what everyone agrees is an important need, then, after what has happened, the public needs satisfying about this. I beg the Government to accept what I have asked them to accept. If they do not, we shall have to consider carefully our attitude on the remaining stages of this Bill.
  I should like to conclude by mentioning some of the points—obviously, they can only be some of the points—which the inquiry and report for which I have just asked should cover. First is the method of financing. There are two subsidiary questions under this head. First, we should at least ask ourselves again whether the Redundancy Fund should be wholly the responsibility of industry. According to our present thinking in the Opposition, we believe that it should—I want to make that clear—but some industrial opinion thinks that the Fund should be linked in some way to the National Insurance Fund. Although we do not, at least as at present advised, agree with that, we do think that it is a point which deserves looking at and answering.
  But even more important, under this head, is the argument of the flat rate versus the graduated contribution. Here, surely, there can be little doubt. Let us be honest: I think that we all got it wrong when this scheme started. I find the argument for financing by a graduated contribution, a percentage of earnings, rather than a flat rate, to be unanswerable. As the hon. Gentleman himself said, one of the causes of many of the uncertainties and the calls for much higher expenditure than has been repeatedly expected is undoubtedly the fact that the payments are tied to current earnings at the time of redundancy, and those earnings rise.
  It therefore seems inevitable that the Fund is always liable to go into deficit.

  1571
  if the number of redundancies does not fall dramatically, unless the contributions are tied to the change in earnings by making them a percentage and not a flat rate. This should certainly be considered. The prima facie case for it is so strong that it should be adopted unless the inquiry and report for which I have asked shows strong reasons to the contrary, which are not apparent to me.
  The second major question which the inquiry should consider is the matter referred to by the Under-Secretary, the appropriate scale of the rebate. This is a matter of judgment and a matter in which judgment can justifiably change in the light of experience. The hon. Gentleman said that, when the Conservative Government, way back in 1963, first started thinking about this scheme, we thought in terms of putting the weight on the individual company. Although we had not introduced the Bill by the time we left office, I believe that our thinking had changed or was rapidly changing on that matter. But I do not apologise, in any event, for taking a different view in 1968 from that preliminary view in 1963.
  In this Bill, after all, we are reducing the rebate, but I question whether that is right. It increases the burden on a company at the moment of redundancy, when the company may be in financial difficulties. Even if it were not, but had recognised that it had some surplus manpower which it should shed humanely in the interests of efficiency, reducing the rebate is a disincentive and not an incentive to that company to do what the national interest requires. Of course, from the point of view of the total cost to industry, the same overall financial result and burden could be achieved by raising the contributions and maintaining the rebate. That, of course, raises the problem that the cost would rise for the whole of industry and not just those companies where redundancy took place.
  This leads me to the third question which I think that the inquiry should look at. That is—here, I should like to pay a compliment to the hon. Member for Cornwall, North (Mr. Pardoe), who has taken a close interest in this subject—should we not consider a second, additional form of rebate, a sort of "no claims bonus" to those companies which, over a period of years, make no claim
  1572
  on the Fund? That would obviously be a much smaller rebate than the rebate when paying for actual redundancy.
  If this were found practicable, the rebate would be an incentive to proper manpower planning and would also discourage—this is important—any tendency on the part of companies to make an improper, even if strictly legal, use of the scheme when getting rid of people—one of those uses which are suspected and which are not technically an abuse but which certainly go rather wide of the purposes for which this scheme was intended.
  The fourth question which this review should consider is what influence the age weighting rebate formula should have on the company's selection of employees to be made redundant. Surely, because older employees have more difficulty in getting new jobs, because there is a waste to the national economy from the unemployment or underemployment of older but perfectly capable and fit people, and also because the cost to the Fund is much greater when older people are made redundant, we should if anything, give a bias towards making the younger people rather than the older redundant when that choice arises.
  Until now, the scheme has given a bias, if anything, towards getting rid of older people and that was wrong. The Bill makes it at least neutral and we agree that that is better; but the sort of fundamental inquiry for which we are asking should at least ask whether the bias should not be tilted even more, so as to give a greater incentive to choosing the younger rather than the older worker when, unfortunately, the need for redundancy arises. I deliberately say that the question should be asked and I refrain from giving an answer, because these are proper matters to be reviewed and reported, with all their pros and cons, to Parliament, so that we can form our view about them.
  The fifth question which keeps on arising in connection with this scheme and which should be reviewed is the possibility of abuse. The Minister keeps saying that the abuse is minimal, and he may be right. However, we are all aware of individual cases—and as we go about the country we are made aware of the widespread feeling on this point—which must make one wonder whether the abuse is far worse than minimal. It

  1573
  is not sufficient for Ministers merely to say in general terms that it is minimal. For this reason the whole matter should be the subject of an inquiry.
  The sixth question on which we need a full report concerns the definition of "redundancy". Should it be changed to reduce the anomalies which occur? Even if one discounts the tales of widespread abuse, one cannot deny that anomalies exist. One need only think of cases of people who get large redundancy payments when under the scheme as it was originally thought up, it was never envisaged that they would be receiving such payments. As the Under-Secretary said a classic example was that of people employed by television companies, and another arises out of a change in the status of associated companies. There are many others.
  We should also recognise that there are cases of the reverse kind; that anomalies occur in both directions. We can think of cases where tribunals have ruled against the payment when on all normal grounds of natural justice the applicant would have seemed entitled to a payment.
  There is also a more general problem of great economic importance. When a worker feels that he is in a dead-end job and can see other opportunities—perhaps can foresee his company or industry declining—he should in in his own and in the national interest be encouraged to change his job. However, the scheme as at present set up discourages that because unless such a worker waits until he is made redundant he does not get a lump sum payment. I do not want to exaggerate the effects of this, but it must be admitted that this acts as a disincentive pressure on people doing what they should do in their own and in the national interest.
  Last and perhaps the most important question into which the review should look, is whether the present system of lump-sum redundancy payments is the best way of spending the money in the fund. Prima facie the present system seems absurd, because the redundant worker gets an amount which is related entirely to the chance of his past record of service and not in any way related to his difficulties and needs in finding good alternative employment. How can that be right?
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  I wish to make it clear that I accept as well as know the case for making good payments on the termination of a job and for having them related to past service. In principle, this is already covered by the Contracts of Employment Act and if the provisions of that Measure are inadequate they should be amended. That would be the proper way of meeting this need. Indeed I notice that the Government's recent White Paper, "In Place of Strife", makes some suggestions to that effect. We must therefore accept that there is already overlapping and confusion in this matter.
  Even more important perhaps for hon. Members in considering the Bill and the scheme is an awareness of the fact that the purpose of a redundancy scheme in social as much as in economic terms should be to make easy the free movement of labour from one job to another. Payments should be related as far as possible to the difficulty which faces a man in changing his employment and not to what has happened to him in the past. That need appears to point to a number of questions.
  The first is the need for generous mobility pay—as we might call it. We already have this principle accepted to some extent in the wage related unemployment benefit, but is the scale and implementation of that right? The second is to set up a more effective and professional placing service. I do not wish to throw bricks at the Department which performs the task of the old Ministry of Labour—as a former Minister at St. James's Square I take pride in and have an affection for what the placing service does—but I suggest that it could now be made more effective and professional.
  The third need towards which the primary purpose points is for a massive adult retraining programme going far beyond the present Acts and provisions. The fourth need is for the compulsory transferability of pensions.
  These matters should be the priority objects for attention and expenditure if we wish to make our redundancy payment scheme both as humane as possible and as economically effective as possible. In Sweden, an employee who must change his job—for example to avoid overmanning—is guaranteed continuity of income and maintenance of his living

  1575
  standards provided he is willing to be retrained and if necessary work elsewhere, and is given full help to move elsewhere. Is not that the direction in which we in Britain should be moving? The inquiry for which we are asking should take a close look and report on the principles and methods of operation of the Swedish labour market policy.
  The Bill, unfortunately, seems to us to be a sorry further chapter in a sorry and incompetent story. It is only tolerable to pass it if the Government will now promise the House the sort of far-reaching inquiry and report which I have been suggesting so that the next similar Bill—I am sure that we will have another one and not in the far distant future—is a properly thought out and well constructed Measure instead of just another last-minute botch-up.
  5.37 p.m.
  Mr. David Mitchell: We are asked today to give a Second Reading to a Bill which is merely a rescue operation for the Redundancy Payments Act, 1965. I will confine my remarks to three points in an endeavour to see whether we should be doing something more radical than the proposals which the Government have put before us.
  I want to know, first, whether in terms of cost effectiveness the 1965 Act is good value for money; and, secondly, whether the Bill is a step in the right direction or is, as I believe it to be, the opposite. I intend, thirdly, to suggest what we should be doing. I begin by quoting some words used by the then Minister of Labour in 1965 in moving the Second Reading of the Redundancy Payments Act. He said:
  "In the White Paper on the Economic Situation, published last October, the Government undertook to carry out an active policy to make it easier for workers to change their jobs in accordance with the needs of technological progress …"—[OFFICIAL REPORT, 26th April, 1965; Vol. 711, c. 33.]
  Repeatedly during his speech it was made clear that that was the main purpose of the legislation. The first question which one must ask, therefore, is whether the Act is giving good value for money.
  One must remember—and it is easy to forget—that this is an additional charge
  1576
  on industrial costs. The Minister will appreciate as much as any hon. Member how important it is for British industry to be competitive. It is essential, therefore, to look at the built-in overhead costs of industry, of which this is one, to see whether they are giving really good value for money.
  This Measure gives payment according to the past and does not deal with the problems of the future. It enables a man to be paid when he may not even be unemployed. He may walk out of one job, cross the road and step into another. He may even walk out of one job and cross the road to a better paid job. In spite of that, he is entitled to draw on the Fund. Indeed, he may walk out of one job and into another in another factory belonging to the same group, but he is entitled to the payment.
  Equally, a young man who has not been long in his job, and who has children and other built-in costs, suffers far greater hardship when he must move jobs because he gets very much less out of the fund because of the shorter period he has been working. This man may be involved in moving from the North of England to the South of England or vice versa and having to meet major costs. He gets less than the older man who has been longer in his job but who crosses the road to a new job. This cannot be a soundly based cost-effective way of using industry's money.
  The House passed the 1965 Act on the clear basis that it would take a long time for wage-related benefits to be introduced They have now been introduced and the Government do not seem to have taken account of them and the effect that they have in relation to this scheme. I would have thought that the passing of the 1966 earnings-related benefits provisions created a new situation which the Minister should bear in mind.
  My second question is whether the Bill improves or worsens the situation. It will certainly increase the cost, from one-third to 50 per cent. for an employer who wishes to dismiss a man. I understand that during the operation of the Act payments have averaged £250 per worker. If we consider the case of rationalisation in an industry involving the shut-down of a factory employing, say, 2,000 workers—this example might occur in an area in

  1577
  which there are many jobs available and in which, therefore, no great hardship will be caused—the cost to the employer will be about £⅓ million in terms of redundancy payments, assuming that about three-quarters of the labour force is eligible.
  This must have a substantial bearing on the decision of an employer in considering whether to close a factory, when the economic case for it is clear and necessary, when the economic position of the nation requires mobility of labour, which should be encouraged, but when the provisions of the Bill detract from giving such encouragement—indeed, to the tune of £17 million.
  We should be thinking more in terms of something like sickness benefit, for which one pays while one is well and which one draws out only when one is sick. Because employers and industry are committed to contributions under this scheme, there is insufficient incentive for us to do as good a job as we should be doing by way of wage-related benefits.
  I come to my third point, which is to consider what we should be doing. The House recognises the urgent need for mechanisation, modernisation and rationalisation in British industry. This is nationally recognised, but it is individually opposed and resisted in factories. One can understand the reason for this. It is the legacy which has come down to our generation from what happened in the 'twenties and 'thirties—the legacy of a period when unemployment varied between 1 million and 3 million. One can understand men's feelings when a new piece of machinery was installed, so causing redundancy and adding to the pool of unemployed. In those days it meant being unemployed for months, if not years. Men clung together to find ways of spreading work. Where two men could be employed on a piece of machinery when only one was really necessary they tried to keep up the labour force and so prevent a few men from being on the dole.
  We appreciate and understand what happened in those days. But what in the 'thirties saved men's jobs is today doing desperate damage to the nation's prosperity. There is, therefore, an urgent need to take away the fear of unemployment;
  1578
  indeed, to do what the then Minister said in 1965 when moving the Second Reading of the Redundancy Payments Act.
  As an aside, I would say that I do not think that that fear has been helped by the present Government's record of unemployment, standing at over 500,000 for 19 to 20 months, and the Prime Minister's elasticity of phraseology, when he maintains that there is full employment. The urgent need is to remove the causes of resistance to change, to make adequate payments, to prevent a change of job meaning a drastic lowering of a person's standard of living. As so many people today are heavily pre-empted and mortgaged on their pay packet with hire purchase, it is even more important to look precisely at the sort of causes, to which I have drawn attention, where hardship is caused in moving from one job to another. The need is not for payments related to past services, but to the costs that the man will incur, for the period for which he is unemployed, for the cost of retraining, and moving, if that should be necessary.
  These are the things which Government policy ought to be doing. I am aware that there are Measures on the Statute Book in this connection, but we have not been able to deal adequately with these things, because of the preemption of available money on this scheme. If one looks at earnings related benefits, where a man is earning £24 a week, not far from the national average, he can calculate that £15 of his earnings are within the range of the Act, and he will receive approximately £5 supplement. A man earning £30 a week receives a maximum supplement of £7. We ought to look carefully to see whether those figures are adequate, especially in relation to the sort of problems to which I have drawn the Minister's attention.
  There is a case for the amalgamation of wage-related benefits with redundancy payments, relating it to the previous standard of living and the period in which the man is unemployed, with what I would call a "no claims bonus" for long-service employees who have not been drawing unemployment benefits. In this way, we can tailor-make the payments to the size of the problem. The trouble with the Act as it stands, and the Measures before us tonight, is that

  1579
  instead of tailor-making the payments to the problem, they tailor-make the payments to past service, which has no bearing or relationship to the size of the problem affecting the man. This is, as my right hon. Friend said, a miserable Measure and the Government ought to have a careful search for a new way of dealing with this problem, which I and my colleagues recognise ought to be dealt with to help the mobility of labour, so essential to the country.
  5.47 p.m.
  Mr. Ernest Thornton: With all the criticism so far levelled at this Measure, the House is tending to lose sight of the fact that this redundancy payments scheme is one of the most efficient economic reforms passed by this House in many years. The recent announcement that during 1968 we had, for the first time for many years, a rise in productivity and an improved balance of trade is, to a substantial extent, attributable to the working of the Act, with all its shortcomings.
  The overriding difficulty in forecasting accurately to bring the Fund into balance stems mainly from the Government acceding to the pressures of the Opposition in Committee, and increasing the basic payments from the Fund from 50 per cent. to 66⅔ per cent. That was done after Opposition pressure, and requests from the C.B.I. I know that the C.B.I, has come to recognise that that percentage was too high. If my memory is correct, and I had a little bit to do with the progress of the Bill, the request was that the payment from the Fund should be 75 per cent. or 80 per cent.
  There was a slow realisation among employers that generous payments could be extracted from the Fund in respect of long-service employees. For the worker with 20 years' service, all after 40 years of age, seven-ninths, or almost 78 per cent. is paid from the central Fund. If one takes into account the fact that the employer is paying approximately only 22 per cent., then it is obvious that the employer can be very generous. For each such worker made redundant, or arranged to be made redundant, he can be paid £100, at a net cost to the employer of about £10 when the employer's tax is taken into account. That is the reason why it has been difficult to fore-
  1580
  cast correctly. This trend has been some time in emerging and being pinpointed.
  My guess is that now the Minister has gone too far in the other direction. I confess that my estimates, like everyone else's have been wrong. I make a guess on the assumption that if one does so often enough, sooner or later one must be right. My guess is that this Fund will now swing very rapidly into surplus, after eliminating the £17 million deficit. That will mean that there will be a considerable time before there is a need to review contributions.
  I want to refer particularly to the older workers. There is a lot to be said about a scheme which helps the older worker, in preference to the younger worker, who is more mobile. One thing not overlooked in devising this system of the extra half week pay for each year of service for workers 41 years of age or more, was that it might become an additional deterrent to employers to engage workers in their forties or fifties. Certainly this was in my mind. If we are not careful this Bill will add to the many deterrents against employing these older men.
  If they become redundant they will be an expensive proposition for the employers. There are many possible computations. To revert to the original proposition of 50 per cent. for the basic week from the Fund is correct, and we should look again at how the extra half week for each year of service from 41 years of age and over could be met.
  We might consider making a contribution from the central Fund for this half week of two-thirds of the amount. That would have the net effect of a minimum payment of 50 per cent. from the central Fund and five-ninths, if my arithmetic is correct—between 55 per cent. and 56 per cent.—from the central Fund in the case of years of employment for which qualifications are met from the age of 41. I should like the Minister to look at such a proposition. One of the problems in industry is getting into employment men in the late forties, fifties and early sixties. I am afraid that this Bill will be an additional deterrent to employing them. With these qualifications I commend the Bill, and hope that at a later stage the Minister will look at my proposal.
  5.56 p.m.
  Mr. Kenneth Lewis: As my right hon. Friend said, this is about the sixth occasion upon which we have discussed this subject, and in this time we have had about nine changes. If the Minister ever becomes redundant, and I suppose that in a couple of years we would hope that he will, he is well qualified to be the director of a nationalised industry, because I know of no one who can put forward an adverse balance with such buoyancy and do it with such persistence.
  On a number of occasions the Minister has told us that this has nothing to do with the ordinary taxpaper. We accept that, but lie has a lot to do with industry, which has to pay the Bill. Unhappily, industry is in a position where it has to pay the bill but the Government direct. The hon. Gentleman is running the Fund and telling industry how much it shall pay in, and in the long run the Government are responsible for the balancing of the Fund. When the Fund ceases to balance, and in so far as it ceases to do so, the burder is bound to be imposed upon industry. There was an excuse at the beginning for the Government getting things wrong, because this was something new and the Department concerned was bound to be uncertain as to how it would work out; but to have to come back six times to the House and make nine changes is allowing a good deal more scope than would be justified for any administration which pretends to be competent.
  The correct use of the Fund is important for mobility of labour and the general efficiency of industry. It would seem, from the trends that this Fund is being used as a kind of extra "dole" payment; the social service aspect of the Fund is pre-eminent to both the recipient and the employer. I am not sure that it is not pre-eminent in the Government's thinking. Ministers talking about this Fund frequently boast that they alone have introduced a Measure which, at last, gives to the worker the block payment, the golden egg which used only to be available to the director.
  I am not averse to lump sums being paid to help people who lose their jobs, particularly if they are over 50. To a man over 50, the social service aspect of the Fund is important. If the usefulness of the Fund is to rest there, however, it
  1582
  clearly makes less contribution to the nation's industrial well being or to the improvement of efficiency. This is where the Government must examine where they are going. This is why my right hon. Friend's suggestion that there should be an inquiry is important. Unless, arising out of the Fund we are getting, together with the social security payment, mobility of labour and retraining, and unless we are providing new industries with the people that they need, clearly the whole idea behind the scheme will fail.
  The Minister was kind enough to quote something I had said against met At least, he imagined that it was against me, though I may not accept that. I have looked up some of the other things which I and others has said on this subject. On 15th November, 1966, I said that the over-50s appeared to be increasing in number as recipients of these payments and that if the Minister did not take action to change this trend he would be faced with a serious situation.
  The Minister has now made a late change which seeks to persuade employers to make people redundant in their 40s or below. I wonder whether this is not another miscalculation, because there are two things to which regard must be paid when we are considering the attitude of an employer to those to whom he is going to pay redundancy money and the attitude of an employee as to whether he will accept such a payment. Those who are in their 40s and their 50s are not in any different situation. I think that, on balance, the over-50s are more able to move than the 40s and under-40s, because the man of 40 or under is at the time of life when he has a young family. The man of, say, 41 down to about 30 has probably just bought his house and got his children's schooling settled and is not very anxious to move. Therefore, it is possible that the change announced by the Minister will have no material effect.
  This Fund is valuable only as long as it runs alongside many other changes which are required, which the House has been calling for over a number of years, which are sometimes difficult to institute, but which, nevertheless, are essential if people are to be persuaded to move from one place to another. The Times Business News today contains an article on the closing-down of the

  1583
  A.E.I, factory at Woolwich, which wiped out 5,500 jobs. Two things are clear from the article. First, many of the workers went out of Woolwich and travelled some distance to get new jobs. This is the pattern in the South of England, and it is generally acceptable. I will return to this point later, because it is not acceptable elsewhere. Secondly, there were others who were prepared to move to other parts of the country but were unable to get housing. Unless housing arrangements are made which will encourage the mobility of labour, no "top hat" payments will help to persuade the worker to move, because he cannot move.
  The first essential is that, in another sphere, the Government must try to persuade councils increasingly to provide houses, or persuade industry itself to provide houses, where they are required, so that a worker who has received a redundancy payment will know that when he goes to a new job in another part of the country he will have a home. The second thing, which is very simple—I come back to what I was saying about Woolwich—is that if in the provinces a man has to go two or three miles to work he considers that to be a long way. In London, if he has to go 15 miles to his work, he does not consider it to be very far.
  The Government must think in terms of whether, if they want a worker to travel a distance to work—it could be 20 miles a day, because it is better to travel 20 miles there and back in a day than to have to uproot one's home and get a new house—they would not be well advised to pay additional travelling expenses to facilitate this.
  The question of schooling is important. It is not easy for a worker with children to transfer them from one school to the right kind of school in a new area.
  The question of old people is even more important. It is surprising how many men in their 30s and 40s would not think of moving because they have an old relative—an elderly parent of the man or his wife—living close to them, and they just cannot find an old people's home for that parent to go to if they themselves move. An inquiry is necessary into the whole aspect of how the Fund is working out in relation to its
  1584
  main objective, not the objective of providing simply an additional social payment.
  Finally, my right hon. Friend suggested that we might have to look at the whole question of the payment of lump sums. As we have started the Redundancy Fund in this way, I should not wish us to end the payment of lump sums. That would produce a situation where certain people, having received a lump sum, would have done very nicely, while those who came afterwards did less well. There is a case for making payments to compensate people on a purely social basis.
  Any Government who are looking at the reform of this Fund and future changes which have to take place may have to consider whether they should provide extra payments to workers of any age—whether they are 30, 40 or 50—who seriously intend to move, have indicated that they will move, and can prove that they have new jobs to go to elsewhere; and also to people who are ready to be retrained. A plus payment for such people might provide the kind of incentive which would get us the freer flow of labour which we must have if we are to increase industry's efficiency.
  6.9 p.m.
  Mr. John Pardoe: I have no intention of going through all the horrific details which have led to this occasion. We have been through them often enough before. Indeed, I have itemised them in print elsewhere. The whole purpose of redundancy pay, which all hon. Members accepted, was that we should encourage the mobility of labour. The Bill is one step in trying to solve the problems into which we have got ourselves as the result of our attempts to overcome the difficulties of labour immobility.
  I thank the right hon. Member for Mitcham (Mr. R. Carr) for mentioning a suggestion which I have put forward in the House on two or three occasions and which, I am sorry to see, is not incorporated in the Bill, namely, that we should follow the American practice of experience-rating. Under the American unemployment compensation fund, it is a common factor that firms which have a long-term record of bad unemployment and bad redundancy—I stress long-term—are rated

  1585
  accordingly, there are no-claim bonuses and, on some occasions, even the whole of a company's payment to the fund is waived if its record is good. We could in this way ensure that payments to the Fund were increased if a company's record was bad.
  It may be thought by the Minister—I hope that he will not do so—that his policy of charging the employer rather more at the time of the redundancy, or making him pay a higher part of the total payment, is a move towards my suggestion based on the American experience. I hasten to say that it is not. At no time did I suggest that we should increase the employer's liability at the time when he wanted to make the redundancies. That is the wrong time to increase a penalty.
  Also, I never suggested—and I certainly do not do so now—that we ought to judge an employer's labour record in the short term. It would be necessary to use not just the information available from the Redundancy Fund, which has been going for only a few years, but the records which, I should have thought, would be available from unemployment payments over a much longer time.
  I have repeatedly emphasised the need for redundancy insurance, because it oils the wheels of labour mobility. However, my first comment about the contribution to the fund—I relate it to the contribution as it will be after the Bill—is that, right from the start, it ought not to have been a flat-rate contribution. One of the problems today—the Minister mentioned it, and it is obvious to all who have followed the course of the scheme in recent years—is that with a flat-rate contribution, if wages rise and payments rise accordingly because they are related to wages the Fund is always likely to go into the red from time to time, and progressively on a permanent trend, not just occasionally so that one could cope with it by deficit financing. It would have been better, therefore, if we had from the start ensured that employers paid into the Fund by means of a percentage payroll tax. This would have been clearly related to increases in wages and, therefore, would match outgoings.
  I welcoms the Government's decision not to reduce the total payments to
  1586
  redundant workers. It is important that these payments should remain high, whatever part of them the Government meet. I should have preferred the alternative of increasing the contributions coming from employers, though, as I say, on a percentage basis, and, moreover, relating them to their long-term unemployment record.
  Several hon. Members have raised the whole question of the lump-sum payment. In my view, in the light of the experience we have, the termination grant is mistaken. It would be much better to move towards the Swedish or French system under which much more emphasis is placed on removal costs, housing policy and housing priorities. One of the major obstacles to the geographical mobility of labour is the shortage of housing. We ought to try to create a housing system which does not discriminate against the mobile, which is what our present system does.
  I represent in North Cornwall a development area. A great deal of industry has recently moved in, and one of the first questions which an industrialist asks on moving into an area is, "What sort of houses may we have for our key workers?" I know of the considerable prejudices which are stirred up among those who are on the existing housing lists. People write to their Member of Parliament, and the Member stirs it up with the local council. But we must devise a subsidy policy which persuades local authorities to be tough about this and to overcome the prejudices. At present, as I say, we discriminate in favour of the immobile.
  We must look at our unemployment policies as a whole. I have always regarded the redundancy payments scheme as only a temporary measure until we had our unemployment scheme brought to the level at which we would wish to see it. I have said before that unemployment pay during retraining should be at least 100 per cent. of normal earnings. I shall come back to that. There is a desperate need to incorporate redundancy pay within a new system of unemployment pay, and these policies should be tied to regional manpower needs and regional retraining policies.
  I know only too well of the occasions on which constituents of mine in the South-West have been retrained, at the

  1587
  generosity of the Government, but who, unfortunately, all too often find that there are not opportunities open to them in the area. In fact, they went into the retraining never intending to move from the area. It is wrong that within a region we should retrain people who do not intend to move out of the region, who are firmly set against doing so, if at the end of the period no jobs are available for the skills in which they have been trained.
  Hon. Members frequently mention abuses of the Fund. I shall not harp upon the abuses, save to observe that the Minister writes off their effect too easily. They prejudice people against the whole scheme, and that is rather more important than the cash value involved. As a result of an article on redundancy pay which I wrote in The Times in December last, I received two extremely interesting letters which disclosed what I regarded as flagrant abuses of the scheme. One came from the personnel manager of a large company in Cardiff. He said:
  "Earlier this year at my company we carried out a reorganisation of the Traffic Department with the result that two or three foremen, staff salaried employees, became surplus to requirements. They were informed that every effort would be made to find them suitable work, and eventually they were transferred to other sections with the same status and salary.
  One of these men indicated that he wished to be declared redundant, but this was refused. Following this, he went to his doctor and obtained certificates to the effect that he was unable to follow his employment and continued to receive his salary in accordance with the conditions of his employment. We were surprised, therefore, when we received a claim for redundancy payment from this man, which we opposed on the ground that he was still employed by the company at the same salary and status as previously.
  However, the claim went before the Tribunal and the man was awarded £400 because the company had not tendered to him four weeks' notice of their intention to transfer him from the Traffic Department to another department."
  I do not believe that the Redundancy Payments Act was passed to deal with that kind of situation.
  Here is another example, again of flagrant abuse, this time concerning a farmer. He wrote to me as a result of my article, saying that he had, just over a year previously, relinquished the tenancy of the farm which he had worked for 29 years. He relinquished it to his
  1588
  landlord who intended to farm it himself. Some weeks before the changeover took place, he went to the landlord and arranged with him that two of his men should carry on working for the landlord. He even made arrangements that they should start work for the landlord before the official change-over took place, since the two farms were adjacent and it was easy for them to do so.
  Although they left his employment on a Saturday and started working full-time for the ex-landlord the following day, they claimed redundancy pay. Naturally, my correspondent opposed their application, but it went before the Tribunal and they were paid it. In fact, they had not lost a day's work. All the arrangements had been made for them. They were working on the same farm and doing precisely the same work. The payment was made just because the employer had changed. It seems ridiculous.
  I mention those abuses because I do not consider that the Minister can run round them quite so readily as he sometimes seems to suggest. They are flagrant abuses of the scheme, and I should like to have his comments on them. I shall pass the letters and full details to him if he wishes.
  If an adequate policy of unemployment pay were in operation, there would be no need to take care of the income loss in this situation. After all, we are dealing with three things—poverty, income loss after redundancy, mobility of labour and retraining. I am convinced that there is very little need to deal with the first outside of an unemployment policy. I have already referred to geographical mobility. There is a considerable need for the improvement of the regional and inter-regional dissemination of information about jobs and about the various grants for moving and for housing which are available. It is important that there should be retraining for jobs which exist and it is also important to encourage firms contemplating making older workers redundant responsible for the retraining of those workers within the firms before redundancy occurs.
  I wish that before the Minister had introduced the Bill, to which I am totally opposed, he had read the work of a supporter of his, Professor Jack Wiseman who sent me, again as a result of my

  1589
  article, a reprint from the spring, 1965, issue of the Moorgate and Wall Street Journal, in which he made an extremely comprehensive case in an article entitled "A positive approach to redundancy policy". This is totally different from anything the Government have proposed in the Bill. I would not be so opposed to the Bill if many of these suggestions had not been made in the House already, particularly by myself. My colleagues and I voted against the last round of increases. We said then that they were an example of disgraceful forecasting and maladministration by government, and I hasten to say that I said by government and not by the Government.
  I remind right hon. Members on the Conservative benches that the Economist this week begged progressive M.P.s of all parties to vote against the Bill. I was delighted to receive the support of the Economist for I derided it earlier in the year, but it left the Conservatives with a get-out from voting against the Bill by saying that many Tory questions on Monday managed to be more silly than the Minister's replies. That presumably is why they will not join us in the Lobby tonight v/hen we divide against the Second Reading, as we undoubtedly shall.
  6.23 p.m.
  Mr. Nicholas Ridley: I go a long way with what has been said by the hon. Member for Cornwall, North (Mr. Pardoe). I only wish that 60 per cent. of my party would come into the Chamber to hear what I had to say when my name appeared on the annunciator.
  The Government have had an extremely bad afternoon. They have been properly Knocked about with their scheme for redundancy for all the Under-Secretary's buoyancy. He should have appeared before us in sackcloth and ashes but he was extremely jaunty and I do not believe that he had appreciated the strength of the criticisms to be made against him.
  I do not want to waste the little time which remains to me by going over the ground of the incompetence of the forecasting and the budgeting for this scheme, but it is important to underline what my right hon. Friend the Member for Mitcham (Mr. R. Carr) has said. The time has come when this kind of thing
  1590
  cannot go on any longer. We now have to hammer out a proper policy for redundancy pay which does not contain the anomalies and abuses of the present scheme and which will be acceptable to the world outside and to industry. The reason why the scheme keeps drifting into the red—and it will do so again—is that we have put a price on the head of every man and woman in employment, amounting to so many £s for every year in employment. This sort of Tantalus situation makes it almost inevitable that people will try to get hold of that large capital sum on their heads.
  I feel rather strongly about the position of those who merely retire. It is indefensible that a man who is 64 and made redundant may receive up to £1,200. whereas a man who just retires and who is not made redundant receives nothing. That is by far the worst anomaly and by far the most objectionable part of the whole scheme. Others simply cannot wait until they are made redundant and they provoke redundancy. The hon. Member for Cornwall, North and my hon. Friends have given examples of such instances. There is collusion with the employer, jumping the gun on change of ownership, or switching between subsidiaries, and the rather odd principle of "first in, first out" in some of the cyclical industries, like the motor car industry, where people are only too keen to be made redundant.
  The whole concept of a capital sum based on the number of years worked is totally wrong. It would be perfectly right and proper for there to be a capital element in wages to be saved for a man's retirement or dismissal. In other words, a small percentage of the weekly pay packet would be put aside and would be the employee's by right at any time he was dismissed or retired. This would be an extension of the old gold watch principle, although I would hate to label it with that sort of annotation.
  Mixed up with this is the need to provide money for those who are displaced or made redundant and who greatly suffer from unheaval and the need to find a new house, or a new job and perhaps have retraining. But the two are not the same. The basic anomaly is that we are trying to make one capital element cover two totally different sets of circumstances.

  1591
  Those who go through life and eventually retire should be able to expect a little capital nest egg but those who, through no fault of their own, are made redundant, not just once, but twice, or three, or six times, will get only one proper nest egg, although they might earn a second entitlement. But that is not related to need. We have to decide whether in wages there should be what might be called a capital element which accumulates, and whether we must make proper arrangements for redundant people.
  I go the whole way with the hon. Member for Cornwall, North in saying that the first step is to make unemployment pay entirely adequate, and that probably means making it 100 per cent., and certainly 90 per cent., of past wages. It might even be necessary to make a small capital grant at the same time to cover the expenses of being made redundant, which probably vary very little from case to case and involve travelling to find a new job, travelling to find a new house, moving furniture, moving house and perhaps the expense of retraining. All those things might be rightly accompanied by a severance grant, but it is perfectly clear that the attempt to combine the two is failing to meet the case and at the same time is producing an ever-increasing bill—another £17 million this afternoon—as well as public hostility to the whole concept of the Redundancy Payments Act.
  People talk about trying to engineer their payments and there are all sorts of jokes about this scheme, which is becoming a sort of music-hall farce. Parliament cannot go on voting more money and the Minister cannot keep asking the House for changes without expecting some criticism. In the existence of the scheme so far there have been about 650,000 payments and it is a sobering thought that there may be as many as 25 million people who may try to find ways and means of realising the price on their heads. That is why the Minister has to keep coming back for more money. It is high time that he accepted my right hon. Friend's suggestion of a complete overhaul of the scheme, preceded by a careful inquiry into all these complicated economic and social questions which have been discussed today, so that the next time he
  1592
  introduces such a scheme it will be much less crude, much more sophisticated, not so extravagant and better designed to aid labour mobility.
  6.30 p.m.
  Mr. Nicholas Scott: When we last debated this subject in July, I opened by asking the Under-Secretary of State whether he had managed to borrow the suit of sackcloth and ashes which, it was reputed, the hon. Member for Poplar (Mr. Mikardo) had obtained for the celebration party on the Prices and Incomes Act. I assume that the reason why the hon. Gentleman was in his usual ebullient mood today and was far from being in a sackcloth and ashes mood was that the suit is being used by the same hon. Gentleman to celebrate the White Paper on reform of the trade unions.
  The second thing which should be said about the Under-Secretary of State is that again we are to have the pleasure of hearing him speak twice in one debate. Whether he has great keenness to discuss this subject and will not be denied, or whether there is no other Minister available who is able to make a contribution on this subject, I do not know. However, it seems a remarkable state of affairs that in two successive debates the hon. Gentleman should open and wind up the debate.
  Like my right hon. Friend the Member for Mitcham (Mr. R. Carr), I accept, as all of us on this side of the House accept, the social and economic needs for a redundancy payments scheme, severance payments scheme, or whatever one might call it, which broadly achieves the objectives of the present Fund—to bring about mobility and to take away the stress, strain and bitterness which can result from redundancy. We accept, too, that it is right in this reform to remove the distinction based on age in the amount of rebate given. It is fair to say that, having removed that distinction, we have, by definition, a slight bias the other way, because the amount which the younger workers who are made redundant will draw from the Fund will be smaller than the average amount. Whether we should be thinking about shifting the balance still further is one of the issues to which I hope the Under-Secretary of State will turn his mind tonight.

  1593
  Our attitude to the Bill has been made cystal clear by my right hon. Friend the Member for Mitcham. We regard it as inadequate and unsatisfactory, but we have no intention of dividing the House against ii. I was surprised to hear that the Liberals were to repeat what I regard as their i responsible folly in dividing the House on the last occasion that we discussed this matter by, in effect, saying that if they had their way and this Bill were thrown out they would be happy to see the Redundancy Payments Fund go swifty into bankruptcy and there would be no provision for payments to be made to people declared redundant.
  Mr. Pardoe: That is not what I intend to do by dividing the House against the Bill. By dividing the House I shall be showing that this is a hateful and inadequate Bill, and if the Fund is allowed to sink further into the red, the Government will eventually have to do something sensible about it.
  Mr. Scott: The Liberals rarely have to take into account the consequences of their action. It is only their intentions which are relevant. However, it seems to me that for once they might take the effects into account.
  I will not go over the abysmally inaccurate forecasts which have been made by the Government during the history of the Fund. One might almost refer to the rake's progress of the Fund since it was introduced. The forecasts have been vastly wrong. They do not quite compare in scale perhaps with the inaccuracy of their forecasts in other fields, but one is interested to observe that, wrong as they have continually been proved to be, the Government still make, in the Explanatory and Financial Memorandum to the Bill, surprisingly concise forecasts about the effect of this reform. Time alone will tell whether this exercise of forecasting is any more accurate than their previous attempts have been.
  The other point which I should like to make by way of introduction is that previously the Government have been at pains to proclaim that the Redundancy Payments Scheme is industry's scheme: it belongs to industry, they pay for it, and their views should be taken into account and respected when decisions are being made about the scheme. When
  1594
  at Question Time on Monday I said to the hon. Gentleman that industry's views had been disregarded, he responded by saying that one side of industry's views had been disregarded. I remind him that it is the side of industry which pays the bill whose views have been completely disregarded.
  The Under-Secretary of State must face the fact that there is considerable lack of confidence and respect in the Redundancy Payments Scheme in the country, in industry and in commerce. It is regarded as poor value for money and, even if it is not regarded as a fiddle—and we frequently hear references to it as being a fiddle—it is completely off-beam and has many anomalies and much scope for abuse. I view this with sadness because the underlying aims of the scheme are right and should be achieved.
  I appreciate that the Bill is just a life-saving operation to tide the Government over until, as we now hear, we come to the next chaper when the anomalies and abuses are tidied up. But if, as the Government said, they have kept the operation of the scheme under continuous review, why could not Clauses have been put in the Bill dealing with the anomalies and abuses? Why must we wait for yet another chapter in the history of the scheme and yet more legislation to tackle the anomalies and abuses which are so widely talked about in industry?
  It is all very well for the Under-Secretary of State to shrug off the abuses and anomalies. I would not wish to complain unduly about the circumstances in which certain numbers of men will be redundant and some men volunteer to be included in that number. Abuses were referred to by the hon. Member for Cornwall, North. There is the collusion which occurs when men have already obtained other jobs and then go to their employer and ask to be declared redundant. Men due for retirement in the near future take out their nest egg. There may well be scops for the concept of the nest egg in our society. But it should not be tackled through a system of redundancy payments which is designed to compensate people for loss of their job.
  I am sure that the Under-Secretary of State takes the point that even small-scale abuses can discredit the scheme.

  1595
  Rather than simply giving the House bland assurances about how little impact abuses and anomalies have had, it is up to him to do his best to quantify them and to show, if he can, the impact which they have had on the Fund.
  When we last debated this matter on 23rd July, I said that the Estimates Committee or the Public Accounts Committee should look at the scheme, and particularly at the anomalies and abuses, and should try to establish the facts and recommend action to overcome the anomalies and abuses.
  Mr. Kenneth Lewis: The Estimates Committee has the right to select its own subjects for consideration. We can recommend that this is a subject which would be worth looking at. But any inquiry set up by the Government would be quite separate because the Estimates Committee, in view of its already fixed programme for this Session, would not be in a position to conduct an inquiry into this matter.
  Mr. Scott: I take that point. In July, I was expressing the hope that one of these Committees might take this as a subject. Now I think we need a much more fundamental and far-reaching inquiry on the lines called for by my right hon. Friend, and I trust that the Under-Secretary, in winding up the debate, will announce that such a fundamental review will take place.
  We have presented to us today a Bill which as the Economist put it, will fine those employers who decide to make their contribution to the Prime Minister's more purposive use of labour. Those who try to shake out their employees and have redundancies will be fined for doing so. The impact of the Bill will reduce the effectiveness of the scheme. Reducing the burden upon employers who declare men redundant is bound to reduce the overall effect of the scheme and its benefit to the economy. It is a controversial patchwork, additional to the patchwork of the Redundancy Payments Scheme, but I am sure that it is not the end of the story. I hope that the Government will announce a fundamental review to look at the real problem which the scheme is supposed to tackle.
  The then Minister of Labour, the right hon. Member for Southwark (Mr.
  1596
  Gunter), speaking on the Second Reading of the original Bill, spoke of the concept of an employee having in his job a capital asset, in the same way as an employer has an asset in his property. If this concept is true, it should be completely separated from the Redundancy Payments Scheme, which produces the inexplicable situation that a man who actually completes his term of employment loses all right to the nest-egg which he has been building up within the scheme.
  We must clear our minds about how the scheme is to be financed, whether we continue with flat-rate financing, with all the problems which have arisen, or whether we move on to financing by a percentage of the payroll, as my right hon Friend the Member for Mitcham suggested.
  Secondly, it would be wrong to look at this in isolation. We must look at redundancy payments as they fit in to the overall scheme of encouraging mobility of labour and of coping with those who lose their jobs; how it relates to earnings-related unemployment pay; what impact the Government's decision to introduce transferability of pensions will have on the need for redundancy pay; what impact the policy of training grants and incentives will have on redundancy pay.
  The hon. Member for Cornwall (Mr. Pardoe) mentioned housing. When we were in office we introduced a scheme in Scotland whereby a special housing association built houses for those who needed to change their jobs, thereby overcoming the political difficulties associated with local authority building. All those, together with redundancy payments, need to be welded together in a comprehensive scheme to cope with mobility and with the human problems involved in redundancy. Thirdly, we must overcome the lunacy of a situation whereby a man who has the initiative to look for and obtain a job loses all right to redundancy payments, whereas a man who waits until the bitter end to be declared redundant obtains a redundancy payment.
  Fourthly, whatever scheme comes out of the review, it must be linked not simply to the man's record in work but to his needs, the obstacles which he has to overcome before he is able to obtain further employment and to his age. The

  1597
  hon. Member for Farnworth (Mr. Thornton) mentioned refining the scheme in the direction of helping older workers. It is still much too crude an instrument which needs to be closely related to the personal needs of the man who has to re-establish himself in another career after losing his job.
  The Bill is unsatisfactory; as my right hon. Friend has said, it merits a defeat in the House; but would he accept the need for such a Bill and believe that it would be irresponsible to vote it out at the moment. I repeat the demand of my right hon. Friend that, unless we receive an undertaking that a report on the future of the scheme will be produced during 1969, we shall have to reconsider our attitude to the remaining stages of the Bill and to the future of the Fund.
  6.45 p.m.
  Mr. Haftersley: I am sorry that I must seek to weary the House a second time during the debate—
  Mr. Speaker: The hon. Gentleman must ask leave of the House.
  Mr. Haftersley: With the leave of the House, Mr. Speaker, I regret that I must attempt to weary the House a second time, and I particularly regret that I am unable to do it in a sufficiently gloomy and subdued fashion to meet the demands of the right hon. Gentleman. I am always anxious to meet his wishes, and, therefore, I would try, but when I turn myself from his speech to the facts I realise that penitence would be an inappropriate emotion. I hope that in the few moments left to me I shall be able to convince the House of this.
  The right hon. Gentleman complained in strong terms about the Government's previous forecast. I pass lightly over this, but I must remind him that he in no way adequately dealt with the problems of the forecasting of the Fund. I acknowledge that the Government have made estimates which in the event turned out to be wrong. This has been done on several previous occasions, but the right hon. Gentleman does the Government less than justice by failing to acknowledge the almost insuperable difficulties of making the assessments which are necessary. He certainly does
  1598
  himself less than justice when he says that what we are doing today has added an extra £17 million to industrial costs. I repeat, as I did in my previous speech, what I said a week ago when I made my statement, that what we are doing today in no way influences industrial costs. The facts of redundancies influence the cost of redundancy payments. What we are doing today is determining how that cost should be met.
  The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) yesterday asked a Question about the total of redundancy payments. We told him that the complete cost of payments was about £138 million. I cannot remember whether or not he asked, but had he done so we should have told him that the Fund contributed about £104 million of that. Those two sums are determined by the inter-action of two factors, one the total liability on the Fund and the other the distribution of those liabilities between individual companies and the Fund as a whole. That is what determines the total level of payments and industry's liability, not what we are deciding today. All we are deciding today is how that distribution should be brought about.
  Mr. R. Carr: If one goes on paying contributions on the same level out of industry but reduces the amount of receipts back into industry from the accumulated Fund, the costs must go up.
  Mr. Haftersley: The right hon. Gentleman persists in misunderstanding the nature of the Fund. He speaks as if the Fund were financed by the Government, the country, the Treasury. The Fund is financed by industry, and one is increasing the cost to industry only in the sense that the redundancy payment costs as a whole have gone up. All we are doing this afternoon is determining how the cost shall be distributed in industry.
  If the right hon. Gentleman thinks for a moment about the principles underlying the Fund, he will understand that the only ways of reducing the outgoings from the Fund are either by reducing the rate of benefits, which no one in the House wants to do, or by trying to concentrate the redundancy payments among recipients who receive lower average benefits than has been the case over the last two years. The latter is our intention.

  1599
  The right hon. Gentleman went on to make three demands of the Government, and he justified his three demands by six reasons. I hope the right hon. Gentleman will accept it as a compliment, as I intend it to be, when I say that I find his demanding moods less convincing than his reasoning moods. I will, with the permission of the House, comment on his reasons and then answer his demands.
  The right hon. Gentleman's three demands were for a searching review, for the review to be published and for the entire operation to be completed before the end of the year. To those, I must give an answer which he may think is a partial one but which I hope will be regarded by him as satisfactory at least in part.
  First, some of the questions which the right hon. Gentleman asked to be examined in the review have been examined already and the answers have been made public. He asked the Government, for instance, to consider whether the contribution to the Fund should be graduated rather than flat-rate. If he looks at paragraph 58 on page 21 of the Social Security White Paper calculation published this week, he will discover that already, as part of the new social security provisions, a quarter per cent. of the total employer's contribution is to be allocated to the Redundancy Fund, thus making a graduated rather than a flat-rate contribution. One of the aids to mobility to which he referred, the preservation of pension rights, appears in Chapter 6 of the White Paper. If time permitted, I could give other examples of questions which have been answered already. Indeed, some of his questions were answered in my first speech. He asked about the searching review of abuses, and the hon. Member for Paddington, South (Mr. Scott) asked if that review could be quantified. I thought that I had made it clear that the Government have had a review of literal, fraudulent abuses, and have been unable to find a single example of fraud of that sort.
  What right hon. and hon. Gentlemen opposite are asking for in part is not a review of abuses but a review of anomalies, and I could hardly have been more forthcoming than I was on that subject. I said in specifying that a review of
  1600
  anomalies was necessary, and I said that it would be carried out. I went even further, and stipulated some of the anomalies which we anticipated needed revision, and I committed the Government to look at them specifically.
  The hon. Member for Paddington, South asked: Why not now? The answer is again simple. I said in my opening remarks—and I am sure that it was right to do so—that our first obligation is to discuss the anomalies with both sides of industry, who have already drawn our attention to some of them. The illustrations I gave to the House owe something to this source. There are many hon. Members on both sides who could give further examples.
  Clearly, what right hon. and hon. Gentlemen want is a comprehensive review of the situation. That must mean discussions with the C.B.I, and others. I give the undertaking that the discussion will begin and, when it is completed, a Bill will be put before the House in an endeavour to eradicate these obvious anomalies.
  When I say that, I should make it clear that perhaps we are still over-stating the extent to which anomalies are a problem. Certainly anomalies exist, and they need to be tidied up, but there is a tendency for some people who, perhaps unlike hon, Members on both sides of the House, do not even share support for the principles of the Act to use the occasional anomaly to discredit its entire operation. While I totally absolve the hon. Member for Cornwall, North (Mr. Pardoe) from any such motives, he mentioned in his very interesting and constructive speech an agricultural anomaly which was exactly that when it was referred to him some months ago. It arose because of a decision of an Industrial Tribunal. I am sure that he will be happy to know that, as a result of a Court of Appeal decision, the ruling has been reversed and the anomaly rectified. I am sure the hon. Gentleman will understand why I have dealt with that fairly fully, because he will share my wish that anyone who happens to read my speech tomorrow should not be left with the impression that the anomaly continues. But anomalies there are, and the Government intend to mount an inquiry into them with a view to remedying them when the inquiry is completed.

  1601
  Clearly, the fundamental question raised by many right hon. and hon. Members was the entire basis by which the redundancy payments are calculated, whether we were wise to calculate them on earnings, length of service and age, or whether there should be a different calculation. The hon. Members for Basingstoke (Mr. David Mitchell) and Cornwall, North, the right hon. Member for Mitcham and the hon. Member for Paddington, South all asked that question.
  I must explain that in the Government's view the other criteria—post-redundancy needs rather than what happened before redundancy—fail to meet all the intentions of the Bill. The Government believe that they have a social as well as an industrial content. One of the aims of the Bill is, at a time of need, to meet the problems that a redundant man faces. It is difficult to imagine how an assessment of his post-redundancy needs could be made easily in terms which would be socially acceptable to the Government. It is difficult to imagine how an assessment of his post-redundancy needs could be made with any great accuracy, other than estimating and providing services which enable him to get another job. The preservation of pensions is one, and the provision of adequate training is another. All these seem to the Government to be matters which we have to operate side by side with the Redundancy Payments Act, rather than as alternatives to it.
  As well as risking the social intention of the Bill, were we to operate a payments system which was not related to earnings, length of service and age we should destroy one of the fundamental
  industrial purposes of the Bill, which is to reduce resentment at and refusal willingly to accept redundancy when it comes.
  The man in a job for 10 or 20 years, the man aged 55 rather than 35, the man on high earnings rather than low earnings, often is reluctant to accept redundancy, to the point of refusal. Without the incentive to accept it which the Bill provides, he might only accept the need to obtain another job after considerable industrial disruption. The undoubted increase in efficiency in the motor industry over the last three years, associated with reduction in the labour force, would not have happened anything like as peaceably had it not been for the Act.
  In part, that is a rejection of some of the right hon. Gentleman's points, but certainly we concede his principal contention that there are anomalies which need to be investigated. I made the concession, if concession it be, in my opening remarks. This is a matter on which we shall report to the House and prepare a Bill when we are ready to do it.
  In the meantime, the solvency of the fund must be preserved. The Bill does that, and that is why I welcome the assurance that, while not supporting it in its entirety, right hon. and hon. Gentlemen opposite at least acquiesce, perhaps reluctantly, in this stage of its progress to the Statute Book.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 146. Noes, 5.

  Division No. 52.]

  AYES

  [6.58 p.m.

  Anderson, Donald

  Davies, Dr. Ernest (Stretford)

  Freeson, Reginald

  Archer, Peter

  Davies, Harold (Leek)

  Gardner, Tony

  Atkins, Ronald (Preston, N.)

  Dewar, Donald

  Gray, Dr. Hugh (Yarmouth)

  Atkinson, Norman (Tottenham)

  Diamond, Rt. Hn. John

  Griffiths, David (Rother Valley)

  Bennett, James (G'gow, Bridgeton)

  Dickens, James

  Griffiths, Eddie (Brightside)

  Bidwell, Sydney

  Dobson, Ray

  Griffiths, Rt. Hn. James (Llanelly)

  Bishop, E. S.

  Doig, Peter

  Griffiths, Will (Exchange)

  Booth, Albert

  Dunnett, Jack

  Hamilton, William (Fife, W.)

  Bottomley, Rt. Hn. Arthur

  Dunwoody, Mrs. Gwyneth (Exeter)

  Hamling, William

  Boyden, James

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

  Harper, Joseph

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

  Eadie, Alex

  Harrison, Walter (Wakefield)

  Butler, Herbert (Hackney, C.)

  Ellis, John

  Haseldine, Norman

  Butler, Mrs. Joyce (Wood Green)

  English, Michael

  Hattersley, Roy

  Cant, R. B.

  Ennals, David

  Hazell, Bert

  Carmichael, Neil

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

  Heffer, Eric S.

  Coe, Denis

  Faulds, Andrew

  Hilton, W. S.

  Crossman, Rt. Hn. Richard

  Fletcher, Raymond (Ilkeston)

  Hobden, Dennis

  Dalyell, Tam

  Foot, Michael (Ebbw Vale)

  Hooley, Frank

  Darling, Rt. Hn. George

  Forrester, John

  Houghton, Rt. Hn. Douglas

  Davies, G. Elfed (Rhondda, E.)

  Fraser, John (Norwood)

  Howarth, Harry (Wellingborough)

  Howell, Denis (Small Heath)

  Marks, Kenneth

  Shaw, Arnold (Ilford, S.)

  Howie, W.

  Mellish, Rt. Hn. Robert

  Sheldon, Robert

  Hoy, James

  Mendelson, John

  Shinwell, Rt. Hn. E.

  Huckfield, Leslie

  Mikardo, Ian

  Silkin, Rt. Hn. John (Deptford)

  Hughes, Emrys (Ayrshire, S.)

  Millan, Bruce

  Skeffington, Arthur

  Hughes, Hector (Aberdeen, N.)

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

  Slater, Joseph

  Hunter, Adam

  Moonman, Eric

  Small, William

  Jenkins, Hugh (Putney)

  Morgan, Elystan (Cardiganshire)

  Snow, Julian

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

  Morris, Alfred (Wythenshawe)

  Stonehouse, Rt. Hn. John

  Judd, Frank

  Morris, Charles R. (Openshaw)

  Taverne, Dick

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

  Moyle, Roland

  Tinn, James

  Kerr, Russell (Feltham)

  Murray, Albert

  Tomney, Frank

  Lawson, George

  Newens, Stan

  Tuck, Raphael

  Lee, Rt. Hn. Frederick (Newton)

  Ogden, Eric

  Walden, Brian (All Saints)

  Lewis, Arthur (W. Ham, N.)

  O'Malley, Brian

  Walker, Harold (Doncaster)

  Lipton, Marcus

  Orme, Stanley

  Wallace, George

  Luard, Evan

  Owen, Will (Morpeth)

  Watkins, David (Consett)

  Lyons, Edward (Bradford, E.)

  Page, Derek (King's Lynn)

  Wellbeloved, James

  McBride, Neil

  Pannell, Rt. Hn. Charles

  White, Mrs. Eirene

  McCann, John

  Pavitt, Laurence

  Willey, Rt. Hn. Frederick

  MacColl, James

  Peart, Rt. Hn. Fred

  Williams, Alan (Swansea, W.)

  MacDermot, Niall

  Perry, Ernest G. (Battersea, S.)

  Williams, Clifford (Abertillery)

  Macdonald, A. H.

  Perry, George H. (Nottingham, S.)

  Wilson, Rt. Hn. Harold (Huyton)

  McKay, Mrs. Margaret

  Price, Christopher (Perry Barr)

  Wilson, William (Coventry, S.)

  Mackie, John

  Rankin, John

  Winnick, David

  Mackintosh, John P.

  Reynolds, Rt. Hn. G. W.

  Woof, Robert

  Maclennan, Robert

  Richard, Ivor

  McMillan, Tom (Glasgow, C.)

  Roberts, Gwilym (Bedfordshire, S.)

  TELLERS FOR THE AYES:

  McNamara, J. Kevin

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

  Mr. J. D. Concannon and

  MacPherson, Malcolm

  Ross. Rt. Hn. William

  Dr. M. S. Miller.

  NOES

  Bessell, Peter

  Steel, David (Roxburgh)

  TELLERS FOR THE NOES:

  Davidson, James (Aberdeenshire, W.)

  Thorpe, Rt. Hn. Jeremy

  Mr. Eric Lubbock and

  Crimond, Rt. Hn. J.

  Mr. John Pardoe.

  Bill accordingly read a Second time.

  Bill committed to a Committee of the whole House.—[Mr. McBride.]

  Committee Tomorrow.

POST OFFICE (DISPUTE)
7.6 p.m.
Sir Derek Walker-Smith: I beg to move, That this House do now adjourn.
I start by expressing regret if the practical effect of your allowing this Adjournment Motion, Mr. Speaker, has been in any way to truncate the interesting debate on the very important subject with which the House has been concerned.
Perhaps it would not be inappropriate for me also to express regret for any consequential inconvenience that may be caused by the debate to the arrangements of hon. Members.
Mr. David Griffiths: On both sides.
Sir D. Walker-Smith: To hon. Members on both sides, as the hon. Gentleman rightly says. But he, as an old Parliamentarian, would be the first to agree with me that we are debating matters which hon. Members think very well worth while, and that we gladly put up with any personal inconvenience so that we may serve the ends for which we are sent here.
We all recognise that the revised Standing Order No. 9 procedure has given, and continues to give, opportunities for prompt and punctual debate on matters of importance requiring urgent consideration. That being so, it is important that the House takes the opportunities when they come under the Standing Order, and does not let such matters pass without that prompt and punctual debate that we are now entitled to have.
The House has been following with sympathetic concern the difficulties in the postal services. We are not now debating the broad question of the claims of the postal workers, still less the general merits, such as they are, of the Government's prices and incomes policy. If a debate were to be restricted to them it would be very short.
Mr. Speaker: Order. That is something that the right hon. and learned Gentleman cannot debate now.
Sir D. Walker-Smith: I was mentioning that only to pass it over, Mr. Speaker.
1606
That was what I think Cicero called praetermissio 2,000 years ago.
Any discussion on matters arising out of the dispute necessarily takes place with a keen awareness of the value of the services rendered by the Post Office and the postal workers. Perhaps we in this House have a particular indebtedness to the postal workers; we must be among the biggest recipients and transmitters of mail in the country. I think that I shall be speaking for all right hon. and hon. Members when I testify to our sense of appreciation of these services rendered to us day in and day out over the years.
The policy of a Postmaster-General in these matters should be to seek to attain the highest common factor of good and inexpensive service to the community with harmony in his relations with the Post Office workers. It is clear that at present the right hon. Gentleman is achieving neither of those desirable objectives, and today's statement came as further evidence of failure.
When a Minister announces a diminution in the services for which he is responsible, and a fortiori when he announces a cessation of an important section of those services, he clearly owes two duties to the House. First, he must explain the necessity for such unwelcome measures and the grounds for supposing that they will help to remedy an unsatisfactory situation. Second, he must identify the powers under which he is acting, so that the House in turn may fulfil its constitutional purpose, to which Parliament owes its origin, of seeing that the Executive acts within the law. This afternoon the right hon. Gentleman failed in both those duties.
There was perhaps no great cause for surprise that he failed on the first matter. We have become accustomed to right hon. Gentlemen on the Treasury Bench not being able to make out a case on its merits for the proposals they bring to the House. We have become accustomed, too, to their obstinate persistence in error, their invincible reluctance to admit mistakes which are patent to all but themselves. We have become accustomed, too, to the spectacle of a Government which, having won power on the promise of the policy of expansion, pursues in office the policies of cuts.
Mr. Speaker: Order. The right hon. Gentleman asked for this debate for a purpose. He must talk about that purpose.
Sir D. Walker-Smith: Indeed, my Lord—I apologise for addressing you thus, Mr. Speaker. My only excuse is that I have been engaged in rather extensive forensic oratory. At least I have avoided calling the judge "Mr. Speaker". I certainly want to keep within the bounds of your Ruling, and therefore I shall come straight to the question, giving no more time to those matters which on other occasions can be brought home to right hon. Gentlemen opposite.
The failure on the second matter, the duty to identify the powers under which the right hon. Gentleman acts, was surely enough, or should have been to surprise even the most disillusioned, most cynical observer of Government action. For a Minister not to be able to tell Parliament the powers under which he acts is as disturbing as it is unusual. There are only two possible explanations for such ignorance. One is idleness, and the other is indifference. I hasten to say that nobody, certainly not I, would charge the right hon. Gentleman with idleness. He is, I believe, a diligent and conscientious Minister. But when he has been acquitted on that count it necessarily follows that he must be convicted on what is the graver indictment from a constitutional point of view—an indifference to the question of his legal powers and the rights of Parliament.
The right hon. Gentleman's ignorance stems not from idleness but from the attitude of the present Government that they make executive decisions, albeit to the hurt of the country, as they please, and that Parliament listens but does not question. They ask us, improbably enough, to adopt the attitude defined in the words of Burke:
"Let them venerate where they cannot presently comprehend."
In seeking to make themselves the arbiters of executive decision without regard to the constitutional proprieties and the basis of legal power with which they act, they mistake the temper and purpose of the House, or at any rate the temper and purpose of right hon. and hon. Gentlemen
1608
on these benches. We propose to discharge our constitutional purpose of bringing the Government to account for their actions and seeing that they act only within their powers and responsibility to Parliament.
That is why I felt it to be my duty this afternoon to ask the Minister to identify the powers under which he was taking these steps. That is why I thought that it was my duty to seek to press the matter when he so signally failed. I have brought no charge against him of acting beyond his powers. What I wanted him to do was to make clear to the House, as his basic and inescapable duty is, what he thinks is the legal and constitutional basis of his action. The charge against him is not one of illegality but of a high-handed indifference to whether or not he is acting legally.
There are special considerations in regard to the postal services which make a scrupulous regard to constitutional propriety a matter of particular importance. The Postmaster-General exercises a monopoly. We see that in Section 3 of the Post Office Act, 1953, headed
"Exclusive privilege of Postmaster-General."
Subsection (1) says:
"Subject to the provisions of this section, the Postmaster-General shall within the British postal area have the exclusive privilege of conveying from one place to another, and of performing all the incidental services of receiving, collecting, despatching and delivering, all letters: …"
Section 4 make it an offence for anybody to seek to infringe that privilege.
I am very glad to see the right hon. and learned Attorney-General here. Powerful reinforcements have evidently been called up in proportion to the desperate situation in which the Minister feels himself to be. The Postmaster-General is exercising, in words which the right hon. and learned Gentleman will recognise, a power coupled with a duty, a duty to transmit letters and provide these services for the public. That duty is buttressed and reinforced by, for example, a statutory obligation placed on the railways to carry the mail.
Therefore, in making these cuts in the service the Postmaster-General, while maintaining his monopoly and his exclusive privilege, is defaulting on his duty. The right hon. Gentleman is suspending the second-class service. What an odious

1609
phrase, "the second-class service"—a second-class service from a third-class Government.
The second-class service, so called, is priced at the first-class rate of yesterday. The right hon. Gentleman is suspending an integral and important part of the service which it is his national duty to provide. So it comes to this: people must either forgo their right to communicate, or pay more so to do and, in doing so, of course, nullify those objects to which the Government pay lip-service in their Prices and Incomes Policy and stoke up still more the fires of inflation.
Under what powers is it done? I do not regard myself as an expert on Post Office law—a disability I seem to share with the right hon. Gentleman. Nevertheless, in the short time available, I have been looking at the Post Office Act, 1953, Section 8 of which reads:
"Post Office regulations may make provision as to (a) the time and mode of posting and delivery of postal packets and of the payment of postage and other sums payable in respect thereof under this Act."
Going on, sub-paragraph (k) reads:
"the postponement of the despatch or delivery from a port office of printed or sample packets or postcards to avoid delay in the despatch or delivery of letters."
The House will see that there is statutory power to postpone delivery under regulations suitably made in respect thereof. That is not quite the same thing perhaps as suspending the larger part of the service, but that is the power that the Act gives, and such regulations are made by Statutory Instruments which have to be laid before Parliament. The Postmaster-General has not told us that he is operating under any new regulations. In fact he has not told us anything at all.
Sir Douglas Glover: The right hon. Gentleman does not know.
Sir D. Walker-Smith: The right hon. Gentleman may know by now. He did not know earlier. We are helping him all we can. The presumption is that he must be acting under existing regulations. Could it, I wonder, be Regulation 17 of the Inland Postal Regulations, 1968, Statutory Instrument No. 1253? If so, it is strange that the Postmaster-General should have forgotten them so soon,
1610
because he was defending them in the House as recently as last November. Regulation 17 reads:
"Any second class letter or printed packet may be withheld from despatch or delivery until any subsequent despatch or delivery."
Are those the powers under which the Postmaster-General is acting? Are those the powers under which he is making this wholesale suspension of this service? It may well be, on that wording, that he could squeeze himself within the letter of the law, though clearly in the action that he has taken he is in contravention of it in spirit.
After all, Section 8, under which these Regulations are made, deals with the conditions of the postal service, not the suspension of large parts of it, and postponement. The operative word is "postponement." It is more than a postponement that the right hon. Gentleman has announced today. It is of indefinite duration, with no date given for resumption.
How long does the right hon. Gentleman claim to be able to suspend under these powers, assuming that I have correctly identified the powers under which he is acting? Does he claim to be able to do it for ever? Could he sink the 4d. post without trace and force a flat rate of 5d. for all postal service—as a gesture, presumably, of co-operation and harmony with the policies of the Secretary of State for Employment and Productivity? Does he claim those powers? Perhaps the right hon. Gentleman will tell us more precisely than he was able to tell us when asked to identify those powers this afternoon. Does he have that intention, if he has those powers? Is it the next step in the alleged rationalisation of the postal services, for which he is responsible?
Meanwhile, what is to happen to the suspended 4d. letters? Suppose some staunch citizen, some latter-day Hampden, continues to affix a 4d. stamp in accordance with what he deems to be his rights If the Postmaster-General is going to interpret his power in this harsh and wholesale way, if he is going to disregard the spirit of the law, where do we end?
I read the following words, which are innocent on their face value, with a Postmaster-General who can be trusted to comply with the constitutional proprieties, but ominous read in the context of the

1611
situation in which we now find ourselves. They are from Section 8(4):
"Where for any reason any postal packet can neither be delivered nor be returned to the sender, that packet may be destroyed"—
Hon. Members: Oh.
Sir D. Walker-Smith:
"or otherwise disposed of as the Postmaster-General may direct."
Those are the powers that an innocent and confiding Legislature has given—not to this right hon. Gentleman. It might well have shrunk from that; even hon. Gentlemen opposite would still have had sufficient regard for liberty to deny this Postmaster-General those powers. But those are the powers that he has under the Act. Is he then going to say that this provision would entitle him to destroy those 4d. stamped letters because they cannot be delivered owing to the difficulties of the postal service? Is that the next step? Are we to come here next week, or perhaps the week after—after all, every boa constrictor has a short interval for digestion—to be told by the right hon. Gentleman blandly, and perhaps with some simulation of sorrow, that he has no course but to destroy the letters under the powers of Section 8(4)?
Of course, we should like to give the right hon. Gentleman the benefit of the doubt. But the fact remains that the doubt is one which he has brought upon himself by his arbitrary and ill-considered action.
References to Statutes and to regulations and phrases like the identification of powers may perhaps have a technical aspect on the face of them, but there is nothing technical or arid about the matters which we raise tonight. The speedy, economical and reliable transmission of mail is of great and real importance, especially to a commercial community such as ours. The wellbeing of the workers in a State monopoly is of great and human importance, for which this House should feel a special responsibility. Regard for the rule of law by Ministers and the propriety of constitutional procedure is also of basic importance as old as this House itself.
I thank you, Mr. Speaker, for allowing this Adjournment debate, thus enabling the House to have regard to its duty in all these important respects and to show,
1612
once again, that, whatever the transgressions of the Government, Parliament remains true to its trust.
7.30 p.m.
Mr. Eric S. Heffer: I join with the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) in thanking you, Mr. Speaker, for allowing us to debate this matter this evening. It is right that the House should debate it now. This is a serious affair and not a students' union matter. I trust that from now on we shall treat it in a serious way. [Interruption.] The hon. Member may consider that I am pompous, but the average intelligent Member will recognise that having thousands of postal workers on strike—with the announcements made this afternoon and the great inconvenience caused to our people—is a matter of the gravest importance and it should be treated as such.
The consequences, especially of the suspension of the 4d. second-class post, will be very great. The question is whether my right hon. Friend is acting strictly within the powers of the relevant Act and even whether he can extend the actions that he has so far taken. I am not saying now whether I think that my right hon. Friend is justified—I shall deal with that point later—but it is clear that he has the necessary powers under the Post Office Act, 1953. I am rather surprised that the right hon. and learned Gentleman did not quote the relevant parts of the Act which gives my right hon. Friend the power to do what he has done.
I understand that the 1953 Act continues to apply, and the operative Section—Section 2—provides that:
"The Postmaster-General may appoint for the purposes of the Post Office such officers, deputies, agents and servants as seem to him necessary and, subject to the provisions of this Act, may establish such posts and post offices as he thinks expedient, and collect, receive, forward, convey and deliver in such manner as he thinks expedient, all postal packets, transmitted within or to or from the British postal area or a British postal agency."
It is clear that the operative words are
"in such manner as he thinks expedient"
and it is obvious that if the Postmaster-General thinks that the 4d. post should be suspended for the time being he is entitled to suspend it under the provisions of that Section.

1613
But that is not really the argument. That point can no doubt be clearly answered by my right hon. Friend.
Mr. Angus Maude: Surely the hon. Member is not saying that completely to refuse to accept a large part of the mail offered can be construed as a means of dealing with and expediting all postal packets. That is what the Act says. It seems to me an extraordinary idea that he should be able to do what he has done.
Mr. Heffer: It may seem extraordinary to the hon. Gentleman but, as far as I undstand it, under the Act the Postmaster-General has these powers.
In addition, I have carefully checked the 90 Sections and the two Schedules of the Act. I have also referred to the Acts of 1961, 1962 and 1965, and although they are irrelevant to the point under discussion I have learned a great deal about the way in which the Post Office operates. I may be able to apply for a law degree, at least in a limited direction, after having carefully studied these Acts. I cannot find anything to show that the Postmaster-General has in any way acted contrary to the powers given him. My question is not so much whether he has exceeded his powers but whether he has used them correctly. It is obvious that he has the powers, but I think it can be said that he has misused them.
We cannot debate this question without considering its background. The Postmaster-General did not come here this afternoon and make his statement in isolation from what has gone before. It was not like the blinding light that struck St. Paul on the road to Damascus; he was not suddenly converted in a way that made him decide to eliminate the 4d. post. He told us this afternoon that the 4d. post was to be suspended as part of the action that he was taking as a result of a strike that involved all the postal workers.
It appears that under the Act my right hon. Friend has only limited powers to reach agreement with the postal workers. If his powers in this direction are more extensive he certainly is not exercising them. It seems to me that other people—his colleagues—are determining the policy that should be adopted by him in
1614
connection with the postal situation. I say to him, "Use the powers you have under the Act. Stand on your own two feet. Be independent." A previous Postmaster-General who comes from my city wrote in the Guardian today that my right hon. Friend should stand up and carry on, or resign. My advice to him is to carry on and not resign. But in carrying on he should change the policy, and make certain that he reaches an agreement with the postal workers at the earliest moment, in order to put an end to the chaotic situation that is developing quite unnecessarily.
It is not a question of the 4d. post in isolation. When the 4d. post was first introduced the case for it was badly handled. The impression was given that it was merely a device to disguise a penny increase and that there was no other case for it. In the end it was left to one of the rank-and-file postmen to write in the national newspapers explaining that there was a good case. I would have made him the right-hand man of the public relations department in the Post Office. Today he is probably on strike. I am sure that he will be out with the rest.
The serious question is: what shall we do about the strike in terms of the use of the proper powers? I should like to quote The Times, which I do not normally do, whose editorial on 27th January was very sensible and intelligent in its approach to this question:
"The union's action, if fully supported by their members "—
as we know it has been—
"will be an increasingly serious drag on industry and commerce—and indeed on everyday life. Mr. Jackson, the general secretary, is justified in implying that if so damaging a dispute had occurred elsewhere than in the Civil Service, the conciliators at the Department of Employment and Productivity would have been at work before this."
Some of us have said that when there is a prices and incomes policy on the one side of an Employment and Productivity Department and a conciliation machinery on the other, the officials in that Department must be schizophrenic and constantly suffering crises of confidence in themselves deciding which side they will participate in at any moment, whether to keep to the criteria and the norm or to conciliate. Perhaps they are locked away in two different departments and

1615
never meet. I hey certainly have not done on this occasion.
My right hon. Friend referred to the criteria. What does the Union of Post Office Workers say about this? They clearly point out that they are within the criteria and are not arguing about the prices and incomes policy or challenging any award or any related question. They are challenging the fact that they are having forced on them a deal which they have not properly negotiated. They have negotiated an agreement which has been tied to something else.
The easy and quick answer is not to create the atmosphere which my right hon. Friend's statement this afternoon created, unfortunately, of a long siege and further battles with the postal workers, an atmosphere not of conciliation but of further warfare. That is not what we want. The solution is very simple. Let us have some conciliation, some further talking. Let us get a settlement to the problem and get the strike over; let us use the available machinery. If we do this, I shall support the Government in every possible way. That is the message which we must give my right hon. Friend this evening.
7.44 p.m.
Mr. Ian Gilmour: If the hon. Member for Liverpool, Walton (Mr. Heffer) supports the Government in this matter, it will be a novelty both for him and for them. Although he made an interesting speech, it was surprising that he spoke second. This afternoon the Postmaster-General revealed that he did not know whether he had the necessary legal powers. The fact that he did not answer my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) suggests that he still does not know.
The Postmaster-General (Mr. John Stonehouse): What I said this afternoon was that I am satisfied that I have the full legal powers to take the action which I announced this afternoon. I have no doubt at all about that point.
Mr. Gilmour: The right hon. Gentleman announced that he was satisfied but he was unable to give any reasons for his satisfaction, and assertion without supporting argument is not very valuable.
1616
Normally in these debates we have a good deal of sympathy for the right hon. Gentleman, because the disasters and idiocies which have occurred in the administration of the Post Office since he has been there are not entirely his fault. Certainly, many of the things that went wrong over the introduction of the two-tier system were the fault of his predecessors. Certainly, much of the present difficulty is not his fault but that of the Cabinet and particularly of the First Secretary.
We read in the papers only last week that the right hon. Gentleman is "hopping mad"—I do not know whether that is his phrase—with the straitjacket which Ministers have put on him:
"Mr. Stonehouse is said to have told his colleagues that it was absurd and idiotic"—
a phrase which the hon. Member for Liverpool, Walton might well have used—
"for Mrs. Barbara Castle's Productivity Department officials to try to lay down the details of every productivity agreement as though they knew more about the industry than his own officials."
Nearly everyone on this side would agree with him, if that is what he said.
But if we are normally sympathetic, we must be far less so this evening because of the way that the right hon. Gentleman behaved this afternoon. He was no longer just the fall guy. He was himself throwing the custard pies around, and his chief target was the public. His action this afternoon, as well as, probably, impermissible legally, was quite inexcusable politically and commercially. What he should have done was make an appeal to the public to use the postal services as little as possible. That was the way to behave in a civilised and democratic society. The party opposite always rushes for compulsion if there is any way at all of using it. That should not be the way in this country. It is certainly not the way of this side of the House. A voluntary appeal would have been more in accordance with this country's traditions and far more effective in curtailing the postal services.
Instead of appealing to the public, the right hon. Gentleman has cut out the 4d. post altogether. That is the final culmination of his introduction of the two-tier system, and it is the final nemesis of the facile and futile optimism which he has exhibited since the very

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beginning of this system. First came the advertisements, then the switches of policy, and all the time the right hon. Gentleman has said that things were going better than was expected and that it was a success. Every time that we have had a debate, he has said, "Now more and more people are using the first-class service and this is a success". Now that he has stopped the 4d. post, and has achieved 100 per cent. use of first-class mail, no doubt he will claim that this also is a great success and much better than expected.
On any view, the right hon. Gentleman should not have these powers under which he has purported to act. Even if he has them, apparently he did not know that he had them. He was, therefore, apparently prepared to act regardless of the law. He is like a man who writes a cheque irrespective of whether he has money in the bank, not caring whether it is a dud or not.
As to the legal aspect, it does not seem that Regulation 17 gives him the powers that he claims. As my right hon. and learned Friend said, the relevant Section 8 deals with conditions of the postal service and talks about postponement, not suspension. I do not think that the words of Regulation 17:
"Any second class letter or printed packet may be withheld from despatch or delivery until any subsequent despatch or delivery"
mean or can be made to mean that all second-class letters will be suspended indefinitely. If the Government intended to take such wide power, they should have said so. Under one of the basic constitutional provisions of this country, this action by the Postmaster-General is illegal. The first and most important provision under the Bill of Rights of 1689 lays down
"That the pretended power of suspending of laws or the execution of laws by regal authority without the consent of Parliament is illegal".
It also states:
"That the pretended power of dispensing with laws or the execution of laws by regal authority as it hath been assumed and exercised of late is illegal".
It seems clear that the purported action of the right hon. Gentleman today comes under the first heading. This is not a dispensing power allowed in certain circumstances but a suspending power which the right hon. Gentleman has
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claimed, and that is illegal by the Bill of Rights—unless there is plain Parliamentary sanction for it. Some people believe that we need a new Bill of Rights, and there are many cogent arguments for that. Whether or not we do, our first job is to obey the Bill of Rights that we have, the one under which we have lived for nearly 200 years. It is part of our condemnation of the right hon. Gentleman that he has disregarded some of our most important constitutional provisions.
As the hon. Member for Walton rightly said, the Postmaster-General has by his action today—and, I would add, by his other actions, too—created a bad atmosphere over the whole dispute. He has succeeded in entirely disrupting the nation's communications. While we normally deplore the quick turnover in Postmasters-General, there is now a case for a speeding-up of the turnover once again.
7.52 p.m.
Mr. R. F. H. Dobson: The debate is taking place against a difficult background because we are conscious of the delays and mounting chaos in postal services throughout the country. When I heard my right hon. Friend say that he was suspending the 4d. inland second-class letter service, I was not surprised. I wish to make it clear at the outset that I do not believe that he is acting illegally in any way.
As Chairman of the Post Office Board, the Postmaster-General must be in a position, backed up by countless Acts and Statutory Instruments—hon. Gentlemen opposite have referred to many of them; I will not weary the House by repeating them—to suspend, delay or vary any services when events make that absolutely necessary.
I was extremely disappointed at the tenor of the speech of the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith), who treated the matter with great levity and used hack Tory arguments against the second-class mail system. We have heard those arguments ad nauseam, and I trust that the right hon. and learned Gentleman appreciates that remarks of that kind do nothing to enhance our ability to debate postal affairs in a decent light and do nothing to enhance the public's view—I refer to people generally and not merely

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to Post Office employees—of our ability to deal sensibly with a matter of such great public importance.
As I listened to the Postmaster-General, I thought that he had no alternative but to take the action contained in his statement. On Monday, I forecast that there would be chaos if something were not done to bring an end to this unfortunate dispute. I said that there would be chaos because postal workers are absolutely sure that they are absolutely right in this dispute and because it is clear that, until something is offered to them and until there are further discussions, with the Post Office or with other advisers, there is no possibility of the dispute coming to an end. Postal workers are intent on defending their position and the union is intent on looking after the interests of its members.
As soon as I heard my right hon. Friend speak about the suspension I intervened to question him because I cannot understand how it will operate. What will happen to the 4d. mail that has been posted? I posted some mail using 4d. stamps and I should like to know what will happen, not only to my envelopes but to the many others that will be posted throughout the country. Will a letter posted with a 4d. stamp be returned to me, which is a long and cumbersome process, will it remain in the sorting office to which it has happened to go until such time as the backlog has been cleared, or will it be delivered to the intended address and a surcharge of 2d. made, which is the difference mutiplied by two? My right hon. Friend's statement that the mail is to be suspended in a certain classification is not, therefore, the end of the story for the letters which have been posted.
In some major cities where the sorting is in a chaotic state there are special boxes for 4d. posting. Will they be closed so that people cannot post 4d. letters? If so, what will happen to 4d. letters which are placed in the 5d. boxes which, until now, have been alongside the 4d. ones? I want my right hon. Friend to know, however, that I appreciate that he had no alternative but to suspend some sections of Post Office business.
Using the Post Office accounts for 1967–68 as a guide, I have made a check to see what the effect of my right hon.
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Friend's announcement will mean to the Post Office in terms of revenue. I trust that he will pass this information on to the D.E.P. because a serious situation could arise. Taking the 4d. mail as representing two-thirds of total postings for a year—I trust that this dispute will not last that long—in a year the Post Office would lose £123·4 million. The parcel post suspension would cost £46·1 million in a year, giving a grand total of £169½ million.
The suspension of the parcel post and the 4d. mail represents a loss of £3·26 million in a week and, if my right hon. Friend prefers to face the facts on a daily basis, it would cause a loss of £550,000 per day. These are the losses which the Post Office can suffer as a result of the measures announced today by my right hon. Friend.
It is not unfair to compare these losses with the issue involved in the dispute. The figures which I have used come from the Post Office accounts. My next figures—they are important in assessing the situation—are only estimates, but they are probably undervalued because they are estimates of something which the union concerned does not, in this case, wish to accept. I will not develop this matter further because we went into it last Monday evening. We find that the total cost per year involved in the dispute is £50,000, against a loss per day to the Post Office as a result of the measures announced by my right hon. Friend of £550,000.
Mr. Arthur Lewis: Is it not a fact that the Postmaster-General and his Department have spent more on advertising in the Press today than would have covered the extra cost to which my hon. Friend is referring? Is not this absolutely stupid?
Mr. Dobson: It is absolutely stupid, but I would not say that more has been spent on advertising in one day than the estimate of £50,000 which I have given.
Mr. Arthur Lewis: Do not kid yourself.
Mr. Dobson: Suffice to say that, comparing the estimated cost involved in the dispute with a loss of £550,000 per day, one can see how the Post Office could find itself in dead trouble, particularly as

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we are seeking to run it on a commercial footing. This cannot be done with losses of this magnitude.
I have listened with care to the remarks made today and have studied what was said in the debate on Monday. Having done that, I am still not sure where we stand in the dispute. I gather that my right hon. Friend claims—he must be speaking for his right hon. Friends in other Departments—that the dispute is against Government policy. The union, meanwhile, takes the clear view that the terms of the dispute are not outside the Government criteria. The problem is whether or not we will get an explanation of how it could fall outside the Government criteria, the area in which it falls outside them and the part of Government policy against which it offends.
Perhaps it is best to start by considering the 5 per cent. which has been offered to, and accepted by, all other Civil Servants. How does that fall outside Government policy? If 200,000, or perhaps even 800,000, people have had that percentage, all within the Government criteria, we must take it that it does not fall outside their policy. I cannot understand, therefore, how it can be said that 5 per cent. would in this case be outside Government policy.
We must then consider the 2 per cent. offered by the Post Office and related to a productivity bargain. If it is so related, can it be wrong? If there can be a copper-bottomed productivity bargain, it must be within the Government criteria; and one cannot have a copper-bottomed productivity bargain unless something is agreed at local level. There must be agreement about the figures which are being discussed. There need not be a serious dispute about the odd £500,000, so to speak, but there must be general agreement about the figures being used. One must consider how they measure up to the criteria and there must be agreement about them.
Much has been said about acceptance of the 5 per cent. and the need for more talks on productivity bargaining. I understand that the union is prepared to do that, despite provocation from Ministers. I refer not to my right hon. Friend but to Ministers responsible for other Civil Service Departments. I urge the
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Postmaster-General to reconsider this whole matter.
As my right hon. Friend has said on several occasions that the union must not expect something more than other civil servants have been offered, we are entitled to ask what he means by "something more than". That is where the productivity bargain comes in and even other sections of the Post Office accept this. If this issue is holding matters up, I trust that my right hon. Friend will explain the matter to the D.E.P. and even possibly to the Chancellor of the Exchequer. Somebody should tell certain other Government Departments that only a small section of the Post Office is involved in this type of productivity bargaining at this stage and that a principle is at stake. That is why the rest of the postal workers are coming out in support.
I warn my right hon. Friend, as I did on Monday, that this is a serious dispute which will not be improved until further discussions take place. Nevertheless, I wish to inform hon. Gentlemen opposite that, whatever the rights or wrongs of the Motion, I shall be opposing the right hon. and learned Member for Hertfordshire, East—[Interruption.]—because I do not believe that he is right, in fact or in law. My right hon. Friend has every right to suspend services, as Chairman of the Post Office Board, and, for this reason, I am unable to support the Opposition in this matter.
Having said that, I urge my right hon. Friend for goodness sake to bring this strike to an end by having further discussions. He must not allow it to go on and on so that money is thrown away. This can only cause backlog and chaos. Considering that only £50,000 is involved, there could be a settlement. The alternative is a loss of £550,000 a day. I trust that my right hon. Friend accepts that he must think again.
8.5 p.m.
Mr. Peter Bessell: I am particularly grateful to you, Mr. Speaker, for calling me immediately after the hon. Member for Bristol, North-East (Mr. Dobson) because, if I may say so, I thought that he outlined the basis of the dispute with great clarity, and the case which he advanced for the benefit of the Postmaster-General, on behalf of the

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unions, was unanswerable. He knows already, from exchanges at Question time, that he and I have exactly the same points of view on this aspect of the dispute.
It is always a particular joy to listen to the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith). Today we are particularly grateful to him for introducing a debate of significance and importance. I join with him in paying tribute to those members of the Post Office staff at all levels—postmen, post office sorters, telegraphists, telephone operators and others—who serve us in this House so well and with such diligence and such immense devotion to duty at all times.
I also pay tribute to postal workers generally throughout the country who have to carry out their service to the public, often under appalling conditions in the sense that they have to cope with bad weather and similar hazards. They have done this with immense courage, often unrecognised by the public at large. I would also join with the right hon. and learned Gentleman in the words he used to describe the Postmaster-General. He referred to him as a "diligent and conscientious Minister", and I share that view.
I pass over the failure of the right hon. Gentleman to meet what I regard as the reasonable proposals of the telegraphists, whose demands are the cause of the Postmaster-General's mysterious and, if I may say so, monstrous decision announced this afternoon. I pass over this because the case has been adequately stated by the hon. Member for Bristol, North-East. I know, too, that it can be argued that the 4d. postal service is such a failure that in the context of the two-tier postal service its suspension might be irrelevant. I will explain later why I do not believe this to be the case.
Apart from the fact that some 4d. letters have been known to be delivered on time, many important communications are posted under this stamp for reasons of economy. It is not the large business corporations, the large Government offices working on the taxpayers' money, or the wealthy sector of the community which will be affected and hurt by the Postmaster-General's decision. On
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the contrary, it will be those who depend for their livelihood upon businesses which have a small income but are, nevertheless, dependent upon the postal services to keep their customers informed or to deliver their goods.
It is those people who are living on retirement pensions, those who are unfortunately unemployed, those who are least able to bear any additional financial burden at this time who will be hit beneath the belt by that decision. It is for that reason that I believe that the House of Commons is right to look very carefully at the legality of the Postmaster-General's announcement. Whilst I do not claim to be any authority in matters of the law, and certainly I would not attempt to cross swords with any hon. and learned Gentleman, I feel that the arguments advanced, to which I have listened very carefully, by the hon. Member for Liverpool, Walton (Mr. Heffer) do not have the same stamp of authority as the arguments advanced by the right hon. and learned Member for Hertfordshire, East If I am to be guided on matters of law I have to say to the House that I would prefer to be guided by the right hon. and learned Gentleman.
The main question is the constitutional issue raised by the decision. The truth is that the Postmaster-General is arbitrarily suspending a vital part of the Post Office service without the special authority of this House. It may be said that the right hon. Gentleman will tell us that he has the powers and it may be that he is in a position now, as he was not at Question time, to quote the exact section of the relevant Act under which he considers he obtains those powers. In a matter of this sort, and for reasons which have already been enumerated by other hon. and right hon. Gentlemen, this is the kind of issue on which the House should be the final arbiter. It is wrong for an Order of this kind to be made at such brief notice without proper opportunity for debate and a vote in the normal way.
Mr. R. Gresham Cooke: May I query one point? The hon. Member refers to an Order. This gives the impression that this is a Statutory Instrument. My impression is that this is a

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purely arbitrary executive act of the Postmaster-General, without any Order at all.
Mr. Bessell: I am obliged to the hon. Gentleman and I am sure that he is right. I had missed a point, and I thank him for steering me on to the right course. I accept what he says.
Another important matter is a consideration which arises today and which would not have arisen 12 months ago. Whatever the merits or otherwise—and I recognise that I should be out of order if I attempted to discuss them—of a two-tier postal system, we have such a system.
Sir Spencer Summers: We had.
Mr. Bessell: At least we had one until today, as the hon. Gentleman says. It can be argued that under the old system of the 3d. and 4d. post there was, in a sense, a two-tier system. But it was not a two-tier system as we know it now, as it has been practised in the United States for very many years, a policy which was adopted by the Post Office when the two-tier system was introduced. Now that we have a two-tier system, to take the step already announced is a very serious matter.
It is relevant to quote these figures, given to me at the end of December. They came from postmasters in my constituency. First, the postmaster at Bodmin told me that first-class mail passing through the sorting office there was approximately 20 per cent. of the letter mail, and that the second-class mail made up the remaining 80 per cent.—[Interruption.] The hon. Member for Nottingham. West (Mr. English) is being facetious from a sedentary position. Mail does not consist—I give him this information so that he may be better acquainted with the postal service—entirely of letters. I was referring to letters, and I said letters.
Liskeard had a first-class mail figure of approximately 30 per cent. at the end of December with second-class mail making up the remaining 70 per cent. This means that if the figures reflect a national average, at least 70 per cent. of all letter mail is suspended. This is a very serious situation.
The question has been raised by the hon. Member for Bristol, North-East about what will happen to the 4d. letters
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already in the pipeline and in the pillar boxes. If they are to be delivered, how will they be distinguished with certainty from letters with a 4d. stamp which may be posted after the Postmaster-General's decision came into effect? We must know, if they are not to be delivered, what will happen to them.
Mr. Stonehouse: There is a simple answer—date stamp.
Mr. Bessell: The right hon. Gentleman says that the answer is the date stamp, by which I take him to mean that anything which has today's stamp on it, whether it be 4d. or 5d., will go through the pipeline in the usual way.
Mr. Stonehouse Mr. Stonehouse indicated assent.
Mr. Bessell: I see the right hon. Gentleman nods his assent.
Mr. Stonehouse: So that there is no misunderstanding, any 4d. mail that we have now will be delivered as soon as possible after priority is given to the first-class mail.
May I take the opportunity of replying to the other point raised, because it is important to get these questions correct early in the debate? If there is second-class mail posted after the suspension from tomorrow, we will put that mail on one side and deal with it just as soon as we can. We are not undertaking to deliver that 4d. mail, because it is essential that we maintain the priority service of the first-class mail.
Mr. Bessell: I am grateful to the right hon. Gentleman for that intervention because it clears up points which have been bothering hon. Gentlemen. There is a further point, and I will gladly give way to him if he wishes to interrupt again. The point that concerns me is to do with the 4d. post now in the pipeline. The right hon. Gentleman said that it would be delivered when the 5d. first-class mail was dealt with. Does that mean that it follows that the 5d. mail at present in the pillar boxes, and in the pipeline, will be dealt with first, then the 4d. mail, or does it mean that the 5d. mail there, plus the 5d. mail which will arrive tomorrow and on the following days, will take priority over that 4d. mail at present in the pipeline.

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In other words, can we be assured that the 4d. mail in the pipeline at the moment will be dealt with immediately after the 5d. mail now in the pipeline? This is the point on which we must have an assurance. Perhaps the right hon. Gentleman would care to answer this at the end of the debate. If the 4d. mail now in the pipeline is not only to wait until the 5d. mail has been delivered but until tomorrow's 5d. mail and the 5d. mail thereafter has been delivered, then obviously, the right hon. Gentleman would not be discharging his duty under the terms of the Act. He would be suspending mail indefinitely which had been posted in good faith by the public and for which, obviously, they expected to receive the service for which he is responsible under the terms of his office.
The fundamental issue is a very simple one. At Question Time today I asked the Postmaster-General if he would accept the formula offered to him by the union responsible for the telegraphists. If he would do this—and I echo the words of the hon. Member for Bristol, North-East—then I believe the strike could be brought to an end and negotiations could commence. It is insufferable, and very dangerous, that a situation should be created such as we have today when it could be resolved in this way.
There is another point to this fundamental issue, the misuse of a monopoly power by the Postmaster-General. He has this ability to dictate not only to the public but to the Post Office workers. It is wholly wrong that this kind of situation should be allowed to continue. The right hon. Gentleman is—and I do not say this in any impertinent or patronising sense—an honourable man. If, as was suggested by the hon. Member for Liverpool, Walton, he is being ruled by his Cabinet colleagues, then let him act according to his own instincts and his own judgment, and let him restore the 4d. post and end this strike now under the terms available to him.
8.20 p.m.
Mr. Michael English: Until five minutes ago I was a little concerned to discover what it was that my right hon. Friend had done as distinct from the point raised by the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith)—namely, the powers under which he
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had done it. The right hon. and learned Gentleman put in a considerable number of words a point which amounted to saying that the Postmaster-General had the power to postpone delivery of letters under the Post Office Act, 1953, but that nowhere in that Act was it stated that he had the power to refuse acceptance of letters.
Sir D. Walker-Smith: Suspend.
Mr. English: I did not use the word "suspend". As I understood the right hon. and learned Gentleman's argument, he said that the 1953 Act empowered the Postmaster-General to postpone delivery of letters that he had accepted but gave him no power to refuse to accept letters. Is that a correct statement of the argument?
Sir D. Walker-Smith: It goes beyond that. There is the question whether the basic power of postponement under Section 8 covers a suspension of indefinite duration covering a whole section of the service such as this. That is the point of doubt on the legal position.
Mr. English: I am aware that the right hon. and learned Gentleman can state his opinion about what the words mean, but, as I understood it, his quotations from the relevant Act were to the effect that I have just mentioned, namely, that there is a specific statement that my right hon. Friend can postpone the delivery of letters—presumably letters that he has accepted for delivery. The right hon. and learned Gentleman merely pointed out that nowhere in the Act is there a specific statement that my right hon. Friend can refuse to accept letters.
The right hon. and learned Gentleman is on distinctly weak ground even on that last point, because he must be aware, as surely many hon. Members are, that the Post Office does many things which are not laid down by Statute. To take a simple example, the Post Office opens letters and taps telephones, if approriate circumstances warrant it. Any Member of the House can determine from the appropriate White Paper that the power to tap telephones is a statutory power—that there is a statutory right to do so.
There is no statutory right to open letters, but the practice has been going on for centuries. There may be such a

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power in in the new Post Office Bill, but that is a different matter. I believe that the practice was instituted by Oliver Cromwell, but, strangely enough, in law it is defended by the Royal Prerogative. It is a little odd that Oliver Cromwell should have instituted a practice which is defended by the Royal Prerogative. It is not a valid argument to say that an ancient Department like the Post Office, which was not set up by Act of Parliament, cannot do something merely because it is not stated in an Act of Parliament that it can. I am sure that the right hon. and learned Gentleman will agree that this is so.
Until the intervention by my right hon. Friend a short while ago, everybody was concerned to find out what this mysterious term "suspend" might mean. I think that my right hon. Friend was ill-advised in the terms of the statement he made this afternoon. Civil servants and Ministers naturally wish to keep statements short, because the House wishes to listen only to short statements from Ministers. In this case it would have been a little clearer if instead of using the word "suspend", which not only does not appear in any Act of Parliament but which also is not clear in itself, my right hon. Friend had said "postpone delivery", which is what he implied in his intervention in the speech of the hon. Member for Bodmin (Mr. Bessell).
I took it this afternoon when listening to my right hon. Friend that he meant that he would refuse acceptance of second-class mail and therefore, obviously, not deliver it. By the intervention he made a few moments ago he made it clear to me at any rate—perhaps earlier I had been a little naive or a little dim—that he now intends not to refuse acceptance but merely to postpone delivery. It seems that this demolishes the legal argument which was raised.
Why has my right hon. Friend taken this action? Why has he not, for example, suspended the first-class mail? My right hon. Friend argued this afternoon that this action is taken not because of the one-day strike but because of the overtime ban; it is the overtime ban that is causing the backlog, not the one-day strike. I do not mean that the two things are alternatives to each other and completely incompatible. I mean that my right hon. Friend's argument, as
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I took it, was that the overtime ban cumulatively creates a backlog and the one-day strike presumably creates one day's backlog.
Mr. John Page: Does this argument also apply to the refusal of the Postmaster-General and his officers to accept parcels? That is a refusal to accept, not a suspension of delivery. Does the hon. Gentleman consider parcels to be in the same case?
Mr. English: I do not know that this is so at the moment. Until about 10 minutes ago I was under the impression that letters were being refused delivery, but my impression was obviously incorrect. I will leave it to my right hon. Friend to say exactly what his action on parcels is and whether it is legal.
The important thing I am concerned about at the moment is the question of letters. It is obvious that the one-day strike, in so far as it is relevant at all—my right hon. Friend said that many people had been at work today—can at the most, even if it were fully effective throughout all services of the Post Office, cause only one day's backlog. Therefore, presumably my right hon. Friend's prime reason for suspending the second-class mail is the overtime ban, a backlog which presumably grows cumulatively as overtime is not worked.
What intrigues me is that, as far as I understand it, the Post Office target for first-class mail was 40 per cent. of letters. My hon. Friend the Member for Bristol, North East (Mr. Dobson) said that one-third of mail was first-class mail. The hon. Member for Bodmin said that it was slightly less than that. Whatever the figure is—let us say 30 per cent. in round figures—is it suggested that 70 per cent. of the letters delivered are dependent for their sorting and delivery upon overtime? If my right hon. Friend wishes to intervene, I shall be only too pleased to give way.
Mr. Slonehouse: The target we had for first-class mail was 32 per cent. Before this disruption we had achieved that.
Mr. English: So 30 per cent. is a fair round figure. Thus, we are saying that we shall ban, or, rather, suspend or postpone delivery of 70 per cent. of the letters of the United Kingdom because of a ban on overtime primarily, with the exception of one day's delay caused by any

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strike action which may have taken place. Let us consider the implication of that. We are saying either that we want people who hitherto have sent their mail second class to transfer to first class—and my right hon. Friend specifically said this afternoon that he did not wish that to happen—or we are saying that 70 per cent. of the normal letter delivery of the United Kingdom is dependent upon overtime working. Frankly, I do not believe that it is.
I do not believe that 70 per cent. of United Kingdom letter delivery it dependent on overtime, but, if it is, it reveals something about the Post Office which would be plainly disastrous. It would not be my right hon. Friend's responsibility because presumably, such a state of affairs was reached over a number of years but it would be a disastrous enterprise were 70 per cent. of a major activity such as this to be dependent on overtime. But, if it is not, what does my right hon. Friend mean by saying that he does not wish people who hitherto sent second-class mail to transfer to the first-class service?
Let us take the experience of the individual back bencher. If someone writes to me and says, "If you do not take such-and-such action by Thursday of next week, I shall not have had something to which I believe myself to be entitled", I should probably treat that as cause for using the 5d. post. There is a time limit involved; there is good reason for dealing with the matter within a specific few days. If, on the other hand, someone writes to me and asks that there should be an Amendment to, say, Clause 38 of the Post Office Bill now passing through Parliament, there is no time limit involved. I can discuss the matter with the Department or in the House and write back at leisure.
However, by implication, with an indefinite time limit for suspension of delivery, I am now not supposed to write back at all. I am not supposed to give such a letter first-class mail treatment so that it does eventually reach my constituent, and, if I write my letter and put it in the post box, I have no guarantee of when it will arrive. It may presumably take a year from now if the dispute goes on that long. I do not understand it. I should have thought that, if there is an overtime ban, the logical suspension
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would be of the first-class mail. The only basic difference in first-class mail is that there is a guarantee, not a legal guarantee but a moral guarantee, of delivery by a certain hour the next day.
In the event of an overtime ban, it would, surely, be legitimate to say that this guarantee can no longer be given, that we shall deliver things as soon as we can, that we shall deliver them in the order in which they come, but we can no longer make the guarantee that we shall deliver by a specific time. For example, if half an office is down with influenza, the Post Office could say, "We have only half the staff at work, and we cannot supplement their efforts by overtime because there is an overtime ban". Another office, without influenza, might deliver everything.
Mr. Bessell: I am following the hon. Gentleman's argument with great interest, and he is putting a logical case. But does he not fear, as I do, that the effect of suspending the 4d. mail will be to cause people to use the 5d. mail, in spite of the Postmaster-General's request, so that the ultimate effect will be to put a surcharge on the postal service?
Mr. English: I shall come to that point. I am taking it at the moment on the assumption that my right hon. Friend's request is complied with. One must, in all conscience, first deal with what the Postmaster-General said he wanted to occur, without making assumptions as to what might occur, which cannot be attributed to my right hon. Friend if he did not say that they were desirable.
I should have thought it wholly reasonable to defer delivery from, say, one post to the next of a particular piece of mail, which, in effect, would mean transferring first-class to second-class mail, and that, in effect—to use the vague word which I have criticised before—means suspending the first-class service. I cannot see that the consequence of an overtime ban can logically be said to be that one will not deliver at all while the ban continues 70 per cent. of the mail of the United Kingdom.
My hon. Friend the Member for Bristol, North-East—I come now to the point just made by the hon. Member for Bodmin—said that the Post Office would lose about £550,000 a day Conceivably that is true, but true only if

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one makes the assumption that everyone blindly follows the request made by the Postmaster-General today. I am sure that many people will, on the assumption that the ban does not last very long. It may well be true in the early stages but, if it lasts for a month, the position may be different. In the initial stages, people will presumably wait and see what happens next week, or in a little longer than that. Otherwise, whether by desire or not, my right hon. Friend will be saying in effect that if people are prepared to pay 20 per cent. more, the Post Office will deliver their mail. It will then cease to be a matter of priority.
He did not mention whether, for example, he would be looking at the delivery of the mail of large organisations, of which a noteworthy example would be the football pools. Will he look at their deliveries to see whether the amount of first-class mail delivered to them last week was roughly the same as the amount now being posted as first-class main this week? It could well be doubled. Is there to be any control? My right hon. Friend has made a specific request, but what will he do if it is not carried out? If it is not carried out, he will be merely charging more for the existing service, for a service which in effect the user does not desire, but which he will be forced into using by the action taken.
8.36 p.m.
Mr. R. Gresham Cooke: The hon. Member for Nottingham, West (Mr. English) is perfectly correct to say that the Postmaster-General should be saying that he cannot continue to carry out his promise to deliver the first-class mail and that the first-class mail should, therefore, be dropped at this stage of the proceedings. I live in S.W.I, and the guarantee to deliver my first-class mail by first post has not been honoured on any day of this week. I have not had any post before 11 o'clock on any day, and when I got back to my flat last night, having left it about 10 o'clock in the morning, I found 25 letters on the floor waiting for me. The first-class mail is not getting through.
I am very surprised that the energetic and intelligent Postmaster-General did not come to the House this afternoon armed with these legal references. In the Christmas
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holidays he pursued his monopoly and his privilege of his legal rights with the utmost fervour. He stopped the brownies in Hampshire from delivering their dear little Christmas cards which they were collecting through the Women's Institute. He exercised his legal rights then and he must therefore have been studying his monopoly rights with great assiduity during the Christmas holidays. But when he comes to face the nation's highest forum, he does not have a clue about what his legal rights are, and he relies on some backroom lawyer—I hope that it was a lawyer—who tells him that he is in the clear.
Is this the end of the second-class service, which is suitably to be honoured in the near future by having a red stamp? If it is, and if the suspension goes on for any length of time, the effect on the public will be an increase of 25 per cent. in postage rates. The public now sends two-thirds of its mail by the 4d. post, for which it will soon have to pay 5d., which means that the public will have to spend an extra £110,000 a day to get its mail through. For every day the suspension continues and the public chooses to take advantage of the so-called offer to gets its mail through on the 5d. rate, national costs will be inflated by £110,000.
I wish to pursue the question of what is to happen to the 4d. letters, and, indeed, the 5d. letters, posted, in all innocence, today. I posted some this morning when I left home at about 11 o'clock. I posted a few more when I reached here half an hour later. They were innocent postings. They will not receive today's date stamp because they have not gone through the Post Office. Therefore, presumably, when the 4d. letters which I posted this morning are put with the rest of the 4d. letters tomorrow—and if they are lucky they might get tomorrow's date stamp on them—they will be held back day after day so that the 5d. letters can get ahead of them.
The Postmaster-General this afternoon talked as if there would be no collection on Sunday because, he said, Sunday collection was based on overtime rates. If that is so, the 4d. letters posted today will not, presumably, get away tomorrow. They might be date-stamped on Saturday if they were lucky. [An HON. MEMBER: "Post early for Christmas."] As

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my hon. Friend says, the Postmaster-General will no doubt be soon issuing advice to us to post early for Christmas.
The separation of the first-class mail from the second-class mail in the sorting office depends on the intelligence and skill of one or two sorters. But it appears to me that the late delivery of the first-class mail and the non-delivery of the second-class mail depends on there being no overtime worked by the other sorters in the office. I should like that point to be cleared up. If that is right, if this strike is to go on for any length of time and if no overtime is to be worked during it, there will be not only an almost indefinite suspension of the second-class post, but no first-class post at all. The net effect will be that the public will be forced to pay an extra £110,000 a day for the 5d. postage service and people in the big cities will not have any guarantee that the 5d. letters will be delivered before 11 o'clock in the morning.
8.43 p.m.
Mr. Dennis Hobden: Because of the nature of the debate, we are forced to speak about something largely irrelevant to the basic issue. However, if we want an emergency debate, it must be in relation to a particular subject.
The debate has tended to be confined to the legal issues—whether my right hon. Friend the Postmaster-General is legally able to suspend the 4d. post, whether his actions are correct, and things of that kind. I could not imagine my right hon. Friend taking such action if he had not armed himself beforehand with the necessary Statutes and backing which gave him the right to take it. Obviously, he has the right to suspend the 4d. post. Under the heading of
"Deferment of second-class letters and printed packets".
paragraph 17 of Statutory Instrument No. 1253 of 1968 clearly states:
"Any second-class letter or printed packet may be withheld from despatch or delivery until any subsequent despatch or delivery."
When hon. Members opposite speak on this subject, they bring out all their old opposition to the Post Office and what has taken place in the Post Office and, in particular, get off their chests some of the hatred which they had when they got
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into a tizzy about the introduction of the two-tier system.
Mr. John Page: I have listened with care to the exposition of the hon. Gentleman. Is he saying that the Postmaster-General will withhold letters from delivery but not suspend collection? Is the hon. Gentleman under the impression that the members of the public will be able to pop their 4d. letters into the box and then wait until they come out at the other end, or are they supposed not to post them?
Mr. Hobden: I shall be dealing with that point in the course of my speech. The Postmaster-General has the right to suspend the service. Hon. Gentlemen speak as if the withholding of second-class mail were something new which came in with the two-tier system. When the Opposition were in power, second-class mail was often held back to give priority to other mail. This is nothing new.
I am puzzled by the actions of my right hon. Friend, and I will read part of the statement which he issued:
"I am giving regional directors similar discretion to maintain or reopen services internal to their regions or with neighbouring regions, by arrangement, as circumstances permit."
Does that mean that he has postponed the 4d. service but that regional directors in certain areas will be allowed to maintain the service?
People may be told that the 4d. mail has been suspended, but they will still post their letters. My hon. Friend the Member for Bristol, North-East (Mr. Dobson) wanted to know how the Postmaster-General will be able to continue the 5d. mail without its being affected by the suspension. People will still put their 4d. letters into the pillarbox, and at some time there will be a collection. The mail will go to the Post Office, where it will be put on the facing table and separated into 4d. and 5d. mail. There are about 24 million second-class letters a day. If people continue to post second-class letters at this rate, it will be impossible to deal with the backlog.
I believe that the Postmaster-General is running away from the basic issue, which is the industrial dispute. We have been forced into this debate, and it is not on the issue about which we should be

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speaking. On Monday of this week the Opposition had a debate on the deterioration in the postal services. There was an emergency situation arising in the industry and time should have been spent on dealing with this aspect, the industrial dispute. No one on the other side of the House mentioned the industrial dispute and it was not debated. The debate was confined to the postal services, with which we have dealt at least three times during the last six weeks.
We are brought back to the Government's prices and incomes policy, and we must ask ourselves what that policy means when it is related to the causes of the dispute. If the Government have done anything in the last week, they have converted me from being in favour of the prices and incomes policy to opposing it. However, there is more rejoicing in Heaven over one sinner that repenteth, and I am sure that certain of my hon. Friends will be very grateful to the Government about that.
It is the Government who are breaking their own policy. It is the Union of Post Office Workers which is trying to get the Government to adhere to that policy. The wrong Minister will be replying to this debate. The Minister who should be here will not be. I understand that a poster on display in Hyde Park this morning said:
"For the first time, Barbara keeps mum".
I am sure that that slogan will not be lost on my right hon. Friend the Postmaster-General.
In the past, it has been a debating point of mine that a Conservative Government were so inept that they brought about a strike in an industry which had not known one in all its history. I cannot compare that with the record of Labour Governments any longer, because my right hon. Friend has brought about a similar situation, and I am ashamed that a Labour Postmaster-General should be responsible for it.
Earlier this evening, an hon. Member asked whether he was a free agent. There have been unpleasant leaks in the Press this week to the effect that my right hon. Friend has had his knuckles rapped for giving the impression that he was not entirely at one with those responsible for the prices and incomes policy. I do not know whether that is true. If one wants to discover what is going on these days,
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one has to rely on leaks to the newspapers. But is my right hon. Friend a free agent in the matter, or is he in the hands of a ventriloquist who is pulling the strings and telling him what to do? If there is someone behind the scenes, that person should be appearing at the Dispatch Box tonight to tell the House about the basic causes of the dispute.
This debate has revealed a sorry state of affairs within the set-up of the Post Office. It has come to open warfare with the union which is not militant. As I have said before, it has some of the youngest leaders in the trade union movement today. They are forward-looking people who are anxious to co-operate with the Ministers who are their opposite numbers. It is tragic that the present situation has been allowed to develop, but I prophesy that before the dispute finishes it will be the Postmaster-General who will burn his fingers.
There is an article in today's Guardian by Mr. Bevins, a former Postmaster-General. He gives an insight of what really happens in a Government Department. The present dispute may be advanced as one of the best reasons for making the Post Office a public corporation. When it happens, presumably this type of interference will no longer be possible. However one looks at the situation, it is a tragedy. It is a disgraceful state of affairs that should never have arisen.
My hon. Friend the Member for Bristol, North-East spoke of the finance involved in having a strike as against conciliatory methods. Clearly, my right hon. Friend should go back and negotiate. The present system makes no sense. I hope that before the end of the week sanity will prevail.
8.55 p.m.
Sir Spencer Summers: In the traditional fashion, I must begin by declaring an interest in the 4d. mail in that I am commercially associated with the direct mail order business.
The Postmaster-General's decision is an extremely serious one. If the figures which have been quoted are right and the overwhelming majority of letters are of the 4d. type, and if deliveries are to be suspended, the majority of letters entrusted to the Post Office will be delayed for an indefinite period. It is only right, therefore, that my right hon. and learned

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Friend should have sought further information about the authority by which this very important decision has been reached.
The tragedy of the situation is that it is totally unnecessary, but the fact remains that there has been a major breakdown in industrial relations. It is against that background that we should be judging the need for the steps which have been announced and the challenge which has followed from it.
It is true to say that increasingly people are becoming fed up with strikes. Almost every day one reads in the Press about a strike somewhere. That tends to result in the justice of the case of those who are striking being overshadowed by prejudice which has been built up as a result of previous strikes.
A good deal has been said about the enormous cost to the Post Office. There is no doubt that tremendous damage will be done to commercial interests and others by the action of the Postmaster-General. However, I hope that neither of those reasons will be advanced in judging the merits of the argument between the two sides, because I regard it as essential that settlements should be based upon justice and that there should be no attempt to buy off those who might otherwise create damage by striking.
Talking to people both in the House and outside it, I find that justice is thought to be on the side of the Post Office workers, and that the Postmaster-General is laying up for himself grave trouble, or others are laying it up for him, if he does not change his whole attitude to the situation.
The right hon. Gentleman claims that it is not within the competence of the Government, sticking to their incomes policy, to grant the 5 per cent. Judging by comparisons with 5 per cent. given to others, I cannot see how that case is made out. There is a view among the Post Office workers that they are not challenging the criteria and essential features of the incomes policy. If there is to be any arbitrating, I suggest that it is not on what should be paid but as to whether the settlement asked for is within or without the incomes policy as laid down in writing and presented to the House.
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The great lesson to be learned is that a compulsory incomes policy is bound to fail sooner or later. We are painfully and slowly learning that lesson. I only hope that we shall not have to pay still more to learn it even more effectively, and that the Postmaster-General will come to realise quickly that justice requires further consideration by him of the claims made by the workers in his Department.
8.59 p.m.
Mr. Raphael Tuck: I associate myself with some of the remarks of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). I agree that he should be a very good lawyer.
Mr. Arthur Lewis: Shame.
Mr. Tuck: That is meant as a compliment to my hon. Friend.
An hon. Member opposite said that the Postmaster-General should have appealed to the public to use the mail less. But we have had an example of what appealing to the public does. The Prime Minister appealed to the public this year to do less private spending because of our imbalance of payments, and the result was a spending spree bigger than we have ever had. The shopkeepers were asked to keep their prices as low as possible, and the result has been an increase in prices all round, each one gaining an advantage at the expense of the other. The public is apparently careless of the national interest.
I agree with my right hon. Friend's suspension of the 4d. mail, but our real aid should be to end the appalling situation in which that is necessary. The union was asking for payment of a 5 per cent. increase without any ties. If that were given it would call off the strike and sit around a table and cost the new. Received Revision and OT.T.R.U. productivity agreements, and abide by the costing. The Government, wrongly, have refused its demands.
I have a suggestion which might get over the problem. I suggest that the union should instead call off the strike on an undertaking by the Post Office to pay the overseas telegraph operators a 5 per cent. increase linked with a productivity agreement, to be costed by the Post Office and the unions, the union undertaking at the same time to abide by the result of the costing.

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I am willing to bet anything that the union would accept such a compromise. Instead of a payment, it means an undertaking on both sides. I ask my right hon. Friend to consider that suggestion and, having approved it, which I am sure that he will privately, to go back to his Cabinet colleagues, take their heads and knock them together and get them to agree to it too.
9.3 p.m.
Mr. Kenneth Baker: I have some degree of sympathy with the Postmaster-General this evening because in the short time I have been in the House he has had to answer four censure debates, or what amount to censure debates, and three times he was really apologising for the faults and poor decisions of his predecessors. This time he is really answering for his own decision.
I think that it is generally agreed on both sides that the decision announced this afternoon was bad. It was a bad decision because it was a desperate one. The hon. Member for Bristol, North-East (Mr. Dobson) put his finger on the matter. The root cause of the decision is a financial consideration. The Postmaster-General was faced with the whole of the postal services rapidly slipping into the red. The 4d. and 5d. mails were introduced to get them out of it. On Monday night we learnt that £4 million of the expected increase had gone down the drain because there had been a falling off in the use of the postal services. The Postmaster-General faced a financial crisis, and he has chosen a method of trying to preserve the financial take of the Post Office. That is the framework of the decision announced this afternoon. Like other hon. Members, I also think that it was introduced very badly, and that he should have his chapter and verse for it.
I think that the right hon. Gentleman probably has the powers. I am fairly satisfied that the Post Office Act, 1963, gave him them. The hon. Member for Bodmin (Mr. Bessell) said that he was alarmed at the powers of the Postmaster-General. If he attended some of the sessions of the Standing Committee considering the Post Office Bill upstairs—a Committee on which no Liberal Member is sitting—he would be absolutely alarmed at the powers which we are giving to the new Post Office Corporation.
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They are infinitely greater than the powers which the Postmaster-General attempted to exercise this afternoon.
Mr. Bessell: I am sure that the hon. Member for Acton (Mr. Kenneth Baker) will allow me to make the point that no Liberal is sitting on the Committee because no Liberal has permission to sit on the Committee.
Mr. Baker: That does not stop the hon. Member from coming in to listen to our deliberations. I am sure that the Liberal Party would benefit if it listened to our deliberations in Committee.
The point I make is that the Postmaster-General, to my mind, has acted as he has because he was financially desperate. Why has he done it? In order to try to get a higher revenue at 5d. than at 4d. But the mail will still clog up if the overtime ban goes on. It will not matter whether a letter bears a 5d. or a 4d. stamp in this situation, because there will still be a mountain of mail.
I have great sympathy with the appeals from hon. Gentlemen opposite directed at the Postmaster-General to negotiate and to settle this strike as quickly as possible, because it is doing irreparable damage to the postal side of the Post Office as long as it continues. The difference between the two sides seems to be very narrow, almost minute, compared with the loss which the Post Office will make as a result of fall off in its business and the fact that it cannot cover its running costs.
I believe that the Postmaster-General should negotiate. But when he made his statement this afternoon, sitting on his left was the right hon. Lady the Secretary of State for Employment and Productivity. Clearly there is a division in the Government, although the Postmaster-General has denied it. I do not believe that he is a free agent. I believe that he would prefer to negotiate. He has the Ministerial responsibility for the Post Office and the Ministerial responsibility to make it pay. The Postmaster-General can see the prospects of making it pay slipping from his grasp. Yet he has virtually been told by the ventriloquists in the Cabinet, "Do not negotiate".
I do not know whether negotiations have started this evening. About an hour ago I noticed one of the Government Whips—not a junior Government Whip;

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no less a person than the Vice-Chamber lain of Her Majesty's Household—go over to the Box on my left and ask the General Secretary of the Union of Post Office Workers to go out with him. I ask the Assistant Postmaster-General, although I know it is a futile question because he would be the last to know whether negotiations had started—
Mr. Arthur Lewis: On a point of order. Is it not the custom and practice for hon. Members not to refer to what may or may not be happening in the galleries? The gallery above or below is in fact a gallery. Surely one does not refer to what is happening in the gallery.
Mr. Deputy Speaker (Mr. Harry Gourlay): I think that the hon. Member is quite correct. Perhaps the hon. Member for Acton (Mr. Kenneth Baker) will confine his remarks to what happens in the Chamber.
Mr. Baker: I accept your Ruling, Mr. Deputy Speaker. I was merely suggesting that perhaps there might be some hope as a result of what has been happening this evening, not in the gallery, but outside.
I stress again that the Postmaster-General should be free to negotiate a settlement.
This dispute has shown the travesty of having the sort of prices and incomes policy which the Government are trying to impose on the economy. We read of cases of settlements of industrial disputes well above the narrow margin about which we are talking—the tally clerks, for example. However, when it comes to a narrow margin the Cabinet decides that this is the sticking point and, as a result, we have a strike which is crippling the country. I hope that the Government will decide to change their attitude before the future of the postal side of the Post Office is irreparably damaged.
9.10 p.m.
Mr. Stanley Orme: This is the continuation of a type of industrial debate that has become almost an every-week occurrence. I regret the fact that all our major industrial disputes seem to finish up in debates on the Floor of the House when they can be
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resolved only within the industries concerned and between the employers and the trade unionists who represent the workers within those industries.
My hon. Friend the Member for Bristol, North-East (Mr. Dobson) put the Post Office workers' case with a clarity and definition which all hon. Members accepted. He made clear the justice of their claim. The Postmaster-General has taken a decision which will have a major effect on our postal services. This decision has been taken following a one-day strike of Post Office workers and the implementation of an overtime ban. That is surely the answer to those people including my right hon. Friends in the Cabinet, who felt that they were dealing with a section of workers who were not important to the economy and could, therefore, be pushed aside.
I do not know about the two-tier postal system; I only know that a two-tier system of industrial relations is developing. Apparently the question is whether or not at a given moment an industry or a group of workers is important to the economy and our balance of payments. As the General Secretary of the Union of Post Office Workers said, if they had been employed at Ford's or had been concerned in the Girling dispute negotiations would have been started immediately. In this case it has been impossible to get negotiations going. The conciliation department of the D.E.P. has not operated in its normal function, and I am worried about industrial relations.
My right hon. Friend has a very difficult job, and a hard cross to bear at the moment. What has been said about him personally by hon. Members opposite I entirely endorse. I realise the difficulty with which he is faced at the moment. But, as he said with great clarity, he was bound by the Government's prices and incomes policy. What is that policy? That is the key question. It is not the 5 per cent. that is in dispute; it is the demand for a productivity agreement in respect of the present supplement for telephonists. Collective bargaining is collective bargaining between two sides of industry. The copper-bottomed agreement that my right hon. Friend talked about is not one to be decided by the Government, the D.E.P. or the Cabinet and then put on the table before

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the Post Office workers, for them to be told, "Take it or leave it." I realise the anxiety of the Government to arrive at productivity agreements but there cannot be a norm in respect of any productivity agreement before such an agreement has been reached.
The Post Office workers put their case with great clarity. They showed the differential that exists between telephonists and comparable workers outside and among the rest of the Civil Service, and the response of the members of the Union of Post Office Workers—not a union that goes on strike lightly—has been demonstrated today by the action they have taken in support of their colleagues, quite voluntarily, because they recognise the perpetration of an injustice. Realising this, we appreciate the magnitude of the task that faces us.
How are we to get out of this problem? I shall not refer to people who are not here, because that is wrong, but there are people not 1,000 miles away, other Ministers for example, who could be brought together quickly for negotiations to start. At the end of the day, as in all industrial disputes, negotiations will have to take place; they will have to get around the table and the case of the Post Office workers will have to be made. Are we to allow disruption? The Government have made a major error if they think that the Post Office workers are not of industrial importance to the economy and the baalnce of payments. If the postal services are stopped, disruption is created in a vital industry upon which so many others depend for their development and even survival. The case of the union is unanswerable and the Government must come to negotiation. My right hon. Friend must tell the First Secretary of State that this will not do, that she must negotiate, and the Government must not prejudge these issues.
This is where the prices and incomes policy has led us in three years. If after tonight's debate my right hon. Friend can give a lead by saying that he is prepared to start negotiations and accept the reasonable proposals put before him, I can see a settlement which will save the country and the taxpayers a great deal of money, and not only inconvenience but also good will within the industry. After all, the industry handles over 24 million letters a day. The Government
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might as well admit that they have made a mistake and are prepared to negotiate. Only on those terms will there be a settlement. The Post Office workers see the justice of their case, and in a free and democratic society they are fighting for it by taking effective action. The Government should recognise the justice of that case and go some way to meet them.
9.18 p.m.
Mr. Tom Boardman: I have some sympathy with the remarks of the hon. Member for Salford, West (Mr. Orme), although I will not digress into industrial relations.
The question that this debate raises is the powers which the right hon. Gentleman has purported to exercise, and we wait with interest to hear what they are and what he is trying to do. It has become apparent tonight that there is some doubt whether he is stopping the 4d. post or suspending it. It is difficult to see how he can separate the 4d. post from the 5d., which is a far greater problem than just letting them all go. Might not the solution be to let all mail go through at 4d. to avoid the great delay of sorting, since the mail will have to be collected whichever stamp it bears? He may well find that it is quicker to have a 4d. stamp and let everything go through with the same priority.
The consequence of this stoppage on our industrial life will be severe. It is applying a tourniquet to the lifeblood of industry. If the 4d. post cannot get through, there will be serious consequences for commerce.
It has been said that everything should go through from now on with a 5d. stamp; that we should be persuaded to put on the extra 1d. so that instead of having the 32 per cent. of which the right hon. Gentleman spoke going through by first-class mail, 100 per cent. will go through bearing 5d. stamps, with the result that the problem will be just the same as if he had adopted my suggestion of allowing everything to go through the 4d. mail. We see the inherent danger in a monopoly of this sort. We have been discussing this upstairs on the Post Office Bill.
The person who should be in the dock tonight is not the Postmaster-General but the Secretary of State for Employment

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and Productivity because her policies are at the root of the trouble. She has applied them illogically, often to the weaker and better behaved sections of the community while allowing the stronger, more noisy and often less well behaved sections to escape her clutches.
This debate is occurring on a day when we have heard that there has been wage inflation of 6f per cent. in the last 12 months. Bearing that in mind, it does not seem unreasonable that the Post Office workers should be asking for 5 per cent., plus a 2 per cent. productivity award. That does not seem out of line with the sort of wage inflation we have been experiencing. As for the Secretary of State's policies, there is a great deal in the economy that is out of line with her thinking. The Government have a duty to set an example in these matters. As their policies have produced the consequences which we are witnessing, it is obvious that they have been desperately wrong.
This dispute is comparatively small, particularly in terms of the amount involved. We are dealing with a body of responsible workers. Hon. Members on both sides have great respect for Post Office employees. They are our friends from the moment they bring our mail to the time when they help us with our telephone calls. They represent a section of the community with whom it should not be difficult to reach agreement.
The Postmaster-General is a reasonable man and the difficulties which he faces are not of his choosing. We have reached a point of crisis, of economic loss and of great personal inconvenience as a result of following Government policies which are misconceived and will bring further economic harm to the economy.
9.23 p.m.
Mr. Paul Bryan: This is a surprising debate which none of us expected. I was astonished earlier when the Postmaster-General did not know the answer to the question posed by my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith), particularly as we were debating this matter only a short time ago. However, I am not here to chastise the right
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hon. Gentleman on his ignorance. This has been delicately and effectively done by my right hon. and learned Friend, and I do not expect that hon. Gentlemen opposite will be cracking open a bottle of champagne on the right hon. Gentleman's behalf tonight.
I will not argue at length about the legal side of this question. I will not go into whether the right hon. Gentleman is relying on Section 2 of the Post Office Act, 1953, which says that he may
"… collect, receive, forward, convey and deliver in such a manner as he thinks expedient …"
which is a daunting prospect, or whether he is depending on the Regulation which we debated on 4th November. Whichever it may be, one thing is absolutely clear; that our attitude in that Prayer debate on 4th November was absolutely right. We thought that this was a dangerous power to put in the hands of a Postmaster-General.
On that occasion hon. Members on both sides tried to think of the sort of occasions on which such a power might be used. The right hon. Gentleman assured us that before the two-tier system a similar power had existed in respect of the old second-class post—printed matter, newspapers and so on—and that Tory Ministers had had such a power in their day.
However, we were speaking in different conditions. During the previous few weeks before 4th November we had been suffering all the torment of the early days of the two-tier post, and at that time we were told time and again by the right hon. Gentleman that there would be no delay or deferring of the post while, at the same time, we were seeing all around us the post being deferred. On that occasion, at the end of the debate, the right hon. Gentleman said that he was issuing two instructions, both of which would prohibit delay and deferment of the post. We were obviously being very cautious that night.
The legal side could not have been better expressed than it was by my right hon. and learned Friend the Member for Hertfordshire, East. I presume, therefore, that this power in the hands of the Postmaster-General must be a legal one. I should have thought, however, that necessity had to be proved; that we

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must decide whether it is a necessary power; and when we consider the question of necessity, we must ask what "necessity" means.
When one arrives at a position in which the Postmaster-General has made a major blunder, one which any normal person in normal circumstances would not have done in his position, and when this has caused the post to be delayed, one must ask whether or not the right hon. Gentleman is acting within his powers. The hon. Member for Bristol, North East (Mr. Dobson) asked us not to debate the two-tier system any longer. Important though the strike is—and I appreciate his preoccupation with it—we are tonight talking about powers and also about the customers of the Post Office. They matter, for the customers are every man, woman and even child in Britain. These other matters must, therefore, be in our minds as well as the serious problem which is overhanging all our thoughts.
On the two-tier system, the chaos, delay and deferment which under the right hon Gentleman's powers occurred in the first couple of months of the two-tier system were utterly predictable and, as most predictable things are, utterly avoidable. Yet he was in a position to say that he was perfectly within his rights to delay letters and parcels, and mail was delayed considerably.
In our debate of 4th November I said to the Postmaster-General:
"No one has emphasised the fact that the root cause of all these troubles—the thing that made them absolutely inevitable—was the decision to combine the introduction of the two-tier system with a rise in charges. Once that decision was taken, a calamity was bound to occur."—[OFFICIAL REPORT, 4th November, 1968; Vol. 772, c. 602.]
I will not go into great depth, although I could, as to why the chaos we saw then was absolutely inevitable. On that night the Postmaster-General appeared to think that I was wrong. This week, on 27th January, he said:
"It was a pity that the two-tier system came into operation at the same time as a tariff increase. This caused a great deal of confusion. It would have been so much more satisfactory if it had been possible to have a straight price increase and then six or nine months later to have introduced the two-tier system."—[OFFICIAL REPORT, 27th January, 1969; Vol. 776, c. 1026.]
1650
This is exactly what we have been saying, when we were told that we were using the postal service as a political football. But anyone, a businessman, or anyone not very bright, could see that this was inevitable. When there is chaos like this in sight, delay in the post is absolutely predictable, in which case instead of saying "You benefit we benefit, you lucky people" and all the propaganda we got then, the right hon. Gentleman should have been warning us that this was about to happen. If the Postmaster-General had warned the people, and I say this absolutely seriously—[Interruption.]— hon. Gentlemen may not like to hear this, but it is extremely serious. If on that occasion the right hon. Gentleman had turned to the people and said "I am sorry, but we are starting a new system; it will be chaotic for two months", which is what it was, he would be in a very much better position. He would have the trust of the people a great deal more than he has today. That is what he is short of now. What I venture to say, and I think hon. Gentlemen opposite will agree, is that he is short of trust. People do not trust him, not because he is dishonest. Hon. Gentlemen opposite have been saying these very words.
Mr. Dobson: Is the hon. Gentleman really trying to persuade the House that the chaos that he has referred to in general terms, which is his party's point, is the same as the chaos which now exists because of this strike?
Mr. Bryan: That is a very unlikely argument for me to put. I am about to come to that. What I am saying is that once again this was absolutely predictable, but we do not know whether it is avoidable. This strike has not popped out of the blue two days ago. News of the possibility of a strike began on 18th November, when the Postmaster-General saw the telegraphic workers.
This was a personal warning to the right hon. Gentleman. One could hardly have had longer notice of the trouble. After seven weeks' warning, there was the strike ballot on 4th January. Still the public were given no sort of warning as to what might happen, and yet it was a very big thing likely to happen. Never before has there been a strike of postal and telegraphic workers. It was very hard to see the size that this might get to, as

1651
the hon. Member for Bristol, North-East has just said. We were in sight of something very serious. Were the public given any warning as to what might happen? Perhaps it was a long way off, but the strike ballot took place on 4th January, 19 days ago. The decision to strike was finally taken on 11th January, and the telegraphists were due to strike on 20th January. Everyone in the trade union world, and hon. Gentlemen opposite know more about that than I do, must have known that this move had the sympathy of the rest of the Post Office workers. Something very big was in sight. Yet there was still no warning or guidance. Then, on 22nd January, the Executive of the U.P.W. met to discuss the extension of the strike.
Last Friday we had the decision that all overtime would cease as from Sunday. The Postmaster-General told us in Monday's debate that one-fifth of all Post Office work was overtime. This was a tremendous blow, but again no warning was given to the public. Finally, there was the total stoppage on Thursday for towns with a total population of over 250,000. With all these warnings, it was obvious that a very great danger of the sort of thing from which we are now suffering existed. The Postmaster-General must have known of the sort of position, even of the form it was to take. Despite this what happened? Last Friday we were told that the parcel post would cease three days later—on the Monday morning. This Thursday afternoon we were told that the 4d. post would cease next day. This is absolutely intolerable.
I cannot tell the House now—nor can anybody else—whether this is absolutely necessary today, because we do not know what would have happened if warnings had started to come out 12 days ago. We should probably have started posting; certainly businesses would have started making their postings and gauging them out as best they could. The Government would at least then have been paying the population the compliment of taking it into their confidence and saying, "Take what action on your own personal account and in your own personal lives you want to. This is what looks like happening". Instead of that, within a day we are suddenly told, "We are not quite sure what will happen to the stuff
1652
which has already been posted." I cannot see any argument that the Postmaster-General could possibly advance to say that the people could not have had a longer warning than they have had.
I should like the Postmaster-General to clear up the point I made briefly this afternoon on the question of the country post. During the arguments on the two-tier post one thing that worried people very greatly was the fact that the country post was kept back. Am I to understand that a letter posted in Malton to Pickering on the 4d. post is to be held back? Is it affected by the fact that Leeds, Sheffield and other large towns are hit by the strike?
The point made by the hon. Member for Bristol, North-East about the cost to the Post Office was an excellent one. The hon. Gentleman knows these figures. I do not doubt that they are accurate. A figure we cannot possibly get is the cost to the country. A short time ago I went round a very large mail order firm—Gratton Warehouses—and saw the mountains of parcels there going through the parcel post. I wonder what sort of chaos happens there when at one business day's notice the firm is suddenly told that there is no parcels post. Multiply that chaos 1,000 times a day and we know what is happening all over the country.
This evening I said to a constituent of mine who happened to be down here—I do not get many constituents down from Yorkshire—"What effect will this ruling about the 4d. post have?" She said, "I do not know. One is so beaten down by the Post Office nowadays that it really can do anything to you." This may not be the perfect way to express the attitude to the Post Office, but it is a ghastly indictment, and, I believe, a true one. A moment or two ago I stressed the question which I think is the most important of all, the lack of trust.
Mr. Orme: Would the hon. Gentleman now tell us where his party stands in relation to the justifiable claim that the Post Office workers have?
Mr. Bryan: If a Front Bench spokesman on this side were to come down in open debate at this delicate moment on one side or the other—[Interruption.]— I ask the Postmaster-General to confirm

1653
that I am right in this—he would be accused of very great irresponsibility; and whoever accused us would be right.
Over the last nine months we have had a number of debates on the Post Office. There have been complaints about the number of debates that we have had on the Post Office. Time and again we have not made our indictment of the Postmaster-General because we have been in the awkward position of there having been three Postmasters-General in such a short time—within a year—and the responsibility for the most recent calamity has normally been split between the three.
Tonight I do indict the Postmaster-General, not primarily because of his ignorance of the Act tonight, not primarily even because he has shown twice how to make the worst of every situation. I return to the point I made a few moments ago about the lack of trust. Over the past nine months the Postmaster-General has generated mistrust in this country by time and again telling people not what is happening around them but telling them lies—I must not say lies, must I?—by giving them misleading statements. Because of this lack of trust and his inability to safeguard the legitimate rights and expectations of the entire nation who use his services, I invite the Postmaster-General now to resign.
9.40 p.m.
The Postmaster-General (Mr. John Stonehouse): I congratulate the right hon. and learned Gentleman the Member for Hertfordshire, East (Sir D. Walker-Smith) on securing a debate on the Adjournment of the House under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the suspension by executive action under no identified powers of the second-class postal service".
I congratulate him on that achievement, and I congratulate him also on being almost the only Member in the debate so far to talk to the terms of that Adjournment.
The course of the debate has demonstrated beyond a shadow of doubt the thinness of the right hon. and learned Gentleman's case. But it has been a useful debate, and many of the contributions were in the best tradition of the House on these occasions. I can remember
1654
similar occasions in the past when Mr. Speaker had allowed an Adjournment debate under Standing Order No. 9. I remember one which I myself initiated and to which the present Leader of the Opposition had to reply. They were really significant occasions. This is valuable right which the House of Commons has. I believe that the right hon. and learned Gentleman was not only right in what he did, but he was wise to pursue the point if he had any doubt about it. It has been a valuable debate because there have been several useful and sincere speeches made from both sides.
Before dealing with the legal question, which is still in some dispute, and answering the points which the right hon. and learned Gentleman put to me, I wish to say at the outset that there is no sadder Member of the House than the Postmaster-General tonight. I did not seek a dispute in the Post Office. I am saddened by this dispute. I bitterly regret that it took place. Every day that it continues, and every day that the overtime ban continues, is as wounding to me as to any member of the Union of Post Office Workers taking part in the strike, however reluctantly.
I bitterly regret this dispute because I believe that it was unnecessary. I believe that it could have been avoided. I am very disappointed that we have had not only a strike by overseas telegraphists last week but the escalation of the dispute this week involving tens of thousands of Post Office workers who have no direct connection with the particular narrow dispute affecting the telegraphists except—
Mr. Arthur Lewis: They are showing solidarity.
Mr. Stonehouse: —except that they belong to the same union and, as my hon. Friend says in his intervention from a sitting position, they are displaying solidarity. I repeat that I am saddened by these events. I have no need to remind the House that I grew up in a Post Office family. Most of the members of my family were working for the G.P.O. My father spent his working lifetime in the engineering department of the Post Office and was a branch secretary of the P.O.E.U. I have Post Office trade unionism in my blood, in a way, and I

1655
am more than deeply emotionally involved in Post Office affairs as a result of this background of experience.
Many contributions have been concerned with the operational necessity for this ban. I want to emphasise, as I did in answer to questions this afternoon, that the suspension of the second-class mail is dictated by operational necessity in the Post Office. We did not impose the suspension as any counter in the dispute which we now have with the union. We did not bring in the suspension and some of the other restrictions in order to show that we are taking a resolute line in opposition to some of the things which have been put to us in connection with the dispute. We have introduced the suspension on purely operational grounds in order to protect the fully-paid, first-class mails which we believe it is absolutely essential and our duty to get through as quickly as possible.
Hon. Members have asked a number of detailed questions. Before answering them, I should like to give a report on the current situation as we have seen it today. If mail is to be kept moving, it must be flowing freely. If there are hold-ups in the mail, such is the cumulative effect that, before very long, there is a complete snarl-up and bags of mail accumulate at railway stations and in vans and trains and so on, and there is nowhere to store incoming bags without filling up the working parts of our buildings.
We have this situation to deal with at Christmas time, but we can deal with this type of problem at Christmas by massive drafts of extra staff and by the many extra buildings which are brought into use and by the 100 per cent. cooperation of our regular staff. None of these aids is available to us in the circumstances of the strike and the ban on extra hours.
Sir D. Glover Sir D. Glover rose—
Mr. Stonehouse: The situation today is extremely serious. There is already a backlog of about two days' work at Birmingham and some of the larger London branches have on hand the equivalent of one day's work or more. Manchester, Glasgow, Edinburgh and Bristol all have heavy backlogs. At none
1656
of these centres was any work possible today and all the staff were on strike. Tomorrow, therefore, all today's postings in the major cities will be piled up on top of the backlog I have mentioned. In addition, the postings in the smaller centres, where work continued today, will pour into the towns.
If we had not taken drastic action today to cut down the amount of mail posted from tomorrow, the postal services could soon have come to a complete standstill in the major towns—by the end of the week—and no mail, urgent or non-urgent, would have been flowing through the system. If I had allowed the 4d. post to continue, and that is 70 per cent. of the mail, I should have been deliberately inviting chaos. I have a duty to the public to maintain a letter service. Hon. Members have been referring to the obligations put upon the Postmaster-General by the Acts. I should be running away from those obligations if I allowed the snarl up to take place and no mail to come through.
The Union of Post Office Workers has had a great response to its call for a ban on overtime and for the one-day strike today. There is no doubt that it has been determined to achieve the chaos in the mails which was predicted by the General Secretary at the beginning of the week. Hon. Members ask why we did not appeal to members of the public for their co-operation. At the beginning of this week, when it was clear that the overtime ban would take place from Monday, I appealed to the public to co-operate by posting only what was urgent. But, as the House has heard, this appeal has not been as successful as we should have liked. The mail has built up, and we can no longer give a guarantee of service for the second-class mail. It was, therefore, my duty to impose the suspension which I announced today to prevent a complete snarl up.
Questions have been asked about the detail of the suspension. The hon. Member for Bodmin (Mr. Bessell)—and I thank him for the courtesy shown in his speech—asked when the 4d. mail in the pipeline would be delivered. We undertake to give the best possible service to that mail. We shall not unnecessarily hold it back. But we shall give priority service to the 5d. mail which is already

1657
in our hands and feed the existing 4d. mail into the streams as soon as it becomes operationally possible so to do.
My hon. Friend the Member for Nottingham, West (Mr. English) asked why we had to suspend the 4d. mail. We had to do so because by the ban on overtime work, which, as I said on Monday, is equivalent to one-fifth of the postal work done, and today's one-day strike and the stoppages predicted on Sundays, we are building up to about three days' loss of work in the week. Therefore, we must take account of the fact that we do not have enough available capacity, manpower and hours to deal with all the first-class mail which is coming through plus the backlog.
It is undoubtedly correct that more members of the public will now decide that some of the mail which they would have posted by 4d. mail is sufficiently important to post by 5d. mail. We will accept that. All the mail is equal in priority as far as we are concerned. It is 5d. mail and we will do our best to deliver it. We will give the public the opportunity to post this mail. But we want people to be well aware that we wish to dissuade them from posting non-urgent mail, such as advertising circulars, which could well be put off until this dispute is finished.
Mr. English: My right hon. Friend answered a question which I did not put. I did not ask why the suspension was necessary. I asked why he did not suspend the first-class mail instead of the second-class mail.
Mr. Storehouse: It would have been wrong to imply that we would give priority to the second-class mail. It would have been encouraged all those houses which send out circulars to continue to do so, and this would have been wrong.
My hon. Friend the Member for Bristol, North-East (Mr. Dobson), who is very well informed in these matters, raised a number of questions. I think that I have dealt with them. We shall be clearing the 4d. mail from the boxes, but we will put it on one side until we can deal with it.
The key point which was raised by the right hon. and learned Member for Hertfordshire, East, and which was dealt
1658
with only in his speech—I do not think that anyone else dealt with it—concerned my legal powers. I notice that in certain sections of the Press it is being suggested that I gave an evasive reply to questions this afternoon. Let me repeat what I said—
Mr. Bryan: The right hon. Gentleman did not know.
Mr. Stonehouse: I knew the answer. I assure the hon. Member for Howden (Mr. Bryan) that I was fully aware of my powers and fully appreciative of the way in which the Post Office does business. I said this to the Leader of the Opposition in answer to his question:
"I am advised that I am fully entitled to impose temporary restrictions in the light of the exceptional circumstances with which we have to deal. This is an operational restriction. It is not a complete ban on mails. If it were a complete ban on mails it could possibly be construed as being outwith my powers; but it is not a complete ban …"
The Post Office has been given the power to operate postal services, and my current powers are contained in the Post Office Act, 1953. The provisions of this Act have a long history, but at no time in this long history has there been any specific obligation placed on the Post Office to operate any particular service in any particular way. The powers are given to me under Section 2 of the Post Office Act of 1953, which my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) referred to in his excellent speech. He has saved me the necessity of quoting that Section. I ask the House to note that these are powers which are set out in the Act, not obligations. Legally it remains entirely within the discretion of the Post Office how it operates its services.
Hon. Members have referred to the Regulations, and the right hon. and learned Member for Hertfordshire, East referred to the debates last November. I well remember those debates on the Regulations, but the Regulations simply fix the charges and conditions for the services which the Postmaster-General decides to run.
Mr. Charles Fletcher-Cooke Mr. Charles Fletcher-Cooke (Darwen) rose—
Mr. Stonehouse: No specific legal authority is required, therefore, for any suspension of a business which I am running entirely within my own discretion

1659
and not as a result—[Interruption.]—1 would ask right hon. and hon. and learned Gentlemen who are here tonight to confirm that this is the legal position. I am not saying that I am completely without responsibility to this House. Of course that is not the case. I am defining the legal position, which is the question I was asked this afternoon, and the House is entitled to have the reply to that.
The Post Office does not have a statutory obligation to operate a second-class service or a parcels service. It therefore follows that it is not necessary to plead any statutory power to suspend it. That is the answer to the various questions that have been asked during the debate.
One final point. In 1962 and 1964 the Conservative Governments of the day had to suspend the parcels and printed paper services. I will not burden the House with quotations from Mr. Reginald Bevins which are to be found in the OFFICIAL REPORT of 13th July, 1964, c. 844. If it were illegal for me to operate the suspension, it was illegal for the Postmaster of that day.
There has been no case made out tonight, and I therefore invite the House to throw away the suggestions which have been made.
Question put, That this House do now adjourn:—
The House divided: Ayes 151, Noes 187.

Division No. 53.]

AYES

[10.0 p.m.

Alison, Michael (Barkston Ash)

Goodhart, Philip

Onslow, Cranley

Allason, James (Hemel Hempstead)

Goodhew, Victor

Orr-Ewing, Sir lan

Astor, John

Gresham Cooke, R.

Osborn, John (Hallam)

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

Griffiths, Eldon (Bury St. Edmunds)

Page, Graham (Crosby)

Baker, Kenneth (Acton)

Gurden, Harold

Page, John (Harrow, W.)

Balniel, Lord

Hall, John (Wycombe)

Pardoe, John

Barber, Bt. Hn. Anthony

Hall-Davis, A. G. F.

Percival, lan

Bennett, Dr. Reginald (Gos. & Fhm)

Hamilton, Michael (Salisbury)

Peyton, John

Bessell, Peter

Harrison, Col. Sir Harwood (Eye)

Powell, Rt. Hn. J. Enoch

Biffen, John

Harvey, Sir Arthur Vere

Prior, J. M. L.

Biggs-Davison, John

Harvie Anderson, Miss

Pym, Francis

Birch, Rt. Hn. Nigel

Hawkins, Paul

Ramsden, Rt. Hn. James

Blaker, Peter

Hay, John

Rawlinson, Rt. Hn. Sir Peter

Boardman, Tom (Leicester, S. W.)

Heald, Rt. Hn. Sir Lionel

Rees-Davies, W. R.

Body, Richard

Heath, Rt. Hn. Edward

Ridley, Hn. Nicholas

Bossom, Sir Clive

Heseltine, Michael

Ridsda'e, Julian

Boyle, Rt. Hn. Sir Edward

Higgins, Terence L.

Rodgers, Sir John (Sevenoaks)

Braine, Bernard

Hogg, Rt. Hn. Quintin

Rossi, Hugh (Hornsey)

Brown, Sir Edward (Bath)

Hordern, Peter

Russell, Sir Reginald

Bryan, Paul

Hornby, Richard

Scott, Nicholas

Campbell, B. (Oldham, W.)

Howell, David (Guildford)

Scott-Hopkins, James

Campbell, Gordon (Moray & Nairn)

Hutchison, Michael Clark

Sharples, Richard

Carr, Rt. Hn. Robert

Iremonger, T. L.

Silvester, Frederick

Chichester-Clark, R.

Jenkin, Patrick (Woodford)

Sinclair, Sir George

Clark, Henry

Jennings, J. C. (Burton)

Smith, Dudley (W'wick & L'mington)

Cooper-Key, Sir Neill

Johnson Smith, G. (E. Grinstead)

Smith, John (London & W'minster)

Corfield, F. V.

Jones, Arthur (Northants, S.)

Steel, David (Roxburgh)

Costain, A. P.

Joseph, Rt. Hn. Sir Keith

Stodart, Anthony

Craddock, Sir Beresford (Spelthorne)

Kershaw, Anthony

Summers, Sir Spencer

Crouch, David

Langford-Holt, Sir John

Tapsell, Peter

Crowder, F. P.

Legge-Bourke, Sir Harry

Taylor, Sir Charles (Eastbourne)

Cunningham, Sir Knox

Lewis, Kenneth (Rutland)

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

Dance, James

Longden, Gilbert

Taylor, Frank (Moss Side)

d'Avigdor-Goldsmid, Sir Henry

Lubbock, Eric

Teeling, Sir William

Dean, Paul

McAdden, Sir Stephen

Thatcher, Mrs. Margaret

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

MacArthur, lan

Thorpe, Rt Hn Jeremy

Dodds-parker, Douglas

Maclean, Sir Fitzroy

Turton, Rt. Hn. R. H.

Doughty, Charles

Macmillan, Maurice (Farnham)

Vaughan-Morgan, Rt. Hn. Sir John

du Cann, Rt. Hn. Edward

McNair-Wilson. Patrick

Waddington, David

Eden, Sir John

Marten, Neil

Walker, Peter (Worcester)

Emery, Peter

Maude, Angus

Walker-Smith, Rt. Hn. Sir Derek

Errington, Sir Eric

Maudling, Rt. Hn. Reginald

Walters, Dennis

Farr, John

Miscampbell, Norman

Ward, Dame Irene

Fisher, Nigel

Mitchell, David (Basingstoke)

Weatherill, Bernard

Fletcher-Cooke, Charles

Monro, Hector

Whitelaw, Rt. Hn. William

Fortescue, Tim

More, Jasper

Wilson, Geoffrey (Truro)

Foster, Sir John

Morrison, Charles (Devizes)

Worsley, Marcus

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

Mott-Radclyffe, Sir Charles

Wright, Esmond

Giles, Rear-Adm. Morgan

Munro-Lucas-Tooth, Sir Hugh

Gilmour, Ian (Norfolk, C.)

Murton, Oscar

TELLERS FOR THE AYES:

Glover, Sir Douglas

Neave, Airey

Mr. Reginald Eyre and

Nott, John

Mr. Anthony Grant.

Anderson, Donald

Haseldine, Norman

Oakes, Gordon

Archer, Peter

Hattersley, Roy

Ogden, Eric

Atkins, Ronald (Preston, N.)

Hazell, Bert

O'Malley, Brian

Atkinson, Norman (Tottenham)

Heffer, Eric S.

Oram, Albert E.

Barnett, Joel

Hilton, W. S.

Orme, Stanley

Benn, Rt. Hn. Anthony Wedgwood

Hobden, Dennis

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

Bennett, James (G'gow, Bridgeton)

Hooley, Frank

Owen, Will (Morpeth)

Bidwell, Sydney

Houghton, Rt. Hn. Douglas

Page, Derek (King's Lynn)

Bishop, E. S.

Howarth, Harry (Wellingborough)

Palmer, Arthur

Booth, Albert

Howell, Denis (Small Heath)

Pannell, Rt. Hn. Charles

Bottomley, Rt. Hn. Arthur

Howie, W.

Parker, John (Dagenham)

Boyden, James

Hoy, James

Parkin, Ben (Paddington, N.)

Bray, Dr. Jeremy

Huckfield, Leslle

Pavitt, Laurence

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

Hughes, Emrys (Ayrshire, S.)

Peart, Rt. Hn. Fred

Buchan, Norman

Hughes, Hector (Aberdeen, N.)

Perry, George H. (Nottingham, S.)

Butler, Herbert (Hackney, C.)

Hunter, Adam

Price, Christopher (Perry Barr)

Butler, Mrs. Joyce (Wood Green)

Irvine, Sir Arthur (Edge Hill)

Rankin, John

Cant, R. B.

Jackson, Colin (B'house & Spenb'gh)

Rees, Meriyn

Carmichael, Neil

Jay, Rt. Hn. Douglas

Reynolds, Rt. Hn. G. W.

Castle, Rt. Hn. Barbara

Jenkins, Hugh (Putney)

Richard, Ivor

Coe, Denis

Jenkins, Rt. Hn. Roy (Stechford)

Roberts, Gwilym (Bedfordshire, S.)

Concannon, J. D.

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

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

Crossman, Rt. Hn. Richard

Judd, Frank

Rodgers, William (Stockton)

Dalyell, Tam

Kelley, Richard

Roebuck, Roy

Darling, Rt Hn. George

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

Ross, Rt. Hn. William

Davidson, Arthur (Accrington)

Kerr, Russell (Feltham)

Shaw, Arnold (Ilford, S.)

Davies, G. Elfed (Rhondda, E.)

Lawson, George

Sheldon, Robert

Davies, Dr. Ernest (Stretford)

Lee, Rt. Hn. Frederick (Newton)

Shore, Rt. Hn. Peter (Stepney)

Davies, Harold (Leek)

Lee, Rt. Hn. Jennie (Cannock)

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

Delargy, Hugh

Lee, John (Reading)

Silkin, Rt. Hn. John (Deptford)

Dewar, Donald

Lever, Harold M. (Cheetham)

Skeffington, Arthur

Diamond, Rt. Hn. John

Lewis, Arthur (W. Ham, N.)

Slater, Joseph

Dickens, James

Lipton, Marcus

Small, William

Dobson, Ray

Lomas, Kenneth

Snow, Julian

Dunnett, Jack

Luard, Evan

Stonehouse, Rt. Hn. John

Dunwoody, Mrs. Gwyneth (Exeter)

Lyons, Edward (Bradford, E.)

Taverne, Dick

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

McCann, John

Thomas, Rt. Hn. George

Eadie, Alex

MacColl, James

Thomson, Rt. Hn, George

Ellis, John

MacDermot, Niall

Tinn, James

English, Michael

Macdonaid, A. H.

Tuck, Raphael

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

McKay, Mrs. Margaret

Urwin, T. W.

Faulds, Andrew

Mackie, John

Wainwright, Edwin (Derne Valley)

Fletcher, Rt. Hn. Sir Eric (Islington, E.)

Mackintosh, John P.

Walden, Brian (All Saints)

Foley, Maurice

Maclennan, Robert

Walker, Harold (Doncaster)

Foot, Rt. Hn Sir Dingle (Ipswich)

McMillan, Tom (Glasgow, C.)

Wallace, George

Foot, Michael (Ebbw Vale)

McNamara, J. Kevin

Watkins David (consett)

Forrester, Jonn

MacPherson, Malcoim

Weitzman, David

Fraser, John (Norwood)

Mallalieu, E. L. (Brigg)

Wellbeloved, James

Freeson, Reginald

Marks, Kenneth

Wells, William (Walsall, N.)

Gardner, Tony

Marquand, David

White, Mrs. Eirene

Ginsburg, David

Mellish, Rt. Hn. Robert

Whitlock, William

Gordon Walker, Rt. Hn. P. C.

Mendelson, John

Willey, Rt. Hn. Frederick

Gray, Dr. Hugh (Yarmouth)

Millan, Bruce

Williams, Alan (Swansea, W.)

Greenwood, Rt. Hn. Anthony

Miller, Dr. M. S.

Williams, Clifford (Abertillery)

Griffiths, David (Rother Valley)

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

Williams, Mrs. Shirley (Hitchin)

Griffiths, Eddie (Brightside)

Moonman, Eric

Williams, W. T. (Warrington)

Griffiths, Rt. Hn. James (Llanelly)

Morgan, Elystan (Cardiganshire)

Wilson, Rt. Hn. Harold (Huyton)

Griffiths, Will (Exchange)

Morris, Alfred (Wythenshawe)

Wilson, William (Coventry, S.)

Hamilton. William (Fife, W.)

Morris, Charles R. (Openshaw)

Winnick, David

Hamling, William

Moyle, Roland

Woof, Robert

Harper, Joseph

Mulley, Rt. Hn. Frederick

Harrison, Walter (Wakefield)

Murray, Albert

TELLERS FOR THE NOES:

Newens, Stan

Mr. Neil McBride and

Norwood, Christopher

Mr. Ernest G. Perry.

BUSINESS OF THE HOUSE
Ordered,
That the Proceedings on the Decimal Currency Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Harper.]

DECIMAL CURRENCY BILL
Order for Second Reading read.
10.10 p.m.
The Minister of State, Treasury (Mr. Dick Taverne): I beg to move, That the Bill be now read a Second time.
It is just over two years until Decimal Day, 15th February, 1971, the day appointed by the Treasury under the Decimal Currency Act, 1967, for the introduction of the decimal currency system. The Act did three things: it dealt with the decimal currency system itself, and said that the system was to be based on the £ sterling, divided into 100 new pence; it dealt with the decimal coinage; and it dealt with the constitution and functions of the Decimal Currency Board.
It was always contemplated that a second Bill would be necessary to effect the changeover, and that is what the present Bill sets out to do.
Where the first Act laid the foundations for the introduction of the new system, the Bill provides the legislative framework for the changeover. We have tried to make it as simple and straightforward as possible, and we have also published a White Paper to explain the main provisions of the Bill in plain terms and relate them to the decisions already taken.
The House will, however, have noticed that while some of the provisions are of wide and general effect others are of technical and specialised interest. My aim today is not to add to the explanations which can be found in the White Paper and the Explanatory Memorandum to the Bill but to state in general terms the sort of results the Bill aims to achieve.
Changing from the old to the new currency system involves a change in the coinage used for cash transactions and in the units used for accounting. This may sound obvious, but there are two points to be made. First, it is with the
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necessary consequences in law of these two changes that the Bill is concerned. Second, in thinking about the way in which the Bill works, or what is to happen in any situation where money is involved, we must be quite clear whether we are dealing with a cash or accounting transaction.
I now turn to the way in which the Bill will work in its general application. The first point is that it is impossible to make an overnight change. There must be a change-over period. Cash registers, accounting machines, slot machines—machines designed to record or calculate in £ s. d. or to be operated by £ s. d. coins—must be adapted or replaced. This physical task will take time. Therefore, there must be a changeover period when the coins of both the old and new currencies are legal tender, and when accounts can be kept in either currency.
The Decimal Currency Board has already estimated that that period need not last longer than 18 months. It may well be shorter. The Board will keep the position under review and will advise the Government when it considers that the period of dual currency working can be brought to an end, which will be done under the powers we seek in the Bill.
When the change-over period begins the present halfpenny, the half-crown and the 10 shilling note will have disappeared. We are all of us already familiar with the five and 10 new penny pieces and their identity in size and shape and value of the 1s. and 2s. pieces. By D-day we shall also be familiar with the 50 new penny piece which, by contract, is of an entirely novel shape. On D-day the only change in the coinage will be that the decimal bronze coins—the new halfpenny, new penny and two new penny piece—will rapidly come into circulation as coin of the realm. The old penny, 3d. piece and 6d. will continue in circulation until the end of the changeover although, for obvious practical reasons, they will not be as freely available at the end of this period as they will be at the beginning.
The consequence of this is that during the change-over period it will always be possible to make an exact settlement of a debt in either currency by paying cash

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as opposed to say, paying by cheque. If it is an £ s. d. debt, incurred either before D-day or during the change-over period, the exact amount can be paid in cash. It will not matter whether the amount is made up of a mixture of old and new coins, although if the amount is not a multiple of sixpence some old coins will have to be used. Similarly, debts incurred in the new currency can also be settled exactly.
At the end of the change-over period the picture will change. The old penny, 3d. piece and 6d. will be withdrawn from circulation and will no longer be legal tender. The only old coins in use will be 1s. and 2s. pieces, equivalent, of course, to five and 10 new penny pieces. It will then no longer be possible to make an exact settlement of an £ s. d. debt unless it is a multiple of sixpence, which is exactly equivalent to 2½ new pence. The Bill establishes how such an amount is to be paid by providing, in Clause 9, for the payment of the corresponding amount in the new currency as shown by Schedule 1 of the Bill. Thus, an amount to be paid in the new currency is certain in law.
Before I leave the coinage, let me turn to the bread and butter situations during the change-over period; for ex ample, buying goods in shops or paying fares on buses. As a rule, a shopkeeper will offer goods for sale at a price either in the old or in the new currency. Similarly, the fares on a bus will be in either the old or the new currency. It will not be open to the customer to decide, if goods or services are priced in the new currency, that he will pay the nearest amount in the old currency. Sometimes, no doubt, this may be what the shop keeper will accept, as a matter of con venience or goodwill; but it will not be the rule. To suppose otherwise is to misunderstand the purpose of con version tables to which I shall return later. The fact that some shops or buses—
Sir Douglas Glover: I do not understand what the hon. Gentleman has been saying. He says that bus fares are payable in either currency. I did not understand his next sentence when he spoke about not paying the exact fare in the old currency. How will we be able to go on a bus?
Mr. Taverne: If the bus fare is expressed in the new currency and a passenger cannot reach that exact fare in the old currency he will not be able to pay in the old currency unless it is accepted as a matter of convenience.
The fact that some shops or buses will be trading in £ s. d. prices and others in decimal prices need pose no special problems for the shopper. All he needs to be able to do is to tender either the exact amount of money due or a higher multiple of sixpence or 2½ new pence, which comes to the same thing. If he does so, it will always be possible for the shopkeeper or bus conductor to give him the exact change. Indeed, I would almost go so far as to say that if a shopper has this point firmly in his mind, there really is very little else that he or she needs to know about decimal currency.
However, the Decimal Currency Board will very soon be issuing two leaflets, one giving guidance to businessmen and the other about cash transactions during the change-over, which will deal with this sort of point in much more detail.
Next I come to prices. It may be asked why the Bill does not provide for the new halfpenny conversion table, set out in the Appendix to the White Paper as Table A, to be used as a matter of law for the conversion of retail prices of goods and services. The answer is that it simply would not be practicable to require by law that for all goods and services every single price of every one in the country should be converted in this way from D-day. The Government feel that the use of this table will be the general rule both in the public and in the private sectors; but, quite apart from the practical difficulties of enforcement, there are bound to be cases where departures from the table cannot be avoided, for perfectly respectable reasons.
It would be impossible to specify in the Bill the sort of circumstances which might justify a departure from the table or to set up some sort of machinery for looking at every exception. The Government do not believe that the business community, and retailers particularly, are out to make money out of the change-over by unfair means. The vast majority will want to play fair by

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the public. There may be a few who try to take advantage of the situation but if they do so they will forfeit good will. Experience from Australia and New Zealand strongly suggests that the public will look closely at price changes at this time, and competition itself will act as a check on abuses.
This is not pie in the sky. As I indicated, there is solid evidence from Australia and New Zealand. There, the value of the smallest unit of currency, when they changed over, was precisely the same as in our system—1·2 of our present pence. Their general policy on prices was much the same as ours. When we look at what happened in Australia in 1966 and New Zealand in 1967, we find no evidence in either country of any increase that could be attributed to the change to decimal currency.
Before leaving the subject of prices and conversion tables, I want to make one general point. It is a great mistake to suppose that, wherever one sees an amount of money in £ s. d., it would or should be converted to the equivalent amount by using the conversion table. I should like to give an example. If I want to buy 12 units of 1s. 1d. each, I would not have to work out 12 times 5½ new pence, using the new halfpenny table. The sum I would convert would be 13s. The thing to do is to add up the total first and then convert from the table. Any conversion to a payable amount is done at the latest possible stage in the calculations.
This is a sound general rule. In cases like this the conversion of the unit in accordance with either of the tables in the White Paper is neither required by the Board nor recommended by the Government; nor is it common sense. That is one reason why, as the White Paper says, the main provisions of the Bill concentrate on what happens when an amount of money has to be paid and why the general emphasis is on how the payment is made rather than on how to make conversions from one currency to the other.
So far I have concentrated mainly on the coinage, on cash transactions and on shopping and prices. I now turn to the implications of changing the unit of account.
Mr. Albert Murray: I wonder whether the Treasury has given any thought to old-age pensioners, and whether it is possible to have conversion tables printed on their pension books before the introduction of the system in 1971.
Mr. Taverne: The question of publicity is a matter for the Decimal Currency Board, and one of the plans of the Board is to see that every household in the country receives a conversion table. I believe that every possible problem which may face the individual citizen in converting to the new currency will be fully considered by the time D-day arrives.
I was talking about changing the unit of account. To some extent this involves mainly technical and rather specialised considerations; the aspect that is of more general interest is payments through the banking system. It would not be practicable for the banks to work in both currencies. This fact has several consequences. The first is that for the banks there is no change-over period. When they open their doors on D-day they must be ready to work exclusively in decimal currency; they will be concerned with the old currency system only because banks will be the means by which the penny, threepenny piece and sixpence are withdrawn from circulation and the new coins are issued. During the changeover they will issue the old coins which are still legal tender to customers who want them.
The banks have an exacting task, because immediately before D-day they must clear £ s. d. items and then convert their machines and accounts entirely to decimal currency working. For this reason the banks will not be able to carry out normal business while they are engaged on the task of conversion. They will, however, be ready to provide a limited range of services, the details of which have been discussed between the banks and the Board.
The Bill provides for this situation in several ways. First, in Clause 13 it provides for the 11th, 12th and 13th February, 1971, to be non-business days. Second, it provides in Clause 4 for the conversion of bank accounts in accordance with the whole new penny table in Schedule 1. Third, in Clause 3, it

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provides for the alteration in accordance with tills table of cheques and similar instruments written before D-day in the old currency but not paid in before D-day.
Fourth, it provides in Clause 2 that bills of exchange, which includes cheques, and promissory notes, of course, will be invalid if written in shillings and pence. No doubt some people will write out cheques in the old currency after D-day, just as some people put the wrong year on a cheque in the first few days of January, but I understand that the banks will allow a period of grace in such cases.
All this means that, from D-day—
Mr. Ian MacArthur: May I ask for some clarification, since this could lead to a good deal of misunderstanding? Is the hon. and learned Gentleman saying that, although a cheque written in £ s. d. after D-day will not be admissible, banks will nevertheless allow a period of grace? What does this mean for the man writing out a cheque on D-day plus one? Will his cheque be admitted by the bank or not?
Mr. Taveme: The banks are not bound to admit it, but in practice they will for the first few days. At the moment, if someone writes out a cheque dated 1st January, 1968, when he means 1969, the banks do not take much notice.
This means that, from D-day, all payments through the banking system must be expressed in decimal currency, with the exception of the period of grace, and this in itself, of course, will be a powerful means of speeding the changeover. Organisations of every kind will find if to their advantage to convert their accounts to decimal currency working as soon as possible after D-day and as Table B in the White Paper makes clear, they are recommended to use the whole new penny system in converting £ s. d. amounts to decimal amounts. This will keep them in step with the banking system and even out overall the inevitable small gains and losses.
If we now look back at the way the coinage and legal tender provisions of the Bill work, and the way the banking provisions work, we can draw two main conclusions The first is that the fact that all banking transactions must be in
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decimal currency is in itself a powerful instrument making for a speedy changeover, and this I think is generally accepted as a desirable objective. The second is that this does not prejudice the right of any debtor to make an exact settlement of an £ s. d. debt in £ s. d. coins at any time during the changeover period. Finally, the Bill makes it clear how any £ s. d. amounts are to be paid after the end of the change-over in a way which is certain and the same whether the settlement is in cash or by cheque, and which is fair overall to debtors and creditors.
Finally, I want to say a word on compensation. As the House will have seen from the White Paper, the Decimal Currency Board has recommended that there should be no compensation in any circumstances; the Government think that this recommendation should be accepted and they are therefore asking Parliament to relieve the Board of its function of receiving representations about compensation. A provision to this effect appears in Clause 17 of the Bill.
Perhaps I may remind the House that there has never been any question of a general compensation scheme to cover decimalisation expenditure. This was made clear when the decision to introduce a decimal currency system in 1971 was first announced. It was also made clear in the White Paper published in December, 1966; and in the debates on this subject when the first Decimal Currency Bill was before the House. The Government said at that time that they did not entirely rule out the possibility of compensation in special circumstances, although they were at pains to make it clear that any such cases would be exceptional; and there might be none at all.
Furthermore, the Government also made it clear in the House that they had a completely open mind on the sort of circumstances that might be held to justify a special compensation scheme. Their view was that the whole issue ought to be examined by a completely independent and impartial Board whose members were drawn from the main fields affected by currency decimalisation, so that they could form their own judgment.
When the Decimal Currency Board made its recommendation, the Government naturally considered very carefully

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the reasons which led the Board to its conclusion. The Board satisfied itself and it satisfied us that in no circumstances would it be able to propose any scheme for special compensation based on clear principles and capable of being administered fairly and soundly. Obviously, if the Government were to put before Parliament proposals for a scheme with which the Decimal Currency Board was not satisfied, and with which the Government were not satisfied, they would be open to severe criticism, and rightly so. In the circumstances, the Government are clear that since the Board has now been able to study in detail both the special and general problems of the changeover, its view on this matter should be accepted.
In my opening remarks I said that the Bill provided the legislative framework necessary to effect the change-over to decimal currency. I emphasise that neither the Bill nor the White Paper is intended to be a blue-print; we do not expect all the organisations affected by the change-over to find solutions to their individual problems simply by reading the White Paper and studying the Bill. But we believe that the important basic information necessary for bringing change-over plans near to completion is now available.
If those responsible for planning the change-over study the White Paper and the reference booklets which the Decimal Currency Board has already published and is to publish shortly, they should have the basic information which they need to make their detailed plans, tailored to their own organisations. We urge, in addition, that they should benefit by the lessons learnt in Australia and New Zealand and should make the utmost use of the two years that remain. This really is of vital importance.
A smooth and rapid change-over will not depend on what happens after D-day; it will depend on what happens between now and D-day. The immediate function of Parliament, in considering the Bill, is to see that the legal basis for the change-over is as sensible and straightforward as we can make it.
Sir D. Glover: The hon. and learned Gentleman referred on several occasions to the Decimal Currency Board taking
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decisions. Considering that we are merely discussing the Second Reading of the Measure, is it not a fact that the Board cannot know in what form the Bill will leave Parliament and whether Amendments will be included in Committee to restrict the Board's activities? Is it not wrong that the Board should be reaching and implementing decisions?
Mr. Speaker: Order. The hon. Gentleman cannot make a speech disguised as an intervention.
Mr. Taverne: I do not think that I misled the House. I made it clear that the Decimal Currency Board, which was set up under an Act of Parliament, was asked to consider certain problems, such as the question of compensation. It reached the conclusion that there was no basis on which to devise a reasonable special scheme. It advised the Government of that decision and the Government have taken their decision. Whether or not the matter is finally accepted is something for Parliament to decide.
10.33 p.m.
Mr. Terence L. Higgins: It is typical of the shambles to which the Government's programme has been reduced that the House which has been asked, and agreed, to spend £3 million on publicity on decimalisation, should be asked to debate the major principles of the Bill after 10 o'clock at night when it is perfectly clear, particularly in view of the earlier events of the day, that the matter will get the absolute minimum of publicity. There was no reason why, a decision having been given to have a Standing Order No. 9 debate earlier, the Government could not have deferred this debate until a time when the subject would have had a reasonable degree of publicity and could have done something to augment the expenditure of £3 million being spent on publicising the change to decimal currency.
The smoothness of the transitional period, a subject on which the Minister placed great emphasis, will depend on the speed with which people begin to make plans for their companies and organisations. This speed will occur only if we have a sense of urgency about the matter. I detected very little sense of urgency in the hon. and learned Gentleman's speech. He said that he was clarifying the position. If the average

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housewife had sought clarification about what was going to happen in the transitional period and had listened intently to the Minister's speech, she would have been terrified, not least in view of the exchanges about whether or not a given coin was likely to be accepted on, for example, buses when the two denominations are not precisely the same.
It is important that we should look at this Measure in the context of the Decimal Currency Act, which was debated in 1967. At that time, we debated at great length the choice of the actual type of decimal currency we were to have, Eventual y, it was decided to select the £-pence system. Two points need to be made in that connection. First, it was a matter pushed through on a party Whip basis although it was clearly not a partisan matter. The decision resembles the decision on British Standard Time. It should have been decided on a free vote.
Many people, including my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) and myself, during the debates advocated the 10s. system. It is worth spending a moment on this, because the system selected is making the operation of the "nuts and bolts" which this Bill is concerned, more difficult than it need have been.
It was generally agreed on all sides that there was a strong case for going decimal, but there was disagreement about the actual system. The Halsbury Committee summed up the matter in a crucial paragraph on page 87, paragraph 373, when it pointed out that the real distinction between the two systems was that the case for the £-penny system was the international case for sterling, and the case for the 10s. system was on the ease with which the system could be introduced, because of the greater "associability" of the 10s. system.
None the less, the Government were determined in March, 1967, because of the international case for sterling, to insist on the £-pence system. What have we had since? We have had a situation when the £ was devalued, and the case for the £ system was considerably reduced. We no longer have the main advantage of the £ system and we have lost the advantage of the 10s. system.
Mr. A. 19. Macdonald: Does the lion. Gentleman recall that,
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whatever may have been said in the Halsbury Report, the Government were at pains not to give so much emphasis to the international aspect as did the Halsbury Report? With respect, is it accurate to say that the Government rested their whole case on the international argument? I believe not.
Mr. Higgins: They did not rest their whole case on it, but like Halsbury, they were prepared to say that the international case was very important.
We debated the other arguments in detail and I tried to get the Financial Secretary to the Treasury to give a ranking list of the priorities. Alas, he produced an answer which could not be described as clear.
The transitional period we face now will be more difficult because of the system the Government have selected. We must accept that, and do everything possible to ensure that the transitional period is as smooth as we can make it.
It is with this objective that we on this side will look at this Measure. The complete reversal of the Government's policy with regard to specific compensation is not likely to increase the confidence of those most involved in industry and commerce. It would be wrong for those on this side to advocate any increase in Government expenditure in the present economic circumstances, where the rate of economic growth has been slow and the burdens of taxation are ever increasing. I am not advocating any increase in Government expenditure. But I think that some may have expected an apology from the Minister of State tonight for the change in the Government's policy on compensation.
Let me spell out the position qua the House of Commons. Clearly the number of people who will be adversely affected to a significant extent as a result of the changeover would be greater if we adopted the £-penny system than if we adopted the 10s. system. I think that will be common ground on both sides. Therefore, the fact that the Government said that the Decimal Currency Board would consider requests for compensation in special circumstances must have weighed in our considerations of whether we thought that the £-penny system was the right system. In fact, we got the

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£-penny system on the specific assurance that requests for compensation would be considered.
Now the Government have gone completely in reverse and are saying that, as a result of the investigation that the Decimal Currency Board has made, they have decided that they are not going to go ahead with the payment of specific compensation after all.
In these circumstances I do not think it is surprising that certain organisations, particularly those most affected, have made charges of bad faith. I want to go into this in a little detail, because it is something which is adversely affecting the atmosphere in which the changeover is taking place. It is well known that the original White Paper of 1966 said:
'"If it can be shown to the Decimal Currency Board, however, that there are grounds for giving some assistance in special cases the Government will consider any recommendations the Board may care to make. But such cases, if there are any at all, will be exceptional."
That is what the Government said in 1966. It was backed up by the then Financial Secretary and embodied in Clause 5(1)(d) of the 1967 Bill.
The Board was charged with the specific function of looking at specific cases—not the general case for compensation. No one was arguing for general compensation, because everyone would gain from decimalisation, which would in general balance the costs; but if a particular interest was adversely affected that would be considered by the Board. I understand that 60 organisations of one kind or another made representations. A considerable time—something over six months—elapsed between the date when oral evidence was taken and the date when these organisations were told that their applications for compensation had been refused.
I want to go into this point, because the Annual Report of the Decimal Currency Board makes a statement on compensation. It sets out a number of criteria which might justify the payment of compensation. I hope that the Minister of State will tell us which of these criteria were not met by those organisations which applied for compensation. Let me take as an example the Automatic Vending Association of Britain.
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The Board's statement points out that it was not empowered to consider general applications for compensation. It then says:
"The Board will examine carefully any other representations they may receive but they will not consider making recommendations to the Government for compensation unless the representations are in respect of costs which meet all the following requirements:
(i) they must be necessarily and directly incurred as a result of decimalisation and would not otherwise have been incurred",
I think it will be admitted that the vending machine operators fall within that criterion.
The next criterion is:
"(ii) they must be clearly identifiable and measurable".
This is an odd criterion, because it will be generally accepted that many of these costs will not be measurable until we get closer to, or perhaps even into, the transitional period. None the less, that they would be measurable and identifiable in principle I do not think would be disputable. Therefore, that criterion was met.
The next criterion is:
"(iii) they must be manifestly disproportionate, after taking into account all tax allowances, both to the costs incurred generally by organisations and to the benefits deriving from the changeover".
I do not see why there should be that criteria. The Board thought the loss must be "disproportionate". If there were any significant loss, there might be some case for compensation. But anyway, certain groups such as the vending machine operators would seem to face a manifestly disproportionate burden compared with the rest of the economy.
The next criterion is:
"(iv) they must be for the conversion or replacement of machines purchased before 14th July 1967".
Fair enough: that obviously applies to the vending machine operators. Then:
"(v) they must extend so far beyond the normal financial fluctuations and hazards of business that they cannot be readily absorbed in normal operating costs".
I do not see why the Board felt normal fluctuations and hazards of business were relevant. None the less, surely it is clear that in the case of machines which have to be completely scrapped or converted at considerable expense: this criterion was met, too.

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If this is the limit of the Board's criteria, and—the statement says:
"In considering representations the Board will apply the criteria … above"—
why did the Board find that there was not a case for compensation in specific instances?
I should like the Minister of State to tell us in what respect the criteria were not met in the 60 cases which were put forward, and particularly the example that I cited.
Next, why are we being asked in this Bill to cut out the possibility of further representations? There does not seem to be any reason, since it is written in as a statutory responsibility, that we should remove from the Board the duty to receive representation from people at subsequent stages who may come forward with an identifiable loss coming within the Board's criteria. If the Government adopted their original policy, at present embodied in Statute, why is this to be overruled at this stage?
The Board says that it cannot devise a system. There are two points on this. First, what consultations have there been with industry about the possibility of devising a workable system? I understand that there have not been any such consultations. Is this true or not?
Secondly, has the Board considered the Canadian experience of a change in coinage, where, I understand, a system with regard to compensation was devised? Why does the Board now think that it is impossible to devise a similar system?
Whatever may be one's own view on compensation, this is a series of arguments to which one ought to have some reply from the Minister, given that there is a complete reversal of his own policy.
He says that the Board has now had a chance to look at the question of specific compensation. But the Halsbury Committee had years and years to look at it, and the Government themselves had years and years after the Halsbury Committee's Report to look at it. This policy was embodied in the Statute of 1967 and now we are told in this Bill that we must reverse it. I hope that the Minister will give us an explanation.
I now turn to another point. If the Government are adamant that they are not going 10 make any compensation to
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any particular group, will the hon. and learned Gentleman seriously consider the possibility of extending the use of the 6d., the equivalent of the 2½ new pence piece, beyond the transitional period? Clearly, the extent to which individual groups of people are badly affected by these Government measures will be considerably diminished if the 6d. remains because, as the Halsbury Committee pointed out, the 6d. is one of the major coins used in vending machines. It also has important implications in some other industries, to which I will turn in a moment.
The arguments against the retention of the 6d. are not very strong. It is true that the Halsbury Committee, on balance, came down against this coin. But in paragraph 396 of the Report it is pointed out that the series ½ cent, 1 cent, 2½ cents, 5 cents, 10 cents, 25 cents, 50 cents, 100 cents was a ratio or series of numbers which provided a reasonable permutation. It is true that with a 2 cent piece as well, the position of the 2½ cent piece would be slightly odd. Yet the experience that we have had over the years with both a 2s. piece and a half crown piece does not suggest that the degree of confusion which is likely to happen if the 6d. is retained will be as great as some experiments have suggested. At the least, there is a case for keeping it beyond the transition period. If it falls into disuse, well and good; in due course it can be demonetised. But why decide at this stage to demonetise the 6d. straight away at the end of the transitional period?
If the Government are determined to reverse their own policy on compensation, there is a case for seriously considering retention of the 6d. It is of particular importance in several other contexts. For example, it appears that the minimum coin for parking meters, if we demonetise the 6d. or a 2½ new pence piece, will be 1s. or a five new pence piece. There are many spheres in which the 6d. is a convenient denomination, or, rather, the 2½ new penny is a convenient denomination, and its retention will help to offset the inflationary effect which the Government say they are anxious to offset.
What is to be the position as regards telephone kiosks? We have had the experience already of the 3d. piece being knocked out. If the 6d. is demonetised,

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there is no other alternative to going up to the 5 new penny piece, that is, the equivalent of appreciably more than the present 6d. I hope that we shall hear from the Minister about that. The same is true—the Minister mentioned bus fares—of the new Red Arrow buses which have a slot machine which takes 6d. If the 6d. is to be demonetised, is the fare likely to go up or down? Not only the Red Arrow buses but other buses in the North of London, I understand, are fitted with slot machines with a similar fitting to take the 6d.
That is a point which the House ought seriously to consider, but I turn now to the whole question of the cost of living. Quite rightly, the Government say that they are anxious to keep down the cost of living. I shall not go into the ghastly details of their failure to do so since 1964—a rise of 19 per cent. since October, 1964, or a rise of 6·6 per cent. since devaluation. However, although the Government are absolutely right to insist that the decimal change-over ought not to lead to inflation, there is no doubt that, if the general trend is inflationary, the incentive for people to round downwards will be much less. If they round down, when the trend of prices is rising rapidly they would take a squeeze in profit margins and subsequently make a big increase in price. It is far more likely, if they expect costs and prices to go up, that they will anticipate the rise. That is not a good thing, but it is a likely result of the decimalisation process taking place at a time when the trend of prices is faster upwards than at any previous date because of the Government's economic policies. Therefore, while I hope that there will not be any inflationary effect, I fear that there may well be because of the environment in which the Government are making their appeal.
Particularly in the light of the controversy in today's debate on the Post Office, one must ask what is to be done about the 4d. and 5d. post. By reference to the Government's conversion table, it is difficult to ascertain what is to happen here. It looks as though there will inevitably be some merging of the two rates. We ought to have a clear statement from the Post Office soon. In general the Government ought to say whether they will use the official conversion
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tables and no Department will do otherwise unless there are good reasons to the contrary.
There are grounds for concern about the inflationary effect of decimalisation, though I go along with the Minister's general view that the effects of competition will be the real determinant of whether people round up or down. If the market is very competitive, they will probably round down. If it is not, or if conditions in the market would in any way justify an increase in prices, they may well round up. But it is ridiculous for the Government White Paper to make the usual genuflection towards the prices and incomes policy, since everyone knows now that that policy, certainly as regards prices, has been absurd and unfair in its incidence anyway.
The Minister of State has rightly said that the sooner the transitional period can be ended, the better. The figure now being suggested is 18 months. Has that period been agreed in consultation with those most concerned, or is it an arbitrary diktat revision of the previous estimate made by the Decimal Currency Board?
Mr. Taverne: Is this the 18 months' change-over period?
Mr. Higgins: Yes. My question was simply whether this had been agreed by those concerned. Has it been shortened from the period previously agreed and, if so, on what basis? One gets the impression that the Board is making a number of arbitrary decisions which have not been taken after great consultation with the industrial and commercial interests involved.
Much of the speed with which the transition can be made will depend on the availability of the machines. In this connection, what will be the Government's decision about the import deposit scheme? Clearly, if machines are not available in this country and the Government want to speed the transition, it is desirable for machines to be imported as rapidly as possible. Has the Minister had any representations about this matter and, if so, what has been the Government's reply?
Mr. Taverne Mr. Taverne indicated dissent.
Mr. Higgins: The hon. and learned Gentleman shakes his head, but I hope

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that he will consider that question before the debate ends, for it is important.
Finally, as I said at the beginning of my speech, publicity is extremely important and anything which can be done to facilitate a smooth transition should be encouraged. We have doubts about a number of Clauses in this Bill and we shall seek to amend the Bill in Committee. However, on the overall issue, we hope that the transition will be as smooth as possible and that the Government will not take with this "nuts and bolts" Bill the same sort of dogmatic attitude towards specific problems which they adopted when debating the main Act.
10.57 p.m.
Mr. George Darling: When making speeches on subjects of this kind the hon. Member for Worthing (Mr. Higgins) always works to a familiar pattern: he begins by labouring a usually poor case of criticism against the Government and then goes on to his usually sensible and constructive proposals. On this occasion he has made one or two proposals with which I thoroughly agreed, particularly that for retaining the 6d. for longer than the transitional period, until the question of inflation arising through the change of currency is completely out of the way.
I want to refer to the difficulties in which retailers, shopkeepers and people engaged in services such as laundries and garages, will be involved in paying for the new machines, accounting machines and cash registers and the slot machines, or in paying for the conversion of their existing machines. These are not cheap machines for many small operators and some modern cash registers are very expensive.
At this stage I am not pleading for compensation. I accept the recommendation of the Decimal Currency Board, after what I imagine, from reading the Board's Report, to have been a thorough investigation, about compensation for the cost of machinery. I thought that the hon. Member for Worthing was not sufficiently generous to the Board in this respect. I think that it gave the subject careful examination. I am firmly of the opinion that it would be inequitable, as the Board says, and inefficient in practice to try to devise a scheme for helping hard
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cases. Either one must give compensation to cover the cost of new machinery to all people who have to buy it, or to none.
I want to raise the question of tax allowances on this, and in case the hon. Member for Worthing should think I am a penitent coming to confess my sins, because I had some responsibility for the change from tax allowances for investment of this kind to investment grants, let me hasten to say that I am firmly convinced we were right to make the change to cash allowances and right to put the emphasis on manufacturing equipment and to treat in rather niggardly fashion initial allowances for equipment going into service trades. However, I should like to tell my hon. and learned Friend the Minister of State that even the best fiscal policies must now and again be adjusted to new circumstances by refining them to meet the changing conditions; and perhaps altered, because there is a case for altering fiscal policies to meet the consequencies of new Government policies.
The service trades need to be efficient, no less than manufacturing industry and they need, and should be encouraged, to install, not only new machinery to deal with decimal currency, but new modern equipment whenever they can.
To what extent shopkeepers and other traders have been deterred from renewing equipment by not getting investment grants, which they are barred from getting is a matter I cannot pursue in this debate, but there is no question that they have to get new equipment. They cannot help it. There is no option but to buy new machines or to convert old ones for the new currency system, and it is inescapable that the Treasury should take the problem into account.
I do not want to pursue this because, if there is going to be a change to provide for additional tax allowances against profits to cover expenditure for this machinery and equipment, it must be brought forward in the Finance Bill and cannot be brought forward here. I ask my hon. and learned Friend the Minister of State to give this full consideration. It can be pursued on another occasion, but if the Treasury is to respond to an appeal of this kind, it may have to be considered during the Committee

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stage of this Bill, even though the provision must come into a Finance Bill.
This follows something which the hon. Member for Worthing put forward when he was talking about keeping the 6d. coin for a longer period, with which I thoroughly agree. We should bear in mind that unless something is done many traders may have to put up prices more than we would expect in the change-over period, merely to cover the cost of new equipment. This applies especially to small traders for whom the cost of new equipment may be a sizeable item in one year's accounting if they have to pay for it outright or over a little longer period when they have a short-term hire-purchase agreement. This should be taken into account and, unless traders are helped in this way, the solemn warning to traders not to run up prices unfairly to their customers should be withdrawn.
It is no use blaming the trader for running prices up apparently unfairly if he is only trying to cover the cost of new equipment which he cannot do without. I therefore agree with the hon. Gentleman the Member for Worthing, we do not want to give any traders a case for increasing prices. We want to keep prices steady during the changeover to the new currency and I therefore ask the Minister of State to ask his right hon. Friend seriously to consider the case for allowing traders to charge the cost of new equipment against profits or Income Tax in the year of purchase. This would be desirable.
11.05 p.m.
Sir Douglas Glover: It is an outrage that at 11 o'clock at night we should be debating the Decimal Currency Bill because of the Government's inefficient management. We have had an emergency debate today, and the Government should have withdrawn the Bill and brought it on at a more suitable time. The Bill, which will affect every person in the nation, needs an enormous amount of publicity, and it is scandalous that it should be debated at a time when it will receive hardly a remark from television, radio or the Press.
However, we are having the debate and from the Government's point of view
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it is most unfortunate that we are dealing with £ rather than 10s. decimal currency, but it would be out of order for me to pursue this. The new system poses many problems, and if I might pay a compliment to the right hon. Member for Sheffield, Hillsborough (Mr. Darling)—if I might call him that, as we are, outside the Chamber, such good chums—what he said tonight was very valuable.
I am dubious whether the Decimal Currency Board is right to have taken a decision about compensation at this early stage. If it has taken that decision and if the Government intend to do nothing else, then the right hon. Gentleman is absolutely right—traders cannot be expected to face very considerable losses as a result of the change-over and then be expected to round their prices.
Basically in the consumer and service industries we live in a free enterprise society. People are in business to make a success of their business and to make a profit. If the Government of the day, for many good reasons, alter the system of currency which causes traders to incur considerable expense, they should automatically get back such costs, which are a direct charge on the activities of the business. The service and consumer industries cannot be expected by exhortation or threats to sacrifice profits by rounding, and at the same time to shoulder a considerable burden of expense in buying new machines to deal with the new currency system.
As the right hon. Gentleman said, to a small firm the expense will be enormous. There will be a very heavy burden on the small village shop, for instance, in having to buy a new cash register. In the capital investment of that shop a cash register is the largest capital expenditure which it enters into in 20 years. It is not like buying a couple of pencils; it is something which is thought about for five years before it is bought, a serious item. Because of Government action—and I am not criticising the Government for changing to decimal currency—these small traders are faced with this heavy expenditure.
I want to make a strong plea in support of the right hon. Member for Sheffield, Hillsborough, when he asks the

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Chancellor to take this factor into account in the Budgets before the date for the change-over. If he does not, there will be a far stronger head of steam towards an inflationary atmosphere in our price structure than would be the case if traders were given reasonable allowances to assist them in getting new machinery, instead of putting the cost of it on their prices.
My second point is to make another very strong plea for the retention of the 6d. Today, the 6d. seems to be about our most useful coin. One can get by without half-crowns or 2s. pieces, but it is almost impossible without the 6d. They are required for public telephones, parking meters, vending machines, and so on. Under the Bill, they will disappear.
We hear a lot about the expenses of vending machine operators. Their immediate costs would be reduced enormously if we allowed the 6d. to remain legal currency for a longer period than the proposed 18 months. If it was made five years, a good many machines would have paid for themselves or become obsolescent by the end of it, and new machines could be installed which would cope with the new currency. If the 18-month period is to remain, it will necessitate an enormous expenditure on new machinery which I gather from the Decimal Currency Board will not be subject to help from the State.
This country used to have a reputation for common sense, though we are rather losing it at the moment. Keeping the 6d. for a five or six year period seems to be good sense, and I can see no reason why it should not be done. By that one step, a great sum of money can be saved, and the Government will spare themselves from a good deal of unpopularity, not only from those in the vending machine business but from members of the public who may be deprived of many of these outlets.
Without the 6d., the present 6d. parking meter charge will be increased to the next coin. A 6d. telephone call will go up to 7£d. at the minimum. If I know anything about the working of these systems, it is more likely to go up to l0d.—the nearest equivalent to 1s. Members of the public will have less hostility to the working of the new currency if the State adopts a sensible approach and
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retains the sixpence as legal currency for a longer period.
If this debate was taking place at an earlier hour, I would have much pleasure in keeping the House listening with great interest, I am sure, to many other arguments. At this late hour, I will refrain from giving hon. Members the benefit or otherwise of my wisdom, except on one final point.
Under the heading:
"Effects of the Bill on public service manpower"
the Explanatory Memorandum says:
"The Bill will not cause any increase in the staff of the public service."
I should not accuse the Government of terminological inexactitudes, but it is not true. I shall never be able to prove that, because nobody will be employed to do something just because of the Bill. But with any change of this sort there is bound to be a slowing down of the mechanism of our daily lives for at least two or three years. For example, when an office acquires an electric typewriter, the long-term result may be increased efficiency. But the short-term result is that the girl who has been working the ordinary typewriter takes twice as long to type her letters because she has to get to know all about the new machine.
There will be a great slowing down while ordinary people are calculating new decimal currency coins in terms of half crowns, sixpences and threepenny bits. Is anybody going to tell me that the girls behind the counters in the post offices will be as quick in paying out pensions in the new currency as they are with the old? For weeks and months they will be much more anxious to see that they do not make a mistake and therefore have to put some money into the till at the end of the day. It will be the same in shops.
The result in the public service is bound to be an increase in staff. It will probably iron itself out after a couple of years, but it is not true to say that this will not occur when we are making one of the biggest changes in our history. Every person in the country will have to get used to new coins, new systems and new prices. The speed of action of the staff in Government offices and post offices will be hindered because the public will be much slower in making certain that they have the right amount of

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money, working out in the old currency whether it is what it should have been. Human beings being what they are, many pensioners will for the rest of their lives work out their pensions as the £4 10s. or £4 12s. 6d. they were getting before, and that will slow down the process. Therefore, it is absolutely untrue to suggest that a change of this sort can be made without being a charge on our resources of manpower and an additional charge on the resources of the nation in all the other fields such as finance and so on.
Because there are so many issues in the mechanics of the Bill it is an outrage that we are debating it at this time of night. I know that my hon. Friend would recommend otherwise, but I feel so strongly about this that I should have liked to divide the House, not against the Bill, but to show our displeasure and disgust that the Government are bringing in such an important Bill, affecting every man woman and child in the country, at this hour of the night.
11.19 p.m.
Mr. Gwilym Roberts: I will not, at this late hour, revive the argument about the 10s. and £1 pieces, even if that was in order; but I want to support some of the matters which have been raised on both sides of the House.
I do not support the arguments, however valid they may be, put forward by the hon. Member for Worthing (Mr Higgins) about compensation. I think that our aim should be to avoid cost and the necessity for compensation.
Mr. Higgins: The hon. Gentleman must not misunderstand me. I did not say that I was advocating compensation. I said that I thought that people were entitled to an explanation of the Government's complete reversal of policy.
Mr. Roberts: I accept that.
I support the argument that has been put forward from both sides for the retention of the 6d. There is an outstanding case for its retention. I agree that we have something here which is half way between two coins—2·5d. However, 2·5 is nothing new in our currency. For many years people have dealt very successfully with half-crowns and half-
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pennies, so this will not complicate matters. It might simplify matters. It is absurd to be pushing it out so hurriedly when, as has been pointed out, we have just introduced it in so many different spheres. I will not go through them all. There is a 100 per cent. case for retaining the 6d. piece for telephone boxes.
We have the one-man buses. The members of the Transport and General Workers' Union took a long time to be converted to that idea. A lot of good will was needed by many members of that union to accept that type of bus. Now that they have accepted it, we reach a position where the whole basis of the system will be changed again. The same argument applies to parking meters.
I suggest to my hon. Friend that even at this late stage—and it is a late stage, because some of the conversions are on the way—he should seriously think again about the retention of the sixpence. I think that it will greatly simplify what will be a very complicated process.
I should like to refer now to what has been said about postage where there are foreseeable complications. Many on this side of the House would be very sorry if the first tier went up to three new pence because, doing a bit of quick mental arithmetic, that would be a 44 per cent. increase, which is very substantial. Obviously, some thinking will have to be done about future postage rates.
The conversion table leaves me slightly unhappy. I wonder on what kind of statistical sampling basis this was produced. Was some statistical sampling carried out to determine, in normal transactions, what the relative effects would be? Apart from the point made by my right hon. Friend the Member for Sheffield, Hillsborough (Mr. Darling), it is clear to me that there is a very real point about the cost, particularly to the small man who perhaps does not have the direct cost, but is faced with a marginal price change. If he deals with a large number of small transactions and takes the lower price he can operate at a loss. If he takes the higher price, through no doing of his own, he can make an abnormal marginal profit. These are the only choices open to him. Therefore, we should look very carefully at this matter.
Finally, my hon. Friend, introducing the Bill, said that this was largely a

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matter of good will. I agree. But imagine the situation on buses, for instance, if we removed the 6d. The hon. Member for Ormskirk (Sir D. Glover) referred lo post offices and shops. One can imagine crowded buses, and the sort of situation which might arise with people dealing in two currencies, one of which seems like a foreign currency to them. We have all heard people who have come back from a holiday abroad who, when asked how they liked it, have replied, "It was a good holiday, but I am sure that I was cheated many times over the currency." That is the feeling which people have in these matters because of the complexity of transactions, and I am afraid that with that complexity ill will will be created, because people will imagine that they have been cheated when they have not.
Our aim should be to minimise the difficulties of this exercise, and the greatest single contribution would be the retention of the present 6d. as long as it is usable. I am afraid that some people will ask, remembering the old slogan on the railways, "Is the whole exercise really necessary?"
11.26 p.m.
Mr. A. H. Macdonald: At this late hour I must resist the temptation to comment on some of the remarks made by hon. Members opposite. That is rather a pity, because I disagree profoundly with some of them. I shall let them go and shall try to bash out one or two points of my own. I have one or two queries about the Bill. I emphasise that they come from no concealed spirit of hostility; I was not only a supporter of decimalisation but a hearty supporter of the method that the Government adopted. Therefore, my queries arise from an anxiety to see this exercise a success.
I refer first to the proposal for the four-day closure of the banks at the beginning of the change-over period. I want to know how this four-day period was determined, and how the Board and the Government satisfied themselves that this was the appropriate period. In particular, I should like to know what consultations were held with the banks and with bank employees. I had the privilege of serving on the Committee of the earlier Decimal Currency Bill, and because I foresaw that the co-operation of
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the banks would be critical to the success of the exercise I ventured to press for a member of the National Union of Bank Employees to be co-opted on to the Board.
I shall not reopen that topic now, but it is proper for me to quote what was said in reply by my right hon. and learned Friend who was then Financial Secretary to the Treasury and leading for the Government in that Committee. He said:
"I am sure that such consultations will lake place in this case … I am sure that the Board will be eager to receive the representations of the N.U.B.E. and will pay the greatest attention and care to what it has to say. I am sure that, at the end of the day, there will not be any complaint about lack of consultation …"—[OFFICIAL REPORT. Standing Committee A, 2nd May, 1967, c. 221.]
I should like to be told—if not now, in Committee—about the consultations that took place. I deeply regret that my understanding is that none did take place. This is a critical point, because at this stage of the exercise the co-operation of the banks is basic and essential. I stand here speaking on a day when 11,000 bank clerks attended this honourable House. It will be seen that this is a body of people who will not lightly be set aside. They are anxious that the exercise shall be a success and I am anxious to be satisfied that the Government have created the conditions in which they can carry out this change-over in a successful manner.
Another aspect of the closed period is that the Bill says that these days "shall" be non-business days: it is not optional. How far is the closure to extend? Will no foreign exchange business be transacted? Are the trustee departments to be closed? What of the Trustee Savings Banks? What about the finance houses, at least one of which is by legal decision a bank? There are also the acceptance houses and discount houses. Will it be an offence for any institution, which, in the Government's view, is a bank, to stay open? Will the Post Office Giro close? If not, what will happen to money passing through it during the change-over? At what point will the values and denominations be changed and by whom?
The Bill says that, during this period, the banks may present and pay cheques, and nothing else. But in paragraph 18

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of the White Paper and by my hon. and learned Friend we were told that they may provide a minimum service on request. There seems to be a discrepancy here. If presenting and paying cheques is all that the banks may lawfully do during this period, what will happen about the things which they would have done if not forced to close, like remittances under standing orders? What if non-payment leads to disadvantageous consequences for their customers or themselves? Will there be any indemnity? Was this considered by the Decimal Currency Board when it recommended that there should be no compensation. Suppose the banks receive instructions to buy or sell securities and the price changes during the closed period, so that the price realised afterwards is different. Will there be any indemnity for any consequent loss?
All these queries arise from this concept of a closed period; they should have been answered and are not cleared up in the Bill or the White Paper.
Another significant point is the proposal in Clause 3 that instruments may be altered. This will have to happen, but I want to be satisfied either now or in Committee about the exact circumstances in which it will be done. I presume that it will be done in the banks and that such alterations will not have to be approved or initialled by the parties to the instrument. We are embarking on an understandable course but one which may be dangerous if not circumscribed. The banks will be able to alter the face of an instrument without necessarily the knowledge of the parties, whose consent will have to be assumed. Suppose there is inadvertently an error. What situation is likely to arise?
My third query arises from the proposal that during the transitional period both sets of currency shall be legal tender. This is natural and sensible. Hopes have been expressed that the transitional period will be short. I hope so. But who will be responsible for the segregation of coins, separating out the old from the mixture of old and new that will be circulating during that period?
I presume that the banks will freely accept and issue the new currency during this period—that they will accept over
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the counter old currency or mixtures of old and new in multiples of five new pence, and, if requested, will issue old currency or mixtures of old and new, again in multiples of five new pence. But all this will involve a great deal of segregation, and I should like to know who will do it. Are the banks expected to do it? If so, have there been consultations? Not long ago I served on the Estimates Committee looking into the affairs of the Royal Mint, and a witness from one of the banks expressed some anxiety about the ability of the banks to perform this act of segregation.
Other points that I had in mind can wait until the Committee stage, but I cannot resist the temptation to make a minor point. Clause 2(2) refers to a certificate made in writing by a banker. I should love to know the definition of a banker. It has vexed many people for a long time. It would be just as well to know, because the term appears in the Bill without a definition. At some stage I should like to hear more about that.
11.37 p.m.
Mr. Albert Murray: I hope that after the completion of the Bill the Opposition will make a commitment not to create difficulties and oppose the decimal currency when it comes into operation in 1971 in the same way as they have made political points over the introduction of British Standard Time.
I am concerned about publicity—I raised this earlier with the Minister of State—and old-age pensioners particularly. We must go further than issuing a leaflet to every household. As politicians, we know what happens to many leaflets that go through the doors at election times. Sometimes people do not get them or they put them on the mantel shelf and then they disappear. This information ought to be printed in pension books. It should be remembered that these people are from the penny-farthing age in more ways than one.
Mr. Gwilym Roberts: Would not my hon. Friend agree that if the leaflets are anything like the conversion table they will be completely unintelligible to probably 70 per cent. of the population?
Mr. Murray: I could not agree more. Pensioners, having lived all their lives

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with pounds, shillings, pence and halfpence, will suddenly have an entirely new system thrust on them. We must take special care of them. Younger people, and especially children, will soon get used to the new system, but I urge my hon. and learned Friend to remind the Board about the difficulties which older people will experience.
I reinforce what has been said about keeping the 6d. piece. Rather than ex tend the transitional period, I would keep the 6d. piece as a two-and-a-half new penny piece and as part of the decimal currency system. I am equally concerned about the way in which prices will be rounded up or down. How will you round down or up the price of, say, a box of matches, which now sells for 3d.? You will have a job rounding up or down—
Mr. Deputy Speaker (Mr. Harry Gourlay): Order. It is not the responsibility of the Chair to round anything up or down.
Mr. Murray: I take the point, Mr. Deputy Speaker, although you may well have to perform this exercise.
When rounding off a small item like a box of matches, will the trader charge one-and-a-half new pence, representing 3·6d., or one new penny, making it 2·4d.? If we retained the 6d. piece we would avoid this: trouble, and two boxes of matches could be purchased for that coin. I can think of many items, including parking meters, for which the 6d. piece would be invaluable.
The possibility of overcharging is a problem which is exercising many people's minds. Will there be a department responsible for looking into this matter, with inspectors like those who at present watch matters like weights and measures? Will somebody be ensuring that while this rounding up and down process is going on people are not overcharged?
Having raised these points, I believe that the Bill is to be welcomed. We need to go decimal, and I hope that the Measure receives a speedy passage through the House.
11.43 p.m.
Mr. Taveme: With the leave of the House, I will reply to the questions which have been raised in the debate, many of which we can go into with more profit
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in Committee, such as that mentioned with considerable knowledge by my hon. Friend the Member for Chislehurst (Mr. Macdonald) about banking. On that matter the Treasury is satisfied that there is no contradiction between the White Paper and the Bill; but we can argue the matter further in Committee.
The first major point put by the hon. Member for Worthing (Mr. Higgins) was his belief that the Government had more or less persuaded the House to accept the £ unit with a promise of special compensation. That was not so. He read a passage from the White Paper which said that cases for special compensation would be exceptional, if there were any at all—clearly implying that there might not, or need not, be any such cases. The Act placed a duty on the Decimal Currency Board to consider the possibility of making provision for compensation in special circumstances, but it was always made clear that there might be no compensation at all.
The hon. Gentleman then wondered what guidelines had been laid down and whether, in connection with the Decimal Currency Board, there had been any criteria which had not been met. I wish to make it clear that the Government did not in any way attempt to influence the Board in coming to its decision about whether or not there should be a special compensation scheme or about the kind of scheme that should be drawn up. The matter was left entirely to that expert body. It was the statutory function of the Board, and not the Government, to consider representations. It is not the job of the Government now to say exactly in which respects individual representations did or did not meet the guidelines laid down by the Board.
The Board looked at these cases very carefully. It received a large number of representations and considered how far it could work out an equitable scheme. Such a scheme had to have a number of features. It had to have clear and logical principles, which justified treating people differently, which justified putting some people in and some people out, in a way not unfair to those left out, and it had to be a scheme whereby it was possible to translate such principles, on the basis of clear criteria, in a way capable of being administered efficiently equitably, and without risk of abuse.

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This highly-qualified Board looked at this, and came to the conclusion that there simply was no way in which such a just scheme of compensation could be worked out. It was not for the Government to examine the individual cases.
It is asked: why abolish this now; why not keep the position open, in case someone comes forward with a good case? That would be the worst of all possible worlds, because then, far from facing the fact that they must adapt, and make their plans on that basis, there would be an inclination to defer certain decisions on the ground that perhaps compensation might be obtained. It is better to be clear, when the Board has made this careful study of the matter, and have a decision on which everyone could act. Everyone would feel that they were an exceptional case of hardship. The Board would be bound to go into numerous claims put up to it. This would not be at all desirable. The Board has already made a study, and the Government have accepted its recommendation.
It is said "All right, there will be no compensation, but can we not ease the position of those who are particularly badly hit—those with vending machines—and keep the 6d.?".
Mr. Higgins: Before the hon. and learned Gentleman leaves that point, if the Government are accepting the recommendation of the Board that there is no viable scheme, but that the Board laid down some criteria and that these appear to have been met, surely either one must conclude that the criteria were put forward as some sort of bluff, or else the Government should accept that the criteria were met and explain why this was not sufficient?
Mr. Taveme: The Board made it clear that this was not the scheme it was putting forward. It said that all these things had to be satisfied before it could consider a case, and no one was to apply who could not satisfy those criteria. It had to see if it was possible to form a scheme, and it could not. It felt this extremely strongly.
Several speakers have suggested that we keep the 6d. and save money. This is not necessarily the case. Studies have shown that if one has more coins, particularly fractional coins, the whole ease
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of handling, with which this Bill is concerned, the whole decimalisation process would be slowed down. If there were seven instead of six decimal coins, the mechanics of payment and change-giving would be slowed down and all people handling cash would suffer. It is said that it will affect manpower. If the whole process of decimalisation is slowed down, if it is not as efficiently planned, this would mean a loss of manpower, less efficient use of manpower. It is asked: what about parking meters, telephone coin boxes, vending machines? It is a mistake to suppose that it is impossible for these machines to be adapted equally efficiently, and that the only alternative to the 6d. telephone call is a five new pence call. One could have a two new pence call for a shorter time. We have chocolate machines taking 6d. pieces, and the size of the chocolate bars has been made smaller. There are all sorts of ways in which these problems can be met, and have been met, as different charges are made, as a result of duties imposed on different objects.
Mr. Gwilym Roberts: Following this to its logical conclusion, is my hon. and learned Friend suggesting that the same principle should be adopted on the new buses and we should take a shorter journey?
Mr. Taveme: What bus fares are decided on cannot possibly be stated two years in advance. What can certainly happen in many cases, such as machines selling chocolate, and telephone boxes and parking meters, is that adjustments can be made with new coins which mean that the cost of the item is not increased. For example, many machines now use half-crowns. It was then found that as the duty on cigarettes was raised they had to be adapted to use two units together. Such a solution is perfectly feasible in the vast majority of coin boxes and vending machines which at present use the 6d. piece. I concede that the abolition of the 6d. and not having a 2½ new penny piece will in some cases cause extra expense, but this factor must be balanced against the undoubted slowing down of the cash handling system in general and the convenience of the public as a whole.
Mr. Higgins: The crucial matter is the minimum amount. If the 2½ cent piece

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is abolished, the minimum charge for telephone calls and other things will rise. It may be, though I doubt it, that there is some slight inconvenience involved in retaining the 2½ cent piece in transactions, but there would be an advantage in that there would be less rounding up and inflation and people who are not to be compensated would not suffer so badly.
Mr. Taverne: The hon. Gentleman is wrong. It does not necessarily involve rounding up, because in the case of telephone calls the time unit can be adjusted. In the case of machines, the size of what is offered can be adjusted. This does not affect the sixpence. In the case of the matchbox referred to by my hon. Friend the Member for Gravesend (Mr Murray), it is possible to adjust the size of the matchbox; it does not necessarily involve rounding up. This is precisely what has been found in countries where decimalisation has been introduced, because they have had exactly the same problem with the penny and the 1–2d. and the problem which is inherent in going to a slightly larger unit or a slightly smaller one. We can return to this point in Committee, but there is no doubt that there is no necessity for rounding up in every case.
My hon. Friend the Member for Bedfordshire, South (Mr. Gwilym Roberts) asked about tables. Studies have been made about conversion tables. The studies show that, taking the average household and converting by means of the table the old coinage into the new coinage, there is a negligible effect on the average cost. In some cases items may be put up. In other cases items may be put down. Exactly the same kind of fears which my hon. Friend has expressed were expressed before decimalisation was introduced in Australia.
A news letter issued by the Decimal Currency Board shows what happened to prices down under. The decimal made no difference to the result as far as prices were concerned. A smaller rise occurred in the six months following D-day than had occurred in the corresponding period of the previous year. In New Zealand, again there was no evidence of any kind that the price index rise was affected by decimalisation. All these fears which were expressed there, as they are being expressed here, were not realised.
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I was asked about the 18-month period. The Board's announcement that the length would not exceed 18 months was the first announcement of length. It was the hope of the Halsbury Committee that it would not exceed two years. The Board has had elaborate consultations. It has found it impossible to find a period which pleases everybody. It is more desirable to have a short period if this can be managed, but in the end it will be for the Government to decide. The Board recommended 18 months, but the final decision will be for the Government.
As for tax relief, if the hon. Gentleman reads my speech he will see that the position will be set out fully in a booklet, "Points for Businessmen", which the Board will publish on Monday. Briefly, the present position is that conversion costs count as revenue expenditure, replacement costs count as capital expenditure, and each qualifies for the appropriate relief. The question of free depreciation is something which the Government will carefully consider.
Lastly may I say something which is central to the whole scheme. That is the question of publicity. I agree with my hon. Friend the Member for Graves-end that it is vital that there should be a really effective simple publicity campaign which reaches everybody—old-age pensioners, people who have difficulty with figures and those who have difficulty in understanding documents. We have not had this campaign yet. The strategy of the Press publicity campaign has been to concentrate so far on management. This is to enable management to plan ahead for the change-over period 1970–1, because planning is vital there at this stage.
Only at the end of 1970 and the beginning of 1971 will the Board concentrate all its resources on a huge campaign aimed at the general public. If there were a great campaign today and if nothing were done later at the appropriate time, it would be useless because people forget. Use will be made of all the available publicity media. The Board will contact every household in the United Kingdom. It will bring its main publicity campaign to bear very late. It is no good hoping, as the hon. Member was apparently hoping, that what is said in this debate will affect

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the attitude of the housewives. At this stage it is management that must make its plans. The campaign addressed to housewives and the public at large will have to come in the period immediately before Decimal Day. I have no doubt that these kinds of things can safely be left to the Board. The Board is well qualified. Banking interests have been fully represented, and every commercial interest that has been concerned with decimalisation has been fully represented on the Board.
Many of the things which hon. Members have feared have been taken into account by the Board, which has looked at this matter in a way in which the House as a whole can have confidence.
Question put and agreed to.
Bill accordingly read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

TURNHOUSE AIRPORT
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]
11.57 p.m.
Mr. Anthony Stodart: Mr. Deputy Speaker, I feel that the subject of Turnhouse Airport is one in which you yourself may have shown some little interest in that you are a frequent passenger to and from there.
Turnhouse used to be a very famous name in the annals of the Royal Air Force. It was the home of one of the great fighter squadrons, No. 603, the City of Edinburgh Squadron. But in recent years it is not unfair to say that the fame which surrounded Turnhouse has given way to notoriety. It has been the continual subject of Questions in the House, Motions on the Order Paper and delegations to Ministers. Cross-winds, a lack of surveillance radar and of a second runway have disrupted traffic in and out of Turnhouse, and latterly traffic has been all but completely halted through an industrial dispute.
I have no desire to embarrass the working party which I hope will have every success, and I should at this stage
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like to thank the Minister for his courtesy in allowing me to be informed of the progress of negotiations in the troubles that have been affecting Turnhouse. But one must say, since the House of Commons is the place in which public opinion ought to be reflected, that public opinion, which appreciated the gesture made by the men at Turnhouse over the Christmas and New Year holiday, will react in another way now at the rejection of the advice which I understand, they were given by the leaders of the union, after the reopening of Turnhouse was announced for tomorrow morning.
I emphasise to both sides, one of which in this case is the Minister himself because the management of the airport is in the Government's hands, for whom the Board of Trade acts as agent, that not only do the general public suffer but many firms are experiencing acute difficulties since they rely on the Turn-house services to send their goods daily to London, and from London to the export markets of Europe and America.
The Minister has said that improved productivity must be an essential factor in any increase in the wage award. It is important that people understand what the dispute is about and what the solution suggested is. What does "improved productivity" mean in this dispute? What does it mean when applied to firemen? Clearly, it does not mean that one hopes that they will have more fires to put out. I am, therefore, somewhat confused. Does the Minister want fewer men to man the tender and thereby secure improved productivity through a reduction of manpower, or does he want the existing strength to do more and other jobs about the airport? If the latter, what jobs will they be? These are simple questions which should be answered in simple language, for everyone's benefit.
However, because I am, and have been all along, most anxious to say nothing which would stand in the way of a settlement being reached, for the benefit of the general public, I propose to say no more now that the working party has been set up. I wish it well.
I turn now to the longer-term future of Turnhouse Airport. Here, I shall be rather more critical of the Government. It is deplorable and inexcusable that an airport at which passenger traffic has

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over the past 10 years increased by an average of 20 per cent. per year, compared with an annual increase for all other United Kingdom airports of 14 per cent., an airport serving the city which is to house the Commonwealth Games in 1970, should have no adequate runway facilities, have no surveillance radar, and lack good terminal buildings.
It is depressing to recall the occasion early in 1965 when I led an all-party delegation to see the right hon. Gentleman who is now Chancellor of the Exchequer. While of course no promises were made at that time, the right hon. Gentleman was hopeful, and we all went away rather encouraged by his hopefulness that we would have a new runway at Turnhouse in about four or five years. Ever since then, there has been what I can only describe as continual procrastination and continual shifting of ground as to why there has not been development at Turnhouse.
By the end of 1966, the right hon. Gentleman who is now the Minister of Power said that new terminal buildings would be needed within five years, but that the present runways were adequate for some years after 1970. A month later, when he was under pressure on the subject, he excused the inaction about Turn-house on the ground that no airline had made any representation for new runways. At the end of 1967, the ground was shifted again to saying that the timing of the new runway was dependent on the replacement programme of British European Airways.
We have been informed that a new runway will take at least 3½ years to construct by the time the planning, the surveying, the engineering and the actual laying of the concrete are done. Therefore, it looks as though 1973 is the very earliest date we can hope for. Even that will require much more action by the Government than we have had up to now. The hon. Gentleman may blame the reluctance of Edinburgh Corporation to do business with him, but he cannot avoid the fact that it is slightly more than a year since it was announced that the British Airports Authority had agreed in principle to the ownership of Turn-house. It was then announced that agreement was expected in March for transfer later last year. In April, last year, it was
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announced that officials of the Board of Trade and the British Airports Authority had agreed on appropriate terms for the transfer. Ever since then, eight or nine months ago, the hon. Gentleman has been studying these terms.
Therefore, we have the fact that in 1965 we had a situation in which we were told that a new runway would cost between £2 million and £3 million while today we are quoted figures of between £7 million and £8 million as the cost of the runway and the new terminal buildings. The hon. Gentleman may say that priorities come into this matter. If he does, his mention of priorities will not be very well received in Edinburgh in view of the amount of Government money which is being spent on the new tube from Victoria to King's Cross and which everyone will agree will not be a viable proposition, but which is regarded as a necessity for the traffic. The need for a reliable airport outside the capital city of Edinburgh is absolutely as essential as convenient, quick traffic between Victoria and King's Cross.
Therefore, let the hon. Gentleman come away with some priorities tonight. If the sum of £7 million or £8 million is sticking in the Government's throat, let him authorise a runway as a first priority in addition to the comparatively minor but essential cost of radar, which I understand he has authorised and which we are to have next year. Let the terminal buildings come later, because we could make do with the terminal buildings we have provided we are spared the inconvenience of diversions to Abbotsinch. Let us have tonight from the Minister the decision which is long overdue.
12.10 a.m.
The Minister of State, Board of Trade (Mr. William Rodgers): I fully appreciate that the future of Turnhouse is of great interest not only to the City of Edinburgh but to Scotland as a whole, and that the airport has a long and distinguished history of more than 50 years of operational use. It has been, as the hon. Member said, a famous name. It also has a great potential for development and can play an important part in providing rapid communications to Scotland as a whole with consequences, for example, for economic development and tourism.

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I have lately received a request from the Lord Provost of Edinburgh for a full discussion of what the future holds, and the topics on our agenda will inevitably have much in common with the points the hon. Member has raised tonight. I have replied to the Lord Provost today, agreeing to a meeting which I hope will take place shortly.
I am glad that the hon. Member has taken the initiative and provided this opportunity for discussion in the House. I have noted carefully all that he has said, and I am sure that the exchange will turn out to have been of mutual advantage to us all.
I will first deal with the current industrial dispute, because whatever difficulties it has caused—and I do not disagree with the assessment the hon. Member has made—it is in a sense the lesser issue. I appreciate his generous personal remarks, and I shall keep him informed of any development.
The present position is that the principal union concerned, the Transport and General Workers, has agreed to participate in a joint working party which will examine urgently the prospects for a productivity agreement which would also cover Aberdeen and Belfast, I do not think I should be tempted into discussion of what productivity is, because this would prejudge the inquiry and any decision I might have to make, but the object is fuller utilisation of whatever manpower may at any time be employed. I hope we shall find scope for it despite the problem that the hon. Member has mentioned.
I have asked for a report by the end of next week, and I hope that at that stage we can move towards an agreement. I must emphasise that any final settlement must be consistent with the Government's prices and incomes policy, and that any productivity bargain must be genuine.
As the House knows, on 4th December the employees were offered an increase of 13s. 4d. or 3½ per cent., in accordance with the long-standing practice by which the basis for rates of pay has been Scottish local authority rates. Perhaps I might add, because there has been some misunderstanding about this,
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and much emphasis on anomalies, that the gap between rates at Turnhouse on one hand and Abbotsinch and Prestwick on the other is not that large, especially when proper account is taken of the pension arrangements for established Government employees at Turnhouse. I say this without prejudice to whether a common rate for all Scottish airports could be justified. However, I shall not pursue this now. The immediate necessity is to let the working party get on with its job.
I am very glad to tell the hon. Gentleman that the employees will be back at work tomorrow morning at 7 a.m., and that B.E.A. services to and from Turn-house will be resumed normally by Monday, as soon as B.E.A. can operate again. I understand that the airline will operate some extra flights meanwhile for the rugby international on Saturday. This is a movement in the right direction, and I hope that in the end it will have a happy outcome. If common sense prevails and everybody creates conditions in which the airport can function properly, we shall avoid further inconvenience to passengers and the possibility of damaging consequences for the Scottish economy.
On the wider issue, perhaps I may recapitulate some of the developments of the last ten years. Discussions with Edinburgh Corporation on the future of Turnhouse began as long ago as 1959, as I know the hon. Gentleman is aware, when transfer from the then Air Ministry to Civil Aviation was pending. They were resumed in the light of the White Paper of August, 1961, which set out the previous Government's declared policy of transferring Board of Trade grade II airports to local authorities wherever possible. From that date on there was a series of meetings with representatives of the Corporation, until the summer of 1967. It seemed to the Ministry of Aviation and then to the Board of Trade that transfer to Edinburgh Corporation made sense.
Local authorities generally proved willing to assume responsibility for the airports offered to them, both in their own direct interest as they saw it and with wider regional responsibilities in mind. But Edinburgh Corporation made it clear that it would not accept transfer on

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terms which might result in a contribution from the rates to operating losses, especially one which looked like being larger than at Glasgow. In particular, the Corporation saw difficulties in accepting an open-ended responsibility for capital costs. All in all it wanted liability limited.
It was, of course, entitled to this view, for it, and it alone, can judge its own best financial interest. But it should be clearly understood—and I have in mind here what the hon. Gentleman said about continued procrastination—in view of the criticisms of present delays, that Edinburgh Corporation showed considerable hesitation over a long period of negotiations in assuming the task of ownership, whereas some other local authorities jumped at the chance and were prepared to undertake the costs and risks involved. I should add that the British Airports Authority, which has a statutory duty to operate profitably, is expected to take the airport over on terms not more favourable than those offered to Edinburgh Corporation.
Mr. Stodart: May I ask one thing? I am not quite clear what is the purpose of the Minister's meeting with the Lord Provost. Is this to reopen the idea that Edinburgh is to take over the airport, and will he see that this does not further delay the plans for the development of Turnhouse?
Mr. Rodgers: The request for the meeting came from the Lord Provost. He has not provided me with the agenda, but as a matter of common courtesy I have agreed to meet him. I suppose that he will probably wish to discuss the sort of timetable which the hon. Gentleman has raised tonight, but it is his initiative and not mine.
Although we hope very much that the transfer to the British Airports Authority will go forward, the B.A.A. has rightly insisted on a clear agreement on the capital programme for Turnhouse which it will inherit and on the amount which the central Government will contribute.
There are two principal items in the capital programme: first, the terminal buildings; second, the runway. As the hon. Gentleman knows, the existing terminal building, which was opened in 1956, is seriously over-crowded during
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busy periods; there is no dispute on this. Although we have been spending small sums on relieving the more pressing problems of congestion, it is clear that a new terminal building and various associated features are required. Our present estimate of costs for this alone is £4 m. or more. This is a lot of money. After the most careful review, we remain convinced that an entirely new terminal complex on a new site must be operational by the summer of 1973, capable of an annual capacity of 1½ million passengers. Again, we do not dispute the necessity, and this is the sort of timetable that we still have in mind.
The problem of the runway is twofold. There are the difficulties arising from its alignment. We in this House are very familiar with the problem of diversions due to cross-winds, though almost as many diversions from Turnhouse are attributable to other weather reasons, especially bad visibility. Then there is the difficulty of its length. The present runway is already causing some payload restrictions, and the economic effect of these will grow as a greater proportion of the traffic is in modern jet aircraft such as the later version of the Trident.
The need is to analyse carefully the benefits of improved runway facilities in relation to costs, which could be as much as those for the terminal complex. There is no doubt that a second runway will be required one day, but, clearly, the economics must be examined, and this can affect the time scale. Of course, there is room for improvement, but we have at least as great a responsibility to the British taxpayer—especially at a time when the House has put all public expenditure under the closest scrutiny—as Edinburgh Corporation has to its citizens. The Opposition have been particularly outspoken on this.
It may be, though I simply do not know until our studies are complete, that a new runway would be best postponed for some years after 1973 and that much the same operational result could be achieved by interim extensions to the existing runway. We have not yet come to a firm view, but I hope that we shall do so very shortly. Meanwhile, this is a decision for the Government, and it would be unfair for anyone to blame the British Airports Authority for the delay.

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In recent weeks, together with my hon. Friend the Minister of State, Scottish Office, I have seen Mr. Peter Masefield and Mr. Robin McLellan. They have assured us of the Authority's continuing wish to assume the management of the aerodrome as soon as the Government make it possible for development to begin on the lines agreed. It is their determination to make Turnhouse a credit to their undertaking, with a high standard of public service.
What I have made clear is our hope that we shall be able within the next few months to put the British Airports Authority in a position to develop and operate the airport in a manner consistent with the expected growth of passengers, freight, aircraft movements and the range and spread of air services, and to be as free as possible of the existing
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operational restraints. In parallel, we shall continue to provide and improve the aerodrome navigation services as far as we can.
As I said at the beginning, Turnhouse has a significant rôle in improving access to that part of Scotland, with important and desirable consequences not only for the people of Edinburgh. We shall certainly play our part in ensuring that it is well fitted for this rôle. I hope very soon that we shall be able to make the future plain. However, it is our duty to take all factors into account and phase the very considerable expenditure involved in a way consistent with restraints on public expenditure and the real benefits which will result.
Question put and agreed to.
Adjourned accordingly at twenty-four minutes past Twelve o'clock.