Commons Sitting of 18 February 1971

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

    Prisoners (Contact with Members of Parliament)
    Mr. Molloyasked the Secretary of State for the Home Department what procedures exist which permit inmates of Her Majesty's Prisons to contact their Member of Parliament.
    The Under-Secretary of State for the Home Department (Mr. Mark Carlisle): This matter is governed by Section 5(c) of Prison Standing Orders, a copy of which is in the Library of the House. Broadly speaking, a prisoner may write to an hon. Member about general matters, about his conviction and sentence, and about prison treatment provided that any complaints about treatment have first been raised through official channels.
    Mr. Molloy: While thanking the hon. Gentleman for that reply, may I ask whether he is aware that there are grave allegations abroad that these conditions are not being met and that prisoners are being hindered in trying to contact their Members of Parliament? Is he aware that this applies, in particular to one London prison? Will he consider sending an instruction to all prisons to the effect that there should be no interference, within the rules and regulations, with inmates in their wish to contact Members of Parliament?
    Mr. Carlisle: I am aware that prisoners from time to time make complaints of
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    this kind. The hon. Gentleman drew one such complaint to my attention which I was satisfied on examination had no justification. Certainly the Home Office will look at any other complaints but, as far as we know, in general the rules are carried out.

    Trade Unions (London Demonstration)
    Mr. Speaker: Mr. Arthur Lewis, Question No. 3.
    Mr. Arthur Lewis: On a point of order. May I draw your attention, Mr. Speaker, to the fact that, no doubt due to my bad writing, the figure of 25,000 has been included in my Question by the printers instead of the figure of 75,000—although I understand that it should now be 100,000.
    Mr. Arthur Lewisasked the Secretary of State for the Home Department whether he is aware that on 21st February the Trades Union Congress is to bold a demonstration against the Industrial Relations Bill involving 25,000 workers marching through London; and whether he will ask the Metropolitan Police Commissioner to agree to its request to close Oxford Street and Regent Street for vehicular traffic during this demonstration.
    Sir G. Nabarroasked the Secretary of State for the Home Department having regard to the proposed demonstration by 30,000 members of trades unions against the Industrial Relations Bill, taking place in London on 21st February, 1971, what special instructions he has given the Metropolitan Police Commissioner concerning security, safety of London residents and pedestrians using the streets on the route of the demonstration, and safeguarding free passage of vehicular traffic.
    The Minister of State, Home Office (Mr. Richard Sharpies): These are matters for the Commissioner of Police of the Metropolis. The police are in close touch with the organisers of the demonstration.
    Mr. Lewis: I will not delay the House. I now give notice that I shall raise this under Standing Order No. 9 at the end of Questions.
    Sir G. Nabarro: Is it reasonable that the life of London should be totally disrupted by the incursion of these huge numbers of demonstrators? Would my hon. Friend tell the House, as he seems to disclaim responsibility, what special arrangements are being made to park the demonstrators' cars conveniently for them near the commencement of the route of the march and what special arrangements are being made to transport them back to their motor cars at the end of the march so that they shall not be incommoded in the process?
    Mr. Sharples: I understand that a large number is coming by train. I understand that 34 special trains and 230 coaches are due to come into London. As to what my hon. Friend says, I do not think that anyone would wish to under-estimate the burden which a demonstration of this scale puts upon the police.

    Law and Order (Enforcement)
    Mr. Wellbelovedasked the Secretary of State for the Home Department what action he has taken since 18th June, 1970 to strengthen the forces of law and order; and if he will make a statement.
    The Secretary of State for the Home Department (Mr. Reginald Maudling): In the six months from the end of June, 1970, 3,127 officers were recruited to police forces in England and Wales and police strength rose from 92,824 to 93,748, a net increase of 924. This compares with increases of 212 and 489 in the corresponding periods in 1968 and 1969. There has been a substantial increase in national recruiting publicity and provision has been made to assist some local campaigns.
    Mr. Wellbeloved: Does the Home Secretary recall the disgraceful campaign mounted by his noble Friend, Lord Hail-sham, prior to the General Election, on the subject of law and order? Is he aware that the morale of the police force is at a very low ebb and that the delay in meeting their justifiable pay claim and his failure substantially to increase recruiting have done nothing to implement the policies put forward in that disgraceful election campaign?
    Mr. Maudling: I totally disagree with the hon. Member's description of my
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    noble Friend's speech and with his comment on the morale of the police.

    Private Zoos
    Mr. Kenneth Clarkeasked the Secretary of State for the Home Department whether he will seek powers to make regulations governing the establishment and inspection of private zoological gardens and collections of wild animals.
    Mr. Carlisle: I am not at present in a position to add to the reply given on 5th November to a Question on this subject by the hon. Member for Eton and Slough (Miss Lestor.)—{Vol. 805, c. 1250.]
    Mr. Clarke: While I am grateful for that reply, may I ask whether my hon. Friend is aware that the answer of 5th November said that he was considering representations? May I ask my hon. Friend to consider the position of constituents of mine who go in fear, of all things, of baboons and a puma kept somewhat insecurely by a neighbour? May I ask him seriously to consider introducing some commonsense control over who can keep wild and dangerous animals and where they can be kept?
    Mr. Carlisle: I will, of course, consider anything that my hon. Friend wishes to put to me. I point out that, in respect of civil liability, if a wild animal which escapes causes injury or damage, the owner is liable to have damages awarded against him.
    Mr. Dalyell: Is the Minister aware that any blanket criticism of private zoos is a bit unfair because there are some such establishments, like Blair Drummond in Scotland, which are extremely enlightened and well run?
    Mr. Carlisle: I am grateful for what the hon. Gentleman said. It is within our knowledge that, for example, R.S.P.C.A. inspectors keep careful watch on private zoos, and we have very few complaints.

    Suspended Sentences
    Mr. Arthur Davidsonasked the Secretary of State for the Home Department if he is satisfied with the working of the system of suspended sentences; and if he will make a statement.
    Mr. Fowlerasked the Secretary of State for the Home Department whether,

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    in view of concern about the operation of the suspended sentence system, he will consider amending the law on this subject.
    Mr. Maudling: I am not in all respects satisfied with the operation of the suspended sentence system, and it is among the matters which I have in mind for possible future criminal justice legislation.
    Mr. Davidson: I am grateful to the right hon. Gentleman for that reply. Is he aware that one of the results of the system, which is exactly opposite to that which was intended, has been that many people are going to prison who would not previously have done so but might have been put on probation? Will he consider, while keeping the system, allowing more flexibility to magistrates in the way in which they operate it
    Mr. Maudling: There is a lot in what the hon. Gentleman says—that people who might have been fined or put on probation are now given suspended sentences. This is one of the reasons why I want to review the system if we have a chance to introduce a new Criminal Justice Bill.
    Mr. Fowler: As suspended sentences have helped to fill the prisons rather than to empty them, and as there are already a number of alternatives to prison in existence, will my right hon. Friend consider the case for abolishing suspended sentences rather than simply reforming them?
    Mr. Maudling: In the course of the review of another Criminal Justice Bill I will consider what is to be done about suspended sentences. My information is that they have not added as much as is thought to the prison population, if they have added anything. But the system is not working as the House intended it to work.

    Criminal Injuries Compensation Scheme
    Mr. Arthur Davidsonasked the Secretary of State for the Home Department if he is satisfied with the workings of the Criminal Injuries Compensation Board; and if he will make a statement.
    Mr. Geoffrey Finsbergasked the Secretary of State for the Home Depart
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    ment if he will give early consideration to reviewing the procedures of the Criminal Injuries Compensation Board.
    Mr. Carlisle: The Criminal Injuries Compensation Scheme is in general working satisfactorily, but my right hon. Friend has well in mind the need for a comprehensive review of this experiment in due course.
    Mr. Davidson: When the comprehensive review begins to operate, will the hon. Gentleman consider holding the hearings of the Board in public so that members of the public who are victims of criminals and are unaware of their rights become aware of them because of the publicity given to the hearings?
    Mr. Carlisle: I agree that wide publicity should be given to the existence of the scheme. I am not sure whether I agree that that need would be met by having public hearings in connection with a scheme under which the form of hearing has the advantage of being reasonably informal.
    Mr. Finsberg: When my hon. Friend reviews the procedure, will he see whether it is possible to give a right of appeal to the Committee on Tribunals or to my right hon. Friend the Home Secretary so that we may have an assurance that appeals are properly conducted?
    Mr. Carlisle: We will consider that point. At the moment the Board's decisions are not subject to Ministerial review but anyone whose claim to one member of the Board is unsuccessful is entitled to appeal to a meeting, of the full Board.
    Mr. Edward Lyons: First, will the hon. Gentleman consider extending the powers of the Board to include a case in which a man is injured seeking to apprehend a criminal—for example, when he is pursuing a bank robber in his car which crashes and he is injured? At the moment such a person can receive no compensation. Secondly, will the hon. Gentleman consider enabling the Board to pay compensation to victims of mistaken identity who have been wrongly committed, charged or convicted of criminal offences and the true culprit is subsequently found and convicted?
    Mr. Carlisle: I think that the hon. Gentleman is wrong on the first part of his supplementary question. The scheme

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    compensates direct victims of crimes of violence and people hurt in trying to prevent crimes of violence or to arrest those who have committed them. The example which the hon. Gentleman gave is covered. He knows that the second part of his supplementary question is nothing to do with the Criminal Injuries Compensation Scheme and does not arise out of this Question.
    Miss Fookesasked the Secretary of State for the Home Department whether he will amend the terms of the Criminal Injuries Compensation Scheme so that persons who suffer injury as a direct result of going to the aid of a victim of a crime of violence can receive compensation.
    Mr. Carlisle: The existing Scheme includes persons who sustain personal injury directly attributable to the prevention of an offence. My right hon. Friend has no present plans for an extension of the Scheme to other situations where injury is sustained as a result of going to the aid of a victim of a crime of violence.
    Miss Fookes: Will my hon. Friend not accept that there is grave injustice, and may I draw his attention to the plight of my constituent, Mr. Knaggs, who is in such a position? Will my hon. Friend undertake to investigate the matter?
    Mr. Carlisle: I am aware of the case to which my hon. Friend refers. However, the Board's decisions are not open to Ministerial review, and clearly it acted in accordance with the scheme on that occasion.

    Emergency Voluntary Services
    Mr. Iremongerasked the Secretary of State for the Home Department what steps he is taking to establish an organisation of emergency service volunteers; and when he expects to announce details of a complete scheme.
    Mr. Blakerasked the Secretary of State for the Home Department when he will be able to make a statement on the future of the emergency voluntary services.
    Mr. Sharples: My right hon. Friend is not yet in a position to make a statement.
    Mr. Iremonger: Will my hon. Friend say just how enthusiastic the Government are about this subject as a matter of defence and social policy?
    Mr. Sharples: It is important that there should be a comprehensive review of the home defence system, and that we should get it right before making a statement.
    Mr. Blaker: I accept that this matter requires careful planning, but does my hon. Friend agree that it will help the members of the voluntary civil aid services to continue their membership and to retain the buildings which they have managed to obtain if they know that an early announcement will be made?
    Mr. Sharples: I appreciate the feeling among people interested in the voluntary organisations, in particular, that an early statement should be made. I can give an assurance that a statement will be made as soon as possible, but it must follow the comprehensive review.
    Mr. Ashton: Before he makes a statement, will the hon. Gentleman note that if any attempt is made by emergency service volunteers to act as blacklegs during an official dispute it is likely to cause a great deal of upset in society and may do a lot more harm than good?
    Mr. Sharples: I do not think that that point arises from the Question.
    Mr. Jessel: Will my hon. Friend bear in mind the possible use of voluntary emergency services in the event of air crashes in the vicinity of airports?
    Mr. Sharples: The police have overall responsibility for matters of that kind. Where volunteers can be used they will be used.

    National Referenda
    Sir D. Walker-Smithasked the Secretary of State for the Home Department what arrangements he has made for the conduct of a referendum on a major matter on which the nation's opinion is required; and whether he is satisfied that they can be put speedily into operation.
    Mr. Maudling: None, Sir. The second part of the Question does not therefore arise.
    Sir D. Walker-Smith: Is it not time that my right hon. Friend got on with the arrangements, having regard to the fact that it is clear that a referendum is constitutionally appropriate if it is a guide to parliamentary action and not a substitution for it and the fact that there is no other obvious way in which the test can be applied which the Prime Minister stated in May last year to see whether entry into the E.E.C. has the wholehearted support of the British people?
    Mr. Maudling: I cannot agree. Our constitution provides for all matters, be they matters as serious as war and peace or the death penalty, to be decided by Parliament.

    Northern Ireland
    Mr. St. John-Stevasasked the Secretary of State for the Home Department whether he will make a statement of Government policy concerning Northern Ireland, in the light of recent developments in Ulster.
    Mr. Maudling: I would refer my hon. Friend to what I said in the debate on Monday, 15th February.
    Mr. St. John-Stevas: Will my right hon. Friend make it plain to the House and to the country that the violence practised by the I.R.A. in Northern Ireland in no way discredits the reform programme there and that it is still Her Majesty's Government's intention to give all moral and material support to the Northern Ireland Prime Minister in his efforts to reconcile the two communities?
    Mr. Maudling: I should be very happy to give that assurance.
    Mr. Kaufman: Will the right hon. Gentleman give an assurance that, whatever necessary action is taken by British troops in this very serious situation, there will be no infringement of the rule of law and the rights and liberties of the subject, as took place during the weekend of 3rd to 5th July last year?
    Mr. Maudling: I do not necessarily accept the premise on which that supplementary question was based. But let us
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    be clear: the rule of law is threatened by the gunmen.
    Captain Orr: Is the intention to uphold the rule of law helped by the appalling irresponsibility of the British Broadcasting Corporation? On the very day on which it was announced that a soldier lost his life, two gunmen were interviewed, with their backs to the camera, protected by anonymity. Can my right hon. Friend imagine anything more inflammatory or more damaging to the task which our troops have to do?
    Mr. Maudling: I do not want to comment on a programme which I did not see, but it is fair to say that in general it is not possible to be impartial between those who die in protecting the law and those who kill to destroy it.
    Mr. Callaghan: While the Home Secretary may not want to comment on a programme, is he inquiring of the Commissioner whether he has asked the B.B.C. for information about these men so that, if the allegations are correct, they can be brought to justice?
    Mr. Maudling: I have myself instituted those inquiries, as I have done on previous occasions.

    Public Houses
    Dr. Gilbertasked the Secretary of State for the Home Department whether he will seek powers to compel all holders of public house licences to maintain a part of their premises with public bar facilities and public bar prices.
    Mr. Carlisle: Licensing justices already have power to secure this. It will be for the Committee on Liquor Licensing, now in course of appointment, to consider whether more is required.
    Dr. Gilbert: I thank the hon. Gentleman for his answer, but does he not accept that there is the germ of a serious problem here? As public bars are increasingly squeezed out of existence, there will be nowhere for the ordinary working man, coming home in his working clothes and probably with mud on his boots, to have a quiet drink. Secondly, it is important for the old-age pensioner to be able to get his beer at the cheapest possible price consistent with hygiene.
    Mr. Carlisle: I am sure that we all agree that there is a place for the public bar in the English public house, but this must in the end be a matter of commercial judgment. The licensing justices have power to decide whether premises are suitable, and they also have to agree to any later adaptation of the premises that may be made.
    Mr. Waddington: Should not we be trying to get rid of the out-moded restrictions on licensees rather than adding to those restrictions? Has not the time come for a speedy review of the whole of our licensing laws?
    Mr. Carlisle: That is why my right hon. Friend has set up a Committee on Liquor Licensing, the Chairman of which will be the right hon. Lord Eroll of Hale. We hope that that review will take place as speedily as possible.

    Obscenity, Pornography and the Permissive Society
    Sir G. Nabarroasked the Secretary of State for the Home Department whether he will introduce legislation to give effect to the provisions of the hon. Member for South Worcestershire's proposed Motion, Obscenity, Pornography and the Permissive Society.
    Mr. Carlisle: The Misuse of Drugs Bill is designed to strengthen my right hon. Friend's powers to prevent the distribution of drugs for socially harmful purposes. For the rest, he has no present proposals for legislation on those aspects of my hon. Friend's Motion which are susceptible to implementation by changes in the law.
    Sir G. Nabarro: Has not the time arrived for this whole subject to be surveyed by an impartial committee, with a view to making recommendations for legislation to strengthen society against the insidious inroads of all the evil influences named in the Motion? Has not my hon. Friend observed that 102 members of his party, representing a substantial body of parliamentary opinion, have now signed the Motion?
    Mr. Carlisle: I agree with my hon. Friend that there is a great deal of proper public concern about the matters to which that Motion draws attention, but I would point out to him that the Motion asks the Government not to legislate but
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    to resist all legislative proposals, and that the Government propose to do.
    Mr. Strauss: Is not the Motion ridiculous in other ways, too, in that it associates drug taking with the permissive society? Will the Government give an assurance that it will in no way curtail the beneficial effects of recent civilising permissive legislation, in particular the Theatres Act, 1968, which abolished play censorship?
    Mr. Carlisle: I am surprised that the right hon. Gentleman should say that there is no connection between drug taking and permissiveness. I thought that the words "permissive society" included that matter. I entirely agree with the right hon. Gentleman's comments on a civilised society and I hope that all of us on both sides of the House wish to see a civilised society with civilised social legislation.
    Mr. St. John-Stevas: While I do not go all the way with my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), whose Motion I have not signed, is there not a case for a Select Committee to investigate the whole question, so that we can have some guidance on how to preserve legitimate freedom and at the same time turn back the tide of filth which is becoming a major public nuisance?
    Mr. Carlisle: I repeat that I believe that there is genuine public concern about these matters. My hon. Friend asks for a Select Committee, but I would point out that the Act at present in force, which he is criticising as inadequate, was itself the result of a recommendation of a House of Commons Select Committee.
    Mr. Wellbeloved: Will the hon. Gentleman bear in mind that, while he has the support of the whole House in defence of a civilised society, he does not have the support of the whole House in defence of pimps, ponces and purveyors of pornography? Is he not aware that large sections of the community are outraged at the flood of filth coming into the country, and is it not time that his Department did something about it?
    Mr. Carlisle: The hon. Gentleman will know from previous Question Times that the Home Office is fully aware of public concern about the purveyance of filth,

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    as he describes it, and of pornography. The fact remains that this comes under the Obscene Publications Acts of 1959 and 1964, which make it an offence to publish anything which tends to deprave and corrupt. It is difficult to find suitable words to put in the place of those words. That was the result of a recommendation of a House of Commons Select Committee. Although we are always willing to listen to suggestions for the alteration of the law, we must be sure that any alteration we make is to the advantage of a civilised society rather than the reverse.

    Holloway Prison (Mothers with Young Children)
    Mrs. Renée Shortasked the Secretary of State for the Home Department what special provision is included in the plans for the new Holloway Prison for mothers with young children serving sentences.
    Mr. Carlisle: There will be accommodation in special units for up to 42 mothers and their children. It is hoped that mothers serving sentences of imprisonment will then be able in appropriate cases to keep their children with them up to the age of about five years.
    Mrs. Short: Is the hon. Gentleman aware that a woman may have more than one child with her in Holloway? Is it not a serious situation that we should allow women with young children first to be sent to prison and then to have their children in that environment? Will he look at the proposals for the rebuilding of Holloway while there is yet time for the plans to be altered to see what can be done to make sure that women with young children are not sent to prison unless they require the most secure conditions, which is necessary only in a small minority of cases?
    Mr. Carlisle: I know the hon. Lady's interest in this matter, but it is a question of striking a balance between the undesirability of sending mothers with young children to prison where it can be avoided, with which I agree, and the necessity from time to time when the safety of the public requires it of imposing a prison sentence on a person who happens to be a mother with a young child. That is why the provision is made. I agree with the hon. Lady that where possible mothers with very young children and women who
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    are pregnant should be dealt with in ways other than by imprisonment.

    Major Fires in Shopping Precincts
    Mrs. Renée Shortasked the Secretary of State for the Home Department what research is being carried out in his Department into ways of controlling major fires in modern shopping precincts, and into the identification of the special hazards involved.
    Mr. Sharples: A working party of the Central Fire Brigades Advisory Councils has almost completed a study of the fire hazards associated with shopping precincts and similar town centre redevelopments, with a view to circulating recommendations on how to deal with them to fire authorities and other interested organisations.
    Mrs. Short: I am much obliged to the hon. Gentleman for that reply. Is he aware that the recent serious fire in the new shopping precinct at Wolverhampton brought to light difficulties about access for fire engines and the provision of automatic alarm and sprinkler systems? Is the committee considering the need to make these obligatory?
    Mr. Sharples: I understand that a full report on the fire to which the hon. Lady refers is being prepared, but my information is that the fire involved no special features which have not already been taken into account by the working party.
    Mr. Merlyn Rees: Despite what the hon. Gentleman told the House about the central fire organisation, is not fire research split between the Home Office and another Department, and would it not be a good idea if the recommendations of Holroyd in this respect were implemented as soon as possible?
    Mr. Sharples: That raises a wider question involving the whole recommendations of the report which are at present under consideration.

    Fox Hunting
    Mr. William Priceasked the Secretary of State for the Home Department whether he will now introduce legislation to ban fox hunting.
    Mr. Carlisle: No, Sir.
    Mr. Price: In view of the Government's claim to be acting in accordance with

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    public wishes on other matters, is it not time that they extended that policy to blood sports to which there is clear and overwhelming opposition? How long are Governments, both Labour and Conservative, to hide behind the miserable excuse that this is a matter for private Members?
    Mr. Carlisle: I am happy to say that I do not have to speak for the Labour Government, particularly for the behaviour of the previous Administration. So far as this Government are concerned, we do not intend to legislate in this matter.

    Illegal Evictions
    Mr. Frank Allaunasked the Secretary of State for the Home Department if he is aware that the police are not interfering against illegal evictions of tenants because they are often uncertain of the legal position; and if he will therefore make regulations requiring that the landlord is required to show the police the court eviction order, or other documents giving him legal authority.
    Mr. Sharples: Difficult legal problems may arise over an eviction, whether or not documents are produced. I do not think it would be right to seek powers to require the police to alter their rôle.
    Mr. Allaun: Is the Minister aware that many of these illegal evictions take place late at night or at weekends, when no local government officials are available and when only the police could stop them? Would not my suggestion invalidate the reason given for the present inactivity by the police in this matter?
    Mr. Sharples: The function of the police in cases of eviction is clear. It is to prevent breaches of the peace; to make investigations on the spot into possible criminal offences; to warn those concerned of possible offences under the provisions of the Rent Act, 1965; and to report any such offences to the local authority. I believe that the police carry out their duties in this respect.
    Mr. Elystan Morgan: Is it not as important for police officers to attend illegal evictions as to attend legal evictions, otherwise it will not be seen that the police are impartial in their rôle.
    Mr. Sharples: If a complaint of an illegal eviction were made to the police, the police would attend.

    Police (Pay)
    Mr. Fernyhoughasked the Secretary of State for the Home Department whether he will ask the Police Council to give special payment for overtime and shift allowances in the police force which are matters causing concern to the police.
    Mr. Sharples: Overtime already attracts either additional time off or payment at special rates. Shift work has been taken into account in the basic rates of police pay since 1960.
    Mr. Fernyhough: Does the hon. Gentleman appreciate that his answer will be very unsatisfactory to the vast majority of the police force who feel in the same position as the postmen since their legitimate pay claim is being held up to satisfy the ideology of the Government? Does he not realise that, unless there is a better shift allowance and better overtime payments, more resignations are likely to take place and there will be less recruitment.
    Mr. Sharples: I find it difficult to understand the right hon. Gentleman's question, because if on this matter there were concern in the service the Staff Side would have expressed that concern in the Police Council. In fact, the Staff Side has not done so.
    Mr. Fowler: Has my hon. Friend considered the desirability of consolidating rent allowance in the pay since the rent allowance in London amounts to as much as £8 a week? That would be a true picture of the policemen's pay and might act an an inducement to recruitment?
    Mr. Sharples: This is a matter for general consideration by the Police Council, which they might take into account in the present negotiations.
    Mr. Bagier: Would the Minister accept that when one talks to individual policemen one factor they raise is that their collective wage includes emoluments, and so forth, and that the average sum amounts to a completely unsatisfactory figure? Would he agree that although the recruitment figures announced a little earlier by his right hon. Friend appear to be satisfactory, the number of resignation from the force by experienced officers is a very serious factor?
    Mr. Sharples: If the police feel that this is a matter which they wish to discuss, the right course is for the representatives of the police to bring it forward in the Police Council. That is the right place for such details to be discussed.

    Public Order
    Sir D. Walker-Smithasked the Secretary of State for the Home Department what consideration he has given to the need for clarifying and simplifying the law relating to public order; and if he will make a statement.
    Mr. Maudling: I have nothing at present to add to the reply given to a Question by my right hon. and learned Friend on 5th November.—[Vol. 805, c. 411–12.]
    Sir D. Walker-Smith: Is my right hon. Friend aware that the Society of Conservative Lawyers, after exhaustive analysis and the cataloguing of statutory provisions on this subject, concluded that these provisions were scattered, diverse, and in many cases archaic and lacking in clarity, and urged simplification and clarification? Would he reconsider the matter in the light of that recommendation?
    Mr. Maudling: I am well aware of the report, and that is why we are considering these points.

    Channel Islands (Constitution)
    Mr. Liptonasked the Secretary of State for the Home Department what arrangements are being made to enable residents in the Channel Islands to give oral evidence to the Royal Commission on the constitution; and to what address written evidence should be sent.
    Mr. Carlisle: I understand that, after inviting written evidence through notices in the local Press, the Commission took oral evidence in the Islands in April last year. The Commission's address is G.K.N. House, 22 Kingsway, London W.C.2.
    Mr. Lipton: Is the Royal Commission on the constitution taking note of the fact that in the matter of housing land in Guernsey and other islands, the authorities operate a ruthless discrimination against British subjects, unless they are willing to buy houses each costing £15,000
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    or more? Will he arrange for this matter to be looked into, or find out whether any investigation of this practice has already taken place?
    Mr. Carlisle: I find it difficult to see how this is within the ambit of the Royal Commission on the constitution, but I am sure that the Royal Commission is taking note of any evidence which it heard in the Islands.

    Cinematograph Act, 1952
    Sir R. Thompsonasked the Secretary of State for the Home Department whether he has now completed his consideration of the problems raised by the abuse of Section 5 of the Cinematograph Act, 1952; and if he will now introduce amending legislation.
    Mr. Carlisle: This problem raises some difficult issues and the examination of these has not yet been completed.
    Sir R. Thompson: Does my hon. Friend realise that Section 5 is being used for purposes which were never intended by Parliament? In his further consideration of these matters will he turn a deaf ear to the raucous clamour of the permissive society and, instead, pay heed to the expressed wish of the silent majority of our people?
    Mr. Carlisle: I agree entirely with my hon. Friend in that I believe that it is clear that Section 5 of the Cinematograph Act, 1952 is not in practice being carried out in the way intended by Parliament, but my hon. Friend will appreciate that there are difficulties when one is dealing with private clubs and the question whether censorship should exist.
    Mr. Ford: Is the Gentleman aware of a notable phrase coined by one of my hon. Friends that "one man's porn is another man's corn"? Is he also aware that there is no satisfactory legal definition of "pornographic", that these are largely matters of taste, and that individuals should be left to decide such matters for themselves?
    Mr. Carlisle: I am aware that it is a matter of taste and of the fact that people are not required to go to these clubs if they do not wish to do so. Nevertheless, I should be failing in my duty if I did not repeat again what I said on

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    an earlier Question—that I appreciate that there is public concern about certain things which are happening.

    Security Prisoners (Religious Welfare)
    Mr. St. John-Stevasasked the Secretary of State for the Home Department whether he will make revised arrangements for the religious welfare of prisoners in security wings.
    Mr. Carlisle: I am not aware of any need to change the present arrangements but should be glad to consider any suggestions which my hon. Friend may have in mind.
    Mr. St. John-Stevas: Does not my hon. Friend realise for Catholics it is the mass that matters and that communion given to prisoners in their cells is not the same as allowing them to take part in a public act of worship?
    Mr. Carlisle: I appreciate what my hon. Friend says, but the difficulty, as he knows, is that those who are within the security wings are kept segregated from the rest of the prison population. I can tell my hon. Friend that chaplains and ministers regularly visit these wings and positively offer services to those in them.

    Pornographic Books and Magazines
    Mr. Michael McNair-Wilsonasked the Secretary of State for the Home Department whether he will take steps, by legislation or otherwise, to restrict shop window displays of pornographic books and magazines.
    Mr. Carlisle: Legislation already in force prohibits the publication of obscene articles and the public exhibition of indecent material.
    Mr. McNair-Wilson: My hon. Friend goes on concentrating on this act of obscenity, whereas we are discussing matters which disgust and shock thousands of people who have to walk past these shops. The Swedes, who seem to take a much more enlightened view than our Home Office, have a law which prevents these displays and insists on the one word "Porno" being shown over these shops. Could not we do something similar?
    Mr. Carlisle: From the various other Questions and answers that we have had today, clearly this is a serious matter, and it is difficult to decide what is best to be done. We have the Obscene Publications Act. We have also the Indecent Advertisements Act, 1899, which is still in force. As for cinema advertisements, which is one of the matters worrying my hon. Friend, as I told him on another occasion, the licensing authorities have power to impose conditions, including those to prohibit the display of advertisements likely to offend good taste or decency, to lead to crime or disorder, or to offend public feeling.

    Hypodermic Syringes
    Mr. Michael McNair-Wilsonasked the Secretary of State for the Home Department whether he intends to introduce legislation restricting the sale of hypodermic syringes to persons of 18 years of age or over.
    Mr. Sharpies: No, Sir.
    Mr. McNair-Wilson: My hon. Friend will be aware, since I have sent him a hypodermic syringe bought in my constituency by a child of eight, that they are freely available to anyone. When the drug figures are going up by leaps and bounds, are we wise to allow this vital instrument of the drug trade to go on being freely available to children?
    Mr. Sharples: The Pharmaceutical Society has advised its members to deal personally with requests to purchase syringes, to ensure that they are required for genuine medical purposes. The solution posed by my hon. Friend might have worse effects than the system operated at the moment.

    Prison Service (Investigation)
    Mr. Evelyn Kingasked the Secretary of State for the Home Department if he will appoint a committee to investigate the prison service and make recommendations as to recruitment, remuneration and career structure, with particular reference to custodial and sociological functions and the nature of the staff best qualified to exercise them.
    Mr. Carlisle: These are all aspects of staffing which are kept under constant review, and my right hon. Friend does

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    not think that there is any occasion for an inquiry by an outside committee.
    Mr. King: Does not the community owe a great debt to members of the prison service who act on its behalf sometimes in difficult and painful circumstances? Is my hon. Friend aware that they do not want to be regarded only as turnkeys, but want to play a more constructive rôle? Is he further aware that this is all linked with a career structure and better prospects for promotion?
    Mr. Carlisle: I am glad to have this opportunity to pay tribute to the dedicated work of members of the prison service in difficult conditions. As for a career structure, my hon. Friend may know that a working party appointed by the previous Home Secretary is examining the prospects of promotion to the Governor grade.

    Official Secrets Act, 1911
    Mr. Liptonasked the Secretary of State for the Home Department when he will introduce legislation to amend the Official Secrets Act, 1911.
    Mr. Dribergasked the Secretary of State for the Home Department if he will review the workings of the Official Secrets Acts, with particular reference to the recent tendency of governments to extend the scope of the Acts beyond their original purpose of combating espionage and other serious threats to national security.
    Mr. Joplingasked the Secretary of State for the Home Department what steps he is taking to review the operation of the Official Secrets Act.
    Mr. Maudling: I have decided to appoint a committee to carry out a full review of the operation of Section 2 of the Official Secrets Act, 1911. I am glad to inform the House that Lord Franks has agreed to serve as chairman of the committee. The names of the other members will be announced shortly.
    Mr. Lipton: Does the right hon. Gentleman agree that the Official Secrets Act, 1911, is inequitable, inefficient and out of date? Is he aware that we do not want a long-drawn-out review because, in the meantime, this Act gravely
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    affects the freedom of the Press, and speedy action is required?
    Mr. Maudling: It is because of the seriousness of the issues involved that a thorough review by a committee under such a distinguished person as Lord Franks is to start work.
    Mr. Driberg: While warmly welcoming that reply, may I ask the right hon. Gentleman if the committee will include, besides representatives of the security services and lawyers, who are no doubt necessary, any ordinary lay people such as those who have been or some day might be victims of the wider application of this Act?
    Mr. Maudling: I will bear that suggestion in mind.
    Mr. Biggs-Davison: Has my right hon. Friend and have the Law Officers studied the editorial in the New Statesman by the right hon. Member for Coventry, East (Mr. Crossman) describing his search of Cabinet papers? Is this in conformity with the Official Secrets Act?
    Mr. Maudling: I always read the right hon. Gentleman's articles with great interest. However, I do not think that the article to which my hon. Friend refers arises on this Question.
    Mr. Callaghan: As the Official Secrets Act is to be reviewed, why limit the review to Section 2? Why should not the committee be free to consider the impact of other Sections?
    Mr. Maudling: Because it is Section 2 which has been criticised.
    Mr. Callaghan: Is not it the case that there has been continuing criticism of other Sections of the Act, and that there were earlier preliminary discussions with a view to making a much wider review than that now proposed? Will the right hon. Gentleman consider the matter again and at least give a committee in which he has so much confidence, under the chairmanship of such a distinguished figure, the right to look at the whole Act?
    Mr. Maudling: I will look at any suggestion that the right hon. Gentleman makes. However, there is a big distinction between Sections 1 and 2. The distinction is pointed out in Question No.

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    77. My impression is that there is a great difference between the two, and the criticism in recent cases has been of Section 2.

  PRIME MINISTER OF NORTHERN IRELAND (DISCUSSIONS)
  Mr. Molloyasked the Prime Minister if he will now seek a meeting with the Prime Minister of Northern Ireland.
  The Prime Minister (Mr. Edward Heath): I met Major Chichester-Clark last weekend at Chequers when we had a useful general discussion of the whole range of issues affecting Northern Ireland.
  Mr. Molloy: While thanking the Prime Minister for that reply, may I ask whether he agrees that discrimination, whether it be in Russia, Rhodesia, South Africa or in Northern Ireland, is bound to result in the kind of situation which now exists in Northern Ireland? Is he prepared to consider making a proposal to establish a peace council for the Province which includes people of all religions especially His Eminence the Primate of all Ireland, Cardinal Conway?
  The Prime Minister: As a result of these discussions, we came to the conclusion—which my right hon. Friend the Home Secretary mentioned in the debate last Monday—that relations between the communities in Northern Ireland were improving, and I think that the first report of the Ombudsman in Northern Ireland substantiates that fact. The situation now arising is one in which members of a particular minority group apparently are determined to use force to disrupt society there.
  As for the second part of the hon. Gentleman's Question, I know that my right hon. Friend is prepared to consider a proposal of this kind. Certainly I welcome the prospect of representatives of the different faiths in Northern Ireland, as well as of various societies, coming together and discussing matters around a table.
  Mr. Harold Wilson: Is the Prime Minister aware that the whole House hopes that, under the present Government, as under the previous Government, Government and Opposition can combine to keep out of party politics the rôle of
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  the British troops in Northern Ireland, and that this will be possible, as it has been in the past and I think is still, so long as the troops are seen to be exercising a fair, detached, neutral rôle in Northern Ireland? In furtherance of that, will the right hon. Gentleman assure us that he will set his face against any proposal to rearm the Royal Ulster Contabulary or to reconstitute the B-Specials?
  The Prime Minister: I quite agree with the right hon. Gentleman. I am not aware of any different approach. British forces are there to help maintain law and order in support of the civil power in a neutral fashion as regards the communities there.
  As for the last part of the right hon. Gentleman's Question, we have always given that assurance, and it remains.
  I am sure that we all regret the sudden illnes which has struck down the present Commander-in-Chief in Northern Ireland. Major General Tuzo has been appointed to take his place and will take up his duties at the earliest possible moment.
  Mr. Harold Wilson: I am sure that my right hon. and hon. Friends all support what the Prime Minister said about the vary sad illness of the Commander-in-Chief. However, will the right hon. Gentleman reconsider the words which he used when he referred to the Army being there in aid of the civil power? Is not the right hon. Gentleman aware that continuously, since August, 1969, the Army, at the invitation of the Northern Ireland Government, is in total control of police and security matters? British troops are not just there in support. They have a special responsibility, which means that this House as well as the Stormont House must be concerned with actions taken not only by the Army but by the police.
  The Prime Minister: The right hon. Gentleman is quite right in saying that this House must be concerned about any action taken by the Forces in Northern Ireland, who are responsible to my right hon. and noble Friend the Secretary of State for Defence. At the same time, the Northern Ireland Government have a responsibility as the civil power in respect of the police and the maintenance of law and order. The former Home Secretary pointed out in his speech last Monday that there is a dichotomy. But it can be made to work perfectly well.
  Captain Orr: Is the Prime Minister aware that while we all support the fact that both the Army and the police must be impartial in upholding the law, there can be no impartiality between the Forces of the Crown and those who are engaged in subversive activities against the Crown?
  The Prime Minister: That surely is a principle which applies whether one is discussing the police or Her Majesty's Forces.

  DEPARTMENT OF TRADE AND INDUSTRY (MINISTERS)
  Mr. Carterasked the Prime Minister if he will reduce the number of Junior Ministers at the Department of Trade and Industry by two.
  The Prime Minister: No, Sir. The number in the Department and in the Ministry of Aviation Supply is already four fewer than in the Ministry of Technology and the Board of Trade under the previous Administration.
  Mr. Carter: I thank the Prime Minister for that reply. Does the right hon. Gentleman agree that urgent changes in both the personnel and the policies of the Department of Trade and Industry are required immediately to bring about a rapid reduction in the staggering number of unemployed in the country, and in particular the record number of unemployed in Birmingham, which is the highest since 1940?
  The Prime Minister: The policies being pursued by the Government in the sphere of trade and industry can be discussed later today.
  On the second part of the hon. Gentleman's supplementary, the rise in unemployment is regrettable, but, as we have constantly pointed out, it is the consequence of wage-cost inflation making itself felt in industry as employers and those who find themselves priced out of markets try to protect themselves.
  Mr. Tom Boardman: Does my right hon. Friend agree that one of the additional burdens on the Department is clearing up the problems left by the incompetence of the last Administration, particularly the former Minister of Technology?
  The Prime Minister: That is a burden which every Department in Government today has to bear.
  Mr. William Price: Is the Prime Minister aware that some of us on this side of the House regard my hon. Friend's Question as quite outrageous because it is wrong to pick out any two Ministers in that way? Is not the only just solution to sack the lot?
  The Prime Minister: I do not think that the hon. Gentleman was picking on any two Ministers. He was trying to make the point that, with rising unemployment, one must face the real cause which, as I have just decribed, is wage-cost inflation.

  PRIME MINISTER'S OFFICE (STAFF)
  Mr. John Fraserasked the Prime Minister what is the current cost of staffing his office; and what he estimates the cost will be in one year's time.
  The Prime Minister: About £150,000 a year. The cost for the coming year will be presented in the Estimates in due course.
  Mr. Fraser: Is the truth of the matter that the Prime Minister cannot give an estimate for one year's time because he has just sacked the Civil Service arbitrator, Hugh Clegg? If the Prime Minister is able to give an estimate, why does he not publish the estimate of a fair distribution of incomes throughout the public and private sectors, which will remove the deep sense of injustice which is felt in many sectors of the community and is one of the causes for strikes in the public sector, because there is no control in other areas? Will the Prime Minister publish these estimates as well as those of his own Department?
  The Prime Minister: I have stated that the estimate will be published in the customary way at the proper time. There is no question of there not being an estimate.
  The second part of the hon. Gentleman's supplementary question is not strictly relevant, but I am prepared to deal with it. Professor Hugh Clegg's term as an arbitrator was due to expire on

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  10th March, and he has not been reappointed.—[HON. MEMBERS: "Why?"]—I will tell hon. Gentlemen why. Because, as he himself said, the Chairman of the Arbitration Tribunal ought to command the confidence of both sides. As Professor Clegg accepted nomination as a trade union representative on another inquiry, it was therefore quite natural that his appointment should not be renewed. This is particularly the case, because, if there is disagreement on the tribunal, it is the chairman himself who decides. If the chairman of any tribunal had accepted an appointment as a business men's or employers' representative, the trade unions would rightly have complained.
  Mr. Harold Wilson: In that case, will the right hon. Gentleman explain why he did not object at the time when Professor Hugh Clegg was appointed to the Scamp Inquiry? Is the right hon. Gentleman aware that when a person is nominated to these inquiries, he is nominated to be one of three judicial persons and not to represent the interests of those who nominated him?
  Is the right hon. Gentleman further aware, as the Minister for the Civil Service, that the Whitley Council over 50 years, consisting of wise men from both sides, has brought the matter of consultation and arbitration to a very high pitch because of its actions? Is the right hon. Gentleman prepared to destroy that by one further action in this new style of Government by vendetta?
  The Prime Minister: It did not lie in the Government's power to object to Professor Clegg taking up an appointment on another tribunal as a trade union nominee. But when the question of his reappointment arises, then it is right for the Government, far from undermining arbitration, to maintain the integrity of the Chairman of the Tribunal.
  Mr. Harold Wilson: The right hon. Gentleman—[HON. MEMBERS: "Sit down."] The right hon. Gentleman did answer my first question; he dodged it. He did not say why he did not object at the time.
  Nor did the right hon. Gentleman answer my second question. Has he not yet studied the subject sufficiently to know that when three judges are appoin
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  ted to a tribunal or a court—if the trade unions are consulted, as they were by the Government—they act as judges and not as advocates? [HON. MEMBERS: "Too long."] The results of this are going to be too long for hon. Gentlemen, too. Is it not a fact that they go in as judges, by agreement with all parties, and not as advocates? Does not the right hon. Gentleman understand that?
  The Prime Minister: The Scamp Tribunal was not appointed by the Government. We had no say in its membership and therefore we had no responsibility for the nominees of either the trade union or the local authorities. The right hon. Gentleman knows perfectly clearly that that is the position. Therefore, we had no power to stop Professor Clegg from taking up that appointment. Having studied the situation carefully and the history of arbitration in the Civil Service, I know that it is vital that the integrity of an independent chairman should be maintained, and that is what we are doing.
  Mr. Thorpe: Is the Prime Minister suggesting that the Government had no advance knowledge of the personnel of the Scamp Inquiry before they read the names in the newspapers? If that be not the position, did not the Government see the need to make representations on these clearly and strongly held views about Professor Clegg? Further, the Government having declared that they no longer have confidence in Professor Clegg, is it not strange that they have agreed that he should continue, albeit when his term has expired, on a large Civil Service claim which is still pending? Is not this the illogicality of Government by pique?
  The Prime Minister: There is nothing illogical in allowing Professor Clegg to complete his term of office as arbitrator but not renewing the appointment afterwards, for the reason which I have given. It is the responsibility of the Government, which I fully accept.
  We had no responsibility for the appointments to the Scamp Tribunal. They were not our appointments and we had no power to change them.
  Mr. John Fraserasked the Prime Minister how many people are now employed in his office; and how many

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  are engaged upon dealing with Parliamentary Questions.
  The Prime Minister: Sixty-six and three, Sir.
  Mr. Fraser: Will the Prime Minister tell the House how many of those three are engaged in ensuring that he does not answer Parliamentary Questions? Will the Prime Minister get somebody into his offic who can draft a parliamentary reply which gives a frank confession to the House that he has failed utterly in his promises to the country to reduce unemployment and prices?
  The Prime Minister: It is not that Questions do not get answered, but that the hon. Gentleman does not like the Answers which he gets. The hon. Gentleman would be serving a better purpose, and my staff would be serving a more useful purpose, if he would put down Questions seeking information instead of trying to make cheap political points.

  CHANCELLOR OF THE EXCHEQUER (SPEECH)
  Mr. Sheldonasked the Prime Minister if the public speech of the Chancellor of the Exchequer in London on 27th January to the United States Chamber of Commerce on public expenditure represents Government policy.
  Mr. William Hamiltonasked the Prime Minister if the speech made by the Chancellor of the Exchequer in London to the United States Chamber of Commerce on Wednesday, 27th January on the question of public expenditure, represents the policy of Her Majesty's Government.
  The Prime Minister: Yes, Sir. As did also that part of the speech dealing with Anglo-American relations and the value of the British market to American traders.
  Mr. Sheldon: Yes, but since my Question dealt with the aspect of public relations—[Laughter.]—public expenditure, I mean, what will the right hon. Gentleman do since he reduced income tax by 6d. in the £ last autumn and at the same time attributed that cut to reduc
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  tions in public expenditure, about the blanket promise that any foreign bid for Rolls-Royce would be surpassed by one from the Treasury? How will he get that money—by further reducing the limits of public expenditure or by increasing taxes?
  The Prime Minister: I always thought that the hon. Gentleman was more interested in public relations than in public expenditure. On the second part of his speech, the Receiver is in negotiation with the Government, following the passage through Parliament of the Bill for the purchase of Rolls-Royce, which will be done on a fair valuation.
  Mr. Hamilton: Since the Chancellor of the Exchequer boasted in that speech about the proposed reductions in public expenditure in the next five years and said that £700 million of that reduction was in aid to commerce and industry, which has already resulted in 30 companies telling the Secretary of State for Trade and Industry that they will not pursue plans for settlement in the development areas, how can the Prime Minister or his right hon. Friend justify that kind of cut, if it will so adversely affect the unemployment situation in the development areas?
  The Prime Minister: The second part of that question is not related to the facts. As I told the House last Tuesday in answer to the Leader of the Opposition, 37 firms said that they were reviewing their investment arrangements. Of these, only two said that they were not going ahead due to the change from investment grants to investment allowances.
  Mr. Dalyell: Is it wise to tell Lockheed that it can wait for at least a month? What on earth do the Government expect the sub-contractors to do in the meantime?
  The Prime Minister: The Receiver is carrying on certain work on the RB211, but the Government are determined to have an independent investigation which will, for the first time, reveal clearly what the position of this engine is, what its technical capacity is, what its ultimate cost will be, what the true cost of development will amount to, and by what date it can be produced. Surely the House will agree that, where public money is

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  concerned, it is essential that a Government should act responsibly on this information—information which was apparently never available to the last Administration. When that information is available, we can then have detailed discussions with Mr. Haughton.

  QUESTIONS TO MINISTERS
  Mr. Molloy: On a point of order. In view of this very serious situation which must arise within the Civil Service, involving its National Whitley Council, which I appreciate hon. Members opposite know very little about—hence their hilarity and stupid behaviour—will it not be right and proper, in view of the seriousness of this situation and the statement made about Professor Clegg, that the Minister responsible for our Civil Service should come to the House and make a statement?
  Mr. Speaker: That is not a point of order. Mrs. Castle, Private Notice Question.

POST OFFICE (DISPUTE)
Mrs. Barabara Castle (by Private Notice)asked the Secretary of State for Employment if he will make a statement on the steps he is proposing to take to settle the postal workers' dispute, following the union's decision to continue the strike.
The Secretary of State for Employment (Mr. Robert Carr): Since my statement yesterday there have been two developments. First, the Executive of the Union of Post Office Workers decided yesterday to continue the strike, Second, Mr. Jackson came to see me, at his request, to report his executive's decision. Mr. Jackson and I also had a long discussion, in the course of which we reviewed the dispute from every angle and also possible courses of action which might help to resolve it. We mutually agreed that, given the wide gap between the firmly held positions of the two sides, which have already been intensively explored in previous discussions, a further attempt to conciliate at this juncture would, regrettably, not result in progress towards a settlement, and might even be damaging. Mr. Jackson also made clear that the union's refusal to go to arbitration remained unchanged. While, therefore,
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neither of us saw further scope for a useful initiative, unfortunately, we promised to keep closely in touch with each other.
Mrs. Castle: Does the right hon. Gentleman remember the words which he used in the House yesterday, when he said how vital it was for this union and other unions to be prepared to go to arbitration if we were to have a more orderly and peaceful society? How does he reconcile those words with his decision not to reappoint Professor Hugh Clegg as Chairman of the Civil Service Arbitration Tribunal? Is he not aware that this has seriously damaged the confidence of all unions in arbitration machinery under this Government? As he can now no longer press the Union of Post Office Workers to go to arbitration, what does he intend to do to break this deadlock? Will he set up a court of inquiry?
Mr. Carr: As to the question about arbitration, I note two things: first, that the Civil Service side in the central pay negotiations have been quite content to go to arbitration, in spite of knowing the decision first—[Interruption.] They knew the position when they took their decision. The second thing is that the refusal of the Union of Post Office Workers to go to arbitration completely antedates this decision. I should like to add that this matter was not mentioned to me in the slightest way by Mr. Jackson in talking to me yesterday—[Hon. MEMBERS: "He did not know."] I do not know whether he knew or not——
Mr. Callaghan: How could he raise it if he did not know?
Mr. Carr: But that does not invalidate the point which I have made, that the union's refusal to go to arbitration antedates anything to do with Professor Clegg's appointment. That is the substantial point.
Third, as to a court of inquiry, I must ask the House to realise the difficulty which faces that possible course of action. Only last week, we had a report from a court of inquiry, namely, the Wilberforce Committee, which, apart from its recommendations on actual pay in the electricity supply industry, made strong recommendations on two issues which are of general application and which are central to this Post Office dispute—namely, the need for parties to honour

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procedural agreements, including agreements to go to arbitration, and, second, the need to tie our increases in earnings to specific increases in efficiency. Those were two central recommendations expressed in very strong terms by the Wilberforce Committee. The House and the country really must accept these as fundamental principles which cannot constantly be challenged and inquired into.
Mr. Tom Boardman: Does my right hon. Friend agree that the time has come when the unions should make sure that they represent the views of their members, and that they should hold a properly conducted ballot of their membership for that purpose?
Mr. Carr: I believe that, while of course this is a matter for the union, it is a matter which the union should now consider. I think that there is a danger, not only in this but in all protracted disputes, for the people concerned to remember the claim and to remember the rejection of the claim but to lose sight of what is actually on offer to them.
Mr. John Mendelson: Does the Secretary of State recall that this situation is not wholly unprecedented in that two sides have been as far apart in previous disputes? Is he aware that the fact that one court of inquiry has sat has never been given as a reason for not setting up another court of inquiry, if the dispute was of sufficient national significance?
Would he agree that constitutionally a court of inquiry has only to point in the direction of a settlement often to allow the two sides to reconsider their position without having to feel publicly defeated? Is it not his duty, therefore, to proceed forthwith to the setting up of another court of inquiry?
Mr. Carr: I do not believe that going to arbitration, to which one has agreed in a voluntary procedure agreement, is in any way admitting defeat by either side, whatever may be the outcome of that arbitration. Courts of inquiry are, of course, specific to industries and cases, and I agree that the appointment of one does not automatically rule out the appointment of another.
However, I ask the House and the country to consider the fact that the
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Wilberforce Court of Inquiry was asked to look at these matters in a wider and more fundamental way than previous courts of inquiry. Its Report is only two weeks old. In looking into that dispute, it made strong recommendations about two central points which are of universal application; namely, the need to honour agreements, including agreements to go to arbitration, and the need for increases to be tied to increases in efficiency in a specific way.
Both of those issues are central to the union's position in this dispute. I believe that they are universal principles and that the nation will not make the progress we want it to make unless and until these principles are accepted and practised, and are not constantly challenged and inquired into.
Mr. McLaren: Would it surprise my right hon. Friend to hear that postmen in my constituency have been to see me to say that they think the Post Office offer to be fair—[Interruption. ]—and that they would like to return to work on those terms?
Mr. Carr: I am interested to hear that. It underlines—[Interruption.]—that at some stage, and I hope at a quite early one, this union should consider what it has, I believe, done before; namely, putting the offer to its members in a properly conducted ballot.
Mr. Loughlin: Does the right hon. Gentleman remember that on the last occasion when he made a statement to the House he referred to the willingness or unwillingness of the Acting Chairman of the Board to make an additional payment and that he emphasised the need to respect the Acting Chairman's commercial judgment? Is it not a fact that the Government have very clearly told the Acting Chairman that should he improve on the present offer, then under no circumstances would the Government allow any increases of any kind in Post Office prices? Is it not equally a fact that the Government are aiming to smash the Post Office Workers' Union as a deliberate lesson to the whole of the British trade union movement?
Mr. Carr: No. the last part of the hon. Gentleman's supplementary question is the complete opposite of the truth.[Interruption.]It is a complete and utter falsity. As to the first part, it was

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the former Labour Government who established the Post Office as a nationalised corporation and gave it, among other things, financial targets.
As I believe is well known, the Post Office is at the moment running into deficit. To cure that situation, it has had to apply, as from this week, very large increases in postal charges—increases far larger than ever before. In spite of this, it has made an offer, a substantial one, to its employees.
However, it has said, and the House must accept this, that it cannot—[Interruption.]—I am stating what the Post Office has said, and perhaps if the case went to arbitration this is one of the things that might be tested. It has said that it cannot increase its total offer—I emphasie "total offer" and not individual earnings—without asking at once for further increases in prices. It believes that if it were to have to do that it would not only be unpopular but would lead to a downward trend in the business of the Post Office, which would damage employment.
Mrs. Castle: On a point of order. I wish to give you notice, Mr. Speaker, that at the appropriate moment I shall seek to raise this matter under Standing Order No. 9.

BUSINESS OF THE HOUSE
Mr. Harold Wilson: May I ask the Leader of the House to state the business by day and by night for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. William Whitelaw): Yes, Sir. The business for next week will be as follows:
MONDAY, 2ND FEBRUARY—Debate on a Motion to take note of the White Paper on Public Expenditure 1969–70 to 1974–75 (Command No. 4578).
Motion on the Television Act 1964 (Additional Payments) Order.
Second Reading of Mr. Speaker King's Retirement Bill.
TUESDAY, 23RD FEBRUARY, AND WEDNESDAY, 24TH FEBRUARY—Industrial Relations Bill: Committee stage (9th and 10th Allotted Days).
THURSDAY, 25TH FEBRUARY—Remaining stages of the Coal Industry Bill.
FRIDAY, 26TH FEBRUARY—Private Members' Motions.
MONDAY, 1ST MARCH and TUESDAY, 2ND MARCH—Debate on a Motion to approve the Statement on the Defence Estimates 1971 (Command No. 4592).
Mr. Harold Wilson: Would the right hon. Gentleman, having heard the exchanges in the House this afternoon, arrange for either the Secretary of State for Employment, who is normally responsible, or the Minister for the Civil Service, who is really responsible, to make a statement next week on this petty act affecting Professor Clegg so that the House may know all the facts and considerations, which we have not had this afternoon?
Secondly, the right hon. Gentleman's attention having, I am sure, been drawn to the Motion which stands in my name and the names of some 200 of my hon. Friends, will he give further consideration to the case for appointing a Select Committee into the Rolls-Royce situation, in view of the fact that a Companies Act inquiry, to which the Prime Minister referred, could take anything from two to six years to report? Is the right hon. Gentleman aware that the House is entitled to know the full facts on which the Government took their decision, which is becoming increasingly criticised both here and abroad?
[That this House, recalling the Prime Minister's undertaking to deal directly with Parliament, the Press and the public, and recognising that Parliament, Press and public have not been given adequate information to reach conclusions about Her Majesty's Government's handling of the Rolls-Royce affair, calls upon Her Majesty's Government to move for the appointment of a Select Committee of this House to examine all aspects of Government relations with and decisions concerning Rolls-Royce, including the agreement to supply RB211 engines to Lockheed, and the events leading up to the appointment of an Official Receiver, and to report to this House.]
Thirdly, as the right hon. Gentleman has no doubt studied what happened last Friday on the Employed Persons (Safety) Bill, when many of his hon. Friends, through their loquacious enthusiasm to support the Bill, prevented

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the House from reaching a decision on it——
Sir G. Nabarro: The Opposition did not have 100 hon. Members present.
Mr. Wilson: There was a full day's debate, but no decision.
As the right hon. Gentleman must be aware of the general desirability of the Bill and the fact that it is supported in all parts of the House, including by those who sought to talk it out, will be consider giving Government time so that this matter may make further progress?
Mr. Whitelaw: I shall, of course, ensure that my right hon. Friends the Secretary of State for Employment and the Prime Minister note what the right hon. Gentleman has said. [Interruption.] Naturally they have heard his remarks. If a statement needs to be made, one will be made; but I would not wish to make any commitment about whether or not one will be.
The answer to the second part of his supplementary question, about appointing a Select Committee into the Rolls-Royce matter, is that I have nothing to add to what the Prime Minister said at Question Time on Tuesday.
As for the third part, concerning the Employed Persons (Safety) Bill, I understand that the position was put forward by my hon. Friend the Under-Secretary quite clearly; that the Government recognise the importance of and need for legislation in this sphere, that it was thought right to await the very important report of the Committee on this subject under Lord Robens, and that the Government had committed themselves to legislate thereafter. I would have thought that that was the right decision.
As for giving Government time for Private Members' Bills, I can only repeat what I have said before, which is that although I recognise that there may be very exceptional cases when this may be desirable, in general terms I wish to stick to the principle that the Government do not give time to Private Members' Bills.
Mr. Hastings: In view of the forthcoming two-day debate in another place on the Roskill Report, when is this matter likely to come up in this House? Would my right hon. Friend agree that two days would be appropriate here as well, in
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view of the great anxiety that now exists over this matter?
Mr. Whitelaw: I think that the debate will take place before Easter. I hope to bring it on as soon as I possibly can, but I am afraid that I must restrict it to one day.
Mr. McBride: In view of the economic and employment problems of Wales, may we expect a day soon on which to debate Welsh affairs?
Mr. Whitelaw: I can add nothing to what I said last week to the right hon. Gentleman the Member for Cardiff, West (Mr. George Thomas).
Mr. Neave: Has my right hon. Friend further considered the strong representations made to him by the Select Committee on Science and Technology about the need for a debate on its Report on research and development in defence? Is this not a crucial issue long overdue for debate?
Mr. Whitelaw: I fully appreciate the importance of the subject and the request for a debate. There may well be an opportunity for this one to be debated when Select Committee Reports are debated. I could not give a commitment as to time at this stage.
Mr. Hugh D. Brown: I remind the right hon. Gentleman of his remark last week about the reform of local government, when he said that there would be ample time to discuss both the White Papers. When shall we be able to discuss the Scottish White Paper? As there is a large measure of agreement, many of us are puzzled about why it should be a year late in relation to proposed legislation.
Mr. Whitelaw: I think that I said also last week that it would be right for right hon. and hon. Members to have time to study these White Papers. I think that that is what right hon. and hon. Members would wish. Thereafter, there will certainly be time for discussion of all the proposals. The proposals for future legislation were plainly set out in the White Paper.
Mr. Farr: When will the House have an opportunity to discuss the Second Report of the Select Committee on Procedure which was published about a year

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ago? My right hon. Friend knows that the Committee makes several useful recommendations regarding the length of Question Time. As Question Time is now a source of frustration to almost every hon. Member on both sides, may we hope for an early opportunity to debate those recommendations?
Mr. Whitelaw: I have undertaken in the past that I should bring forward some proposals, before Easter, about the future of Question Time. That will give the House an opportunity to consider them and, if appropriate, accept them. There would then be a chance to bring them in after Easter. I stand by the undertaking that an opportunity will be given to consider any proposals which I may bring forward arising from that Report.
Mr. C. Pannell: Will the Leader of the House think again about the request to set up a Select Committee on the Rolls-Royce affair and consult the Prime Minister about it? He will recall that, when the news broke, there was for three days or so a great deal of puzzlement among hon. Members. As the matter calls for a great deal of assimilation of all the facts and factors involved, would it not be far better if a Committee of hon. Members, with their various viewpoints—there is a wide spectrum of nonpolitical considerations here—inquired into the matter? Would not a Select Committee be the best and most satisfying method for the House to take to consider the matter? I think that that is the view of a great many hon. Members.
Mr. Whitelaw: I can only repeat that my right hon. Friend the Prime Minister made perfectly clear on Tuesday that there would be a Department of Trade inquiry and that he believed that that was the right way to proceed.
Mr. William Clark: As only one day can be allowed for the debate on the Roskill Report, will my right hon. Friend consider suspending the Ten o'clock rule so that more hon. Members may have an opportunity to speak on this important matter?
Mr. Whitelaw: I shall not commit myself at this stage.
Mr. Cant: Reverting to the question of local government, and the right hon. Government's remark about the need to study the documents, will he take it
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that the City County District of Stoke-on-Trent required only five minutes to register its instant reaction, which was one of complete outrage? Is it not important that this vast subject should be brought before the House for debate at a very early date?
Mr. Whitelaw: Whatever may be some of the reactions, favourable and unfavourable, from different local authorities, I still think it right to give time for consideration of these important and far-reaching documents before they are debated in the House.
Mr. Onslow: When taking into account the pressures being put upon him for a Select Committee to inquire into Rolls-Royce, will my right hon. Friend not forget the grave personal injustice which resulted from the P.A.C. inquiry into the affairs of Bristol-Siddeley?
Mr. Whitelaw: I think that I should be wise to confine myself to what I have already said, that my right hon. Friend the Prime Minister made perfectly clear that the Government's view is that the right way to proceed in the matter is through the Department of Trade inquiry.
Mr. Harold Wilson: But does not the Leader of the House realise that a Department of Trade Inquiry is limited by the Companies Act to actions committed by the company in relation to its shareholders? The House has not been told of the considerations before the Government, the figures and facts involved, obviously very serious, which the Government had to face. We have not been able to form any view on whether the Government took the right or the wrong decision, having regard to the wider considerations affecting the matter. Does the right hon. Gentleman realise that, although the Public Accounts Committee could look into it in a year or two's time, it still would not bring before the House aspects concerning the Government's responsibility and the facts connected therewith, on which, I am sure, the Government would be prepared to defend their case, although they seem to make a very poor fist of it every time they try from that Box.
Mr. Whitelaw: There have been opportunities for debate in the House. I shall not at this stage, or indeed, in the future,

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go further than what I have made perfectly clear in my previous answers.
Mr. Merlyn Rees: Is the right hon. Gentleman aware that it is being authoritatively stated outside the House that the Government's new immigration Bill is to be published next Tuesday? May the House be told the facts?
Mr. Whitelaw: No day has yet been fixed for that Bill to be introduced, but it will be introduced very soon, probably next week.
Mr. William Hamilton: Will not the right hon. Gentleman consider extending the time for the debate on Monday on the White Paper on Public Expenditure, as we should normally have two days? Second, would he welcome, or could he stop, an existing Select Committee itself investigating Rolls-Royce?
Mr. Whitelaw: On the first point, no; I think that we shall stick to the ordinary time for Monday's debate. As to the second point, what Select Committees inquire into is entirely a matter for them in accordance with their terms of reference.
Mr. Cledwyn Hughes: Can the Leader of the House say when we may expect the statement on the Annual Farm Price Review, as the farmers are anxiously awaiting details of the bonanza which they have been led to expect?
Mr. Whitelaw: I cannot at this stage say when that statement will be made.
Several Hon. Members rose——
Mr. Speaker: Order. We must move on.

POST OFFICE (DISPUTE)
Mrs. Castle: 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 refusal of the Secretary of State for Employment to take any action to break the deadlock in the postal workers' dispute".
Mr. Speaker: The right hon. Lady asks leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific
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and important matter which she thinks should have urgent consideration, namely,
"the refusal of the Secretary of State for Employment to take any action to break the deadlock in the postal workers' dispute".
I am satisfied that the matter raised by the right hon. Lady is proper to be discussed under Standing Order No. 9.
Does the right hon. Lady have the leave of the House?
The leave of the House having been given—
Mr. Speaker: The Motion for the Adjournment will now stand over until the commencement of public business on Monday afternoon, when a debate on the matter will take place for three hours, under Standing Order No. 9(2).
Mr. Bruce-Gardyne: On a point of order. Mr. Speaker. In the light of the acquiescence in the request for leave to move the Adjournment under Standing Order No. 9, the Motion standing over until Monday afternoon, we shall be in some difficulty as regards the debate on the White Paper on Public Expenditure. As you know, we had a two-day debate last year, but on this occasion we have only one day. After the completion of the debate under Standing Order No. 9, we shall have inadequate time left for a proper discussion of the White Paper on Public Expenditure.
Mr. Speaker: That is a point which no doubt the Leader of the House could observe. It is not a point of order.
Mr. William Hamilton: On a point of order. Is it not the case that when we have a Standing Order No. 9 debate the three hours are added on at the end of the debate, so that we carry on the debate on the White Paper on Public Expenditure until 1 o'clock on Tuesday morning? Could the Leader of the House give his view on that?
Mr. Speaker: Order. I do not think that I can allow this, that whenever a Standing Order No. 9 debate is granted there should be an immediate discussion about the other business of the House. The Leader of the House is here. He will know what has happened and will have to take into account, according to his judgment, what should follow from it. We cannot have a series of points of order which really amount to business

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questions when I have granted a Standing Order No. 9 Motion.
Mr. Hamilton: With due respect, Mr. Speaker, the Leader of the House is here. He could surely give the House an indication. The House has a right to know. We shall be debating public expenditure over the next five years. To have three hours cut off that debate is simply not good enough. As the Leader of the House——
Mr. Speaker: Order. I ask hon. Members to assist in this matter. I have been asked to prevent what are really false points of order. This is not a point of order but a matter for the Leader of the House. He will have an opportunity to make a business statement, if he wants to, at tomorrow's sitting. I must ask the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) to proceed.
Mr. Harold Wilson: Further to the point of order. No one wants to put you under such pressure that you will be less willing to accept reasonable Motions for Standing Order No. 9 debates, Mr. Speaker. Would not it be right to leave the matter and proceed to the next business, to give the Leader of the House the opportunity during the course of the evening to reflect on what has been said and, if necessary, to make a business statement at 11 o'clock tomorrow morning?
Mr. Speaker: That is what 1 was venturing to suggest.
Mr. Wellbeloved: On a completely new point of order, Mr. Speaker. You said just now in a Ruling that you have been asked to be rather more strict with points of order. We have noted also that you have curtailed the amount of time on business questions and the number of Members who are called. In view of both those occurrences, may I ask by whom you have been asked? Is it the House or just a small number of hon. Members who have asked this of you, so that you are responding to a minority?
Mr. Speaker: The speeches which were made when I was elected Speaker will be within the hon. Gentleman's recollection.
Mr. Wellbeloved: Not by the House.

TRADE UNIONS (LONDON DEMONSTRATIONS)
Mr. Arthur Lewis: On a point of order. I am sorry, Mr. Speaker, but I have given you two notices with regard to a Standing Order No. 9 Motion and a third one in the House only about two hours ago. 1 thought that probably as the Standing Order says that if a Member wants to raise a matter under Standing Order No. 9 he should give notice to Mr. Speaker, you might, having had three notices, have called me. What is the position?
Mr. Speaker: It is a matter for the discretion of the Chair.
Mr. Lewis: Then 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——
Mr. Speaker: It is within my discretion whether I accept such a Motion. I do not accept it. Mr. Roy Jenkins.
Mr. Lewis: I am sorry, but I went to the Table Office and inquired and I was advised that under the Standing Order an hon. Member is entitled to move and Mr. Speaker must listen to the submissions. Mr. Speaker may, of course, refuse, but I suggest with respect that you should not refuse to hear me, even after I have given you three notices that I intended to raise the subject. You may or may not wish to hear me, but that is not for you to decide but for the House.
Mr. Speaker: I will certainly hear the hon. Gentleman. I would ask him to have mercy on the House. We have a very important debate ahead.
Mr. Lewis: I accept that, Mr. Speaker, but I also would ask you to give me the same consideration as you give to other hon. Members.
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 refusal on the part of the Home Secretary to take action to ensure compliance with the reasonable request of the Trades

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Union Congress that vehicular traffic in Oxford Street and Regent Street should be banned on Sunday, 21st February, when over 100,000 of Her Majesty's loyal subjects who are active trade unionists will be marching, the Home Secretary thus failing to take full and adequate precautions to prevent interference with the demonstrators, and bearing in mind the disorders that will take place as a result of this refusal."
Hon. Members: Oh.
Mr. Lewis: Oh, yes.
I intended to move my Motion formally, Mr. Speaker, but as you have decided upon it without hearing it I want, as is customary, to submit a few points.
First, I submit that the Motion is most definite and most specific. It is urgent and it is of public importance. [Interruption.] There is no doubt that there will definitely be a demonstration of 100,000 people in London on Sunday. [Interruption.]
Mr. Speaker: Order. I ask the House to let the hon. Gentleman proceed.
Mr. Lewis: I am very much obliged, Mr. Speaker.
This is a responsible demonstration being organised by the most responsible Trades Union Congress. It is known that the demonstration will be going down Oxford Street and Regent Street, which are normally congested with traffic. Therefore, the matter is definite.
Now I come to the grounds of urgency. This is late Thursday afternoon, and there will be no opportunity between now and Sunday for the matter to be debated unless we have a debate between now and tomorrow. Therefore, there is obviously urgency.
Third, on the grounds of public importance, the matter which is of import is the fact that millions of Her Majesty's loyal subjects have found it impossible to raise through the usual channels of their Parliamentary representatives their objections to the pernicious Industrial Relations Bill. This is the only means whereby they can exercise their democratic rights to show what they feel about the matter, because the Government have guillotined any discussion.
We know from experience that when a few thousand people are liable to attend
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a demonstration on the occasion of a State visit the police can and do stop the traffic for the period of that State visit. We know that as can happen, has happened, and is likely to happen, when 100,000 people march down Regent Street and Oxford Street and motorists get a little bit exasperated there may be trouble.
Sir G. Nabarro: Hear. Hear.
Mr. Lewis: There was an occasion recently when a farmer illegally squirted offensive liquid over a striker's car. I am not suggesting that the trade unionists would do that, but the urgency and importance of the matter is in the fact that if there is an attempt either to force the traffic through or to defend the marchers there could be serious trouble.
Therefore, as the Home Secretary himself has said that he realises the great difficulties with which the police will be confronted, the matter should be debated so that we can tell the Home Secretary and the police that we feel that the marchers should have their democratic rights ensured.
Mr. Speaker: The hon. Member for West Ham, North (Mr. Arthur Lewis) asks for leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter which he thinks should have urgent consideration, namely
"The refusal on the part of the Home Secretary to take action to ensure compliance with the reasonable request of the Trades Union Congress that vehicular traffic in Oxford Street and Regent Street should be banned on Sunday, 21st February, when over 100,000 of Her Majesty's loyal subjects who are active trade unionists will be marching, the Home Secretary thus failing to take full and adequate precautions to prevent interference with demonstrators, and bearing in mind the disorders that will take place as a result of this refusal."
As the hon. Gentleman knows, under Standing Order No. 9, Mr. Speaker is required to take into account the several factors set out in the Order but to give no reasons for his decision. I have taken into account the representations which the hon. Gentleman has made to me, but I have to rule that his submission does not fall within the Standing Order and I therefore cannot submit his Motion to the House.

ECONOMIC AND INDUSTRIAL POLICY
4.11 p.m.
Mr. Roy Jenkins (Birmingham, Stechford): I beg to move,
That this House has no confidence in the economic and industrial policy of Her Majesty's Government.
The Motion expresses the lack of confidence which we on this side of the House, and an increasing number of people outside, feel in the major home front policies of the Government. We do not wish this debate to be too narrow or too technical an economic debate. We do not on this occasion propose to discuss the intricacies of fiscal or even monetary policy, or the details of public expenditure. These can be more fully dealt with next Monday, if there is time, and when we come to the Budget debates. What we are more concerned with here is, first, the unemployment position and prospects, particularly in the weaker regions, but now affecting to an increasing and disturbing extent hitherto prosperous areas as well.
Secondly, we are concerned with the Government's attitude towards industry, both private and public, as exemplified on the one hand by their handling of the the Rolls-Royce affair and on the other hand by their proposals for hiving-off. The projected level of industrial investment gives a clear indication of how industry views the future under this Government.
Thirdly, we are concerned with the Government's policies, or lack of policies, for dealing with inflation, in particular, their handling of recent public sector wages claims.
Let me make it clear to begin with that it is no part of my case to deny that the Government face genuine problems. Some were there when they started. They inherited many things which were good and some things which were bad. Clearly, they inherited a very strong balance of payments. The Chancellor of the Exchequer told us on Tuesday that there would be a current account surplus of at least £600 million and possibly a good deal more than that. That is the strongest position we have ever had.
I am wholly mystified by the strange quirk of character in the Prime Minister which makes him incapable of admitting this inheritance and which leads him into
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all sorts of twisted convolutions in order to try to pretend that black is white and white is black and that, whatever distortions he may have to get into, he must prove not only that he is right now but that he has always been right in the past. The plain fact is that there was no deteriorating trend in June, as he claimed, but rather the contrary, if anything. Everyone except him now knows this to be true.
What the Prime Minister could reasonably say is that the last Government left the present Government an unprecedentedly strong and, for the time being, secure balance of payments but a rising inflationary trend. That would be a balanced and convincing statement. But he cannot achieve conviction because his stubborn partisanship will not allow him to be fair or balanced—and even when he deals with inflation he has to try and persuade himself that we deliberately engineered it for electioneering purposes, which is, quite frankly, just childish. If elections were the cause of inflation there must have been an awful lot of other Governments in the world who were under the mistaken impression that they were facing an election in 1970. The dates of elections are not normally matters about which Governments make mistakes. [Laughter.] Let me say that the statutory dates are not normally a matter about which they make mistakes.
I do not blame the Government for taking inflation seriously. The case against them is different. It is that nearly everything they have done—from the Chancellor's crass words about the doctors' 30 per cent. during the election to the mini-budget and to the abolition of the Prices and Incomes Board—has made things worse and not better. What is the new policy? The absence of a prices and incomes policy, or at least the unwillingness of the Government to take the responsibility for stating one, is now paradoxically made the excuse for not having a policy on almost every other major economic issue too.
What is the policy for reducing unemployment? What is the policy for increasing industrial investment? What is the policy for using the unprecedentedly strong balance of payments surplus as a platform for more rapid and sustained economic growth? Or are we just to

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stand petrified and watch this fritter itself away without any effective use being made of it?
The Prime Minister's attitude whenever any of these questions is asked is rather like that of a surly shopkeeper who says, "Haven't you heard that there's an inflation on?" His errand boy, the Chancellor of the Exchequer, says the same thing, only a bit more nervously because he is afraid of the customers. The object of economic policy must always be to try to achieve a balance between a number of different objectives, and in any event there is not the slightest evidence that rising unemployment, falling investment and stagnant production will help us to cure inflation. If anything, the reverse is true.
No one would sensibly want to exacerbate the present cost-push inflation by adding demand inflation to it. But we are miles off that. Today's unemployment figures are by far the worst we have known since the war, save for a short time in the quite exceptional winters of 1963 and 1947, when there were totally different weather conditions from those prevailing now. Unless there is a rapid change of trend—and there is no tendency of that at the moment—we shall very soon be back almost exactly half way between the full employment figures of the earlier post-war years and the mass unemployment, the mass wastage of human resources, of the late 1930s which we thought we had left behind us for ever.
The figure of 721,000 unemployed for the whole country is bad enough. The Scottish figure of 118,000, or 5-5 per cent., is even worse. It is a horrifying figure. It is far worse than any monthly total under the Labour Government. But it is not only the position in Scotland and in other development areas. The position, as I indicated earlier, is that it is now the more prosperous areas of the country too which are beginning to feel the pressure of real unemployment. The figures for Birmingham were published yesterday; a post-war peak of 2·7 per cent., a total of 14,700, over one-third as much again as in this month last year.
In Derby, as we know only too well, there is still more at risk. There are over 7,000 further redundancies already announced—without any from Rolls-Royce—in the Midland Region not
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included in these figures. It is very serious that we should have this development even in the very prosperous areas, because not only does it mean that because of the destruction of a large part of development area incentives as a result of the policies announced by the Government last October, there is less pull to the development areas, but it means that there is less to pull because there is less prosperity and employment in the country as a whole.
Whe one considers this position, the words used consistently by Tory Opposition spokesmen as they then were, and as they ought to be again soon, about the unemployment position up to last June make pretty hypocritical reading. We all know the figure published today, 721,000. That, at least, was the figure 10 days ago. It is probably quite a bit worse today.
In April 1970 the unemployment figure was 100,000 less than that. Commenting on that figure the Secretary of State for Employment said:
"If we could get back to Tory policies, the unemployment situation would be a great deal better than it is today."—[OFFICIAL REPORT, 6th May, 1970; Vol. 801, c. 421]
That was when the figure was 100,000 lower, In May of last year the figure was 140,000 lower than it is on today's count. The same right hon. Gentleman then said that this was
"a damning indictment of the Government's economic policy, and of their good faith."
In June the figure was 200,000 less than it is today, and the late Iain Macleod, who I believe would have been horrified by today's figures, described it as "a tragedy for Britain" and spoke of the unemployment position as "the final proof that Labour Government has failed."
Quite apart from the Prime Minister's promise of 16th June to reduce unemployment "at a stroke"—it was a double promise, on unemployment as well as prices—were these strong words intended to mean anything or where they just a cynical Opposition exploitation of an issue without any intent that anything should be done about it as soon as the votes were counted? At Question Time the other day the Prime Minister denied that it is the deliberate policy of the Government to bring about unemployment in order to contain inflation. I suppose that is something, though it is far from enough.

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The present United States Administration used very similar words in April 1969, two years ago, but they have put unemployment up from 3½ per cent. to 6 per cent., and without curing inflation either. Without achieving their objective, in the United States they have switched their policy, and one may well ask what has been the purpose of this abortive essay in deflation for two years which has been switched off before it had any beneficial results. That is a matter for the United States. But the Government might well learn some lessons from this experience, and one of these almost certainly is that we shall now require far more than a neutral policy, which the Prime Minister implied; we shall need a very vigorous and positive policy indeed to prevent unemployment rising rapidly still further and, in the weaker regions at least, rising to quite intolerable and unacceptable levels in the very near future. I hope that we shall hear from the Government not palliatives but a major programme of expansion to deal with this great problem at present.
I turn to industrial investment. The Government's survey of intentions predicts a fall of 2 per cent. This is the first time since 1963 that a fall has been predicted. Home machine tool orders, a crucial factor here, are reported this morning as 42 per cent. down in the last quarter of 1970 as against the last quarter of 1969. The statement from Mr. Barrett, the trade association general secretary, says that in his view that decline in orders has continued during the first six weeks of this year, and he attributes part of it to the difficulties associated with the switch-over from investment grants to investment allowances.
I gather also that the C.B.I. survey of investment intentions, the full results of which have been delayed, probably indicates a still worse prospect. But even if that were not so, the outlook here is bad enough and industrial investment, as I need hardly remind the House, is not merely an abstract statistic but is vital for our future competitiveness, for the security of jobs and for our future standard of living.
Hon. Members in all parts of the House quite rightly reminded me frequently and forcibly enough when they thought that I ought to have been getting a bigger surge in investment in the
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two years up to the General Election. But the position was consistently far better than the really calamitous situation revealed by the figures which I have quoted.
We must remember that investment intentions depend above all on industry's confidence in the future—on the future, not on the past; on the prospects, not on the inheritance. Even a Government as devoted to shrugging off their responsibilities as this one can hardly contend that investment intentions for the future, in February, 1971, are all the fault of the Labour Government who went out last June. They are a very clear indication of what industry thinks of future prospects under this Government's economic policies.
Everything I have been talking about so far was the result prior to the Rolls-Royce crash. It has undoubtedly become a good deal worse as a result of that in the past two weeks. There are the jobs directly at stake. There are those affected by the widespread repercussive effects here at home. There is the longer term threat to our exports involved in the damage to our national reputation in the United States and elsewhere. No one should minimise that.
It cannot possibly be argued that these consequences will do other than harm to the already bad climate for unemployment and business confidence. The Rolls-Royce situation has been debated twice, and will be debated again. I want to deal primarily today with the attitude of the Government to public and private ownership generally, as illustrated by this particular situation. Their attitude almost defies belief. During last Thursday's proceedings, apart from the Parliamentary Secretary's great statement that on, above all, hard bargaining, it was the intention of the Government to outbid any rival and to announce it in advance, the dominant note in that debate was the concern of the Government to reassure their back-benchers, and perhaps some of their front-benchers too, about how quickly, once the State had done its rescue operation, the company could be returned to private ownership on a healthy, profit-making, going concern basis.
This must be seen against the background of a general policy, to which apparently the highest priority is to be

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given, of hiving off as many of the profitable bits of existing nationalised industries as they can lay their hands on. Even before the Rolls-Royce affair, this was partisan dogmatism run mad and something which I believe would be emulated by practically no other Government in the world. The French, the Italian and the American Governments do not try to sell off the valuable national assets which they control. Whether Governments be nominally left-wing or nominally right-wing, the general tendency is very much in the other direction.
After Rolls-Royce, this Government's policy becomes not only dogmatic, retrograde and partisan, but insensitively ridiculous as well to an extent which suggests that the Prime Minister must have had a very close personal hand in it.
I do not often agree with the right hon. Member for Wolverhampton, South-West (Mr. Powell), but I thought that on Monday of last week he handled the dagger with absolute precision when he said that it
"is an extraordinary proposition to come from a Conservative Government—that State ownership is the natural instrument, the chosen method, for restoring unprofitable assets to profitability."—[OFFICIAL REPORT, 8th February, 1971; Vol. 811, c. 82.]
This Government apparently intend to be the chosen instrument and natural method by which the nation always pays the cheque and the private owner always gets the profit, if there is one.
Mr. F. A. Burden (Gillingham): In view of the Government's involvement with Rolls-Royce for such a considerable time, why, if they considered that it was such a great national asset, and in view of its difficulties which must have been known to them, did not the Labour Government nationalise it when they had the opportunity?
Mr. Jenkins: First, the hon. Gentleman credits the Labour Government with a great degree of prescience if he says that the difficulties must all have been known to us by last June, since this Government have made it quite clear that the position was not known to them, even in broad outline, by last November. Second, the point of substance is a reasonable one for the hon. Gentleman to put forward. He now appears to be a
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general convert to nationalisation, though I do not recollect his voting for our Amendments to nationalise the whole company last Thursday evening. However, I was defending, and I do generally defend, an undogmatic position. What this Government are putting forward is one of the most dogmatic positions which has ever been put forward in any advanced country—that to save private enterprise the State nationalises, but when something under public ownership is going well the State gets rid of it.
Following what has been for the Government the Rolls-Royce fiasco and for everybody else the Rolls-Royce tragedy, let us now for the sake of common sense, and indeed of common decency, have an end to this hiving-off nonsense. Let the Government leave the Air Corporations to get on with their job. Let them leave British Railways Hotels where they are, profitable and, on the whole, very well run. Let them stop harrying the Steel Board and damaging its investments. Above all, let them leave the Coal Board unpillaged and give themselves a chance of getting a chairman for it who can command the confidence both of the nation and of the miners.
On the wages front the Government's record is a mixture of inconsistency, unfairness, dilatoriness and spite. Before the election, they proclaimed two policies. First, they were doctinally against any form of prices and incomes policy, voluntary or statutory, against any form of guide lines, and against the P.I.B. When they talk about the inflationary pressures that they inherited, it must not be forgotten that they consistently opposed every attempt to curb inflation. They voted in the Lobbies for inflation whenever they had the chance.
Second, although for the private sector it was to be market forces and nothing else, on the public sector—I agree that they said this before the election—there was to be heavy but undefined Government pressure. Then they made nonsense of the second point and made the unfairness doubly compounded—for this the Chancellor bears a very heavy personal responsibility—by endorsing 30 per cent. for the doctors during the election.
Then they introduced the mini-budget, which will make every family man earning up to nearly £3,000 a year worse off.

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It must not be forgotten that the substantial inflationary effects of that minibudget—the effects on school meals, of prescription charges, of other health charges, and perhaps above all on rates and ultimately on rents—have yet to be felt. They are still in the pipeline; they have not come out of the pipeline yet.
Then the Government saw that the situation was getting out of control. Let us not be in any doubt that, for all their talk about the inheritance, the pace of wage settlements was substantially faster in the second half of 1970 than in the first part. Then the Government saw the situation getting out of control and thought that they could get the Wilberforce Inquiry to dig in for them and then proceed, by the totally arbitrary method, based on no principle of fairness, of 1 per cent. less on each subsequent settlement.
But the Wilberforce Inquiry backfired in all sorts of ways. First, by its own natural and inevitable lack of economic experitise, confessed to by itself, it showed what a nonsense it was for the Tories to have got rid of the P.I.B. Second, it put the responsibility for formulating a general incomes policy firmly back on the Government's doorstep as something which went, in the words of the Report, to the heart of political decision. Third, it illustrated the unwisdom, to say the very least, of Ministers sheltering behind the oral evidence of senior civil servants in a major matter of such current political controversy. I do not believe that that procedure will ever be followed again.
Fourth, the Wilberforce Inquiry told the Government that they cannot ignore prices in dealing with wages, Fifth, it produced an award which, so far from being a guide line—under a different name—for the future, has been differently interpreted by nearly everybody who has studied it, but hardly anybody, except the Secretary of State for Employment and a few of his colleagues, believe that it is 10·9 per cent. [AN HON. MEMBER: "They should read the Economist."] It is not only the Economist. Many other commentators in almost every paper of every shade of opinion have said so.
So where do the Government go from here? [HON. MEMBERS: "Out."] The Post Office strike is allowed to drag on,
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with the union continuing its determined fight to avoid an actual reduction in the standard of living of its members. The Government no doubt think that the U.P.W. should go to arbitration. I take it that the sacking of Professor Clegg is intended to encourage it in that direction. It illustrates only too clearly the basis of the union's fears, and it illustrates, too, that the Prime Minister cannot trust or tolerate an independent mind, neither at the Treasury nor at the Civil Service Arbitration Tribunal.
It is typical of this Government that they choose Post Office workers to bear the brunt of their so-called anti-inflation policy. They are public servants. They are amongst the most lowly paid, and thought, probably wrongly, to be without great bargaining strength. But it is a policy which is proving far more effective at spreading bitterness than at containing inflation. That is the fundamental error of the Prime Minister's approach. He has no sense of persuasion and no sense of fairness. He is an expert at demolition and at division, whether it be in industrial relations, in dealing with Rolls-Royce or in dealing with the Commonwealth; but at promoting cohesion and construction he is barren. This, I believe, is because he is to an extent greater than any Prime Minister since Neville Chamberlain, incapable of understanding the minds of those who do not agree with him or have a different background of experience.
What should be done? Inflation cannot be dealt with by further depressing employment. The price would be so intolerable that not even this Government could in the last resort pay it. They would repeat what has happened in America. What they must, on the contrary, do straight away is to try to recreate confidence—confidence for workers in the future of their jobs, confidence for business in the future of investment and the confidence of the nation as a whole that our social structure is not to be further torn apart by divisive dogmatic policies.
The Government must give up their foolish faith, which hardly any informed person now shares, that everything can be dealt with by an ill-thought-out unworkable Industrial Relations Bill. They must give up their plans for a further instalment of unfair redistribution in the Budget. They must, on the contrary, try to repair the damage of the

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mini-budget. They must renegotiate the RB211 contract and give jobs back to Rolls-Royce and faith in Britain's name back to our customers abroad. They must show that they care about prices as well as wages. They must stop discriminating against the public sector. They must stop trying to pick off the weakest. But, above all, they must stop the unemployment drift and offer the prospect, the quick and massive prospect, of more jobs and growing production. That is the only way in which they can get co-operation to halt the wage-price spiral.
In their eight months of life they have exposed the bankruptcy of their own narrow philosophy with a speed rarely equalled in the history of British government. To begin to re-create confidence they must give up their dogmatism. Until they do that they will damage themselves almost as rapidly as they are damaging the country.
4.45 p.m.
The Chancellor of the Exchequer (Mr. Anthony Barber): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"recognising that cost inflation weakens the nation's competitive position, undermines employment and industrial investment and creates social injustice through rising prices, applauds the determination of Her Majesty's Government to curb inflation by resisting excessive pay claims, by maintaining a firm monetary policy by keeping down public expenditure, and by reforming industrial relations, thus preparing the way for sustained economic growth".
Those of us on these benches have often wondered why the right hon. Gentleman and his Friends decided, week after week, not to use one of their Supply days to debate what is undoubtedly the most pressing economic problem of our time, cost inflation. Now, having listened to the right hon. Gentleman the Member for Birmingham, Stechford (Mr. Roy Jenkins) this afternoon, I believe we appreciate the reason; because the truth is that on this, which is the basic problem which we inherited from him and his Government, and which we face today, the Opposition have no policy.
I shall return to the speech of the right hon. Gentleman, but there is one other aspect I should mention by way of introduction. The right hon. Gentleman has waited to select these matters for debate
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until less than six weeks before the Budget. He of all people realised full well when he put down the Motion that at this time I would have not the slightest intention of anticipating next month's Budget. Nevertheless, despite this obvious constraint, I am pleased to have this opportunity, first of all, of dealing with the current situation and of explaining the Government's policy, and secondly, of showing the House that this Motion of censure is a sham and deserves to be decisively rejected.
Mr. E. Fernyhough (Jarrow): Can the right hon. Gentleman explain why it would be improper for him, in replying to my right hon. Friend, to reveal anything of his intentions as far as his Budget is concerned next month when he has already revealed, last November, what part of that Budget will contain?
Mr. Barber: I believe the right hon. Gentleman, if he listens to what I have to say, will appreciate the answer which I give to his right hon. Friend's speech. His right hon. Friend started by saying—which I must say really was the understatement of this Parliament—that some of the problems were there when this Government took over. Whether it be the course of earnings and prices, of unemployment, of industrial relations or of investment, every single one of these problems, as he knows full well, has its origins in the disastrous economic policies which were pursued by the last Government.
Mr. Harold Wilson (Huyton): Since the right hon. Gentleman the Prime Minister and his friends claimed at that time to have full knowledge of all these problems, why did they at that time, in the week of the election, say that they would reduce unemployment, that they would take action to reduce unemployment, to cut the wage-price spiral and to reduce prices within a few weeks, at a stroke? Why did the right hon. Gentleman say that if he knew then what he now claims he knew?
Mr. Barber: The right hon. Gentleman knows perfectly well, for my right hon. Friend has dealt with that point time and time again. I would say this to the right hon. Gentleman. His right hon. Friend's speech this afternoon would have been a little more convincing if it had not been

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totally belied by his performance as Chancellor. The right hon. Gentleman was Chancellor for three years. [An HON. MEMBER: "You will not be".] During that time the standard of living of the British people rose by less than 1 per cent. a year. At the end of that period there was a full abandonment of all remnants of an incomes policy and prices were rising faster than at any time for 20 years. [An HON. MEMBER: "Not as fast as now".] They were three years in which he boasts that he increased taxation more than any other Chancellor in the history of this country.
Mr. Roy Jenkins: As a matter of interest, will the right hon. Gentleman say whether he seriously believes that in the last minute he has given a fair summary of the salient economic events of those 2½ years?
Mr. Barber: The right hon. Gentleman need not worry. In the course of what I have to say I shall refer to a few other points. The right hon. Gentleman recognises that the central problem facing both the Government and the nation is that of cost inflation. It is central to almost every economic problem of consequence. Cost inflation, it is universally recognised, is the principal cause of rising prices and the principal cause of the present high level of unemployment and of the poor record of industrial investment to which the right hon. Gentleman quite properly referred.
It is, moreover, an evil which threatens the whole fabric of our society. What are the facts?
"The country is at present in a dangerous condition of spiralling inflation."
These words are not mine, they come from the report of the Wilberforce Court of Inquiry which listened to evidence not only from the Treasury but also from the T.U.C. and the C.B.I. It went on to say this:
"By 'dangerous' we mean a state of affairs which undermines, almost from the start, the real benefit of the wage increases sought, creates social injustice and resentments, and which if continued will threaten our balance of payments and destroy the value of money."
What are the origins of this situation? Only a few minutes ago the right hon. Gentleman accused the Government of shuffling off their responsibilities. Does he not remember that just six months before the General Election, as Chancel
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lor, he came to this House to speak in support of the then Government's White Paper which laid down a norm for pay settlements of 2½ per cent. to 4½ per cent.? That was in December, 1969. [Interruption.] I am entitled to reply to the right hon. Gentleman because he accused this side of the House of not being responsible in relation to these matters concerning wages.
What he did in December, 1969, was to say that pay settlements should not be above the norm of 2½ per cent. to 4½ per cent. Although it is scarcely credible, it was the same right hon. Gentleman, in the same speech just six months before the General Election, with all the information available to him as Chancellor, who predicted that in 1970:
"We should now be able to look forward to a greatly reduced rate of price increase."—[OFFICIAL REPORT, 17th December, 1969; Vol. 793, c. 1476.]
That is what he said in December, 1969, six months before the election.
Mr. Harold Wilson indicated assent.
Mr. Barber: If the Prime Minister nods approval—[Laughter.] To come to the substance of the matter—and, I hope that the Leader of the Opposition will listen to this, because I will tell him what actually happened—in every single month between then and the election the rate of price increases was higher than during the month when the right hon. Gentleman spoke—every single one of them. When the right hon. Gentleman handed over the reins of office in June of last year pay settlements were running at the rate not of 2½ per cent. to 4½ per cent—his own figure—but of 9 per cent. [Interruption.] Earnings were rising by 12 per cent. and what is more, the rise was accelerating.
Mr. Harold Wilson rose——
Mr. Barber: I will give way later. What is more the right hon. Gentleman by this time had abandoned all pretence of curbing the rise in pay settlements. That was the deteriorating situation which the right hon. Gentleman bequeathed to us in June of last year, a situation which he knew on the information then available to him was fast becoming critical.
Mr. Harold Wilson: The right hon. Gentleman referred to me just now, in rather mixed capacities. In talking about

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the price increases in those early months of 1970 would he recognise that the one on which he went to town, with his right hon. Friend, on I think 20th May was a 2·1 points increase in the cost of living at the seasonal peak of the year, made up partly by seasonal food price movements but mainly by Tory councils increasing rents and rates? [Interruption.] The records of the Department of the Secretary of State for Employment explaining this at the time are on record and the Prime Minister can look them up if he will understand them. Having made that point about the month up to the election, may I ask whether the right hon. Gentleman will now give an assurance that the increase in May this year, apart from seasonal food movements, will not be a lot more than 2·1 points as a result of his mini-budget?
Mr. Barber: The right hon. Gentleman cannot avoid the facts.
Hon. Members: Answer.
Mr. Barber: Not just in May but in every single month since his right hon. Friend said to the House what I have mentioned, the cost of living rose. In his speech the right hon. Gentleman referred again to some remarks which I made during the General Election campaign about doctors' pay. He used the words which he has used before and said that I endorsed the 30 per cent. for the doctors.
I took no notice of that when he raised this on the first occasion, because I assumed that he would take the trouble to check. I will now tell the right hon. Gentleman, and I am sure that he will accept it from me, that what I said in the course of my speech was this:
"Of course any Government, Conservative or Labour, must have the last word, and a deteriorating economic situation is a relevant factor. Having been concerned with doctors' and dentists' pay both as a Treasury Minister and as Minister of Health, it is crystal clear to me that in the context of the present awards the only reason for turning them down can be the threat of an economic crisis."
I then went on to add this:
"There can be no possible reason for rejecting these recommendations of an independent body other than that the Government is gravely alarmed at the inflation which is now gathering force."
We are determined not to allow the present rate of cost inflation to continue.
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There can be no dispute that the continuation of cost inflation at the present rate would have the most serious consequences both domestically and externally. At home it would lead to an arbitrary and haphazard redistribution of income with the main sufferers, as always with inflation, being the poor, pensioners and those living on fixed incomes. [Interruption.] Hon. Gentlemen opposite are destined to sit on those benches for a minimum of four to five years and if they go on shouting like this they will sit there for a lot longer.
Externally the affect of a continuation of the present rate of inflation would be to weaken our competitive position. There are already signs that this country's costs are rising faster than the costs of some of our main competitors. By the third quarter of 1970 wage costs per unit of output in manufacturing were already 9 per cent. higher than in the last quarter of 1969. It is true that Germany experienced a similar rise over the same period, but in Italy, Japan, France and Canada the rise was probably of the order of 5½ to 7½ per cent. and in the United States it was considerably less. There are also indications that there was a deterioration in the profitability of United Kingdom exports between the third quarter of 1968 and the third quarter of 1970, and nobody would pretend that the present Government were responsible for that period. Wages and material costs per unit of out-put in manufacturing rose in that period by about 14 per cent. while export prices of manufacturers rose by only about 8½ per cent.
The right hon. Member for Stechford, who had the audacity this afternoon to criticise this Government, knows full well that all this was building up while he was Chancellor of the Exchequer. What did the right hon. Gentleman do? The General Election was approaching and so he let inflation rip; that is the truth of the matter. The right hon. Gentleman, quite rightly, referred to the very high level of unemployment which was announced in the figures today, but I hope that the House will be under no illusion as to what a continuation of the present rate of cost inflation would mean for employment. It would lead without doubt to a direct loss of jobs in export industries and also in industries competing with imports. In turn, this would be

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bound to have a cumulative effect on those employed in other industries and services.
The present level of unemployment is, as the right hon. Gentleman indicated, as wasteful in economic terms as it is in human terms, but there can be no doubt that one of the principal causes of the increases in unemployment has been the excessive increases in pay settlements. It is, I believe—[Interruption.] If hon. Members opposite will give me a chance I will let them have the facts and figures.
It is a sad spectacle to see some trade union militant leaders almost forcing their members to price themselves out of work, but that is what is happening. It is time that those who are directly involved in the negotiation of wages realised that the more excessive the claim the more likely it is that it will lead to redundancy and unemployment.
The right hon. Member for Stechford referred quite rightly to the question of investment. The same considerations apply. The right hon. Gentleman was right to look to the future and to talk about investment intentions, but I am sure that he would be the first to agree—because he as good as said this when he was Chancellor of the Exchequer—that the prospect for investment is directly related to the current level of inflation. However attractive particular investment incentives may be—and we have discussed at length whether we should have retained investment grants—the overriding consideration which governs investment intentions is whether management believes that the company concerned can sell its goods at a profit.
There can be no doubt that the poor investment record of industry in the past few years has been both a cause and a consequence of our poor rate of growth, and we shall not achieve a significant improvement in investment intentions—let alone achievements—as long as we are cursed with the present rate of cost inflation.
When a company takes its investment decisions it has regard, first, to prospects and, secondly, to profitability. On both sides of this balance sheet, getting down the present rate of cost inflation is crucial.
Mr. R. B. Cant (Stoke-on-Trent)rose——
Mr. Barber: The present rate of inflation is damaging to confidence which is essential to investment. I agree with the right hon. Member for Stechford on that. Company liquidity is bound to be under severe pressure until there is some easement in the pressure of rising costs and inflationary wage increases.
Mrs. Elaine Kellett (Lancaster): Has my right hon. Friend heard what a well known trade union leader said when he addressed the Kent branch of the Institute of Management? Mr. John Cousins said:
"It is my union's policy to hurt as many people in a strike as possible. I realise that strikes cause a great financial strain on some companies. But I would rather close a firm down than not have it pay wage claims".
Does my right hon. Friend agree that this is one of the major causes of the present high unemployment?
Mr. Barber: I had read the report of that speech and I thought that it was appalling. But, whether one is considering the high level of unemployment or the low level of investment by industry, one is inevitably brought back to the root cause of our troubles—cost inflation. This is why the Government are resolute in their determination to defeat it, and this is why the steps we have taken have been necessary.
There can be no doubt about the serious consequences of the present inflation and I hope that there is no one, even on the benches opposite, who doubts the seriousness of the situation. But, equally, there can be no doubt whatever about the main cause. There are some hon. Members who would bury their heads in the sand and, in a vain attempt to divert attention away from the inflationary consequences of wage and salary bargaining, pretend that pay increases are not the most important cause of inflation. But if one is considering the facts——
Mr. Cant rose——
Mr. Barber: No, I will not give way.
If one is considering the facts, and if one is genuinely seeking the cause of inflation, it is clear that over the past year the main factor driving up prices has been increases in pay.

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Let me give the House the figures. Between the third quarter of 1969 and the third quarter of 1970—the latest period for which full information is available—labour costs per unit of output in the economy as a whole rose by over 12 per cent. Of the other main components of total costs, import prices rose by under 4 per cent., company profits fell by 2½ per cent., and there were no increases in indirect tax rates.
In the light of those figures, it cannot seriously be denied that pay increases are the main cause of the current inflation.
Mr. Jeremy Thorpe (Devon, North)rose——
Mr. Barber: I will give way in a moment.
Hon. Members opposite may now doubt that pay increases are the main cause of the current inflation, but the right hon. Member for Stechford did not doubt it when he was Chancellor of the Exchequer. In his Budget speech last year, he said:
"If serious inflation gets a grip it will be very difficult to shake it off; and in all sorts of ways it will be the weaker members of society who will suffer. The illusion that money incomes can be pushed up by the kind of figures which have become common in industrial bargaining recently without producing harmful effects of this kind is a dangerous one."
The right hon. Gentleman went on to say:
"Everyone concerned with wage settlements should understand that if we are to achieve the reasonable stability of prices which is necessary for a sound economy and a healthy social framework, incomes cannot for long continue to rise at their recent rate."—[OFFICIAL RFPORT, 14th April, 1970; Vol. 799, c. 1224–5.]
It is absolutely right that our policy for curbing inflation should be directed at the source of the problem which the right hon. Gentleman recognised when he was Chancellor of the Exchequer—that is, the excessive level of pay settlements. In the longer term, whatever hon. and right hon. Gentlemen opposite may consider, the country knows that our proposals for reforming industrial relations will do much to restore responsible collective bargaining, and avoid our appalling record of industrial unrest. But in the short term, if we are to defeat the urgent problem facing us now, there must be a progressive and substantial
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reduction in pay settlements in both public and private sectors.
Mr. Thorpe: Would it simplify the task of the Chancellor of the Exchequer, and enable him to give information to the House which the House wants to hear, if it is generally conceded that the entire House accepts that there is an inflationary situation and is anxious to see prices controlled and wages tied to productivity? If that be the case, will the right hon. Gentleman tell us either what new policies the Government now have in mind or, alternatively, what existing policies they intend either to improve or refine?
Mr. Barber: There are those who believe that the policy of the last Government—[HON. MEMBERS: "Answer."]——I am coming to answering the right hon. Gentleman—
Captain Walter Elliot (Carshalton): On a point of order. It will be in your recollection, Mr. Deputy Speaker, and that of the whole House that when the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) moved the Motion, he was heard in comparative silence. Now from the Opposition benches there frequently comes a series of primordial noises, grunts, shouts and cries of all sorts. I can understand that hon. Gentlemen opposite do not want to hear the replies, but is it not possible to get some sort of order so that we on this side of the House can hear?
Mr. Deputy Speaker (Sir Robert Grant-Ferris): The hon. and gallant Gentleman will realise that I must be the judge of order in the House. I have, naturally, been paying attention to it. These are matters which affect the people of this country very gravely, and I realise that feelings are running high. I ask hon. Gentlemen on both sides of the House to accord to the Chancellor of the Exchequer a careful hearing, as they did to the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins). When important speeches are being made, however provocative they are, it is important that they should be allowed to be properly heard.
Mr. Barber: I was coming to a consideration of the alternatives which are open to any Government, and I was saying, not in any critical way, that the right

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non. Gentleman and his right hon. and hon. Friends tried for a time as one solution a total freeze. I have no doubt that a freeze of all incomes would provide a temporary respite, but it would provide no lasting solution. I do not doubt the sincerity of the right hon. Gentleman and his hon. Friends who trooped into the Division Lobby in support of a wages freeze, but we on our side believe—and said so at the time—that the Labour Government were wrong. I believe that the whole House will now agree, in the light of the events which followed, that we were right and they were wrong, and that a freeze is not the answer.
To look to another alternative, I recognise that there are some who hanker after a return to a system of detailed statutory control of pay settlements. I should have thought that we had all learnt not merely that the statutory control of pay settlements is both unfair and bound eventually to break down but that, as our experience has shown, when eventually it goes, as it must in due course, it leaves in its train an even worse situation. As we have seen, the militants take over and the moderate and responsible trade union leader is put in an impossible position.
I recognise that hon. and right hon. Gentlemen opposite detested both the freeze and the paraphernalia of detailed statutory control of incomes. I have never doubted—and I have never said anything to the contrary—that they did what they did, repugnant as it was to each and every one of them, because they believed at the time that it was the right answer. I should have thought that the whole House would have learnt from that bitter experience that the answer to the central problem of excessive pay settlements lies in neither of these two remedies.
So then, it is said, what about a voluntary policy? Both the T.U.C. and the C.B.I. know full well that I have never ruled out a realistic voluntary policy in which they and the Government could co-operate. But, as I have said before, I simply do not believe that it is practicable at present. It is for all these reasons that the Government believe that, if we are to defeat inflation, there must be a substantial and progressive de-escalation in the rate of pay settlements.
Mr. Eric S. Heffer (Liverpool, Walton): Will the right hon. Gentleman give way?
Mr. Barber: No. All the evidence is that the public fully support our determination to stand up to industrial action which is unwarranted. The public also realise full well that the sure way to get more strikes and ever more inflation is always to give way. Every time an unwarranted strike succeeds——
Mr. Heffer rose——
Mr. Deputy Speaker: Order. The hon. Gentleman must not persist if the right hon. Gentleman does not give way.
Mr. Heffer rose——
Mr. Deputy Speaker: The hon. Gentleman must resume his seat unless the right hon. Gentleman gives way.
Mr. Barber: The right hon. Gentleman very sensibly said that he did not on this occasion propose to deal either with monetary policy or with Government policy. We are to have a debate on the latter topic on Monday and I will therefore follow him in that regard.
I turn to one matter which he raised and on which recently I agreed with the philosophy he expounded. As the right hon. Gentleman said, to a considerable extent the problem of unemployment is a problem of balance between the regions. It is common ground between the right hon. Gentleman and myself that if by means of regional policy we could reduce unemployment in those areas where it is particularly high, we could then bring about a much better use of resources and sustain a higher pressure of demand throughout the economy as a whole. This is accepted on both sides of the House.
Since we came to office we have been making a further and thorough-going study of regional policy. The first results of our thinking were contained in the White Paper on Investment Incentives which we published in October.—[Interruption.] If hon. Members from the regions are not interested in listening to what I have to say, their constituents certainly will be. I said in October that further studies were taking place. Certain aspects of these studies have been completed, and I can now give the House our conclusions.

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The Government have carefully reviewed the coverage of the intermediate areas, development areas and special development areas. The one outstanding conclusion to be drawn from the review is the failure of policy in recent years to deal with the problems of the older industrial centres in the development areas, industrial centres which, with the impact of structural change, have been experiencing, for two or three years, unacceptably high levels of unemployment. On 3rd February my right hon. Friend the Secretary of State for Scotland told the House that West Central Scotland was to have special development area status. That status will be effective from today. In addition, the Government have decided to give special development area status to the Tyneside and Wearside area and to extend the coverage of the special development area in South Wales.
For the convenience of hon. Members I have arranged for a list of the employment exchange areas affected to be placed in the Library. These changes, will give special development area status to an additional 71 employment exchange areas and the consequence will be that the proportion of the insured population of Great Britain in the special development areas will rise from the previous figure of 1·8 per cent. to 8·5 per cent.
In the new and enlarged special development areas there is a great need to attract new projects to provide employment. On 28th October the Minister for Industry announced that the operational grant which, under the Local Employment Acts, is available in special development areas for new incoming projects would be in future be calculated on the basis of 20 per cent. of eligible wage and salary costs in the first three years of operation.
In view of the need to increase still further the attractiveness of these areas to new industry, the Government have now decided that the rate shall be increased to 30 per cent. on the same conditions as before. Apart from these changes affecting parts of the development areas, I should also mention that the Government are designating seven employment exchange areas as intermediate areas. The reason for this is that, because they have been excluded from assisted status, they have experienced increasing
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economic difficulties. They are Edinburgh, Portobello, Bridlington, Filey, Oswestry, Okehampton and Tavistock. My right hon. Friend the Secretary of State for Trade and Industry will lay an Order before the House as soon as possible.
While the Government will seek to avoid frequent changes and the risk of uncertainty which this would cause both to industry and to the assisted areas, it is important that the coverage of the assisted areas should be kept under review to ensure that changing circumstances are reflected in the coverage.
Another important aspect of regional policy is expenditure on infrastructure and the environment.
Mr. Edmund Dell (Birkenhead)rose——
Mr. Barber: I shall give way in a moment. In this field the development and intermediate areas already account for a considerable part of the total programmes and we shall ensure that there will be a continuing reflection of regional development needs within various public expenditure programmes—especially in relation to the road programme and general environmental improvement.
Mr. Dell: Is not the effect of creating the special development areas simply to raise the amount of assistance given within them to about what it was before development area incentives were downgraded by the Conservative Government? Does not the fact that the right hon. Gentleman has not included any part of Merseyside as a special development area mean that Merseyside has been downgraded relatively in terms of development area assistance?
Mr. Barber: Many right hon. and hon. Gentlemen have particular interests and no doubt in due course will wish to bring them forward. [HON. MEMBERS: "Answer the question."] There were two questions and I am dealing with the second first. On the first question, the proposals which I have outlined today will involve additional expenditure.
Those who seek to criticise, as did the right hon. Gentleman this afternoon, can make their criticisms stick only if they are able to establish that they could have

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done better. The right hon. Gentleman and his colleagues in the Labour Government had their chance—for six years—and they failed. At the Labour Party Conference last autumn the right hon. Member for Stechford made this impeccable observation:
"We must strike the right balance between consistency and new thought. If the country believes that we are saying different things just because we are freed from the responsibility of government, they will not think much of that."
Little did he know how right he was. It was also the right hon. Gentleman who said in his Budget speech in 1969, that the Government had therefore—
"…decided to implement without delay…some of the more important provisions incorporated in the White Paper ' In Place of Strife'".—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1006.]
We all know what happened to that.
I suggested early in the new year to the N.E.D.C. that we should have a discussion on the whole question of inflation, and we did in fact have an extremely useful discussion. The T.U.C. put in a paper——
Mr. Harold Wilson: Splendid.
Mr. Barber: The right hon. Gentleman the Leader of the Opposition says, "Splendid". I hope that he will say that in a moment when he hears what I have to say. The T.U.C. put in a paper for consideration and later on released it to the Press——
Mr. Roy Jenkins rose——
Mr. Barber: No, I will not give way at this moment. In that paper, referring to the period since April, 1965, the T.U.C. said:
"Real wages and real disposable incomes advanced even more slowly than the limited rate of real pay advances in the decade up to the mid-1960s."
Does the right hon. Gentleman applaud that? It went on:
"The proportionate burden of taxation falling on working-class households increased significantly."
Does he applaud that? It then said that for many income groups the level of real wages actually fell in the years 1965 to 1969. That was the verdict of the T.U.C. on the years for which the right hon. Gentleman and his hon. and right hon. Friends were responsible.
Mr. Roy Jenkins: I am sorry to take the right hon. Gentleman back for a moment—it is difficult to find a moment to interrupt him when he is not quoting one of my own speeches. This is an important point. Does he agree with the statement of my right hon. Friend the Member for Birkenhead (Mr. Dell) that the new incentive he has announced takes the position back in special development areas to what it was before the mini-budget? Will he also confirm that he has announced nothing this afternoon which will improve the general level of employment throughout the country?
Mr. Barber: On the first question, for obvious reasons, if I were to answer a question about a particular area I should want notice of it. On the second matter, I have explained to the House this afternoon, and the House has accepted it, that we cannot hope to deal satisfactorily with the question of unemployment unless we are able to get under control the present rate of cost inflation. That is a basic question which has to be dealt with at the present time.
Mr. Roy Jenkins: I am sorry to have to press the right hon. Gentleman, and I would not do so if it were not quite clear, no doubt because I did not put the question clearly, that he has completely misunderstood my question. I was not asking him about any one area as opposed to another. I was asking him a general question, in regard to all the areas which he has now designated for the first time as special development areas, whether he will say if in these areas as a whole—and he must have a general point about them or he would not have announced a policy—the level of incentive for industry to go there is back to what it was before the mini-budget?
Mr. Barber: I would ask the right hon. Gentleman if he is talking about the intermediate areas in the country as a whole?
Mr. Roy Jenkins: I am talking of the special development areas the right hon. Gentleman has now announced.
Mr. Barber: In October 1 explained that the incentive to industry to go to the regions was not any less than it was previously under the régime operated by the right hon.

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Friends. What we have now done in the light of our consideration—I thought the right hon. Member for Stechford would welcome it—is to designate a number of other and additional areas as special development areas and as intermediate areas. [Interruption.] The right hon. Gentleman the Prime Minister now asks me another question. [HON. MEMBERS: "Oh."] We had to put up with the right hon. Gentleman for six long years and I must say the experience is engraved on my heart.
The right hon. Member for Stechford said at the end of his speech that we were pursuing divisive policies. What has divided the nation above all else in recent years is the sense of growing helplessless felt by those people without big powerful organisations to protect their interests. Whole sections of our society have had to make do with whatever is left when those with greater strength have finished exerting their bargaining power. For far too many people there has been nothing left at all. That is why we are seeking to strengthen the forces of moderation and responsibility in industrial relations. Above all, it is why we are determined to correct the present inflation. By doing these things, we shall be fulfilling the first requirement of greater unity, which is a Government who are determined to ensure justice for every section of the people and to speak for the interests of the community as a whole.
5.31 p.m.
Mr. Alan Williams (Swansea, West): I was surprised to find that the Chancellor observed the convention normally reserved to maiden speakers of avoiding contentious material, though towards the end of his speech he showed a considerable capacity as an unconscious or semiconscious comedian.
The right hon. Gentleman delivered his speech with the enthusiasm that one would expect of one who reading the Gospel according to St. George Street. His speech would have been a source of shame to the lowliest Parliamentary Secretary, and I suspect that, on reflection, it is to the right hon. Gentleman. It was a demonstration in monumental smugness which was matched only by its monumental ignorance of the problems with which we are dealing.
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The right hon. Gentleman showed an astonishing lack of concern for the real lesson that is embodied in today's unemployment figures. He spoke about unemployment being due to cost inflation. At the same time, he abdicated from any duty on the part of the Government to tackle it meaningfully. As he adduced his evidence to support his assertion that it was cost inflation, his unwillingness to consider any meaningful policy became more incredible. He ignored the fact that the current unemployment figures demonstate that we have at last, unfortunately, returned to the state where we see a relative decline in the employment position in the development areas vis-à-vis the rest of the country. The position is getting worse in the development areas faster than it is deteriorating elsewhere, and this is a major reversal of what has been happening in the last six years.
Since November, the rate of decline in employment in the development areas has, on today's figures, been 35 per cent. greater than that in Britain as a whole. This is an extremely disturbing matter to any hon. Member who represents a development area constituency.
The right hon. Gentleman has made certain announcements which, quite frankly, I am astonished that he had the impudence to bring to the House. He spoke of them as being related to the present problem of the development areas. But let us see what he has really said. Implicit in the fact that he has made the announcement is the admission that the timing and content of his last announcement was completely wrong. He has made the mistake of thinking that coverage—the size of areas—is the basic problem. The fundamental problem is one that he has not tackled. It is how to create enough extra footloose industry: how to boost the level of investment to the extent that there is enough industry to go to the development areas.
If anything, the right hon. Gentleman's extra designations have worsened the situation for those places which are already development areas. The limited amount of footloose industry available, which is becoming increasingly limited, will now have to be spread even more widely. As for his infrastructure, this is nothing but a piece of coating on a pill which is a placebo but has no industrial medical value. He knows, as

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we do, that the infrastructure improvements, even if they were massive, cannot produce an improvement in the employment situation in development areas for five or six years, whereas we face a drastic and declining situation immediately. There was no sense of immediacy in the right hon. Gentleman's speech.
I was glad to see that the Secretary of State for Wales and the Secretary of State for Scotland were here to listen to the right hon. Gentleman. They have to share with their right hon. Friends the guilt for the situations that have arisen in Scotland and Wales. There is no one to share the guilt in the North, of course, because the Government have robbed the North of a Minister to look after its problems.
Only a short time ago, the Prime Minister told my hon. Friend the Member for Cardigan (Mr. Elystan Morgan) that the people of Wales should be grateful for any hour's sleep that was lost at night by the Secretary of State. It becomes clear from today's figures that the Secretary of State has not lost an hour's sleep at night. He has not even lost an hour's sleep in the day. He and the Secretary of State for Scotland, with their Cabinet colleagues, fail completely to understand the nature of the development area problem. It is not simply a matter of the lack of diversity. It is not simply a matter of too much 19th century industry. It is also a problem of an abnormal and massive job loss because of tendencies in certain key industries. It is the result of mechanisation in agriculture, of a market contraction for coal, of technical change in the steel industry and of the market situation confronting the shipbuilding industry.
When I was at the Department of Economic Affairs with my right hon. Friend the Member for Stepney (Mr. Shore) I worked on "The Task Ahead" document. At that stage, I was doing the regional work. We pointed out that the magnitude of the job loss in the development areas was frightening during the period for which the document was relevant; that is, to 1972. We pointed out that in the development areas there would be a job loss of up to 300,000 as a result of the industrial changes that were taking place.
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The future of the development areas does not depend on pious speeches, nor on what the right hon. Gentleman called "useful discussions", nor on the submission of papers. It depends, first, on appropriate regional policies to attract industry and, secondly and fundamentally, upon a sufficiently high level of investment to create enough footloose industry to match the job loss being faced in the development areas.
Mr. Dan Jones (Burnley): That should be obvious.
Mr. Williams: It should be obvious but, when they were in opposition, right hon. and hon. Gentleman opposite were too busy talking about the problems to understand and find solutions to them.
The policies that they have adduced will do the exact opposite. Where certainty is needed, the conversion to allowances from grants has created unpredictability. Allowances depend on future profits and the value of money, and no hon. Gentleman opposite will make predictions about the value of money on the basis of the Government's policy.
Where a good cash flow is needed, there is no cash flow for firms on the margins of profitability, and even for those which are profitable, the time spent before cash begins to flow can be longer under the allowance system than under the grant system.
The final factor is that, where business confidence is needed, all that the Government have done is to create alarm and doubt. This is aggravated by their refusal to attack the basic problem of inflation. I suspect that the sheer ineffectiveness of the right hon. Gentleman's speech today will alarm industry even more. Everyone in industry will be as appalled, as my right hon. and hon. Friends were, at the barrenness of the speech and the sheer lack of policy presented by the right hon. Gentleman.
Past experience gives us no reason to put any hope in the new measures which the Government have adopted. In terms of dealing with the down-turn in the investment cycle, looking to the post-1961 down-turn, under the allowance system there was a decline of virtually 20 per cent. in the proportion of G.D.P. which went into investment in the two years to 1963. When we hit our downturn of the cycle in 1966, the fall was a

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third of that under the investment grant system, although the right hon. Gentleman's old organisation, the C.B.I., at the beginning of 1967 predicted that there would be a decline during that year of over 20 per cent. I believe, speaking from memory, that the figure was 27 per cent. In fact, because we introduced the 5 per cent. two-year differential, the decline was a mere 3 per cent. We virtually ironed out the trough in the investment cycle.
There is no question of comparability of the two systems for dealing with cycle down-turns. We have shown in such a situation that the investment grant system is more capable of maintaining the level of investment than the old or the new allowance system.
Experience in Wales—it is similar in the North and in Scotland—shows that under the grant system in 1968 and again 1969 there were more approvals of industrial square footage than in 1961, 1962 and 1963 taken together. Each year under the grant system was worth more than three years under the allowance system.
Right hon. and hon. Gentlemen opposite may say, "It is not the same old package, because we still maintain your old R.E.P. We do not like it, but we maintain it." But we have now got cost without benefit. We have the cost of R.E.P., but the announcement that it will definitely be terminated in four years. This means that new firms looking to Wales and to the development areas will say, "By the time that we have got planning permission, built the factories and got them operational, R.E.P. will no longer be relevant, so we cannot take it into account."
It is not surprising, therefore, that already in Wales inquiries for new industrial sites are down, jobs in the pipeline are down, and vacancies are down. Only unemployment is up.
Mr. Dan Jones: Is it not a fact that the point being made by my hon. Friend is compounded by the knowledge that the banks are now refusing loans which they were formerly prepared to make?
Mr. Williams: This is quite true. Right hon. Gentlemen opposite have got themselves in a paradox of policy, which I shall demonstrate later.
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Three men carry responsibility for this situation. I discount the Secretary of State for Wales and the Secretary of State for Scotland. They do not matter, because they are not voices in the Cabinet. They are public voices outside the Cabinet for the Prime Minister, but they are not speaking for Wales and Scotland inside the Cabinet. That is clear from today's figures.
As I said, three men are responsible. The first is the Secretary of State for Trade and Industry. I am sure that his old colleagues at the C.B.I. were proud when he got his job. He was going to show what the businessman could do in Government.
Mr. Dan Jones: A lame duck.
Mr. Williams: In history, there is no better example than the reversal of the normal process of the gamekeeper turned poacher. The right hon. Gentleman has been a remarkable convert to commercial blood sports. The lame ducks of 1970 are the dead ducks of 1971.
If anyone doubts this, let him look at the figures produced yesterday which show that in a mere eight months the right hon. Gentleman has managed to achieve a situation in which we have reached the highest level of commercial bankruptcies for the last 10 years. They are the highest since 1960—since the last Conservative Government.
The implication was that the right hon. Gentleman was a new boy who had done well and would do better next year. The Government were prophesying figures even worse during the current year.
Mr. James Hamilton (Bothwell): Will my hon. Friend also remind the right hon. Gentleman, who came from the C.B.I., that the C.B.I. in Scotland and the Scottish Development Council have said many times that the departure from investment grants to free depreciation was a retrograde step and would not be beneficial to the development areas?
Mr. Williams: My hon. Friend is quite right. However, he makes the point as if he were talking to reasonable people who want to know the facts. If my hon. Friend were talking to reasonable people who want to know the facts about allowances versus grants, why did the right hon. Gentleman and his right hon. Friend

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not wait for the outcome of the cost benefit study into the effectiveness of investment grants which, when I was at the D.E.A. and later at the Ministry of Technology, they harried us to do? When right hon. Gentleman opposite came to office, without waiting for the conclusions of this study, they abandoned grants in favour of the previous system which, in their previous period of office, had never been the subject of a cost-benefit study by the Treasury. I am grateful for the evidence produced by my hon. Friend in support of my case, but it is wasted because it is falling on the deafest ears politically.
The right hon. Gentleman must realise that many of his old friends now have grave misgivings and doubts about his effectiveness as a policy maker. The only place from which the right hon. Gentleman will find any adulation at present is a group which I am told is thinking of making him the patron saint of liquidators.
The second man responsible for this situation is the Chancellor of the Exchequer. The right hon. Gentleman's policy and psychology of approach to the problem were quite wrong. The change to allowances, which was his right hon. Friend's pet doctrine at the C.B.I., was not based on any economic assessment. It was not an attempt to cook the books, but to gently broil them. All that the right hon. Gentleman wanted to do was to conceal the volume of aid being given to industry by the Government. This is the only useful effect which the right hon. Gentleman can adduce in support of the change.
The right hon. Gentleman's psychology is wrong because, at a time when all the evidence indicated that we were in danger of reaching the peak of an investment cycle, when anything could have precipitated the down-turn of that cycle, he at the N.E.D.C. gave credence to the talk of a spate of bankruptcies in 1971 and a continued tight cash situation. The right hon. Gentleman was essentially wrong in his understanding of businessmen's attitudes to the statements of leading politicians. Obviously, his right hon. Friend was unable to give him any meaningful guidance. The result of the Chancellor's inabilities and ineptitude is that retail stocks are piling up—they are 12 per cent. higher than a year ago—machine
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tool orders are down to the lowest level for three years—the fourth quarter for 1970 was 42 per cent. below the same period for 1969—the chemical industry's investment is down and, even more alarming, is talking of withdrawing from projects in the development areas on which the industry was pinning its hopes. Overall investment has not just been pushed over the edge, but, by the policies implemented by the right hon. Gentleman, now that we are on the down slope the slide is being greased.
The right hon. Gentleman has today given an astonishing demonstration of what can only be described as economic illiteracy. The Chancellor has ignored what we know has been Treasury advice for months on incomes policy. Let the right hon. Gentleman not disdain it, as some do, and say that even the P.I.B. only claim a 1 per cent. effect from it. We must bear in mind that 1 per cent, is £250 million a year—it is £250 million cumulative—and at the end of five years it is doing a great deal to reduce pressure on prices. Concurrently with it, because of our marginal propensity to import there is also a £60 to £80 million bonus in import saving.
The right hon. Gentleman, by refusing to consider a meaningful incomes policy, has left industry knowing that the only available alternative is the traditional contraction, and on this basis it has been planning its investment decisions.
However, there is one word of hope for industry. The right hon. Gentleman cannot give it, but I think we can. "As long as you can hold out for a while there is a chance because, as sure as God made little Conservatives, 18 months before the General Election, the right hon. Gentleman will find that he is able to take off the brakes and allow industry to invest and consumption to boom ahead."
The third responsible man, and the overwhelming one, must be the Prime Minister who won the General Election by disfiguration of the truth, by distorting on the balance of payments, by deceiving the public on his intentions in relation to prices. So now we have achieved Dr. Heath's economic miracle—a touch of the galloping inflations with the near running recessions. This is the sort of paradox that I was talking about in the

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economic problem which the Prime Minister has created.
We now see the three pillars of Tory freedom—freedom from work for an increasing number of people in ever-widening parts of the country, freedom from affluence for the old-age pensioners and those on fixed incomes as a result of the Government's refusal to deal with the problem of inflation, and freedom from security for those who are lucky enough still to have jobs, because they cannot ever feel very certain, with the policies being taken by this Government, that their jobs will remain available.
The right hon. Gentleman has divided the nation. This Government have divided the nation. They have divided it in a rather original way. They have divided it into the have-nots and into the others, who are afraid that they are about to become have-nots. The Government have failed the people. They have cheated on prices and misled on the balance of payments. They have shown themselves utterly unfit to solve the basic economic problems of the country. They have failed, the Chancellor has failed, and after his speech today, we can be sure that they will continue to fail.
5.52 p.m.
Mr. John Boyd-Carpenter (Kingston-upon-Thames): The hon. Member for Swansea, West (Mr. Alan Williams) made a speech which, whatever else it was, was not lacking in courage. First of all, he appeared to regard it as a grave indictment of the present Administration that in the period of eight months they have failed wholly to cure the results of the preceding six years' economic maladministration, and went out of his way, with a most dramatic gesture, to say that they had failed to cure inflation—[HON. MEMBERS: "They have not tried."] Does he really think that a Government inheriting a situation which even the former Chancellor admitted had considerable elements of inflation, a situation of roaring wage inflation, are to be condemned because they have not wholly solved it within eight months?
Mr. Alan Williams: I am sure that the right hon. Gentleman will have detected, from the cries of my right hon. Friends and myself, that it is the Government's sheer inability even to have
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devised a policy within eight months which so alarms us.
Mr. Boyd-Carpenter: If the hon. Gentleman will wait for a moment, I may be able to help him a little on the policy. But I understand, now that he has resumed both his seat and his composure, that he has abandoned the proposition that we could have cured inflation within eight months.
I also thought that there was a certain rather attractive courage in his suggestion—no doubt based on personal reminiscence—that about 18 months before the General Election the brakes would be taken off. I have no doubt that the hon. Gentleman is speaking on the basis of very good personal experience.
But I thought that the hon. Gentleman was on to a matter about which he was rightly concerned, and about which I am also concerned, when he dealt with the question of investment. It is crucial that we should secure a large up-turn in investment, since otherwise the equipment of British industry will become out of date, the British worker will have behind him less and less plant and equipment compared with his foreign competitors, and there will be, quite inescapably, a deterioration in our standards of life.
But where I parted from the hon. Gentleman was over his naïve faith that this could all be put right by returning to the system of investment grants. I wonder whether he has studied, for example, the Report of the Public Accounts Committee of the last Session of the last Parliament. That Committee examined and reported on the way the investment grant system actually worked. It brought out—it is all set out in the evidence—how so much of the very heavy expenditure, which was running at some £600 million a year, went in grants in respect of investment which would have taken place anyway. It also indicated how difficult it was in many cases to secure that the conditions of the scheme were honoured, and how in many cases it was quite impossible to connect this expenditure of public money with any benefit at all to the British economy.
Specific examples were given of ships built abroad, to be chartered abroad, to be operated throughout their working lives abroad, which, simply because of financial transactions which gave them,

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during building, British ownership, although they continued to be used for the purposes for which they had been planned by the people who had ordered them——
Mr. Neil McBride (Swansea, East)rose——
Mr. Boyd-Carpenter: I am in the middle of a sentence, admittedly rather a long one. I hope that the hon. Gentleman will let me put in a full stop anyway before I give way.
Ships built abroad, used for the purpose for which they were intended abroad, never coming near this country, were, because of financial arrangements, receiving substantial grants from the British taxpayer by way of these investment grants. I ask the hon. Member for Swansea, West to appreciate that, however good the intentions, this was a grossly inefficient and extravagant method of doing what he and I and the whole House want to do—stimulating investment.
Mr. McBride: I am listening to the right lion. Gentleman's argument about allowances and investment grants. As he perhaps knows, my hon. Friend the Member for Swansea, West (Mr. Alan Williams) and I have the honour to represent a great Welsh city. One of the difficulties which we face is that the cash flow accruing for every £100 investment being planned means a disparity of £7 in adverse terms under the allowance system compared with the investment grant system. We are faced with this difficulty, which the right hon. Gentleman knows is incontrovertible, that firms native to the area face a difficulty because of non-profitability in the first year, when starting up, and that firms from outside the area cannot be encouraged to go in. How will the right hon. Gentleman relate this to the rising tide of unemployment which we seek to combat?
Mr. Boyd-Carpenter: As I told the hon. Member for Swansea, West, I am as concerned as he is—perhaps even a little more—to get investment, in the development areas and elsewhere, going again. But I do not believe that one can devise a less efficient method than that of investment grants, for the reasons which I have given.
I want to come back to what seems to be the nub of this, that, although all these
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artificial stimuli have their place, particularly, of course, in the development areas, we shall not see the resurgence of investment in this country which we all want to see unless the whole general economic climate is changed. We shall not see companies investing their shareholders' money, or, indeed, even being right to invest that money, unless it appears that there is a reasonable prospect of that investment being remunerative.
If costs are rising the whole time, if the outlook, when one is planning a new investment to build new plant, is rocketing labour costs in the years ahead, if any calculation of a profitable return becomes wholly hazardous, companies will hold back. The House deludes itself if it thinks that any system, whether of grants or allowances, however well devised, will restore the level of investment to the level which we want until the general economy is got right, until wage inflation is checked, until there is a prospect that soundly conceived investments will be profitable, until saving for investment is encouraged and until, along the lines which my right hon. Friend outlined, the economy is put in a stable and forward-moving position.
Therefore, this is the nub of the whole debate. It is perhaps significant that the Opposition Motion gives no reasons at all for the lack of confidence which the House is asked to show in the policies of Her Majesty's Government. No doubt it would have taxed the ingenuity of the draftsmen to do so. Of course, the House knows perfectly well that the very difficult and perplexing problems which concern the hon. Member and which concern us all, which the Government, above all, have to tackle, are not only the direct conseqence but the foreseeable consequence of the policies which have been pursued in the last few years.
The right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), in his very agreeable way, said that economic policy had to be based on trying to deal with a balance of considerations. This, of course, is true. It is true that all major industrial countries in the modern world have been seeking to deal—and, under all Governments, not wholly satisfactorily—with the problem of having at the same time stable prices, free collective bargaining and full employment.

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Since Keynes, it has become possible to operate economies at levels which make quite full use of resources and labour, but that creates a situation in which those who organise labour, unless they exercise very considerable restraint, have such bargaining—and, in some cases, such blackmailing—power that they produce a situation in which the country is driven into roaring wage inflation, with all the consequences, with which we are only too familiar, of unemployment, lack of investment, hardship to those who cannot protect themselves and the pricing of our exports out of world markets. All this will happen unless those who manage these negotiations are able to exercise restraint.
There is nothing novel in this. It was recognised by the Labour Party when in Government. We recall the whole story. Hon. Gentlemen opposite started with a voluntary appeal, and then we had the Declaration of Intent and the rest of it. When that failed, they went for compulsion, and we had the compulsory powers under the Prices and Incomes Act. It was a brave thing for them to do, though we warned them that it would fail, for the reasons which my right hon. Friend gave.
Mr. T. W. Urwin (Houghton-le-Spring)rose——
Mr. Boyd-Carpenter: I will not now give way. I am in the middle of a complex argument. The hon. Gentleman will agree that I normally give way.
As I was explaining, that failed; and then, in the last year or 18 months—this bears on what the hon. Member for Swansea, West said—the Labour Government completely let go of the end of the rope.
The right hon. Member for Stechford looked hurt when it was suggested that that might have been done for political reasons. Perhaps he did not recall, as we do, the observations of his right hon. Friend the Leader of the Opposition, as reported in the Sun on 3rd December, 1969, to a gathering of trade unionist hon. Members. The right hon. Gentleman was reported to have said:
"The crucial issue is not the incomes policy but the next general election."
It is now obvious that the problem of the timing of that election—to which,
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by a Freudian slip, the right hon. Member for Stechford uncharacteristically ineptly referred—was all important. It was to be while a lot of people were feeling happy because they were receiving large increases in money incomes, but before the quite inevitable price avalanche caught up.
This is why a Parliament which could have lasted, from the legal point of view, until next month and more was brought to an end last June. It is also why some of us resent the attitude of the Opposition in lecturing us now on the problem of inflation. This is a problem which they not only failed to tackle but must, certainly in the last 18 months of office, have known that they were failing to tackle and could not have cared, for in the words of the Leader of the Opposition what was crucial was not the incomes but the next General Election.
What is the point of this Motion of censure? Is it because, in the view of hon. Gentlemen opposite, we are seeking to tackle this problem? Is it because my right hon. Friend, with all the immense difficulties with which he must contend, is seeking to secure that future wage increases are increasingly moderate? Are hon. Gentlemen opposite arguing that we should not be doing this?
When one listens to the Secretary of State for Employment making statements at 3.30 on various afternoons one might think that the Labour Party thought there was something appallingly wrong for the Government to be saying that inflationary wage demands should not be accepted. Is this the point of the Motion of censure? This seems to be a correct statement of the position:
"In the next few years output per worker is likely to go up by about 3 per cent. a year. Therefore if we are to avoid a steep increase in the cost of living money income should only rise at about that rate. This was the basis of the 'norm' of 3 per cent. to 3½ per cent. for pay increases which formed the starting point of the policy in 1965. If productivity rises faster than expected then so can incomes. The principle was accepted in 1965. It is still true today. This means that most wage and salary settlements need to fall in the range of 2½ per cent. and 4½ per cent. increase in a year if this aim of greater price stability is to be achieved."
Is that view accepted by hon. Gentlemen opposite? It comes, as they will recognise, from their White Paper "Productivity, Prices and Incomes Policy After

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1969", Cmnd. 4237 of December, 1969. It is these same right hon. Gentlemen who were responsible for the clear, wellset-out statement of the case for restraint who now seem to support any wage demand, however high. [Interruption]. This is the essence, as the House will remember from the speeches we have heard, before and on this Motion of censure; right hon. Gentlemen opposite are criticising my hon. Friends for the resistance, not always successful, which we have shown.
Mr. Arthur Palmer (Bristol, Central): Does the right hon. Gentleman appreciate the great difference between the situation now and the situation some time ago? There is now a much stronger balance of payments position and a need for the economy to expand. It will not expand by having incomes restrained.
Mr. Boyd-Carpenter: The hon. Gentleman ignores the date—December, 1969—when the then Chancellor of the Exchequer was priding himself on the strength of the balance of payments position. He also ignores the fact that the passage which I quoted does not, in terms, relate to the balance of payments position directly but relates to the perfectly simple necessity—for balance of payments reasons and many others as well—to prevent wage-price inflation because of the effect of that on investment, on other people and on the internal level of prices. I want to know whether those words in their 1969 White Paper are still accepted by hon. Gentlemen opposite, and, if not, why not, now that they are in Opposition.
Mr. Michael Foot (Ebbw Vale): I will certainly reply to the right hon. Gentleman's question when I get a chance to do so at the end of the debate—that is, as long as he will say whether he now stands by the statement of 16th June of the present Prime Minister of his policy for dealing with the inflationary spiral.
Mr. Boyd-Carpenter: I am anxious to oblige the hon. Gentleman. I have no doubt that my right hon. Friend's statement was a perfectly sound one. My right hon. Friend has, thanks to the kindness of hon. Gentlemen opposite, been given ample opportunity to justify it from time to time. I do not think, therefore, that it is necessary for me to add to what my right hon. Friend has said and what has seemed to me conclusively to
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justify that statement. I have complied with my part of the bargain. Would the hon. Gentleman like to answer my question, or shall I have to wait for the end of the debate?
Mr. Foot: I want to entice the right hon. Gentleman to be here to hear my comments at the end of the debate, when I shall, of course, reply to his question. I wanted to know from him whether he stood by the statement of 16th June, and, if so, which part of that 16th June alternative policy put forward by the present Prime Minister has been or is to be carried into effect.
Mr. Boyd-Carpenter: The hon. Gentleman will have ample opportunity of hearing that from the Prime Minister himself. I can only add that I see no reason to resile from it. I am perfectly happy with it and, therefore, happy to give the hon. Gentleman the answer he requires. I hope that, in the excitement at the end of the debate, he will not unfortunately overlook the necessity to answer the question which I put, which is whether hon. Gentlemen opposite stand by that White Paper, and, if not, why not.
This is the nub of the debate. We are seeking to do—I suggest more effectively—what the Labour Government were seeking to do. It is surprising that in these circumstances the members of the then Government should appear to be throwing that overboard and seeking to pass a Motion of censure, no reasons given for it, condemning us for doing what they wanted to do.
The truth of the matter is that we shall deal with all these problems only if we get our economy moving forward again. The tackling of wage-price inflation is the first necessary step—the condition precedent, as lawyers would say. We must set expansion going forward, with the higher investment, which will enable our working population to earn much better wages, but to earn them as a return for part of the increased productivity which they create. Some part, of course, must go to those sections of the population—nurses, civil servants and so on—who cannot demonstrate productivity in any measurable way.
We want to see that done, and the House knows in its heart that we must clear away the wage-price inflation which

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the letting go of the end of the rope 18 months ago bequeathed to us.
The Government and the House have much to learn from the practice in other countries. We have much to learn from history about the right methods. I know that my right hon. Friend appreciates that the policy will have to be refined and developed as it goes forward. But on the prospect of the last six years we have nothing to learn from right hon. Gentlemen opposite. For them, with their record of six years behind them, to criticise us for economic mismanagement is an act of sublime impertinence comparable only with advice from Casanova on the desirability of marital fidelity.
6.11 p.m.
Mr. J. Grimond (Orkney and Shetland): It is always a pleasure to listen to the right hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), and we must be thankful that he was not elevated into silence. He began by saying that he would help out the Chancellor of the Exchequer on economic policy, but, although he made some excellent points against the Opposition, I did not notice that he added much to the almost nil start which we had from the Chancellor himself.
I shall return to some of the points which the right hon. Gentleman the Member for Kingston-upon-Thames made—his main point lies at the crux of the debate—but, before doing that, I wish to welcome what the Chancellor said about special development areas. If I tell him that I shall need a little time to find out exactly what it means, he will sympathise, I am sure, because, plainly, he was not quite sure what it meant, either. I draw attention to one point, however, at this stage.
There is always the danger that if we concentrate help on, say, the West Central belt of Scotland, we shall induce some diversion of investment away from other areas of importance, from the far North and the area which I represent, from the Highlands, the Borders, the medium-size towns and the North-East. I should like the Chancellor to consider whether he could limit the extra assistance to, say, companies over a certain size. encouraging smaller companies to go into what are still development areas
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but which, as I understand it, are not to benefit from the new measure which he has announced.
I wholly agree with the right hon. Member for Kingston-upon-Thames that the most serious danger facing us is inflation, and we cannot tackle the serious problem of unemployment until we put that right. To my mind, it is the crucial danger for the Western world. Unless it is curtailed and curbed, raging inflation is the classic prelude to an attack upon liberty in general and can easily lead to anti-libertarian measures.
I do not believe that any Government of any party can meet this danger alone. One of the lessons to be learned from today's debate is that it is becoming common form in the House that economic debates are largely taken up either by saying how badly the Labour Government did in past years or by saying how badly the Tory Government are doing now or did in even more remote times. In fact, inflation went on at a fairly steady pace whatever Government were in power. The alarming feature now is that it is accelerating.
We must realise that a concerted effort is needed. I greatly sympathise with those who have stressed that it needs a united national effort, too. I do not believe that any Government of any party, facing perpetual opposition and a divided nation, can deal with this most serious matter.
At present, in my view, we are on a suicidal course. The rate of inflation has risen from 6 per cent. a year to 8 per cent., and it is all too likely this summer to reach 10 per cent. It is a disease which feeds on itself. The higher and the faster it goes, the more strength it gathers.
It is inconceivable to me that a 10 per cent. increase in wages could be considered a welcome minimum. I was astonished at the exchanges in the House over the award to the electricity workers. We heard the Opposition trying to prove that it was actually better than 15 per cent., and the Government saying, "No, it is only 10·9 per cent.". In fact, the increase in productivity is only about 1 per cent.
If that sort of thing is to be repeated across the board, and if it is to be annual—this matters a great deal, because no

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sooner is one claim dealt with than another is put in—one can foresee, with only the most elementary arithmetic, where we shall end up. In fact, 10 per cent. is double and more the rate which was said to be tolerable by the last Government. We are seeing that now as a minimum, and with serious attendant industrial friction at the same time.
I shall not repeat all that has been said about the dangers of inflation, but I must add a few words because those dangers cannot be too often stressed. First, inflation creates social injustices of a peculiarly harmful sort. There are women and girls in the North of Scotland and in my constituency who are still earning only £7 to £15 a week. Yet that is the extra demand being put in by many trade unions today on top of a basic rate which itself is far above that. The people who are really suffering—it is a disgrace that we do not make more fuss about them—are the low-paid workers and others similarly hit. They are the ones who ought to be demonstrating, demonstrating not only against the Government for their lack of policy but against other sections, too, and some of the trade unions for exploiting their monopoly position.
Second, inflation not only divides but debauches the nation. It rewards the "spiv". It does away completely with the general rule that one should impose upon others only what one is willing to accept oneself. It puts a premium on payments in kind, things under the counter, expense accounts, and so on.
Third—this is closely relevant to what the right hon. Gentleman said—inflation will simply dry up investment. At present. one would have to earn 15 to 20 per cent. on one's investment to make it worth while. There will be little more voluntary investment soon if that sort of thing continues. There could be forced investment, but that would be part of the movement away from a libertarian society. Those of us who have been supporting the savings movement should consider carefully whether we are, in fact. supporting a long-term fraud.
All these results will follow for this country whatever happens in the rest of the world. It is sometimes said, "What does it matter if we inflate if other countries inflate equally fast?". But all these
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injustices will arise in Britain whatever happens in the rest of the world, and, what is more, if we inflate faster than the rest of the world, as is happening now, we shall soon be in a balance of payments crisis.
The trade unions today are in a very different situation from their situation at the time of the Tolpuddle Martyrs. Some of them represent favoured groups who arc by no means the poorest or most helpless people in society. It is the unorganised who are being so hopelessly left behind in the inflationary race.
On the other hand, so expensive is modern machinery that the owners of it, whether the State, nationalised industry or private enterprise, cannot afford to see it standing idle for long. So the bargaining position of the unions—certainly of the strong unions in certain industries—is immensely strong.
Further, it seems to me that certain conditions of a modern industrial State are in themselves inflationary. There has been a dominant bureaucratic trend in both Government and business to worship size and to worship sophisticated technology. This has been largely nourished by arguments about prestige and the pressure of those employed in such industries; for instance, the production of aeroplanes which will never pay their way. The result has been a great diversion of effort to create products for which no one really wants to pay. That is just as inflationary as making weapons in time of war for which wages are paid but which do not add at all to the number of saleable commodities in the market.
There also seems to me to be a difficulty in the lengthening time of production of many sophisticated products. Wages are being paid out all the time, but even if the product is wanted on the market it does not reach it until considerable sums have gone into circulation.
We know the situation. The Government, caught by inflation, cannot expand. Perhaps they have missed their chance. Probably after the election they could have risked some expansion, but now it is much more difficult. So we are in an exceptionally dangerous situation of inflation plus stagnation plus high unemployment. It used to be thought that it was an almost impossible achievement

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to reach a very high rate of unemployment at a time of raging inflation, but we have done it. I doubt whether the real standard of living of many people in this country has risen at all over the past five years.
It seems to me that we must get rid of certain facile assumptions. First, there are the inquiries which are set up ad hoc in one form or another, and which always find something above the minimum demand. They are not a very satisfactory way of dealing with incomes. Second, there are the arguments on comparability. We in the Chamber might compare ourselves with American Congressmen, and if we did we should be entitled to £20,000 a year plus £50,000 expenses. Comparability must take account of the circumstances of the society in which we live.
Further, even if prices go up, which gives people a very valid excuse for a wage increase in many ways, obviously if everyone chases present and future rises in the cost of living we are in exactly the position of the donkey chasing a carrot tied to its own bridle.
But, while the difficulties that we face are great, we have certain assets. We might, even in a debate on a Motion of censure, count our blessings. First, as the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) said, we have a strong balance of payments position.
Second, we have in the unions many sensible men who know the situation all too well. Here I come to a rather controversial note in my speech. I happen to hold the view that the Minister in charge of labour is quite a sensible man, and I do not believe that it is beyond the bounds of possibility—I put it no higher than that—that he should get together with the unions privately and see whether the growing friction can be stopped. I know that there is a National Economic Development Council, but that is the sort of body I want to get away from. The growing friction which is doing nothing to check inflation and could do the economy great harm can only be reduced in less public circumstances.
If we are to restore a better atmosphere, there must be concessions on both sides. I do not know Professor Hugh
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Clegg. I have listened to the explanations of why he has not been reappointed Chairman of the Civil Service Arbitration Tribunal. Of course, the Prime Minister has a case. The question is whether there are not many wider considerations than whether Professor Hugh Clegg took on an appointment by the unions for the Scamp Inquiry. This is the sort of area in which the Government should have shown more generous statesmanship. If they have no other objections to Professor Hugh Clegg, let him go on. Someone must make a few concessions and not appear to be driving through everything on the exact letter of some law or because of arguments which have a certain amount of logic.
I fail to understand some of the talk about hiving off profitable parts of nationalised industry. I am not a very keen nationaliser, but the Government always tell us that nationalised industries must show a profit. When those industries have some part that does, they are told to sell it. I cannot see that that is a very suitable policy.
We must also get away from the question of prestige. I should like the newspapers and other mass media to get away from all the language of battle they constantly use in industrial relations. When a sensible and moderate trade unionist is put on the televisison, someone asks, "Don't you take this finding as a defeat?", when the man has, possibly very reasonably taken rather less in a major award than he originally claimed. We must get away from that atmosphere of battle, for which the papers and television are very much to blame.
Several things are essential to any economic policy that can deal with inflation. First, we must have a lead from the top. It is impossible to forgo wage rises when the top people, the managing directors, the leaders of professions and everyone else at the top increase their emoluments and payments in kind every year. It is almost inconceivable that the managing director of Rolls-Royce had an increase of £9,000 last year. Where is the productivity? I can understand such people having increases when their businesses do well, but they get more cars, more secretaries and more money whatever their businesses do. I do not think that it can be argued that this does not affect the economy. No one suggests.

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that chairmen of companies should be allowed to murder people simply because they do not murder very many, that it does not matter very much if they murder one or two. There is a general rule that the top people show an example.
Second, we should look at some of the top institutions. There is a lot of talk about people putting up prices, but some of the banks have increased their dividends and their charges. They are in a monopoly position; they operate restrictive practices. They even refuse to take the decimal halfpenny. There are members of the Government who have great influence with the banks. Let them induce a little economic sense in them.
Third, we must have a prices and incomes policy. It may not be the same as the Labour Party's policy, but it is insufficient for the Chancellor virtually to say, "I have no policy. We all hope for the best." Does he think that 10 per cent. is the right level of increases in wages? Is that to be the norm? If he does not like the P.I.B., has he any means of establishing a principle for wage increases and fixing salaries and so on in the public sector? Obviously, productivity is not applicable. We cannot judge judges by productivity. A very good point was put to Lord Wilberforce when he was asked, "Has your productivity gone up?" It is absurd to apply productivity everywhere. But there must be some criteria. We cannot leave the matter to a whole series of ad hoc inquiries.
I should also like to see a policy which encourages plant bargaining instead of across-the-board wage increases, and I should like to see increases when they occur in monopoly conditions referred to something like the Monopolies Commission. It has often been suggested that there is no reason why unjustifiable increases arising from a monopoly position should not be subjected to scrutiny by a body like the Commission, and so should rises in prices.
I am not asking the Government to go back to the time when they tried to fix wage rates all across the board, but I am asking them to establish principles and to take action against what they consider to be unjustifiable wage increases. They should also consider the possibility of taxing such increases which are clearly beyond the public interest.
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Next, instead of cutting down the social services the Government should increase them. I am trying to stop the causes of distress in this country. If we increased the Community services in particular we should make it a good deal easier to restrain wage demands. I do not for one moment share the Government's view that the social services are intended only for lame ducks. I regard them as part of the fabric of this country. They need altering and extending in some ways. They should become community services to a great extent. I want them to be used as instruments for greater equality and binding us more closely together.
The question of Government expenditure has not been much raised in the debate. It is pretty clear that in spite of all the promises there will be no reductions, or very little. What is rather significant is that such reductions as there will be will be in the Government's involvement over investment. There are arguments on both sides as to whether allowances are better than grants. Certainly, in my part of the world grants are generally more useful because they provide some cash. According to the Government there will be less money for investment, whatever system is used. Yet we are running a very large Budget surplus with no effect on inflation and have a strong balance of payments position. In this situation we should begin to make credit rather more readily available and try to reduce some interest rates.
I agree with the right hon. Member for Kingston-upon-Thames that ultimately it is the confidence of investors in the future that will decide whether or not they invest, but certainly lower interest rates and a less restrictive policy will encourage them to take a rather rosier view of the future. This is very true. It is very serious indeed that Scotland has 118,000 people unemployed. Although the Government may consider that it is impossible to do anything more than they suggest, I do not think that their present measures will impinge on that situation unless they take more general measures to encourage again investment and the taking up of the slack.
For my part, I believe that the running of the economy is a matter not simply of economics but of politics as well—politics in its widest sense. As has clearly been demonstrated over the years, a great

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deal of the party battle in this House is totally irrelevant. In fact, the economy is not going to be put right by total nationalisation nor by an attempt to go back to a completely competitive society—an attempt which has been knocked on the head as soon as it started. The only major measure the Government have taken is to nationalise Rolls-Royce. That is their great triumph in the first year of office. That is their battle honour. Their battle has not been very successful so far.
If we are to remain a free society, a joint effort must be made both to protect people from the causes and effects of inflation and to deal with the serious cases of hardship caused by rising prices. It must be done by establishing general principles, particularly in the public sector, and by trying by reasonable concessions to build up again some unity of purpose between us with which to run the economy and the labour relations of trade unions and employers and to do all those other things which ultimately go to make the wealth on which we depend.
6.32 p.m.
Mr. John Nott (St. Ives): It is a pleasure to follow the right hon. Member for Orkney and Shetland (Mr. Grimond) because his speeches are always very interesting and also because he represents the most northerly constituency of the British Isles while I represent the most westerly and the most southerly constituency. So, when he talks of inflation, both of us are aware of the serious danger which this causes in particular in our areas which include some of the lowest wage earners in the United Kingdom. But when he says that the only major Measure which the Government have taken of any consequence is the nationalisation of Rolls-Royce, he does his own intelligence and knowledge of the Government's substantial new social security measures less than justice.
We all recognise the dangers of inflation and that somehow it has to be conquered. It is the major problem of the Government and of the western world at the present time. We are in a situation in which, if the current inflation continues at its present rate the price level will double in 10 years, which will bring us just about to the time, in 1980, when the number of pensioners rises from
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about 7 million to about 9 million. There are major social security and other problems ahead of us unless we can get inflation down to a lower level.
My sense of goodwill towards right hon. and hon. Members opposite has been slightly diminished as a result of the sort of behaviour in Parliament to which the right hon. Gentleman referred. Nevertheless, I have to say that the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) was, in a technical sense if in none other, a good Chancellor. I always felt that he possessed in economic and financial terms a good grasp of the job. But I have to say that his speech today was rather inadequate and somehow beneath him. It was worthy of a man who, having watched his own colleagues beat a horse to death, then gives a survey of the carcase but has absolutely no suggestion as to how the poor beast can be raised from the dead. He gave no suggestions as to how he would tackle the increasingly serious inflationary situation which confronts the country at the present time.
I looked up the right hon. Gentleman's last speech as Chancellor of the Exchequer on the prices and incomes policy of the last Government. He said:
"No one can prove exactly what the effect of the prices and incomes policy has been over the past 18 months, or over any other period. It is not in the nature of the subject for exact proofs to be possible."—[OFFICIAL REPORT, 17th December, 1969; Vol. 793, c. 1474.]
The venom and strength of his comments today on prices and incomes policy do not fit very neatly with the views he expressed in office. I think that the Government are equally entitled to their doubts as to the effectiveness of the type of prices and incomes policy followed by the Labour Government.
The right hon. Gentleman also referred to loss of growth. But had the economy grown under the previous Government at an equivalent rate to that achieved in the long period of office of the last Conservative Government, the country would be about £11,000 million better off and we would not have any of the major social problems—the pensions problem and all the other difficulties—which confront the country at the present time.
At the top of the list for sheer effrontery were his charges against the Government on prices, because he cannot rely on his

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reincarnation as Opposition spokesman to obliterate our memories of the fact that he was a strong, early and well-leaked advocate of devaluation.
Contrary to any action which the present Government have taken, the right hon. Gentleman knows that devaluation was a conscious and deliberate policy to shift the balance of our internal and external price levels. It was intended to diminish the standard of living of the community for the benefit of exports and the balance of payments. The Conservative Government have never pursued a deliberate and conscious policy of raising internal price levels. Indeed, they are grappling still with the consequences of devaluation.
Although we welcome the balance of payments surplus, it is quite improper to suggest that it is secure. First, we have the Common Market negotiations and the whole question of our financial contribution looming up; secondly, we have major problems of oil imports which may be upon us within the next few years; thirdly, we have major debts still to repay which the last Government were responsible for incurring. While I agree that we have some surplus in our balance of payments which might be used for expansion or for other purposes, that £600 million is not as secure as I should like.
The right hon. Member for Orkney and Shetland made some valid points. I agree with him about the low level of the debates on inflation in this House. It is almost as low as the level at which we debate entry into the Common Market. Some of the arguments are banal. For the right hon. Lady the Member for Blackburn (Mrs. Castle) to declaim and try to prove that a wage settlement of 10.9 per cent. is nearer 15 per cent. is an irresponsible way of trying to tackle what both sides of the House agree is the major problem of our time.
I want to outline some thoughts of my own which are not of a party political nature. I believe that historical analogies are seldom apt, but when I contemplate the revolutions of the nineteenth century which toppled the royalists from their seats and finally compelled them to accept the rule of law, I recall that everyone at that time looked upon the rule of law as the rampart of liberty, and it sustained the expectations of the Western world for many years and still, indeed,
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sustains the expectations and confidence of the older generation in this country today. But we have another sort of revolution in the Western world at the present. This time it seems to be against the rule of law as being the enemy of liberty. The right hon. Gentleman, who talks of unity, is noted for being a supporter and an enthusiast for certain elements of the younger generations in our society who I feel regard the rule of law as being the enemy of liberty. We are all in search of a basis on which citizens may be protected against the institutional abuse of power by the royalists of the 20th century —the trade unions, the Press, big business and bureaucracy.
I hope that some way will be found to tackle this problem without us all dissolving, as the right hon. Gentleman said could easily happen, into anarchy and unbridled individualism.
The inflation cycle from which we suffer stems initially from political unrest. It is as much a political as an economic problem. It is initiated so often by labour unrest, and that leads to wage inflation. With the previous Government, wage inflation led to "stop—go", which led to economic stagnation, then to cost inflation, to more price inflation and back to labour unrest again.
What I admire about the policies of the Chancellor and the present Government is that they are pursuing a steady course and, in fact, precisely the same level of demand in the economy as was recommended by the previous Chancellor. If the present Chancellor can be criticised at all, the criticism must be that he has been marginally expansionary, certainly not marginally deflationary, and still we are operating, broadly speaking, on the same criteria advanced by the right hon. Member for Stechford. We do not have "stop—go", and I am glad of that.
Mr. Robert Sheldon (Ashton-under-Lyne): If the Chancellor has been marginally expansionary, why is the level of bankruptcies and of unemployment the highest for the past 10 years?
Mr. Nott: The hon. Gentleman knows quite well that the economic measures taken by the Government in October, which is the only date to which we can refer—I do not say that they were major expansionary measures, only marginal ones—are likely to have effect within four

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or five months. That is why I believe that my right hon. Friend is perfectly correct in not moving sharply either in an expansionary or a deflationary direction at the present time.
I apologise for what is nothing more than a preamble, but in these circumstances, where we have major political problems and to some extent a breakdown of discipline in society throughout the western world, the ideological arguments which have divided the two main parties, and which we still have across the Floor of the House night after night, are becoming increasingly irrelevant and sterile. I agree with the right hon. Member for Orkney and Shetland on that score.
In his final remarks the previous Chancellor accused the Conservative Party of being doctrinaire, but a large portion of his speech was taken up in laughing and sneering at the Conservatives because they had nationalised the defence assets of Rolls-Royce. He cannot have it both ways. Either the Conservative Party is doctrinaire or it is not. He cannot sneer at the Conservatives for taking over the assets of Rolls-Royce and, in the same speech, say that we are doctrinaire.
There is not much object in inveighing against capitalism on the one hand and Socialism on the other. The problems of capitalism are entirely practical. They are not much divorced in many respects from the problems of Socialism. First, there is the problem of the growing size of institutional capitalism, with the social problems, which it creates including less adaptability to change, greater bureaucracy, and more impersonal relationships between management and men. Second, there is the growing inability of capitalism to finance new projects. There is not just the problem of illiquidity in the economy but the problem of innovation outstripping the resources of society and capitalism to provide the necessary sums to put developments into production. These problems would exist were the activities carried on in public ownership or private ownership. The only difference is that the sanctions against failure under private ownership are much more severe.
When the right hon. Member for Stechford worked himself into quite an intellectual lather about the so-called hiving off of elements of the public sector, he was not making a very important point. If he
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regards the sale of Thomas Cook, a few pubs, some ferry services, and the odd hotel owned by British Railways, as a major economic issue, I feel rather sorry for him.
It could be said that Thomas Cook is an example of one of the tragedies of the public sector, that, with the greatest name in travel, it has hardly increased its business—it has increased it slightly over the years—whereas American Express, which started 50 years later, is one of the largest businesses in the world.
Mr. Arthur Palmer (Bristol, Central): If the hon. Gentleman argues that getting rid of these assets from nationalised industries is a relatively minor matter, why do the Government go to so much trouble to do it, and cause so much disturbance and disunity in the process?
Mr. Nott: The Government do it for exactly the same reason that the West German Government decided to sell their shares in Volkswagen. The previous Chancellor said that no Western Government—it was a great high-sounding phrase—would ever be so foolish as to sell off a major public sector industry. That is precisely what the West German Government did with Volkswagen, which has since done extremely well. There are many other similar examples. The right hon. Gentleman said "no other Government". I would not go so far as to say that he was ignorant, but he was just wrong. He made an inaccurate statement. There are plenty of examples of chairmen of nationalised industries, such as Sir Ronald Edwards and Lord Robens, who have advocated bringing private capital into the public sector.
Why not bring some of the sanctions of the capital market into the public sector? I cannot see that this will do anything but good.
The right hon. Gentleman the previous Chancellor mentioned Rolls-Royce. I did not speak in the Rolls-Royce debate, but I believe that the Government handled this matter in the most excellent and decisive way, and I will now support that view.
Is it seriously suggested by hon. Members opposite that a huge American company which itself was in comparable difficulties would have renegotiated a contract under the threat, as opposed to the actuality, of receivership? It would

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not. If the Government had said to Lockheed—the crisis was not of the Government's making—"we should like to talk about the renegotiation of this contract with you before we allow the receiver to go in"—if they had any option of allowing or disallowing a receiver to go in—what does the hon. Member for Ashton-under-Lyne think would have happened then? The Government's position would have been utterly untenable in the negotiations. Absolutely no respect is gained in business by displays of weakness, which is what it would have been.
Mr. Sheldon: Surely the hon. Gentleman is aware that no private company other than under the insistence of a Government who fail completely to understand these issues would ever go into the situation of Rolls-Royce, where it has only one creditor that is threatening to ruin it, without seeing what arrangements it might come to with the company before putting the receiver in.
Mr. Nott: The Government did not put the receiver in. If the Government wished to save the taxpayers, pensioners and everyone else £170 million plus and believe that it was worth while renegotiating the RB211 contract, the way to do it was to go to Lockheed not before receivership but after it. This is the way the hon. Gentleman would have handled it.
Mr. Sheldon indicated dissent.
Mr. Nott: Apparently the hon. Gentleman would not have handled it in that way, in which case he would not have come out of the negotiations with a renegotiated contract.
I find no argument of business ethics in the Rolls-Royce case. If Lockheed was so foolish as to enter into a contract with a private company on the assumption that the British Government were underwriting it, it deserved to reap the consequences of its miscalculation. That is my attitude. I do not know what ethics or national reputation are involved in the British Government's sticking to the agreement which had been made to advance a set amount of launching aid for an engine. I do not know of any morality that requires a Government to borrow from, or tax, their citizens to uphold a contract which a private company has failed to meet.
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I have not time to comment on unemployment, except to say that I am gravely disappointed at one matter in the Chancellor's statement. I am very critical of the announcement about development areas and special development areas. I do not know that we want to have development areas, special development areas, intermediate areas or even a new announcement on intermediate special development areas. The regional development policy is becoming a complete jungle. If we could do so, we should abolish it and start again.
However, I must make one parochial plea. I believe that the unemployment in my constituency is higher than that in any one of these new special development areas. It runs at an average of 8 per cent. for six months of the year in one district and at 12 per cent. in another district. Yet there is no mention of Cornwall. I have no doubt that the Department of Trade and Industry will say, "You represent a seasonal area." I assure the Government that the 8 per cent. and the 12 per cent. unemployed in my constituency do not want to be seasonal workers. They want regular employment. The average wage in my constituency is very much lower than that in any of these Scottish and most of these Welsh constituencies. What my constituents want, if we have a regional policy at all, is permanent employment and permanent work.
I therefore hope that my hon. Friend the Under-Secretary will tell my right hon. Friend who is to wind up that I can see no reason why Cornwall is entirely excluded unless it he, perhaps, that Cornwall since the last election has four Conservative Members whereas most of these constituencies are represented by Socialist Members. Perhaps that is not a very fair remark, but I feel strongly about the matter.
I will now conclude, although I think that I have spoken for only a quarter of an hour.
Mr. Speaker: The hon. Gentleman can consult HANSARD tomorrow. He will find that he is wrong.
Mr. Nott: The major problem facing us is an international one. President Nixon is about to indulge in Keynesian economics. By the time that he has been indulging in Keynesian economics for

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two years the dollar deficit will be considerably higher than it is at present and world inflation will be at a very much greater rate. I wish the Government well in their domestic policies, but unless they do something to isolate themselves from the international consequences of what is about to happen in the United States the prospects for bringing inflation down within reasonable levels in Britain are extremely grim.
Several Hon. Members rose— —
Mr. Speaker: I repeat my plea for shorter speeches.
In fact, the hon. Member for St. Ives (Mr. Nott) spoke for 23 minutes.
6.55 p.m.
Mr. E. Fernyhough (Jarrow): The wisest part of the speech of the hon. Member for St. Ives (Mr. Nott) was contained in his last few sentences, when he acknowledged that world conditions were playing their part in the inflation from which we are suffering, although every other hon. Member opposite who has spoken would have the country believe that inflation can be attributed solely to the trade unions.
It is precisely because the Government are taking the line when replying from the Dispatch Box and in their weekend speeches that it is the selfish, grasping greedy trade unionists who are responsible for all the inflation in Britain that we must try to get some part of the record put straight.
When the debate is over I intend to see whether I can find the election addresses of those hon. Members opposite who have spoken today. I will gladly let them read my election address. I did not tell the people of Jarrow that there would be any tax cuts or that the road would be easy. I told them that we should have the standard of living that we worked for.
It is no good right hon. and hon. Members opposite playing down the increases they grant to judges, top civil servants, and chairmen of nationalised industries and giving £100 million away to their friends by abolishing the Land Commission, and then telling the miners, the steelworkers, the textile workers, or any other section of workers, "You must moderate your claims."
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Workers were greatly upset immediately after the Tory Government came to power, because the mini-budget was a deliberate attack upon many workers. The Chancellor said today that my constituency and the surrounding constituencies are to have more help because our unemployment problem is worsening. 1 welcome the news, that Jarrow will be part of a special development area but this is from the same Chancellor who last November said that from this May the unemployed will not get benefit for the first three days, the sick will not get benefit for the first three days, and the victims of industrial injuries will not get benefit for the first three days. Could anything have been meaner?
As I said when the statement was made, we have to go back to 1931 to find an attack so mean and so contemptible. At a time when unemployment is rising, the Chancellor is to take from the unemployed, the sick and the injured the first three days of their benefits. It is the few millions which are thereby saved which are to enable him to carry out his pledge to reduce taxation. If a Government, whatever their complexion, can honour their wild and extravagant pledges only by demanding sacrifices of the weak, the injured and the unemployed, they ought to be swept into oblivion at the first possible opportunity. I believe that they will be, because it is the measure of what they call their humanity, their better tomorrow. What a good start for the better tomorrow is this attack upon the sick, the unemployed and the injured.
It did not stop there. The right hon. Gentleman went on to make his attack likewise upon the sick in relation to prescription charges; and it was said in the same announcement that the price of school meals was to go up. This is the Chancellor who is calling for co-operation from the trade unions, who is asking for help to enable him to get out of the problems and difficulties which he faces. That is very significant, because my constituency was the first victim of the no-help-for-lame-ducks Minister. In April of last year Palmer's, the world renowned ship repair yard, was about to close and a Labour Government decided that there should be a rescue operation. By that rescue operation 1,000 men, 750 of them skilled men, had their jobs saved.

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Immediately this Government came into power they told Palmer's and Vickers that there would be no help forthcoming. The ship repair yard was closed. Now the Government which had to save Rolls-Royce and will have to save Harland and Wolff but which was not prepared to save Palmer's have to spend a lot more money providing alternative work for the lads who would already have been at work if a Labour Government had got back on 18th June last. Those lads fear fear that they are a sacrifice.
If the Chancellor of the Exchequer or the Government think that the shop stewards from Palmer's when they go into other establishments are going to be nice, quiet, understanding and cooperative boys they do not understand how bitter those men feel about being sold down the drain. Of course they are not going to be helpful. Likewise, if anybody expects the miners to be helpful and co-operative when the profitable parts of their industry are to be sold off he does not understand how the men's minds work. Equally, it can happen in steel and certainly within the railways. At a time when the Government need the understanding and co-operation of the organised workers more than ever they spit at them. They knock them in the teeth. They say, "Whatever your views, whatever your feelings, we are going to pursue this policy regardless."
Captain W. Elliot: Would the hon. Gentleman tell the House why Palmer's was closed?
Mr. Fernyhough: It was closed because it was not viable, as Rolls-Royce is not viable. I accept it. Hon. Gentlemen are now going to spend money on getting firms to go there, but there is no assurance that industries will be viable because there is no certainty at all; so they are merely having to spend money to get there additional work which Palmer's would have provided. What is more, it would have made the shipyard the biggest, finest and best-equipped in the North-East when needed. The Prime Minister talks of the threat in the Mediterranean from the Soviet Navy. It may be that we shall have ships involved. They might get damaged, and there will need to be a place for them to be repaired. But the facilities and the craftsmen will not be there
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because the Government were not prepared to find the necessary money to sustain that yard during a lean year or two.
Mr. Nott: The hon. Gentleman has admirably expressed the best argument for Conservative regional policy. We now have an allowance system rather than a cash grant to one industry so that there is no necessity for the less viable firms to go to his constituency.
Mr. Fernyhough: If the hon. Gentleman would like to read a social history of Britain let him read the history of Palmer's. It had to be rescued before, in the 1930s, and if it had not been it could not have done the magnificent job it did in the last war. I hope the need never arises again, but if it does hon. Members opposite will have some responsibility for it.
We want the co-operation of workers. What are the Government going to do about housing subsidies? Rents in Jarrow will be going up by 10s. and in Hebburn by 14s. if the economic rent without subsidy is to be paid. Does the Prime Minister expect the lads to suffer increases in rents of that kind and not try to seek some protection for themselves by getting some wage increases as compensation? What the average council house tenants cannot understand, because they are not blind, is why the Government are going to see that those who can do so pay the economic rent and yet are going to give public money to those who are already very well-housed who can afford to buy a tumbledown weekend cottage and make it up-to-date at public expense. Hon. Members here will know scores of cases where that has happened. Wealthy people buy a tumbledown cottage, whether it be in the Lake District or on the coast, and put it into first class condition at public expense. That will continue under this Government, but no man or woman who lives in a council house who gets a certain income is going to get away with less than the economic rent.
I want the Government to overcome their difficulties if they can because I love this country. I do not want to see mass unemployment. I do not want to see us losing our place in the sun. But there is no possibility whatsoever of their beginning to attempt to overcome their problems so long as they are pursuing

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their existing policies. The Prime Minister talked of uniting the nation. Every major decision they have made so far has divided the nation. It is because of that that I say the sooner they quit those benches the better it will be for this nation and the people in general.
7.10 p.m.
Mr. A. E. Cooper (Ilford, South): What must be said first of all is that for the Opposition to put down this Motion is a piece of effrontery which really takes some beating when one considers that for years they governed—if that is the right word—this country, they allowed a level of unemployment to develop, they increased taxation by no less than £3,000 million and they allowed a situation where profits became stagnant and where it was almost impossible for companies to invest anything. The right hon. Gentleman the Member for Birmingham, Stechford (Mr. Roy Jenkins) in his Budget speech of 1965 introduced the iniquitous Schedule F which is one of the main causes for the lack of liquidity in companies today.
I hope that when my right hon. Friend introduces his Budget later this year he will announce that this is to be done away with. Perhaps hon. and right hon. Gentlemen opposite are not fully aware of the impact that Schedule F has on industry. There are many companies employing, say, 2,000 or 3,000 people, earning a gross profit before tax of about £1 million. Before Schedule F, after they had paid tax and a reasonable dividend, they would have a retention in the company of about £150,000 out of which their investment for future development had to be found.
The right hon. Member for Stechford introduced Schedule F to restrict companies from paying higher dividends. It most certainly had that effect. The result was that after a company had paid its corporation tax and a reasonable dividend, and then Schedule F, it was lucky if it had £2,000 or £3,000 left for retention. High rates of interest combined with Schedule F is the prime reason why, at present, company profits are insufficient for investment.
I listened with great interest to the right hon. Member for Stechford today, and I must confess that I heard nothing
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that was of the slightest interest to the future of this country. I trust that when my right hon. Friend the Prime Minister replies to the debate he will not waste too much time on dealing with the right hon. Gentleman because there was nothing much to talk about. The right hon. Gentleman chides us with the problem of Rolls-Royce when he and his hon. Friends were the people who destroyed TSR2, one of the greatest aeroplanes ever produced. The RB211 flows from that decision. When the present Leader of the Opposition formed his Government who did he put in as Minister of Technology? The right hon. Member for Bristol, South-East (Mr. Benn)—probably the classic case of sending a boy to do a man's job. One of the reasons why we are in this great difficulty over Rolls-Royce is because of the ineptitude, incapacity and inefficiency of the right hon. Member for Bristol, South-East.
The central point of my argument is that, whatever differences there may be between us, there is one basic and central fact governing all and that is that all we have, all we can do by way of education, the provision of pensions and social services, depends entirely on an efficient and prosperous British industry. Everything flows from that. If we cannot have an efficient, prosperous industry, if we are incapable of selling our goods here or abroad, no profits will be earned, no investment will be made and we shall not have such things as pensions and education.
It is a fact to be remembered that we have a population of about 52 million. The working population is only between 23 million and 24 million. In other words, less than half the population provide all that is required. This proportion will become more unfavourable as the school leaving age rises and it becomes possible for people to retire earlier. It is likely that we shall find that the working population will be proportionately less than it is today. It is therefore the bounden duty of Government of whatever party to make sure that company taxation is at such a level or is imposed in such a way that the company is able to earn profits to provide for investment necessary to keep industry up to date.
I have listened to all of the debates on the Industrial Relations Bill and what has worried me has been the talk of some

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hon. Members opposite about the bosses and the workers. I sometimes wonder whether hon. Gentlemen opposite really know what goes on in British industry today, whether they really understand what is happening. There are many of us, and I am sure there are many hon. Gentlemen opposite, who spend a lot of our lives trying to sell the products of industry, not only here but all over the world. What we want is an absolute assurance that we can produce those goods at the right price and deliver them to customers at the right time.
One of the greatest obstacles to selling British goods abroad is not to do with the quality of the product or even with its price. The question that we are asked is, "Can you deliver? Will you have a strike which will prevent you from doing something? Look at the situation at present." With the great capacity of British industry to improvise we are getting over this postal strike and, so far as my company is concerned, Mr. Jackson and his colleagues can go on strike from now until Christmas. We are quite happy. We are getting along quite well as are most companies.
Nevertheless, when it comes to dealing with people abroad this is a very difficult situation to overcome. It is the problem which arises week after week, of whether we can deliver, whether there will be some problem which will prevent us from meeting our obligations. In other words the whole prosperity of the country is built upon co-operation between the people, business men and nations.
Hon. Gentlemen opposite know this. I understand the reasons why they have to make the noises they do during our consideration of the Industrial Relations Bill. They know that there has to be a regularising of relations between management and workers, nations and companies if we are to live together happily and prosperously and to put our affairs on a right footing. What we must seek to do is to make sure that we know the ultimate objective, which is the prosperity of our country and peace, if we can get it, between unions and management.
As management we have no desire to be constantly in trouble with the unions with whom we have to work. Our sole objective is to create a situation in which we can work happily and peacefully together, in which we can tell our men
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what orders we have, what deliveries we have to meet and what conditions there are. The men want that. The trouble is not with the ordinary chap on the shop floor who is a 100 per cent. honest-to-God chap. The trouble is the militant shop steward. He is the man we must control.
For the Opposition to put down this Motion condemning the Government for their economic policies, in view of the awful policies which the Labour Government pursued for six years and which are now largely responsible for our present difficulties, is a piece of effrontery which it would be hard to beat.
7.30 p.m.
Mr. John D. Grant (Islington, East): From 18th June until today is just eight months. I do not think that even the Secretary of State for Employment, were he here, would, with his curious method of calculation, dispute that statistic. But to many of us on this side of the House it seems far longer. It must seem very much longer to the electorate, who were fed on a pre-election diet of promises of the good time ahead and of a better tomorrow. I think that they have already learned the hard way that perhaps tomorrow never comes.
It is perhaps reasonable to say that the autumn of hope has been swiftly followed by a winter of discontent, and we are now heading for a spring of total disillusionment. I cannot say that I feel very cheerful about the prospect of the summer, and nothing that the Chancellor said today alters my view or that of any of my hon. Friends.
It is necessary and relevant to have a quick look back to those balmy pre-election days when the Prime Minister-to-be was sailing on with gay abandon and that carefree smile which we all know so well. That was before he saw "Anthony the Albatross" on the horizon. At that time the right hon. Gentleman talked about the decisions of the Labour Government, which he said were dictated by the short-term gain which had counted for everything. He talked of travelling abroad and hearing about our shrunken reputation; of the cynicism among young people in this country; of the need for a new style of Government with sound and honest British traditions; of

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his responsibility to all the people; and, as he said, of an end to the quick trick.
The Conservative Party manifesto said:
"Under a Conservative Government the gap between the politician's promise and Government performance will be closed, so that people and government can be brought together again in one nation united in a common purpose—a better tomorrow".
If any hon. Member believes that that has been the pattern of events in recent months he should ask his constituents about it. I am sure that my constituents would rapidly let anyone who held that opinion know that he was suffering from some extraordinary delusion.
There are the unemployment figures, for which the Conservative Party was only too ready to blame the Labour Government. We have had the matter underlined today with the publication of the disastrous unemployment statistics. People can see the economic stagnation and flagging industrial investment and. in particular, how that infamous promise by the Prime Minister about reducing prices "at a stroke" was a total phoney, an unprincipled piece of political chicanery. It was this promise above all else which put the Conservative Party in office. I challenge hon. Members opposite: did any of them believe before the election that the Conservative Party, if elected, would reduce prices "at a stroke"? Any offers? The silence is significant and deafening.
Mr. Wilfred Proudfoot (Brighouse and Spenborough): If the hon. Gentleman had read our literature at election time he would have found that we never said that. We said that we hoped to slow them down.
Mr. Grant: The Prime Minister has conceded that he used the phrase "at a stroke" in a speech on 16th June. I did not say that it appeared in election literature. I do not know whether the hon. Gentleman's intervention was an example of touching faith, but it was not reciprocated by any of his hon. Friends. The Prime Minister's speech was a prime example of the "quick trick", about which he was only too pleased to talk before the election—" Here is your price cut, madam: now you see it, now you don't."
Let me deal with the question of our overseas reputation. I do not know what
2208
hon. Members opposite think the South African arms affair will do to our reputation abroad, including the economic implications. I mention in passing the effect abroad of the rantings of the right hon. Member for Wolverhampton, South-West (Mr. Powell), with whom all hon. Members opposite are associated even if they do not like to recognise it. Now we have the Rolls-Royce fiasco. Some reputation that will earn us abroad in terms of prestige, goodwill and economic interests! That is the clearest possible indication of the Government's disruptive double talk—the double standards they set between public and private sectors of industry.
The only answer which we get from the Government when we talk about the perils of inflation is, "Blame the unions." "Aunt Sally" has now become "Uncle Vic". I share the view of the right hon. Member for Orkney and Shetland (Mr. Grimond). It is time the Government started talking directly to the trade union movement. I share the right hon. Gentleman's view that "Neddy" meetings are not a suitable forum in which to initiate this kind of necessary discussion.
We hear from the Prime Minister that he does not believe in ostracising those with whom he disagrees. Perhaps he will make a start by stopping ostracising the trade union movement. The fact is that he does not want to talk to the trade union movement.
The Prime Minister (Mr. Edward Heath): I have no wish to ostracise the trade union movement. In fact, my personal relationships with it are very good. Perhaps the hon. Gentleman could explain why "Neddy" is not the correct forum in which to have discussions between unions, employers and Government. It was created for that purpose by the Conservative Government and carried on by the Labour Government for 5½ years for that purpose. We are doing the same again.
Mr. Grant: I did not suggest that there should be direct talks at this stage between Government, employers and unions. I am referring to the necessity for the Government and the trade unions to get together to find common ground. The Prime Minister said, in effect, that his relations with the trade unions are

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very good. I find that statement staggering. When was the last occasion on which he saw the T.U.C. General Council or any of its members on any deputation outside "Neddy"? Perhaps the right hon. Gentleman will answer that question. The Labour Government were certainly in direct contact with the trade union movement outside the "Neddy" forum.
The fact is that the Prime Minister does not want to talk to the trade unions direct. He wants to restrict them by means of the irrelevant Industrial Relations Bill.
Mr. Arthur Lewis (West Ham, North): Does my hon. Friend agree that the ideal suggestion was made by me in a question to the Prime Minister; namely, that rather than see the T.U.C. General Council, important though that may be, he should go to the demonstration on Sunday and address the 100,000 trade unionists who will be there? It would be much better for the right hon. Gentleman to do that than meet the T.U.C.
Mr. Grant: I am grateful to my hon. Friend. All his suggestions are ideal, although I doubt whether the hearing would justify the visit.
We must look at the fiasco created over the question of arbitration. We have heard a great deal about the necessity for arbitration in industrial relations in the last few days. The decision on Professor Clegg above all else underlines the reason why the trade unions will no longer put their trust in arbitration. The Prime Minister said this afternoon that Professor Clegg had to go because one side of the Civil Service negotiating body —the Whitley Council—had lost confidence in him. Perhaps the right hon. Gentleman would say why he appointed Lord Wilberforce as Chairman of the Court of Inquiry into the electricity dispute when it was clear that the trade unions had no confidence in that gentleman, whatever the outcome of the inquiry might have been.
Meanwhile, we stumble on with no policy for prices except to let them rip. The Chancellor of the Exchequer this afternoon said practically nothing about prices. The crude policy for wages is simply to hold them down regardless of the merits of the individual claim, and even that policy is in tatters. We have the incredible spectacle of the Secretary
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of State for Employment telling the electricity workers that they will get far less than their unions say they will get if they accept the Wilberforce formula. What an encouragement to those lads to settle! That example of face-saving by the Government is as politically deplorable as it is industrially dangerous.
The Tory Party 1964 election manifesto said:
"An effective and fair incomes policy is crucial to the achievement of sustained growth without inflation."
The Government have created a climate in which that policy is now a pipe-dream. So, by their own definition, sustained economic growth is impossible and the Government Amendment is, therefore, irrelevant. The Government have been hoist by their own petard, and none has been hoist higher than the Prime Minister.
I will conclude with a quotation about the Government:
"Its joy is singular, its self-congratulation is premature. Is this the new political line—that you congratulate yourself on what you have not yet done and trust that the fervour of the self-applause will hypnotise the onlookers?"
The Prime Minister might remember that quotation. We know how difficult he finds it to write his speeches, but this speech was, presumably, written for him and the quotation was pinched from the Daily Mirror and used by him in the House, in the debate on the economy in March, 1966, to attack the previous Government. It aptly fits the Government's position since last June, and he is condemned out of his own mouth. The contrived fervour of self-applause by hon. Gentlemen opposite when the Chancellor of the Exchequer sat down this afternoon will certainly not hypnotise us or anyone outside the House.
We had no answers from the Chancellor of the Exchequer, and he could have been described this afternoon as a walking, talking vacuum. Similarly, none of us is confident of receiving any answers from the Prime Minister tonight. The one price that will not be reduced is the price that will be paid eventually at the polls by hon. Gentlemen opposite for their past deception and for the present debâcle. It will be a very high price but one which will be well justified.
Mr. A. G. F. Hall-Davis (Morecambe and Lonsdale): In the course of my remarks I will touch on some of the points raised by the hon. Member for Islington, East (Mr. John D. Grant), but I will start by taking up the point made by the right hon. Member for Jarrow (Mr. Fernyhough) when he said that in his election address he had promised his constituents the standard of living they worked for. Our troubles today stem largely from the fact that during the years of the Labour Government the people did not enjoy the standard of living that they had worked for. Only this afternoon the Chancellor of the Exchequer told us that for the last three years of Labour Government the standard of living rose by less than 1 per cent. This has a direct relationship to the wage cost pressures that we are experiencing today.
I listened with some pleasure to the speech of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), but one remark destroyed his whole argument. He said that Governments do not normally make mistakes about the date of an election, but it is well known to the right hon. Gentleman and to anybody who is at all versed in economic matters that the right hon. Gentleman the Leader of the Opposition knew in May last year that the course of prices and unemployment was then set for 1970. The time lag between decisions affecting employment and their impact is particularly long, and the employment situation to which the Opposition have referred has been determined inescapably by the policies which the Labour Government were following when they were in office.
It is important that these things should be said, because it would be a tragedy if, just at a time when the tide is turning, we were to be diverted from our present policies because we felt that the situation was due to anything other than the decisions and actions of the previous Government. The responsibility for the present situation is not on the Government but on the two right hon. Gentlemen and the right hon. Lady who have put their names to the Motion. The Leader of the Opposition deliberately encouraged a wage bonanza before the General Election. He thought that it would win him the day. He knows this
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is true, and we know it is true. The country spotted what the consequences would be and where we were heading and rejected him on 18th June.
The right hon. Member for Stechford also has a heavy burden of responsibility. The price take-off began in the first quarter of 1970 and continued in the second and third quarters of last year. The percentage cost of living increase on the preceding months was, in January, 1970, 5 per cent.; in April, 1970, 5·6 per cent.; in July, 1970, 6·7 per cent.; in October, 1970, 7·4 per cent. That shows a clearly defined trend pointing inescapably to our experience last year, and the right hon. Gentleman bears much of the blame for 1970 being the year of "Mr. Rising Price".
Why does he bear that responsibility? At the time of devaluation he was not responsible for what went before but he had a direct responsibility for what came after. He made individuals carry the brunt of the devaluation cut-back, and after two years they revolted against carrying that brunt. Talking about his success in containing consumption, the right hon. Member for Stechford said:
"Judged by any standard other than the exceedingly stringent one which I applied last year, a growth of only 1 per cent. in personal living standards, combined with a growth of 4 per cent. in G.D.P. is a considerable and unusual achievement."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 999.]
The trouble was that it was an
achievement which the public found no pleasure in sharing. They were prepared to go on wearing a hair shirt to extricate the previous Government from the results of their economic mismanagement for a limited period only, and at the end of 1969 they revolted.
The origin of the present wage-cost spiral can he clearly traced to the last months of 1969. It was stimulated by the right hon. Gentleman's acquiescence in dropping the first Industrial Relations Bill which he had commended in his Budget statement that year.
The right hon. Member for Blackburn (Mrs. Castle) must take her share of the responsibility. I have some sympathy with her, not just because I come from Lancashire and the area which she represents, but because she is made of sterner stuff than the Leader of the Opposition. She really believed in her Industrial Relations Bill, not just as a political gimmick

2213
but as something of real relevance to our economic problems. How right she was. She fought for it, and when her colleagues gave in she should have resigned. Instead, she stayed to make that disastrous speech to the conference of the Institute of Directors. The speech was probably misunderstood, and certainly misquoted, but the choice of the words
"real power now lies in the workshop"
was, in the circumstances of the time, a fatal misjudgment and politically inept.
Let us look for a moment at the industrial relations scene. It was not last month but midsummer of last year when Vauxhall's chairman had to announce that strikes in his company and in the companies of its suppliers had cost Vauxhall's 22 per cent. of its planned production and produced the worst six-month loss the company had ever suffered. Over the same period British Leyland had lost over 15 per cent. of its planned production—a total of 88,000 vehicles.
The right hon. Member for Stechford commented on the disappointing investment figures. There is no encouragement to management to invest in new, highly expensive machinery which needs to be run round the clock without interruption. They are constantly seeing disruption of production in their factories, and the Industrial Relations Bill and the consequences which flow from it will have a direct relevance to the restoration of confidence in the desirability of investment. I would not expect the Opposition to rush to pull the Government's chestnuts out of the fire. This is not what happens in the House of Commons or in politics in general, but I would expect them to behave with a sense of responsibility in a situation which is largely of their own making.
The hon. Member for Islington, East said that there was a responsibility to all the people. I agree, but it is a responsibility that rests with the Opposition as well as with the Government. There is such a sense of responsibility among many people outside the House. I feel that the tide of wage-cost inflation is turning and that the public's attitude to our problems is changing.
The right hon. Member for Orkney and Shetland (Mr. Grimond) said that it was a pity that we conducted our affairs in an
2214
atmosphere of battle. The general public has formed the view that the time has come to call a truce and that it would be in everybody's interests to do so. It would undoubtedly be in the interests of those members of trade unions whom hon. Members opposite frequently tell us they represent. Those are the people who have the most to gain from a moderation of wage claims and settlements. The people who should be pointing this out to their trade union friends are those hon. Members opposite who sat below the Gangway in the last Parliament opposing vigorously the statutory control of wages of the Labour Government.
The right hon. Member for Orkney and Shetland then referred to the fact that we were perhaps in danger of destroying or restricting the liberty of our society. Hon. Members opposite chide the Government for not taking action, but are they asking the Conservative Government to return to statutory wage control? If I were a member of the Labour Party who had fought against statutory wage control, I should now be saying to my trade union colleagues, "You, above all, should follow a policy of moderation because, unless there is a slackening of the tide, public opinion will force a return to the policies you most bitterly resented and resisted." High wage claims have not worked. They have not benefited the wage earner and are a direct cause of the rising level of unemployment. If one makes any commodity expensive enough. one cuts down demand.
There is another reason why it is in the interests of wage and salary earners to return to settlements related to production and the cost of living in the same type of relationship they were prepared to accept two or three years ago. So long as wage and salary claims continue to be made and pressed at their present levels, they take away from the Government freedom of manoeuvre to take action to expand the economy and to reduce unemployment. I believe that, as soon as wage claims and settlements moderate, if the prospects for employment and industrial investment remain as they are now it will be desirable for the Government to take some expansionary action. I hope they will take action to bring a double benefit, not just in expanding the economy, but in securing a further moderation of the wage-price spiral.

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The alternative is that either the Government can act directly on prices by reducing purchase tax or selective employment tax, or they can act indirectly on prices and industrial costs by reducing direct taxation on lower levels of income and so moderating the pressure for wages and salaries to be pushed up to keep ahead of prices.
I have already referred to the responsibility of the right hon. Member for Stechford through his acquiescence in the abandonment of the first Industrial Relations Bill. He has a further responsibility for the level of wage claims made in the last 10 months. I believe that it was folly bordering on the incredible to have eliminated in his last two Budgets the reduced rates of income tax on the lower bands of taxable income. It showed a lack of political feel—a failure to understand how men's minds work. People pay just as much attention to the tax they will pay if they increase their earnings as they do to what they are paying on their current earnings. When prices are rising by 2 or 3 per cent. perhaps a marginal rate of 32 per cent. is not so significant, but when prices rise by 6, 7 or 8 per cent. union leaders and the men they represent know that it is not enough to get rises equal to the increase in the cost of living if they are to keep pace in their standard of living.
I believe it is in everybody's interests that wage increases should be moderated and that it is unrealistic not to recognise that the first move in this direction must come from the employers and those who negotiate with them across the table, and the second move, the follow-through action, must come from the Government. It is a poor service to those from whom the Opposition claim to draw their main support to seek to make party points in this situation without studying the facts. The fact that the Opposition have moved a Motion of censure today indicates that they still believe that people have very short memories. I find this surprising. It was because the right hon. Member for Huyton (Mr. Harold Wilson) relied on the electorate having a short memory that he rushed to his defeat in June. He has now put himself in a position of putting down a Motion of censure on policies which he himself was carrying out. It is a Motion I shall have great pleasure in rejecting in the Lobby tonight.
Mr. Peter Doig (Dundee, West): The right hon. Member for Kingston-upon-Thames said that there was no evidence on which to base this Motion of censure. Does he not consider that the present high level of unemployment is evidence enough?
I will quote an example in the construction industry. Figures issued by the Department of Employment in October showed that 107,000 construction industry workers were unemployed, and it is common knowledge that that figure has risen considerably since. If we add to that figure unemployment in the service industries which work directly for the construction industry, we find that over 250,000 people are unemployed in the construction industry alone. Does the right hon. Gentleman not think that that justifies this Motion?
The Chancellor of the Exchequer told my right hon. and hon. Friends that if we wanted to make our criticism stick we had to show that our regional policy was effective. I propose to do just that.
I take the Tayside area as an example, with Dundee as its centre. The present unemployment figure in Dundee is 5·8 per cent. That represents 5,319 people. The figure for men alone is 8 per cent. That is a much truer figure, since many women who become unemployed do not bother to register. The male employment rate of 8 per cent. is much more realistic.
In addition to the effect of the Government's policy of economic restraint, in our area we are seeing the contraction of the jute industry, that being the main industry in the region. In that one industry alone we have already lost over 5,000 jobs, 2,000 of them in the last year, and we are likely to lose another 5,000 very shortly. When one considers all those factors, clearly they add up to a very serious problem.
In the area, we have seen the Keiller factory close, we have seen the Swel factory close, we have seen Kellie's factory close, and a linoleum factory has closed. Even a modern industry like N.C.R. is 1,200 below its peak employment figure. Smedleys is proposing to close shortly. Moving out from the immediate area of the city, we understand that the Cupar sugar beet factory is to close, despite all that was said by right hon.

2217
and hon. Gentlemen opposite when they were in opposition.
Another matter which gives rise to concern is that unemployment is not restricted to skilled and unskilled people. There are 60 people on the executive register—draughtsmen, industrial chemists, analysts, electronic engineers, and so on. Those are the types of people in the area who find themselves unemployed. Not long ago, a lorry driver's job was advertised. There were over 800 applicants. That is how serious the problem is.
Unfortunately, we have a record of unemployment which is much worse. Going back to 1921, there were over 43,000 unemployed in the City of Dundee. That represented one out of every two people of working age. Frequently in the 1930s over 30,000 were unemployed. In four different years there were occasions when the figure rose to that extent. Today, however, we regard a figure of 5,000 as quite unacceptable. The reason is that the policy of the Labour Government has shown how the problem can be overcome.
In 1945 a Labour Government passed the Distribution of Industries Act, which brought an industrial estate to our city. Many new industries were attracted to Dundee. In fact, it was so successful that a group of influential local businessmen asked the Board of Trade not to bring any more industries to Dundee. They feared that they would not be able to get workers for their jute mills. That is how successful the policy was in the area, and it gave renewed hope to the whole of Scotland. It resulted in better paid jobs, and the unemployment figure fell to below 3,000.
The two instruments responsible for achieving this result were the industrial development certificate and the investment grant. Those were the means that brought the success. Unfortunately, we reverted to a Tory Government. They relaxed these controls, but, by this time, because we had the new industries, unemployment increased only slightly. In 1964 a Labour Government was returned, and they decided again to tighten the control of industrial development certificates which the Tories had relaxed, and they decided again to increase financial grants with the object of attracting new industry.
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The monthly average of unemployment in Dundee for the whole period in office of the 1964 Labour Government was 2,522. The average from the time that the present Tory Government came to power is practically double at 4,594. Those figures show clearly that the twin policies of effective industrial development certificates and effective financial inducements are successful and can do the job.
Mr. Hall-Davis: While I sympathise with the great problems of Dundee, the hon. Gentleman has quoted several figures. Will he say what was the figure in June, 1970, compared with the average of the period in office of the Labour Government?
Mr. Doig: In June, 1970, it was 4,046. But, as the hon. Gentleman must know, just as both sides of the House agree that one month's trade figures do not give a fair indication, neither do one month's unemployment figures. That is why I quoted the average over Labour's period in office. If necessary, however, I could quote figures going back to 1921 to show that these policies have worked, do work, and will continue to work.
We have a situation now where again the Tories are relaxing industrial development certificates, ending the regional employment premium and ending the Industrial Reorganisation Corporation. They have created a new special development area in West Central Scotland. That is to be welcomed. I understand that they are to create another in the Methil and Buckhaven area of Fifeshire. We have heard today about others that they intend to create. That is good for those areas. However, it is probable that Dundee's prospects are bleaker than those of anywhere else in Britain; yet we find that Dundee is not to be included in a special development area.
The situation will become even worse if we go into the Common Market. Without the inducements that have brought industries to Scotland in the past, the drift to the South will become accelerated. The prospects are worse than any that I have known since the 1930's.
There is a shrinking market for jute. That means that the import quota system to which we have changed now gives a larger share of that shrinking market to

2219
jute imports. At a time when Dundee faces such a bleak future as a result of the rapid contraction of the jute industry, our Trade Ministers are considering increasing jute import quotas. It is almost incredible. Many jute mills are barely paying their way. Any relaxation of controls could lead to their closing altogether. There are alternatives, one of which is the increasing use of polypropylene. However, whereas the Tayside area had a monopoly of the jute industry, it has no monopoly in polypropylene. The labour force required for the manufacture of polypropylene is about half that required to produce jute for the same amount of cloth.
In many cases the regional employment premium payments exceed the gross profits of some of the jute mills. What will happen when these end? The prospects will be bleaker than I have known them since the 1930s.
Consider the plight of the unemployed. What did the Labour Government do to help the unemployed? They introduced redundancy payments, earnings-related supplementary benefits, rate rebates, and increased benefits. These are some examples of what was done by the Labour Government to alleviate the problem.
What have the Tories done? My right hon. Friend the Member for Jarrow (Mr. Fernyhough) told us that about the only thing they have done is to deprive people of the first three days' benefits should they become unemployed or sick.
We now have another equally serious problem—the wage-stop clause. That means that a family cannot get any more by way of supplementary benefits than its normal earnings. In fact, families get slightly less. On that basis, if council house rents go up by 10s. per week a family which is already below the minimum on which people are expected to live will be 10s. a week worse off. Because of the wage-stop clause, when rents go up the supplementary allowances do not, so that people already getting less than the minimum on which people are expected to live are that much worse off.
Another problem which the Government should consider is seasonal employment, which is one of the biggest rackets out. If a person is on supplementary or normal unemployment benefit, and the only work which he can get is for six
2220
months in the year, and he does that for three successive years, then his normal pattern of employment is one of working six months and being idle for six months. So for the six months which he normally works he will be entitled to benefit, but for the six months during which he does not normally work he will not be entitled to any benefit at all. That is an extraordinary situation, which neither the last Government nor this Government appear to have done anything about. It is high time that they had another look at it.
Finally, I turn to prices, also a burning question. The more unemployment there is, the more important prices become to people with shrinking incomes. I suggest that the Government ought to establish a costing department to which prices could be referred whenever there is reason to suspect that there has been over-charging. There are hundreds of ways in which these matters can be discovered. Some companies are still making big profits and paying big dividends. Competition has not brought down prices, as everybody, except the Government, knows. If we can successfully tackle and control prices, and if they can be brought down quickly, we shall solve a lot of our industrial strife.
I suggest that the Government should make Tayside a special development area and that they should scrap even thinking about tampering with the jute import quotas.
8.5 p.m.
Mr. Wilfred Proudfoot (Brighouse and Spenborough): Perhaps I may be unconventional, Mr. Deputy Speaker, by asking your judgment on a possible point of order. Will it be in order for you to call me to order after, say, 15 minutes have elapsed so that hon. Members who have been trying to get in the debate all afternoon can share the time which is left. I shall be delighted if you will stop me even in mid-flight, after about 15 minutes.
We have had an interesting experience since the last General Election. I have enjoyed myself enormously looking at the political journals and newspapers. The journalists and commentators are out on open territory. We are out of trench warfare. It is rather comic, because there are many journalists chasing too much space. They have to produce a thousand

2221
words a day or a week. They have no electors and no real responsibility except to turn out those thousand words. Our society is pushed around by men who have to fill a piece of white paper, or pink in the case of the Financial Times, every week.
I am delighted that the Government have got them hoaxed. I say that because the last Government gave them plenty of copy. The strategic policy of the last Government was changed every other week, so they had plenty of material to go on. I am sure that this Government will stick to their guns and I am convinced that they will succeed.
I am of the opinion that an incomes policy is absolutely impossible in any free society. It might work in Russia or in China, but it will not work here. In my researches on this topic, I have discovered that all countries in the Western world which have tried it have not met with any lasting success. Incomes have been held only for a little while. Indeed, in the previous Conservative Administration there was a wage freeze. At that time I said that if there was another White Paper on incomes from this side of the House its title should be, "More Pay and How to Get It". I am convinced that that is correct.
Someone—I believe an American—once said that we were a half-time community working for part-time wages. I want to see high wages in this country.
The commentators are lost at the moment. They talk about an incomes policy, but they really mean a restrictive policy—holding incomes down. I prefer production to rise and incomes to rise with it.
An incomes policy need not necessarily be restrictive. We have an incomes policy which is more to my liking than any restrictive policy—to trust the market. I did not learn how the market operated by academic means. I learned by getting into business and finding out about supply and demand. The market is not a beautiful logical thing, but it has truth in the end. People do the most ridiculous things in the market. They buy things which they do not want either because they have been conned into buying them or because the neigh-
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bours have got them. But the market in the end produces the truth.
Competition is an absolute must when we consider a free competitive market. I believe that the interference of the I.R.C.—it was proved to be interference —harmed this country. I want the Government to hurry with anti-trust laws. I want more laws to create competition. I also want the Government to look at tariffs. This might be an unpopular thing to ask for in the middle of the Common Market negotiations, but only this morning the Financial Times showed the real protection which business enjoyed in this country.
When politicians interfere with the free working of the market they make a mess of it and ultimately there has to be a day of reckoning. The only achievement of a restrictive rent policy in six years has been to produce a housing shortage. I am convinced that the sooner we get back to free market economics the better. I hasten to add that a free market economy is not cruel, because people do not move so rapidly. It is only when the politicians have to dismantle the things which they have put up that we get a huge movement in any economy.
I have great confidence in this Government. I am delighted that they abolished the I.R.C., which I sometimes thought of as a lot of gentlemen putting patronage before profits, meeting once a month, probably after a restless night thinking of which two, or even three, industries could couple together, and thereby receive a knighthood for a stroke of genius.
It is right to kick away industry's financial props, money provided by the last Government. The courage of the Rolls-Royce decision will pay off in psychological tonic. I think of inflation as an octopus. The previous Government tried to kill it by chopping away at the tips of the tentacles. We must go to the centre of it.
I hope that the Chancellor will check the money supply, as the last Government tried to do until they decided to try to buy the election. If they had kept to what they started, perhaps I would not be here tonight. They ran away from their own policy.
We must get down to direct taxation. We have not heard as much about that

2223
as I should like. Bringing down direct taxes would be an enormous tonic. In my wildest moment I think that if a Conservative Government could bring down direct taxes to about 4s. in the £, we should be the most staggered people in the world. Services would improve and people would work hard, not because of exhortation—that is no good—but because they were allowed to keep their own earnings. The sooner we stop pouring taxpayers' money into limping industry the better. In other words, the taxpayers' point of view should be that it is better for business to be laughing all the way to the bank than crying all the way to the Government.
8.12 p.m.
Mr. John Horam (Gateshead, West): I should like to take my text from the remarks of the hon. Member for Brighouse and Spenborough (Mr. Proudfoot), who talked of market economies. I want to start from the same point, but to arrive at a precisely different end. I speak not only as a former economic journalist, with six years in the field, but also as a man who started a successful business, so I think that the hon. Gentleman will grant my competence to argue against him.
I think that it would be generally agreed that when we are trying to tackle inflation there are two broad alternative paths—either the more orthodox, possibly pessimistic point of view which says that the only way is to squeeze the economy by lowering profits, increasing unemployment, and reducing wage claims, and so affect prices, or the view that it is possible and desirable to act directly on prices and wages and, to the extent that one is successful, accelerate expansion. There are variations within those two broad fields, but they are the main alternatives.
It is also clear at any moment of time that stress a Government are laying on one or other of these alternatives. What is abundantly clear about the present situation and the policies of the present Government is that they are laying the main stress on the unemployment route. They are squeezing the economy and that is how they hope to cure inflation.
In doing so, they are going back not only on the policies of the previous Government—after all, that is their prerogative—but on the past ideas of their own
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Government when they were last in office. We remember when the right hon. Member for Barnet (Mr. Maudling), who is not present unfortunately, was Chancellor of the Exchequer and made a dash for growth. Of course, that was just before an election, and some of us questioned his motives, but many among us agreed that there was a genuine element of trying to get faster growth and to get Britain out of the shackles which had held her for so long.
We remember the creation of N.E.D.C., a genuine dialogue among all three sides of the industrial equation. We remember when the Prime Minister was Minister of Labour, and, perhaps in wiser days, he restrained himself from bringing in a trade union Bill. The membership of the Front Bench opposite has changed a little, but not all that much. The right hon. Member for Barnet still sits on it, now as Home Secretary. In many ways, we wish that he were Chancellor—[An HON. MEMBER: "He might be, very soon."]—from the point of view of both Home Office affairs as well as that of the Treasury. At least he would bring a bit of class to the job.
So why have they changed course since then. It is not a question of changing combinations on the Front Bench. It is more a matter of two other points—first, that in opposition the present Government misunderstood the nature of popular opposition to the then Government's prices and incomes policy. That was never unpopular in principle. I believe that it was unpopular because the Government had to make a net shift in the balance of resources towards the balance of payments, to achieve which they had to limit the increases in the standard of living to very small amounts each year. It was this which was unpopular, not the principle.
Second, I would attribute the shift in the Government's policies—going back not only on the Labour Government's policies but on their own in the Macmillan era—to some extent to the influence of the right hon. Member for Wolverhampton, South-West (Mr. Powell). We know his views on economic policy: they are roughly those of Adam Smith—appropriately, an eighteenth century figure. Those views, distilled with the appearance of compelling logic which he always puts on his utterances, are very heady

2225
stuff to some of the newer Tory Members, particularly if they do not know too much about economics, as certainly the right hon. Member himself does not.
Therefore, the Government, when in opposition, with the pressures on them—we know the pressures on the present Prime Minister when he was in opposition —had to some extent to defer to the right hon. Member's views, even if, by the same reckoning, they had to exclude the man himself.
For these reasons, the Government shifted their ground to this more brutal form of policy. Indeed, when they first came in, they were practically overwhelmed with their ideological purity. They were intoxicated with the exuberance of their own ideology, slightly to misquote a previous Conservative leader of rather greater eminence. In fact, they really believed that free market economics, to quote the hon. Member for Brighouse and Spenborough, would bring down prices, or at least reduce the rate of price increases.
They believed that the rigours of free competition would actually do something about this, by, to use a rather more
lame-duck phrase, "shopping around". But they came up against the facts of life. I once heard a member of the present Cabinet say, "The facts of life are Tory." In the week after the Rolls-Royce affair, I do not think that he would like to be heard repeating that. Indeed, the facts of life point to Socialist solutions, certainly in the case of prices, where the situation now is not uninhibited competition but price leadership and market sharing.
The same is true on economic policy. The Government had to go back to some restraint on wages, but the way that they have come back to it is such a shamefaced, bastard way that they cannot even legitimise it by giving it its proper name. My right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) in describing, with his usual eloquent adjectives, this policy of theirs, called it inconsistent, dilatory and spiteful. I would call it cowardly, unfair and futile. It is cowardly because they have put people into the firing line other than themselves to carry it out, and that goes for the chairmen of nationalised boards and chairmen of courts of inquiry, who, even in their reports, have said that it was
2226
the wrong thing for the Government to have done.
It is unfair because the only criterion for the success of the policy is that a particular wage claim should be settled for 1 per cent. less than the previous claim. It is futile because in their evidence to the Wilberforce Committee they said that prices would rise by 6½ per cent. this year, but on certain hypotheses, based on the policy they were following. In other words, even if their policy were to succeed, that would be the rate of price inflation this year. This, combined with the unemployment statistics published today—this is the real heart of the policy which bites deep—shows the appalling mess into which the Government have got themselves.
In many ways the saddest thing of all —I cannot say this forcibly enough—is that this is such a missed opportunity. Whatever the economic policies of the Labour Government and whatever hon. Gentlemen opposite may think of those policies, they built up the biggest and probably the most lasting balance of payments we have known since the war. That was the springboard which, with the right kind of policies on wages and prices, could have led to expansion which would have lifted us away from our present unsatisfactory base. Instead, however, we have had a narrow sterility which would have done credit to Neville Chamberlain, and one might even go back to Stanley Baldwin.
Mr. Proudfoot: Would the hon. Gentleman care to mention devaluation as well?
Mr. Horam: Devaluation was a springboard, too, as my right hon. Friend the Member for Stechford said at the time. He was right.
My argument is that if one wishes to go in for growth, one can achieve it if one treats the problems one meets on the way, whether they be balance of payments or inflation problems, by direct measures, which leave the path of growth clear.
Whether one has a slightly higher or lower rate of growth may not matter too much in the Chelsea flats or the leafy roads of suburbia, but it matters in Gateshead, Tyneside, and the twilight zones of our big cities and in council

2227
estates. This is why the Conservative Government are now so unpopular, despite all their clever calculations over the Industrial Relations Bill. It is also why they are far behind in the public opinion polls and why they will stay disliked until they change their policies.
8.24 p.m.
Mr. Tom Boardman (Leicester, South-West): I will not comment at length on the economic arguments adduced by the hon. Member for Gateshead, West (Mr. Horam) because, frankly, I found some of them confusing. When he put the argument that economic theory was better than the facts of life, and went on to elaborate something which lost me completely, I thought that I would begin by declining to comment on his general theme. Perhaps my ignorance of economics led to my confusion.
One is bound to be somewhat suspicious of the economic arguments of hon. Gentlemen opposite when one recalls the views and measures of the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) and those of his predecessor who, we were told, took a crash course in economics. That, of course, led to devaluation. I believe that the facts of life have a part to play in our economic affairs and that the experience and practice of people concerned with industry, the shop floor and the unions represent a voice which deserves to be heard. That is the view of the majority of people, whatever theories the economists put forward.
Mr. Horam rose ——
Mr. Boardman: I trust that the hon. Gentleman will forgive me if I do not give way. Many hon. Members still wish to speak.
I must correct the hon. Member for Gateshead, West in one respect. He repeated the statement that the Treasury evidence to the Wilberforce Tribunal forecast that prices would rise by 6½ per cent. If the hon. Gentleman reads the evidence and Report carefully he will see that that was put forward as a hypothetical case; that if certain things happened, certain consequences would result.
Mr. Horam: Would the hon. Gentleman ask his colleagues on the Govern-
2228
ment Front Bench to give their forecast of likely price increases this year, leaving aside hypotheses?
Mr. Boardman: The hon. Gentleman must not tempt me by putting forward something as a fact which is not a fact and asking me to ask others to comment on it. That only diverts me from the main theme of my argument, and I wish to be brief because many hon. Members still wish to speak.
It is agreed that the problem with which we are dealing is cost-inflation, so that there are really only two main headings under which I need speak. The first is the cause, which we must examine because the Motion of censure implies that the cause lies with us. That is obviously not the case.
One need only go back to devaluation and consider what led up to that and the mismanagement which followed it, with the inflationary spiral that was set going. That was the starting point and there followed further prices and incomes freezes and squeezes with all the pressures that they had built up since 1965.
We had statutory controls. They were abandoned and we recall the way in which they were abandoned when, in his Budget speech of April, 1969, the right hon. Member for Stechford told us how he would replace the prices and incomes policy by an Industrial Relations Bill. I wondered how the right hon. Gentleman could this afternoon, having spent the last few weeks voting against the Conservative Industrial Relations Bill, speak in the way he did on this Motion of censure, particularly bearing in mind his Budget speech of 1969.
Following the abandonment of their Industrial Relations Bill, and their prices and incomes statutory controls, we had the inevitable wage explosion, when all the pent-up forces of the previous five years were let loose, particularly in the public sector. We recall what happened in the autumn of 1969, with the buildup of wages, leading up to June, 1970.
Mr. Kenneth Lomas (Huddersfield, West): Will not the hon. Gentleman concede that the previous Government at least sought to do something about prices, whereas the present Government have done nothing? Does he not accept also that, by attacking the public sector, the

2229
Government are destroying their credibility in expecting the ordinary individual to accept the policy which they are pursuing?
Mr. Boardman: If the hon. Gentleman had followed my argument—I am trying to be brief, and I may not have put it clearly—he would have heard me explain what had happened as a result of imposing statutory controls on wages and prices. We know how ineffective that policy was in many sectors and how deeply it was resented. We know also of the inevitable consequences of its removal. We on this side forecast that, when the controls were released, there would inevitably be an explosion in wages and a prices spiral. In fact, that is what happened.
I was surprised to hear from the right hon. Gentleman the Member for Stechford, from the hon. Member for Gateshead, West and from other hon. Gentlemen opposite references to Rolls-Royce, the implication of their remarks being that this was a failure of private enterprise. It was no such thing. If ever there was an example of the results of Government intervention, Government financial support and Government encouragement allowing ordinary commercial decisions to be distorted, this was it. There is manifest evidence of that, but if one wanted justification for the policy which we are adopting in removing Government intervention and that type of subsidy, there it is. Let no one imagine that it was a defeat for private enterprise.
Having dealt briefly with the causes of our trouble, I come now to the courses open to the Government. One course which is advocated sometimes by reputable organs such as The Times is that there should be some form of statutory control. But all hon. Members on both sides recognise how ineffective such a policy is. I shall not cite statistics to show how it failed to stem wage inflation and price inflation a few years ago. We all recognise the consequences when it was removed. My right hon. Friend is absolutely right to resist any pressures upon him from outside to adopt a policy of that kind. It would have but a short-term effect, if any effect at all, merely putting off the day when far more serious consequences flowed from the removal of the controls.
2230
The hon. Gentleman the Member for Ebbw Vale (Mr. Michael Foot) has undertaken, in response to my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), to express his attitude to the paragraph in the White Paper of December, 1969, which my right hon. Friend quoted. I am sure that he will deal with that question, because a pact was made across the Floor that it would be done.
Having rejected a statutory prices and incomes policy, as one can quite briefly, one comes then to the policy being pursued by my right hon. Friend. It is a thoroughly right, sensible and practical policy. The wages explosion behaves, in a sense, rather like the atom bomb; after it goes off, the real mushroom comes out at the top sometime later. Similarly, the real impact of the explosion prepared by the party opposite was felt after the General Election in June last year. It has now come through in price increases, with prices now standing at a level which I certainly do not like, and I am sure that no hon. Member likes it, either.
The Government's policy is to restore rational bargaining and a sense of responsibility. We cannot go on greasing the wheels of inflation with excessive increases in the money supply, either. 1 am sure that my right hon. Friend is very conscious of that in maintaining his approach to what I believe he calls a neutral balance. We have already seen the effect of what the right hon. Member for Stechford did in priming the pump, pouring money in, and aggravating inflation.
Then there is the need for example in the public sector. I shall not develop that at length. Hon. Members opposite must not talk about our penalising the workers in the public sector, for nothing could be further from the truth. The Government have a clear duty to protect the public. I hope that hon. Members opposite, if they complain, as well they may, when their rate bills come in, will remember how much the increases are the consequence of the local government strikes and the wage demands which went with them. They will realise that the Government have a prime responsibility to protect the public consumer, and that the public consumer has no choice here He has only one dustman to empty his dustbin and only one source of electricity supply. The Government and public

2231
bodies have a duty to protect the public by not yielding to unreasonable demands
Mr. Lomas: Fourteen pounds a week.
Mr. Boardman: The hon. Member for Gateshead, West touched on the question of deflation or growth. It must be a mater for judgment and timing. We may be reaching a time when some relaxation is due. Investment plans must be made well ahead, and if they are not made now because of doubts about future demand there could be a lack of capacity and plant over the next three years or so. We are all anxious about unemployment, unused capacity, investment and so on. I am confident that my right hon. Friend's policy is bringing about the de-escalation of demands and will bring inflation under control. The lessons are being learnt, and I am sure that we shall achieve the price stability and rising standard of living that we are searching for.
Mr. James Hamilton: And lower unemployment?
Mr. Boardman: Of course, we are unhappy about the unemployment situation, and I am sure that unemployment will come down. When those objects are achieved, as they will be, I hope that my right hon. Friend will enable us to see that we have the capacity available to meet the increasing demands that will be made in the competitive world in which we operate. I am concerned that if we are late in our timing, if my right hon. Friend perhaps does not encourage investment early enough, in the next two or three years we may find that we are short of the capacity we shall desperately need then. The decisions being made now as to whether or not to invest will affect the production capacity a year or two ahead.
8.38 p.m.
Mr. Gwynoro Jones (Carmarthen): It has been very interesting to hear hon. Members opposite stating their attitude towards the condition of the country in June and saying that inflation and unemployment, the whole basis of the situation today, were stoked up then. If so, there is all the more reason for the condemnatory attitude we should take towards the Prime Minister, who promised to reduce prices at a stroke. He spoke to the housewives of Leicester about school meals and the burden of their cost on the mothers of the children of Britain. I noticed that the
2232
Chancellor was very quiet in his comforting remarks to those housewives. Nothing was ever said about the increased charges for school meals and other charges across the whole spectrum imposed on 27th October, which will directly affect the very people the Conservatives were most concerned about two days before the General Election.
I could go on to analyse the psychology behind all those promises, but many hon. Members want to catch the eye of the Chair. Tonight we must pin the Prime Minister down on his statement about the balance of payments on 16th June, when he said:
"Already on the balance of payments we are over the best and heading downhill. The surplus of which Mr. Jenkins boasted will melt away in a matter of months."
That was two days before the General Election. Peculiar and downright dishonest promises were made, promises meant to mislead. There is no need to argue about the reason why the Tory Party is now in power. It is there because of the promises of a party and Prime Minister hungry for power regardless of the consequences and regardless of people's attitudes.
The Government inherited a regional problem which had not been solved. But while, during the last Government's term of office, 60,000 jobs were lost in Wales because of the decline of the old, basic industries, 30,000 new jobs were created. and 28,000 are in the pipeline. The problem of providing more jobs and opportunities in the development areas would have confronted every Government, and it is to the credit of the Labour Government that those 30,000 new jobs were created in Wales.
Hon. Members opposite have attempted to argue that one cannot assess the relative advantages of investment allowances and investment grants, but the example of Wales shows that the grants were far more beneficial. Between 1965 and 1969, a total of 193 new establishments were announced as going to Wales. In the period 1960 to 1964, only 63 new establishments announced that they were going to Wales under the investment allowances system which the Government now boast about as being the answer to our regional imbalance.
Responsible opinion in Wales in the early part of 1970 was coming to the

2233
conclusion that we were laying the basis for a new economic climate in the Principality. The Chairman of the Welsh Council and other economists held that view. But in a matter of months—indeed, within weeks after the election—the whole situation has changed. There is now great concern in the C.B.I. and the T.U.C. Advisory Committee in South Wales about the facts which are emerging. Redundancies now average 1,000 a month. The percentage figure of unemployed for Wales is 4·4 per cent., the highest since 1963. It is astounding to realise that within eight months of taking office the Government have put back development in Wales by decades. It takes little now to convince the Welsh people that they are seeing policies being applied which failed before and led to ruin in the 1950s and early 1960s. When the restructuring of industry was beginning to take place and old industries were declining, what happened during the 13 years of previous Conservative rule? Wales got only 11 advance factories, providing 1,500 jobs.
The Labour Government put in a tremendous effort, spending £89 million to attract industry to Wales, but even that was not good enough and we were unable to maintain or close the gap between the number of jobs being lost and the number of new jobs coming in. The present Government, in their brief period of office, have engendered uncertainty and concern. On 28th January, The Times said:
"The simplest action the Government could take now would be to make it clear which investment projects are still eligible for grants and how allowances will operate in the variety of grey areas that have come to light … the position now is that viable schemes are being shelved because of the uncertainties involved."
We are witnessing in Wales the £20 million aluminium concern in Swansea being delayed. In the Llantrisant area, two factories are not now coming. According to the Press, in Flintshire a factory which would have employed 500 people is not coming after all. This is the situation which the people of Wales, which has 43,000 unemployed, is faced with, and industrial inquiries are falling.
With the abandonment of the great system, even the National Institute of Economic and Social Research said that the argument for the investment allowance system in the relevant White Paper
2234
was incomplete and almost wholly lacking in supporting evidence, and on the main point, the linking of investment subsidies to current company profitability, the justification offered is no more than a counter-assertion. In his speech today the Chancellor made no reference to any evidence supporting a claim that the investment allowance system is the one which will help the regions of Britain which have built and created in essence the wealth of the whole of the United Kingdom.
If overheating of the economy has been the bugbear in Britain since the war, that overheating happened in the South-East and the Midlands, whilst Wales, Scotland, the North-West and the North-East are under-utilised. We should be creating a better system of redistributing our wealth, as the previous Government endeavoured to do—and which the present Government are so unconcerned about. But they are hastily dismantling the whole edifice upon which the future prosperity of, certainly, Wales, lies.
In a series of pronouncements regarding advance factories, the Government have said that they have no intention of allocating any more to Wales until those there already have been taken up. What a situation, in terms of a factory taking four or five years to build. The Government say that when the last factory has been allocated they will allocate more. That means that there will not be an empty advance factory ready for a tenant for four or five years. This is not a policy of confidence or faith in the future.
I turn briefly to the subject of prices, which again the Chancellor was very quiet about. Probably he is not interested in knowing what the less well off, the lower-paid people in my constituency—35 per cent. of people in Carmarthenshire earn less than £900 a year—now think of the clear cut promises of 16th June, nor the 25 per cent. of the people in Wales who earn less than £15 a week. Those people have been hit by a deliberate policy of increasing the cost of living. The Minister of Agriculture openly said that he had no intention of curtailing, subsidising or taking control of the situation. He is quite happy to see charges, the cost of living, especially the cost of food, rising day after day, and so are the Conservative Party and Conservative Members.

2235
I conclude on a note of warning to the Government. There has been a great deal of talk of lame ducks. Let not the Government or the Secretary of State for Wales, who is Chairman of the Conservative Party, ever imagine that they can treat Wales as a lame duck, as they did in the 1950s. We on this side of the House have a great deal to contribute and a great part to play in ensuring that the prosperity of Wales is equivalent to that in other areas of Britain, as it should be.
8.49 p.m.
Mr. W. R. Rees-Davies (Isle of Thanet: I very much enjoy hearing the accent of the Principality, whence I myself originate. We in the Isle of Thanet, where we have many people who came from the Principality back in the 1920s and the 1930s, do not talk in terms of £900 or £1,000 a year. We talk in terms of so many pounds per week. The Principality is a great deal richer than th Isle of Thanet.
When we in the Isle of Thanet talk about unemployment, we do not talk of 4·4 per cent. unemployed. The unemployment figure for Margate is double that—8·9 per cent. We are quite prepared to give the figures of unemployment for the coastal areas of East Kent. We wish to point out that we are not in a development area, although our unemployment figures are considerably higher than those obtaining in almost every development area.
I wholeheartedly endorse the Government's general policy of what is popularly called "disengagement". I want the Government to get out of certain areas of control where it is impossible for them to succeed. This goes for development area policy, too, although disengagement here must be a gradual process.
The first step to getting effective control over cost inflation is to end industrial anarchy. Last August Tom Jackson, having first discussed the matter with the other unions in the Post Office, signed the Post Office arbitration agreement which contained terms relating to arbitration. Within six months he flouts that agreement. That smells of industrial anarchy. It is not adhering to a gentleman's binding sense of honour, whether it is legally enforceable or not.
2236
Until industrial anarchy is ended there can be no effective control to ensure that the increase in wages is tied to the benefit which a man is entitled to get from his industry. Profits are declining. Investment is right down.
I will give an example of an industry which could be made the finest in the country if the Chancellor would heed three points. I refer to the tourist industry. It is more than a question of just attracting foreigners here. It is a question of building up our home market, which would do much to provide more employment in coastal resorts where the home tourist industry is suffering greatly. Individual hoteliers and caterers are suffering whether they are in Blackpool, Thanet, Whitstable, Herne Bay, Eastbourne or elsewhere.
Three things must be done. First, there must be investment allowances. Second, we must ensure that we get depreciation allowances and that the tourist industry is treated as an industry it is just as much entitled to its purpose-built hotels and other forms of modernisation as other industries are entitled to modernise.
Third, I hope that the Government will find a means of enabling the independent hotelier and caterer to have some access to the cash flow of loan capital in the short run so that this development can be secured. I am completely against the grants, and I am delighted that they are to end.
None of the measures to which I have referred requires Government control. Thus there can be a policy of complete disengagement.
Hon. Members should recognise that with Rolls-Royce we are concerned with the development of the aero-engine industry, which requires capital of such magnitude that no private company on this side of the Atlantic could find it. This is why the Government must take over in this field, not only to secure the protection of our defence commitments, but also to be able to meet Britain's aeroengine commitments world-wide, because what is required in this field it is over and above the type of market finance that any company could ever be able to supply.
I turn now to development area policy. It is a failure because it is not specific.

2237
It does not pinpoint the issues. It is quite pointless nowadays to give development area status to Swansea. One knows well that that is developing as a most successful town. I heard a futile speech delivered at the beginning of this afternoon by one of the hon. Members from Swansea. It was a long tirade of vituperative language—at which I am equally excelled if I need to use it, but I find it distasteful—levelled against the Government without regard to the immense prosperity which has been achieved over the years by the Tory Party and by the Labour Party for large parts of the Principality. What is needed in development area policy today is to get rid gradually of the whole field but to pinpoint the particular areas where specific treatment is required. In certain areas it may be heavy industry, in others light industry, in others office development. In others a tourist development policy may be needed; but according to the particular needs of the district it should be so classified.
The Department of Trade and Industry, therefore, should have several classifications for development areas which should be classified for heavy industry, light industry, office or tourism. Then the particular servants who serve the Department of Trade could be directed to those particular areas to give them encouragement. I believe this to be not new but at least a fairly novel approach to the way in which we could on the one hand secure a policy of gradual disengagement and on the other hand be able to draw the attention of the Department to the best places to direct its efforts.
So far as the Isle of Thanet is concerned, Margate has today unemployment of nearly 9 per cent. and Ramsgate of nearly 7 per cent. In the summer the figure is still 5 per cent.—in excess, I am told, of anything in the Principality.
Hon. Members: No.
Mr. Rees-Davies: I am referring to something said by an hon. Member who spoke earlier. Those are the figures, and, therefore, one is faced with a picture in which we need in the Isle of Thanet some offices, and we need the encouragement of the home tourist industry. That industry could be the biggest single
2238
industry in Britain in the next three years. It is the biggest dollar earner as it is. If we could persuade people to have holidays at home in future instead of going abroad, and enjoy the pleasures of travelling throughout all the country—I am suggesting not just remaining in Margate but passing round the perimeter of Britain so that they enjoy places over the whole of the country—we should be able to develop a first-class home tourist trade.
If we do this we shall provide money for the Chancellor in every way. He will get his money from drinks in the pubs—and we shall shortly extend the licensing hours, I have no doubt with the assistance of the House. We shall get more money from the tobacco tax for him. People will have the pleasure of seeing the Prime Minister engaging in his yachting, a Broadstairs boy enjoying his own pleasures—and I am delighted that my right hon. Friend has now appeared. Generally speaking, therefore, we shall be able to secure in this country a really large balance of payments, not merely by exporting goods but by containing our own people in our own country to enjoy the expansion of our own pleasures.
There is a policy of gradual disengagement, through which we can look forward to assistance in particular areas where it is needed, not so much by grant but by encouraging the flow of light and heavy industry, offices or hotels into those areas which best suit them. We do not have to pay the money but we shall enjoy the benefits. I hope that my right hon. Friend, when he comes to deal with his Budget, will have something pleasurable to say which will assist my constituents as well as the whole of the tourist industry.
9.0 p.m.
Mr. Michael Foot (Ebbw Vale): Speaking as an honorary Welshman and being extremely proud of that capacity, I must say to the hon. Member for Isle of Thanet (Mr. Rees-Davies) that I have never recognised him as a compatriot in these matters. I hope that he will not think me discourteous in any way if I suggest that my hon. Friends who actually come from Wales, such as my hon. Friend the Member for Carmarthen (Mr. Gwynoro Jones) and my hon. Friend the Member for Swansea, East (Mr. McBride)

2239
and others who have spoken in this debate are better qualified than he is to discuss what is good for Wales or the other regions which have figured so prominently in this debate. We wish him well, however, in getting assistance from this Government for the Isle of Thanet.
I come next to the right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) who put a question to me earlier in the proceedings. I will not traverse the whole of the discussion we had, because we entered into a pact and I do not think that he has fulfilled his part of the bargain. I invited him to tell us which parts of the speech of the Prime Minister, delivered on 16th June, he thought had been carried into effect. I have not heard the answer, but I am willing to give the right hon. Gentleman the reply for which he asked with reference to my views.
He referred to some Government White Paper produced, I think, in 1969. It is true that on that White Paper, as on several other White Papers, I did offer to the House, my own judgment at the time. I dare say that developments subsequently have shown my prescience, and therefore I should not like to commit myself to saying that I agree with every paragraph of that White Paper until I have had full time to study it, because I imagine that some of the criticisms I made at the time are as justified now as they were then.
Mr. Boyd-Carpenter: The hon. Gentleman is speaking for the Opposition on a Motion of censure. Will he now answer on behalf of the Opposition the question I asked him, namely, do the Opposition stand by the view that wage increases, given the present level of productivity, should be in the 21 per cent. to 41 per cent. zone? If the Opposition do not think that, can he say why?
Mr. Foot: I propose to address myself exactly to those questions which have formed the dominant theme in the debate. I was dealing with the particular paragraph. I thought it was only courteous to refer to the paragraph mentioned by the right hon. Gentleman. The hon. Member for Leicester, South-West (Mr. Tom Boardman) referred in strong terms, as did others who spoke, to Rolls-Royce and to the part played by my right hon. Friend the Member for Bristol,
2240
South-East (Mr. Benn) in the Rolls-Royce affair.
I suggest to hon. Gentlemen opposite that, if any of them have any criticisms of my right hon. Friend about Rolls-Royce, they should use their influence to persuade the Prime Minister to agree to the proposition which has been put officially by the Opposition—just to satisfy the right hon Member for Kingston-upon-Thames—for a Select Committee to inquire into the matter. Such a Select Committee would have every opportunity of investigating and reporting upon the part played by my right hon. Friend in this matter. It is not very becoming that hon. Gentlemen opposite should continue to make criticisms of my right hon. Friend if the Prime Minister continues to refuse to permit a Select Committee to examine this question. We on this side of the House are in favour of it and we believe that the House will effectively demand such a Select Committee before much more time has passed.
The main features of this debate have been the kindred problems of inflation and unemployment, and I propose to direct most of my remarks to those subjects. I was very surprised by the suggestion of the Chancellor of the Exchequer that the sole cause of rising unemployment is cost inflation. It is a very peculiar economic doctrine to express, particularly when we realise that in our history some of the heaviest periods of unemployment have been during times not of inflation but of deflation.
First, I should like to dispose of what I think is an unfair charge made against the Government in some quarters on some occasions. It is said that they do not have a policy or strategy for dealing with these questions. But I think that they have, and I should like to share my secret with the House and the country. It consists, in the main, of four principal measures—four strategies or prongs in the same strategy: the plan, as they call it, to reform industrial relations; the insistence that they must resist the immediate wage pressure; the measures that they take to restrict and restrain the economy in the meantime; and the measures they are taking to apply the kill-or-cure appliance to the economy and to industry generally.

2241
Those are the Government's four policies and they are now in operation. The main purpose of the debate is to discuss whether they are good policies and where they are leading, and that is what I propose to do. I shall not say a great deal, because the House has spent a large part of its time in recent months on discussing the Industrial Relations Bill. Although it is the background for this debate and what is happening in the country, those who have listened to the debates on that Bill, including some hon. Members opposite, have come more and more to recognise that profound issues of principle arise from that Bill which cause great disturbance in the House and will cause greater disturbance throughout the country.
I come to the more direct and immediate question—the Government's present conduct in dealing with wage claims, particularly in the public sector. I deal first with the question of arbitration. The Secretary of State for Employment was very impressive and eloquent about arbitration. I wonder whether the Prime Minister will tell us whether he thinks that he has assisted the process of arbitration over the past few weeks. Does he think that what he said about the Scamp Report was wise? Does he think that that was a good way of dealing with public servants who have come forward to perform the onerous task of judging these difficult questions?
What about the position of Professor Hugh Clegg? Perhaps the Prime Minister will say something about that matter. I gather that he removed Professor Clegg from his post because of his fastidious feeling that those who preside over these inquiries must be like Caesar's wife—above suspicion. The Government took a long time to find Lord Wilberforce on that same principle.
When the right hon. Gentleman comes to consider it, he will recognise that he has done grievous harm to the possibility of getting effective arbitration. The postmen in my constituency of Ebbw Vale put the matter quite simply. They say, "Under this Government arbitration means that if you have a quarrel with your wife the matter has to be settled by your mother-in-law". But the matter is even more subtle than that. When Ministers speaking in the country say
2242
that they have massive public support for the policy of restraining wages and stopping the roaring inflation, I can understand that in general terms. We are all against roaring inflation. But when it comes down to the details, the details of an inquiry or an arbitration, the Government find it extremely difficult to discover three people in the country—let alone massive support—who will agree with their policies.
Mr. Rees-Davies: Has the hon. Gentleman asked Tom Jackson whether his mother-in-law's policy last August was different from her policy today? Has he asked him whether the policy was wrong when he signed the agreement last August which included arbitration? Was there no arbitrator then?
Mr. Foot: I will say more about the Post Office strike in a moment, although we are to have a full debate on it on Monday. [HON. MEMBERS: "Answer!"] I will answer it in my own time.
There were other disputes before the Post Office dispute. Three people could not be found who agreed with the Government's attitude about the dustmen's strike, and the right hon. Gentleman was furious about it. The Government like some parts of the Wilberforce Report, and the unions like some parts, but that Report certainly does not represent an acceptance of the Government's view. In many respects the Wilberforce judgment is not so different from the Scamp judgment.
It is no use the right hon. Gentleman thinking that the matter can be settled by bandying figures. On the question of how much money goes into a man's wage packet I would rather trust the view of the general secretary of a union who has to explain the matter to his members than the view of a Minister who has to explain it to his backbenchers. If the Wilberforce Report proved anything, it proved that Mr. Frank Chapple happened to know more about wage packets than Sir Douglas Allen and, maybe, even more about Sir Douglas Allen's wage packet. The right hon. Gentleman must not think that by juggling the figures he can conceal the fact that on one major aspect the Wilberforce Report came down in the same way as the Scamp Report in saying that the court could not be expected to intervene

2243
and say that the line has to be drawn at a certain point, and, if there is general inflation, particular groups of workers cannot be expected to submit and say, "We are the people who will have to stop the inflation". It is all in the Wilberforce Report as it is in the Scamp Report.
The same applies to the postmen, who, in my opinion, have an extremely good case. The difficulty which the Government have got the country into with these claims is this. Under this Government's wages strategy, win or lose, it is the country that suffers. If the Government lose, as they lost over Scamp and as largely they have lost over Wilberforce, the matter must go to the next court of inquiry and the next round. But if the Government win as I suppose it is conceivable they might in the case of the Post Office workers—although that would be a disgraceful development—if the Government succeed in driving to defeat the postmen in that sense, what do they think will happen in the public service afterwards?
What do they think will happen in the mining industry to the miners who voted for a strike, which under the Industrial Relations Bill would qualify as a full strike? There would be bitterness there, too. In one public industry after another the Government are building up bitter feelings which certainly will have no good effect on the conduct of those public services and could lead to a much more disagreeable state of affairs in the country as a whole. Therefore, on the first prong of their policy they are taking the attitude about wages which will do great injury to the public service and will not solve the problem of inflation.
I come to another major prong in their policy: unemployment. Unemployment has risen to the highest figure we have known for seven or eight years—720,000 and going upwards. On this basis and at this rate the first major economic achievement of the Government will have been to have added 200,000 to the total which existed under Labour. I criticised the previous Government for accepting and tolerating what I thought was too high a figure of unemployment, and I do not want to withdraw anything I said on that count.
2244
But this figure is far worse. And what the Chancellor of the Exchequer said today is no abatement of the situation.
I do not know whether the Chancellor of the Exchequer—or the Prime Minister in winding-up the debate—will put a figure on these concessions. I do not think the Chancellor was very much aware of what concessions he had made. He has the knack of coming into the House of Commons and making a declaration as if somebody had stuffed that information into his hands just before he came into the House. He seemed as well informed on investment grants as he was on the family incomes supplement. He said also that he did not wish to anticipate his Budget Statement. That is about the only thing he will have a chance of anticipating.
I ask the Chancellor of the Exchequer to regard what was said by my hon. Friend from Wales as by my other hon. Friends from the regions on the intensification of the unemployment figures as showing a situation of the utmost seriousness—as serious as roaring inflation. In Wales almost every day we hear of a new close-down, new redundancies, fresh fears of more of the same thing to come. I do not know whether the Government have any conception of the shiver that is now going through Scotland, Wales and all the regions on the policies which the Government are now pursuing. How long will they persist in this policy? How high has the figure to go before the Prime Minister decides to change course?
Then there is a fourth strand in their policy to add to the situation. This is the policy of the ritual strangling of lame ducks: the kill-or-cure policy; the policy of bullying or blackmailing the great public corporations of the country, such as the steel industry. I do not know whether the Prime Minister intends to deal with this matter. The abolition of investment grants will mean a loss to the Steel Corporation of something like £100 million a year. When taken with other measures, what effect will this have on investment policy generally—at a time when investment is falling as it has not fallen since a Conservative Government were last in power. We can all read it in the newspapers. Hon. Members opposite may say that it is nothing to do with

2245
them. Perhaps they will take it from the Daily Telegraph. In an article headed:
"Alcoa shelves plan to build £20 million plant in South Wales",
Mr. Roland Gribben, its business correspondent, wrote last Tuesday:
"The move provides additional confirmation of the pessimistic capital spending indicators. Latest official estimates suggested that the combination of the policy change on investment incentives, the liquidity squeeze and economic outlook will produce a 2 per cent. drop in manufacturing industry's capital outlay this year."
On top of the heaviest unemployment for years, we have an investment prospect that is much worse than we have known for years. In other words, if there is not a dramatic reversal in the policies which the Government are pursuing, we shall be heading for a major recession. Therefore. we have put down this Motion to see how soon, in the interests of the nation, we can get those policies reversed.
They are policies which are associated with the Prime Minister. He promised us a new style of Government. Certainly we have had a new style of Conservative leadership. There is nothing of the grouse moors about the right hon. Gentleman. The only birds that he ever shoots are albatrosses.
We want to know how long the right hon. Gentleman intends to pursue these policies. It is perfectly true that it is possible to solve the problem of inflation by the combined policy of wage resistance, unemployment and declining investment. It has been done by a Conservative Government before in our history. It was done in the 1920s.
The right hon. Gentleman need not think that this is some abstruse problem. He knows the problem. Inflation can be solved by the methods that he is pursuing, but we shall see the wreckage of the country's industrial prospects in the process. That is what these policies did in the 1920s, and that is the course on which the right hon. Gentleman has started.
We want to know whether the right hon. Gentleman intends to pursue these policies and how far he will persist in them. The four strands of policy associated with the right hon. Gentleman—the Bill, the bankruptcies, the unemployment and the savage discrimination against those employed in the public
2246
service—are like the four horsemen of the Heath Apocalypse. How far will the right hon. Gentleman drive them, with such havoc up and down the country?
The country could take a different course. Whether the right hon. Gentleman would have the courage or the humility or a combination of the two to attempt it is extremely doubtful. At the beginning of the debate, my right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins) outlined some of the possibilities. The whole country knows that, if we are to solve the problem of inflation without mass unemployment and without the kind of industrial catastrophe that we had in the 1920s, there must be a new compact in our society. There must be a new agreement between the rulers and the ruled, between the trade unions and the industrial side of the country. That is the only way.
In order to carry that through, we must have a Government of skill and authority. I say little about the skill of right hon. and hon. Gentlemen opposite. When the Prime Minister made his selection, I suppose that he had to choose the best talent available. As every month has passed, hon. Members on the back benches opposite have understood and begun to appreciate how deadly was the insult.
When the right hon. Gentleman made his selection it was quite evident that we were going to have one of the most pedestrian Administrations of modern times. But what could not have been reckoned upon was that we would have this small-time spite, scarcely to be dignified even with the name of malice, this obstinacy masquerading as courage, particularly, as I say, associated with the right hon. Gentleman.
The right hon. Gentleman's difficulty—it applies to his Government, too, but most of all to him—is that he knows, and the country knows, that his Government were elcted on a lie. Shall I quote the words?
Hon. Members: Yes.
Mr. Foot: I have not mentioned prices before. What was the pledge? "We will reduce prices"——
An Hon. Member: "At a stroke."
Mr. Foot: No. Do not use such harsh terms about the man of principle. Not "at a stroke", not honest Ted. He would not use words like "at a stroke". Not at all. "We will reduce prices when we consider it may be suitable or convenient, or about five years after we have entered the Common Market, whichever period happens to be the longer." Was that the tocsin on which he gathered in the housewives' vote at the election?
We know what happened to the right hon. Gentleman. He tries to pretend that he is so tough, but he loses his nerve at critical moments. [HON. MEMBERS: "Oh."] Oh, yes. That is why we got the story in those few days before 18th June about a new devaluation, a national emergency, prices and unemployment to be cut "at a stroke". The right hon. Gentleman will not stand by any of those claims today. Or let him try. He has never tried since the General Election.
So the real question facing this country and the House—nobody knows exactly when the date will come—is: what are the Government going to do when the crash comes? What will they do when the figures for unemployment move up to the million level? What will they do when they see the deepening crisis due to the failure of investment? Will they have the courage or the humility, or a combination of the two, to put those policies in reverse? Are there any hon. Gentlemen who will perform the service to their country which some Tories had to do in 1940 when the British people had to be saved from a previous Conservative Government?
If the right hon. Gentleman wishes to claim any authority to govern this country he must, first of all, abandon the policy on which he claimed those votes. It was as fraudulent claim. It is a policy which is leading the nation to disaster. The test for the country is how soon a few patriots on the benches opposite will pluck up courage and speak.
9.28 p.m.
The Prime Minister (Mr. Edward Heath): This debate has been built up by right hon. and hon. Gentlemen opposite as a major Motion of censure on Her Majesty's Government. Those of us who have listened to most, or a great deal, of the debate today must have been astonished at what has been taking place. Seldom have I heard the right hon. Mem-
2248
ber for Birmingham, Stechford (Mr. Roy Jenkins), fluent as he is, so unconvincing. [HON. MEMBERS: "Oh!"]
In the course of the debate we have had barely a handful of hon. Members opposite prepared even to speak in support of the Opposition's Motion of censure.
We have just listened to a speech from the hon. Member for Ebbw Vale (Mr. Michael Foot) which has been nothing but a savage Motion of censure on the Labour Government of 1929 to 1931 for creating unemployment. His main success has been in usurping the position of his own Leader, who now prefers only to interrupt intermittently and not to take a major part in a Motion of censure on the Government.
Seldom have I heard an Opposition censure themselves so completely as they have done today. Every criticism made has been a condemnation of their actions during their last year in Government, when they abdicated responsibility as the right hon. Gentleman knows. Never has it been more clearly described than in the words of the hon. Member for Ebbw Vale. He was determined that his own Government were going to abdicate their responsibilities and he did his utmost to ensure it. Hon. Members opposite have clearly demonstrated tonight, as, indeed, they have demonstrated day after day and night after night in these last few weeks, how they behave in opposition—[Interruption.] The behaviour of hon. Gentlemen is not confined to the Chamber. It goes to the country outside, because it demonstrates that, as an Opposition, they have thrown away any sense of responsibility which they had.
The right hon. Member for Stechford paid the Government the compliment of saying that they take inflation seriously. The Leader of the Liberal Party, who is unfortunately not with us tonight——
Mr. Thorpe rose——
The Prime Minister: I apologise, I acknowledge the right hon. Gentleman's presence in an unusual position. He said that the whole House accepts that there is an inflationary situation, implying that it should not be discussed on this Motion of censure. Very well, let us accept that the whole House will agree that there is an inflationary situation here. Let us

2249
accept that they will agree that it is a cost inflation. Very well. I agree about that, but what hon. Members refuse to face up to is the wage element in the cost inflation. That has been apparent throughout this debate.
Nor will they face the fact that cost inflation of this kind leads to redundancies and to unemployment. Inevitably this is so. The facts are there today for all to see, re-emphasised in today's serious unemployment figures, re-emphasised by those who are on short time, or alas, about to be redundant, from Rolls-Royce and those who are on short time because of the postal strike.
All these things emphasise the impact of cost inflation through wages costs on employment. The right hon. Member for Stechford said that he would cover a broad field, and I will do the same—inflation, public sector wage claims, Rolls-Royce, hiving-off, unemployment I will deal with those. But there was not one word from hon. Members opposite, nor has there been from anyone on the Front Bench opposite, nor has there been during these past months from the benches opposite, discouraging inflationary wage claims. Indeed, throughout their period of opposition hon. Members opposite have done everything possible to stoke up wage claims in every way they can—most notably the hon. Member for Ebbw Vale. In fairness to him, he has been frank tonight in inciting larger wage claims.
The right hon. Member for Stechford accused us of voting against the statutory policy and the orders made by hon. Members opposite. What about the hon. Member who has just wound up on his behalf? He opposed a statutory policy. He opposed a voluntary policy. He did not have the guts to vote against it—he abstained every time—but he was absolutely opposed to that policy. His attitude now, on the Opposition Front Bench, to every wage claim that comes up is" Give them the money, all of it".
There was a major example which the hon. Gentleman quoted again tonight; the miners' claim. They asked for 23 per cent., and his view was that they should be given all of it, quite regardless of its inflationary content. That is the position which the hon. Gentleman takes up on every wage claim.
Mr. Michael Foot: The reason why I was in favour of that wage claim was that I believed it to be necessary to get the coal. To get it we must have the miners and the miners' wages have for years been falling behind those of the rest of the community. That is why I said that they should have had what they claimed. That is the only way in which one can deal with the problems in the public service. What we are complaining against is the discrimination of the Government against those who work in the public service.
The Prime Minister: That is an extraordinary economic doctrine to put forward for a declining industry for which the Labour Government made special provision so that redundant miners would be paid special allowances.
Moreover, the hon. Member for Ebbw Vale has been inciting the miners to take more than they themselves were prepared to settle for. That is the concern he has for wage-cost inflation in this country.
Mr. Foot rose——
Hon. Members: Sit down.
The Prime Minister: I have a lot to say and time is short.
Mr. Foot: Is not the right hon. Gentleman aware that the majority of miners voted for the full wage claim?
The Prime Minister: I am aware that the miners' union settled for 12 per cent. and was not prepared to support the hon. Gentleman.
The right hon. Member for Stechford has a heavy responsibility for the wage explosion, cost inflation and the subsequent rise in prices. In the frank and honest way in which he addressed the House this afternoon, he might have acknowledged that. In his 1969 Budget speech he abandoned the statutory incomes policy, presumably because he felt that it could not be worked any longer. I agree. Therefore, however, he has no statutory incomes policy to put before the House. The right hon. Gentleman spoke of a voluntary incomes policy and a norm of between 2½ per cent. and 4½ per cent. He did not get it. He was quite incapable of getting it—so that he has no voluntary incomes policy to put before the House, either.

2251
The right hon. Gentleman announced a programme of industrial relations as the counterweight to abandoning his statutory incomes policy, but within two months he was jettisoned by his right hon. Friend the Leader of the Opposition—[Interruption]—and, as a result of that, he had no incomes policy, no policy for the reform of industrial relations and he got a wage explosion. The proof of that inflation is the escalating rate during the last years of that Government. [Interruption.]
In 1968 we had an index of average wage earnings which was 7½8 per cent. up on the year before. A year later, in 1969, it was 8½2 per cent. up, and by June, 1970, when the right hon. Gentleman went out of office, it was 11·9 per cent. up. That shows the very rapidly accelerating rate, reflected in the rise in prices and working through the system since then. [HON. MEMBERS: "What is it now?"] I am pointing out to the right hon. Gentleman what the position was—[Interruption.]—and if the right hon. Gentleman——
Mr. Roy Jenkins rose——
The Prime Minister: I have given way enough.
Mr. Jenkins rose——
The Prime Minister: No.
Mr. Speaker: Order. If the Prime Minister does not give way, the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins) must resume his seat.
Mr. Jenkins rose——
Hon. Members: Sit down.
The Prime Minister: I have already given way several times.
Mr. Speaker: Order. I remind hon. Members that the hon. Member for Ebbw Vale (Mr. Michael Foot), who wound up for the Opposition, was listened to in comparative silence.
Mr. Jenkins: As the right hon. Gentleman referred to me on several occasions, I would have thought that he would have had the courtesy to give way at least once. My question is simple. The right hon. Gentleman gave the progression from 1968 to 1969, through to June, 1970. What is the figure today?
The Prime Minister: It will be something under 14 per cent. for the year 1970. I cannot give the figure for the year from June, 1970, obviously, so the hon. Gentleman must take the calendar year.
What I am pointing out is the increasing rate of acceleration under the last three years of Labour Government. It is with that that this Government are dealing, and dealing now.
The right hon. Gentleman has criticised us because of the increases in prices in the nationalised industries. He was doing that in a popular, well-paying newspaper last Sunday [Interruption.] I was always very happy to write in it myself. Look at the deficits that the right hon. Gentleman left, the deficits of the nationalised industries, for us to deal with when we took power: in the postal services, £74 million a year down; in electricity, £67 million; in gas, £20 million; in coal, £90 million; in steel, £50 million; and in the B.B.C., £27 million. Those are the reasons, deficits which were ignored by the right hon. Gentleman and on which we had to take action to get the nationalised industries into any sort of balance at all. Let the right hon. Gentleman take the blame for that. The right hon. Gentleman summed up by saying that the last Government handed over some good things and some bad things. This leads on directly to the other matters with which he wants us to deal—the industrial situation and, in particular. Rolls-Royce.
Mr. Roy Jenkins: And the balance of payments.
The Prime Minister: On the balance of payments surplus, the right hon. Gentleman raised again the question of what I said in the first half of 1970 about being on the downward slope. Would he like the figures now? In the first quarter of 1970 the current balance was plus £213 million. In the second quarter it was plus £119 million and in the third quarter plus £73 million. That was a downward slope, and I said so. It was a downward slope for the first two quarters of 1970 which led to the election. Perhaps the right hon. Gentleman will now have the decency to withdraw his allegation and substantiate what I said, because the figures are there for everyone to see.
Mr. Roy Jenkins: Does the right hon. Gentleman seriously believe that the third quarter, which contained extraordinary amounts, with deficits and surpluses of plus £100 million and plus £200 million owing to the dock strike, has any meaning from this point of view? Is it not absolutely clear that the balance of payments for 1970 taken as a whole is the strongest we have had in our history?
The Prime Minister: In June, 1970, I was dealing with the first two quarters of the year. There is no point in the right hon. Gentlemen trying to confuse that with the third quarter. The surplus for the first quarter was £213 million and for the second quarter £119 million. That is a downward slope, and the recovery was made only in the fourth quarter of 1970.
What about the bad things that the right hon. Gentleman declared he left us? He fully acknowledged that he left us with rising inflation. Does he not realise that a surplus on the balance of payments and a rising inflation are bound to mean a damaging situation in the long term? He has shown no realisation whatever of this situation, and still does not show that he realised it at the time.
In addition, the right hon. Gentleman left us with escalating wages, rapidly rising prices and a heavy international debt for which the balance of payments surplus is still required. There is £1,500 million to be paid off. We ourselves have been able to pay off some of it, but it is still a major demand on the balance of payments which above all the right hon. Gentleman should recognise.
Low savings and an industrial situation whose weaknesses were apparent, which the last Government tried to disguise by their so-called industrial reconstruction policy, have now become very clear for the country to see. I doubt whether the reconstruction policy touched more than 1 per cent. of the capital organisation of British industry in the 5½ years of the last Government, but as a result of their general policy of heavy taxation and squeezing profit margins there were insufficient resources left for investment. That is now becoming painfully apparent. Huge personal taxation meant low savings from the people and an insufficient supply of funds to the market for industry. So industry as a whole was forced to go through I.R.C. to the Gov-
2254
ernment to try to get loans and subsidies. The position must now be rebuilt by British industry, and it will take firms a considerable time. Hence the importance of the 2½ per cent. reduction in corporation tax on 1st January this year, to help firms reconstruct their own finances.
The right hon. Gentleman mentioned Rolls-Royce. Rolls-Royce was a bitter blow to British industry and to this country. I do not want to deal with it in detail, because we have already debated it twice in the House, but there are certain points that I wish to make about it. The Government had no responsibility for that matter, and, as far as I know, neither did the previous Administration. That was clear for everyone on both sides of the Atlantic to see. We undertook additional responsibility for launching aid, which was explained to the House, and at the same time we put in the accountants. If that had not been done the real situation would not have been revealed, I believe, either to the company or to Parliament and the country.
I must ask right hon. Members opposite what their real position is about this. Do they believe that we should have taken over Rolls-Royce as a firm with all its liabilities, including the liability which became known at the end of January for production losses of £60 million on the RB211 engine, in addition to the very large further amount of launching aid that would be required and the very heavy indemnities for late delivery of this engine which the firm recognised in January this year?
If that is the position, the Opposition are perfectly entitled to take it, but the right hon. Gentleman should not be so inaccurate as to state that we nationalised Rolls-Royce to save the private investor. The situation is exactly the reverse. We did not save the private investor. The private shareholder will lose his interest in the same way as others who are involved in the unhappy collapse of Rolls-Royce. What we have parliamentary authority to do is to buy that section of the firm which is essential for our defence interests and for safeguarding the defence interests of 81 other nations and the 200 airlines. We would not have been justified, in my view, and, I think, in the view of the country, in using the money

2255
of the taxpayers, whether in direct taxation or indirect taxation of their goods and services, to buy the whole of this company, with all its obligations, liabilities and indemnities. That would not have been justifiable in the public interest.
So we are now having a thorough assessment of the assessment of the future of this engine. We must all hope that we can reach a suitable arrangement. The right hon. Gentleman asked us to renegotiate the contract, and that we shall do once we have the assessment. The answer does not depend on the Government alone, nor on the firm alone, nationally owned as it will then be. It must depend on what others are prepared to do to make an arrangement which will deal with the present problem of the engine.
But surely we all need to learn the lessons of this matter—of the management required, of the commercial expertise required and of the consequences of escalating costs. After all, as a nation, we need to learn that no company, however great, and no workers, however skilled, can survive, whether as a firm or in secure jobs, on unprofitable and loss-making ventures. Nor can these long be disguised by Government subventions and Government subsidies on the scale of modern industry. This, therefore, is the lesson which everyone here must learn and which the nation as a whole must learn. It is a lesson which must be learnt by all sectors of British industry. [Interruption.] If hon. Members opposite are not prepared to learn these lessons, then they will continue to support industries which will not be strong enough to make their own way in the competitive world outside.
The Government have today announced further regional policies. [Interruption.] The right hon. Member for Kilmarnock (Mr. Ross) is apparently critical of them. As Secretary of State for Scotland, he promised that jobs in Scotland would increase by 60,000. In fact, during his term of office employment in Scotland fell by 82,000.
The right hon. Member for Stechford
asked for a comparison of the positions in the special development areas now and as they were in the time of the late Administration. Under this type of
2256
arrangement for the special development areas—and this applies to the other kinds of development area as well—the effect on individual firms depends on the nature of the project, on the balance between plant, machinery, labour and factory building. Therefore, it is not possible to give a generalised view about each project which can get assistance in special development areas.
What one can say in comparison is, as we did when our measures were announced in October, that the differential benefit of free depreciation and increased assistance under the Local Employment Acts is, broadly speaking, equal to what was being provided by other means by the last Government. The fact that these special arrangements involve another —25 million expenditure will put them in a more advantageous position than they were at that time.
My hon. Friend the Member for St. Ives (Mr. Nott) said he wished to have a special arrangement for Cornwall. Cornwall benefited when we restored to service industries the assistance which they had had previously but which was removed by the Labour Government. Under this arrangement for special development areas the service industries are not affected.
In my last few words I want to deal with two particular problems which were mentioned by the right hon. Gentleman and by the hon. Member for Ebbw Vale. It is now becoming customary for the hon. Member to discuss a consensus. His argument runs that a democratically-elected Government have no right to carry out the policies which they had put to the electorate unless the Opposition are prepared to support those policies as well. This is a new constitutional doctrine. It is not one that he himself advocated when the Labour Government were in power. Looking back to 1964–66, when the House was so equally balanced that the Labour Government had a majority of only three, did they take into consideration the views of the Opposition in forcing through their own policies? Indeed, the right hon. Member for Huyton (Mr. Harold Wilson) constantly boasted to the country that with a majority of only three he would carry through divisive policies. How much consideration was given then to the views of the Opposition on steel nationalisation or the Land Commission? The hon. Gentleman's argument is entirely false.

2257
But I do not worry about that because I believe in democratic arguments of the fiercest kind. What I wish to discuss is the argument used more seriously by the right hon. Gentleman—that the social policies being pursued by the Government are dividing the country. That is a view which I challenge, and challenge completely. I do not accept the view of the hon. Member for Ebbw Vale that the reform of industrial relations is a policy which is going to divide the country [HON. MEMBERS: "Oh!" His claim shows how out of touch he is.
What have the Government done socially? They have improved the benefits for those who most need them. They have provided more money for primary schools and for hospitals. They have provided more money for the widows and more money for those who are retired and over 80. Those policies are not divisive. These are policies which are uniting the nation. [Interruption.]
Mr. Speaker: Order. The hon. Member for Ebbw Vale was heard in comparative silence. Hon. Members must not shout from a sedentary position.
The Prime Minister: I thought that hon. Gentlemen opposite wanted to have a serious discussion—[Interruption.] about the effect of social policies on this country. The policies of increasing the number of primary schools and hospitals and of helping the elderly and widowed are not divisive. They are the way in which those who can afford to help themselves more do so, and help through the community to help other people.
On the effect of this on our relations with the trade unions, I welcome the closest possible relations with the trade unions. The trade union leaders themselves know that. At any time I am prepared——
Mr. Heffer rose——
Mr. Stanley Orme (Salford, West)rose——
Hon. Members: Sit down!
The Prime Minister: At any time I am prepared to discuss matters with them, to discuss economic policy with them, to listen seriously to their views and to
2258
exchange with them the views of the Government.
I want to see expansion in this country, but expansion soundly based. I want to see cost inflation dealt with, and we shall continue with our policy of standing up against inflationary wage claims. I shall be glad of the day when right hon. Gentlemen opposite and some of their backbenchers also express their opposition to inflationary wage claims. The sooner they do that, the sooner this economy will be on a healthy footing; and the sooner that happens, the sooner we shall be able to expand it. If the trade unions are prepared to work with the Government, and with management——
Mr. Orme rose——
The Prime Minister—in doing this, we, too, are prepared to respond and work with them.
We are not prepared to abandon the reform of industrial relations. That is a long-term objective to which we shall adhere. That Bill will be placed on the Statute Book, and everybody in Parliament recognises it. Very well, let the trade union leaders themselves recognise it, because it is the will of a democratically-elected Parliament. I wish that they had consulted us and been prepared to carry through a consultation. I wish that right hon. and hon. Members opposite had been prepared not to lose valuable time tramping through the Lobbies, but seriously to discuss the facts.
Several Hon. Members rose——
The Prime Minister: When this Bill is on the Statute Book, the trade union leaders will be prepared to operate it; and they will value it.
Mr. Kevin McNamara (Kingston upon Hull, North): On a point of order——
Hon. Members: Sit down.
Mr. McNamara: I apologise to you, Mr. Speaker——
The Parliamentary Secretary to the Treasury (Mr. Francis Pym)The Parliamentary Secretary to the Treasury (Mr. Francis Pym) rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the Amendment be made:—
The House proceeded to a Division—
Mr. McNamara (seated and covered): On a point of order. In fact, I have two points of order which I wish to raise with you, Mr. Speaker.
On the first point, Mr. Speaker, you have called me for a point of order and 1 was attempting to make that point. I was apologising to you for having to raise my voice because of the hubbub from the pposition—[Interruption.]—but you had called me to raise my point of order and I was on my feet making it when you called the Patronage Secretary to move the Closure Motion.
Mr. Speaker: If I may deal with that point straight away, the Motion for the Closure takes precedence over all other points of order and interrupts them.
Mr. McNamara: I accept that from you, Mr. Speaker.
My second point of order is this. I think that this must be placed on the record. The Leader of the Opposition alleged—[Laughter.] I mean the Leader of the Government; I always forget; the Tories quote so many of our speeches—the Prime Minister said that time was being wasted on having Divisions on the Industrial Relations Bill. I should be glad if you would draw the Prime Minister's attention to a matter of fact and a matter of order, Mr. Speaker. The greater part of the time spent in Divisions on that Bill has been spent after 12 o'clock, when the guillotine has fallen but when we should be delighted to debate the Bill. However, the Government are afraid to do that, because they have been defeated in every argument.
Mr. Speaker: Order. I do not detect a point of order in the second matter the hon. Gentleman raises.
The House having divided: Ayes 309, Noes 275.

Division No. 183.]

AYES

10.0 p.m.

Adley, Robert

Chapman, Sydney

Fowler, Norman

Alison, Michael (Bankston Ash)

Chataway, Rt. Hn. Christopher

Fox, Marcus

Allason, James (Hemel Hempstead)

Churchill, W. S.

Fraser,Rt.Hn.Hugh(Stafford & Stone)

Amery, Rt. Hn. Julian

Clark, William (Surrey, E.)

Fry, Peter

Astor, John

Clarke, Kenneth (Rushcliffe)

Galbraith, Hn. T. G.

Atkins, Humphrey

Clegg, Waiter

Gardner, Edward

Awdry, Daniel

Cockeram, Eric

Gibson-Watt, David

Baker, Kenneth (St. Marylebone)

Cooke, Robert

Gilmour, Ian (Norfolk, C.)

Baker, W. H. K. (Banff)

Coombs, Derek

Gilmour, Sir John (Fife, E.)

Balniel, Lord

Cooper, A. E.

Glyn, Dr. Alan

Barber, Rt. Hn. Anthony

Cordle, John

Godber, Rt. Hn. J. B.

Batsford, Brian

Corfield, F. V.

Goodhart, Philip

Beamish, Col. Sir Tufton

Cormack, Patrick

Goodhew, Victor

Bell, Ronald

Costain, A. P.

Gorst, John

Bennett, Sir Frederic (Torquay)

Critchley, Julian

Gower, Raymond

Benyon, W.

Crouch, David

Grant, Anthony (Harrow, C.)

Berry, Hn. Anthony

Crowder, F. P.

Gray, Hamish

Biffen, John

Curran, Charles

Green, Alan

Biggs-Davison, John

Dalkeith, Earl of

Grieve, Percy

Blaker, Peter

Davies, Rt. Hn. John (Knutsford)

Griffiths, Eldon

Boardman, Tom (Leicester, S.W.)

d'Avigdor-Goldsmid, Sir Henry

Grylls, Michael

Body, Richard

d'AVigdor-Goldsmid, Maj.-Gen. Jack

Gummer, Sefwyn

Boscawen, R. T.

Dean, Paul

Gurden, Harold

Bossom, Sir Clive

Deedes, Rt. Hn. W. F.

Hall, Miss Joan

Bowden, Andrew

Dighy, Simon Wingfield

Hall, John (Wycombe)

Boyd-Carpenter, Rt. Hn. John

Dixon, Piers

Hall-Davis, A. G.

Braine, Bernard

Dodds-Parker, Douglas

Hamilton, Michael (Salisbury)

Bray, Ronald

Douglas-Home, Rt. Hn. Sir Alec

Hannam, John (Exeter)

Brewis, John

Drayson, G. B.

Harrison, Col. Sir Harwood (Eye)

Brinton, Sir Tatton

du Cann, Rt. Hn. Edward

Harvey, Sir Arthur Vere

Brocklebank-Fowler, Christopher

Eden, Sir John

Haselhurst, Alan

Brown, Sir Edward (Bath)

Edwards, Nicholas (Pembroke)

Hastings, Stephen

Bruce-Gardyne, J.

Elliot, Capt. Walter (Carshalton)

Havers, Michael

Bryan, Paul

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

Hawkins, Paul

Buchanan-Smith, Alick(Angus,N&M)

Emery, Peter

Hay, John

Buck, Antony

Farr, John

Hayhoe, Barney

Bullus, Sir Eric

Fell, Anthony

Heath, Rt. Hn. Edward

Burden, F. A.

Fenner, Mrs. Peggy

Hicks, Robert

Butler, Adam (Bosworth)

Fidler, Michael

Higgins, Terence L.

Campbell, Rt.Hn.G.(Moray&Nairn)

Finsberg, Geoffrey (Hampstead)

Hiley, Joseph

Carlisle, Mark

Fletcher-Cooke, Charles

Hill, John E. B. (Norfolk, S.)

Carr, Rt. Hn. Robert

Fookes, Miss Janet

Hill, James (Southampton, Test)

Cary, Sir Robert

Fortescue, Tim

Holland, Philip

Channon, Paul

Foster, Sir John

Holt, Miss Mary

Hordern, Peter

Miscampbell, Norman

Simeons, Charles

Hornby, Richard

Mitchell,Lt.-Col.C.(Aberdeenshire,W)

Sinclair, Sir George

Hornsby-Smith,Rt.Hn.Dame Patricia

Mitchell, David (Basingstoke)

Skeet, T. H. H.

Howe, Hn. Sir Geoffrey (Reigate)

Moate, Roger

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

Howell, Ralph (Norfolk, N.)

Molyneaux, James

Soref, Harold

Hunt, John

Money, Ernie

Speed, Keith

Hutchison, Michael Clark

Monks, Mrs. Connie

Spence, John

Iremonger, T. L.

Montgomery, Fergus

Sproat, Iain

Irvine, Bryant Godman (Rye)

Morgan, Geraint (Denbigh)

Stainton, Keith

James, David

Morgan-Giles, Rear-Adm.

Stanbrook, Ivor

Jenkin, Patrick (Woodford)

Morrison, Charles (Devizes)

Stewart-Smith, D. G. (Belper)

Jennings, J. C. (Burton)

Mudd, David

Stodart, Anthony (Edinburgh, W.)

Jessel, Toby

Murton, Oscar

Stoddart-Scott, Col. Sir M.

Johnson Smith, G. (E. Grinstead)

Nabarro, Sir Gerald

Stokes, John

Jones, Arthur (Northants, S.)

Heave, Airey

Stuttaford, Dr. Tom

Jopling, Michael

Nicholls, Sir Harmar

Sutcliffe, John

Joseph, Rt. Hn. Sir Keith

Noble, Rt. Hn. Michael

Tapsell, Peter

Kaberry, Sir Donald

Normanton, Tom

Taylor, Sir Charles (Eastbourne)

Kellett, Mrs. Elaine

Nott, John

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

Kershaw, Anthony

Onslow, Cranley

Taylor, Frank (Moss Side)

Kilfedder, James

Oppenheim, Mrs. Sally

Taylor, Robert (Croydon, N.W.)

Kimball, Marcus

Orr, Capt. L. P. S.

Tebbit, Norman

King, Evelyn (Dorset, S.)

Owen, Idris (Stockport, N.)

Temple, John M.

King, Tom (Bridgwater)

Page, Graham (Crosby)

Thatcher, Rt. Hn. Mrs. Margaret

Kinsey, J. R.

Page, John (Harrow, W.)

Thomas, John Stradling (Monmouth)

Kirk, Peter

Parkinson, Cecil (Enfield, W.)

Thomas, Rt. Hn. Peter (Hendon, S.)

Kitson, Timothy

Peel, John

Thompson, Sir Richard (Croydon, S.)

Knight, Mrs. Jill

Percival, Ian

Tilney, John

Knox, David

Peyton, Rt. Hn. John

Trafford, Dr. Anthony

Lambton, Antony

Pike, Miss Mervyn

Trew, Peter

Lane, David

Pink, R. Bonner

Trew, Peter

Langford-Holt, Sir John

Pounder, Rafton

Tugendhat, Christopher

Legge-Bourke, Sir Harry

Powell, Rt. Hn. J. Enoch

Turton, Rt. Hn. R. H.

Le Marchant, Spencer

Price, David (Eastleigh)

van Straubenzee, W. R.

Lewis, Kenneth (Rutland)

Prior, Rt. Hn. J. M. L.

Vaughan, Dr. Gerard

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

Proudfoot, Wilfred

Vickers, Dame Joan

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

Pym, Rt. Hn. Francis

Waddington, David

Longden, Gilbert

Quennell, Miss J. M.

Walker, David (Clitheroe)

Loveridge, John

Raison, Timothy

Walker, Rt. Hn. Peter (Worcester)

McAdden, Sir Stephen

Ramsden, Rt. Hn. James

Walker Smith, Rt. Hn. Sir Derek

MacArthur, Ian

Rawlinson, Rt. Hn, Sir Peter

Wall, Patrick

McCrindle, R. A.

Redmond, Robert

Walters, Dennis

McLaren, Martin

Reed, Laurence (Bolton, E.)

Ward, Dame Irene

Maclean, Sir Fitzroy

Rees, Hn. Peter (Dover)

Warren, Kenneth

McMaster, Stanley

Rees-Davies, W. R.

Weatherill, Bernard

Macmillan, Maurice (Farnham)

Rhys Williams, Sir Brandon

Wells, John (Maidstone)

McNair-Wilson, Michael

Ridley, Hn. Nicholas

White, Roger (Gravesend)

McNair-Wilson, Patrick (New Forest)

Ridsdale, Julian

Whitelaw, Rt. Hn. William

Maddan, Martin

Roberts, Michael (Cardiff, N.)

Wiggin, Jerry

Martel, David

Roberts, W yn (Conway)

Wilkinson, John

Maginnis, John E.

Rossi, Hugh (Hornsey)

Wolrige-Gordon, Patrick

Marples, Rt. Hn. Ernest

Rost, Peter

Woodhouse, Hn. Christopher

Marten, Neil

Royle, Anthony

Woodnutt, Mark

Mather, Carol

Russell, Sir Ronald

Worsley, Marcus

Maude, Angus

St. John-Stevas, Norman

Wylie, Rt. Hn. N. R.

Maudting, Rt. Hn. Reginald

Scott, Nicholas

Younger, Hn. George

Mawby, Ray

Scott-Hopkins, James

Maxwell-Hyslop, R. J.

Sharpies, Richard

TELLERS FOR THE AYES:

Meyer, Sir Anthony

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

Mr. Jasper More and

Mills, Peter (Torrington)

Shelton, William (Clapham)

Mr. Reginald Eyre.

Mills, Stratton (Belfast, N.)

NOES

Abse, Leo

Bradley, Tom

Crawshaw, Richard

Allaun, Frank (Salford, E.)

Broughton, Sir Alfred

Cronin, John

Allen, Scholefield

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

Crosland, Rt. Hn. Anthony

Archer, Peter (Rowley Regis)

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

Crossman, Rt. Hn. Richard

Armstrong, Ernest

Brown,Ronald (Shoreclitch & F'bury)

Cunningham, G. (Islington, S.W.)

Ashley, Jack

Buchan, Norman

Cunningham, Dr. J. A. (Whitehaven)

Ashton, Joe

Butler, Mrs. Joyce (Wood Green)

Dalyell, Tam

Atkinson, Norman

Callaghan, Rt. Hn. James

Darling, Rt. Hn. George

Bagier, Gordon A. T.

Campbell, I. (Dunbartonshire, W.)

Davidson, Arthur

Barnes, Michael

Cant, R. P.

Davies, Denzil (Llanelly)

Barnett, Joel

Carmichael, Neil

Davies, G. Elfed (Rhondda, E.)

Beaney, Alan

Carter, Ray (Birmingh'm, Northfield)

Davies, Ifor (Gower)

Benn, Rt. Hn. Anthony Wedgwood

Carter-Jones, Lewis (Eccles)

Davis, Clinton (Hackney, C.)

Bennett, James (Glasgow, Bridgeton)

Castle, Rt. Hn. Barbara

Deakins, Eric

Bidwell, Sydney

Clark, David (Colne Valley)

de Freitas, Rt. Hn. Sir Geoffrey

Bishop, E. S.

Cocks, Michael (Bristol, S.)

Delargy, H. J.

Blenkinsop, Arthur

Cohen, Stanley

Dell, Rt. Hn. Edmund

Boardman, H. (Leigh)

Concannon, J. D.

Dempsey, James

Booth, Albert

Conlan, Bernard

Doig, Peter

Bottomley, Rt. Hn. Arthur

Corbet, Mrs. Freda

Dormand, J. D.

Boyden, James (Bishop Auckland)

Cox, Thomas (Wandsworth, C.)

Douglas, Dick (Stirlingshire, E.)

2262

2263

Douglas-Mann, Bruce

Lamble, David

Price, J T. (Westhoughton)

Driberg, Tom

Lamond, James

Price, William (Rugby)

Duffy, A. E. P.

Latham, Arthur

Probert, Arthur

Dunn, James A.

Lawson, George

Rankin, John

Dunnett, Jack

Leadbitter, Ted

Reed, D. (Sedgefield)

Eadie, Alex

Lee, Rt. Hn. Frederick

Rees, Merlyn (Leeds, S.)

Edelman, Maurice

Leonard, Dick

Rhodes, Geoffrey

Edwards, Robert (Bilston)

Lestor, Miss Joan

Richard, Ivor

Edwards, William (Merioneth)

Lever, Rt. Hn. Harold

Roberts, Albert (Normanton)

Ellis, Tom

Lewis, Arthur (W. Ham N.)

Roberts, Rt. Hn. Goronwy(Caernarvon)

English, Michael

Lewis, Ron (Carlisle)

Robertson, John (Paisley)

Evans, Fred

Lipton, Marcus

Roderick, Caerwyn E.(Br'c'n&R'dnor)

Fernyhough, E.

Lomas, Kenneth

Rodgers, William (Stockton-on-Tees)

Fisher, Mrs.Doris(B'ham,Ladywood)

Loughlin, Charles

Roper, John

Fitch, Alan (Wigan)

Lyon, Alexander W. (York)

Rose, Paul B.

Fletcher, Raymond (Ilkeston)

Lyons, Edward (Bradford, E.)

Ross, Rt. Hn. William (Kilmarnock)

Fletcher, Ted (Darlington)

Mabon, Dr. J. Dickson

Sheldon, Robert (Ashton-under-Lyne)

Foley, Maurice

McBride, Neil

Shore, Rt. Hn. Peter (Stepney)

Foot, Michael

McCartney, Hugh

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

Ford, Ben

MacColl, James

Short, Mrs. Renée (W'hampton,N.E.)

Forrester, John

McElhone, Frank

Silkin, Rt. Hn. John (Deptford)

Fraser, John (Norwood)

McGuire, Michael

Silkin, Hn. S. C. (Dulwich)

Freeson, Reginald

Mackenzie, Gregor

Sillars, James

Galpern, Sir Myer

Mackie, John

Silverman, Julius

Garrett, W. E.

Mackintosh, John P.

Skinner, Dennis

Gilbert, Dr. John

Maclennan, Robert

Small, William

Ginsburg, David

McMillan, Tom (Glasgow, C.)

Smith, John (Lanarkshire, N.)

Golding, John

McNamara, J. Kevin

Spearing, Nigel

Gordon Walker, Rt. Hn. P. C.

MacPherson, Malcolm

Spriggs, Leslie

Gourlay, Harry

Mahon, Simon (Bootle)

Stallard, A. W.

Grant, George (Morpeth)

Mallaiieu, E. L. (Brigg)

Steel, David

Grant, John D. (Islington, E.)

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

Stewart, Donald (Western Isles)

Griffiths, Eddie (Brightside)

Marks, Kenneth

Griffiths, Will (Exchange)

Marquand, David

Stewart, Rt. Hn. Michael (Fulham)

Grimond, Rt. Hn. J.

Marsh, Rt. Hn. Richard

Stoddart, David (Swindon)

Gunter, Rt. Hn. R. J.

Mason, Rt. Hn. Roy

Stonehouse, Rt. Hn. John

Hamilton, William (Fife, W.)

Mayhew, Christopher

Strang, Gavin

Hannan, William (G'gow, Maryhill)

Meacher, Michael

Strauss, Rt. Hn. G. R.

Hardy, Peter

Mellish, Rt. Hn. Robert

Summerskill, Hn. Dr. Shirley

Harper, Joseph

Mendelson, John

Swain, Thomas

Harrison, Walter (Wakefield)

Mikardo, Ian

Taverne, Dick

Hart, Rt. Hn. Judith

Milian, Bruce

Thomas,Rt.Hn. George (Cardiff, W.)

Hattersley, Roy

Miller, Dr. M. S.

Thomas, Jeffrey (Abertillery)

Healey, Rt. Hn. Denis

Milne, Edward (Blyth)

Thompson, Rt. Hn. G. (Dundee, E.)

Heffer, Eric S.

Molloy, William

Thorpe, Rt. Hn. Jeremy

Hilton, W. S.

Morgan, Elystan (Cardiganshire)

Tinn, James

Horam, John

Morris, Alfred (Wythenshawe)

Tomney, Frank

Houghton, Rt. Hn. Douglas

Morris, Charles R. (Openshaw)

Torney, Tom

Howell, Denis (Small Heath)

Morris, Rt. Hn. John (Aberavon)

Tuck, Raphael

Huckfield, Leslie

Moyle, Roland

Urwin, T. W.

Hughes, Rt. Hn. Cledwyn (Anglesey)

Mulley, Rt. Hn. Frederick

Varley, Eric G.

Hughes, Dr. Mark (Durham)

Murray, Ronald King

Wainwright, Edwin

Hughes, Robert (Aberdeen, N.)

Ogden, Eric

Walden, Brian (B'm'ham, All Saints)

Hughes, Roy (Newport)

O'Halloran, Michael

Walker, Harold (Doncaster)

Hunter, Adam

O'Malley, Brian

Wallace, George

Irvine,Rt.Hn.SirArthur(Edge Hill)

Oram, Bert

Watkins, David

Janner, Greville

Orbach, Maurice

Weitzman, David

Jay, Rt. Hn. Douglas

Orme, Stanley

Wellbeloved, James

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

Oswald, Thomas

Wells, William (Walsall, N.)

Jenkins, Hugh (Putney)

Owen, Dr. David (Plymouth, Sutton)

White, James (Glasgow, Polfok)

Jenkins, Rt. Hn. Roy (Stechford)

Palmer, Arthur

Whitehead, Philip

John, Brynmor

Pannell, Rt. Hn. Charles

Whitelock, William

Johnson, Carol (Lewisham, S.)

Pardoe, John

Williams, Alan (Swansea, W.)

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

Parker, John (Dagenham)

Williams, Mrs. Shirley (Hitchin)

Johnson, Walter (Derby, S.)

Parry, Robert (Liverpool, Exchange)

Williams, W. T. (Warrington)

Jones, Barry (Flint, E.)

Pavitt, Laurie

Wilson, Alexander (Hamilton)

Jones, Dan (Burnley)

Peart, Rt. Hn. Fred

Wilson, Rt. Hn. Harold (Huyton)

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

Pendry, Tom

Wilson, William (Coventry, S.)

Jones, Gwynoro (Carmarthen)

Pentland, Norman

Jones, T. Alec (Rhondda, W.)

Perry, Ernest G.

TELLERS FOR THE NOES:

Judd, Frank

Prentice, Rt. Hn. Reg.

Mr. James Hamilton and

Kelley, Richard

Prescott, John

Mr. Donald Coleman

Kinnock, Nell

Main Question, as amended, put and agreed to.
Resolved,
That this House recognising that cost inflation weakens the nation's competitive position, undermines employment and industrial invest
2264
ment and creates social injustice through rising prices, applauds the determination of Her Majesty's Government to curb Inflation by resisting excessive pay claims, by maintaining a firm monetary policy, by keeping down public expenditure, and by reforming industrial relations, thus preparing the way for sustained economic growth.

GREECE AND SPAIN (SHIPPING CONVENTIONS)
10.10 p.m.
Mr. John Prescott (Kingston upon Hull, East): I beg to move,
That an humble Address be presented to Her Majesty' praying that the Consular Relations (Merchant Shipping) (Kingdom of Greece) Order 1970 (S.I., 1970, No. 1908), dated 17th December, 1970, a copy of which was laid before this House on 12th January, be annulled.
Mr. Speaker: It would be for the convenience of the House if we discussed at the same time the Motion:
That an humble Address be presented to Her Majesty, praying that the Consular Relations (Merchant Shipping) (Spanish State) Order 1970 (S.I., 1970, No. 1913), dated 17th December, 1970, a copy of which was laid before this House on 12th January, be annulled.
Mr. Prescott: Before dealing with these Orders—[Interruption.]—it would be—
Mr. Stanley Orme (Salford, West): On a point of order. May we have a little order so that my hon. Friend can be heard?
Mr. Speaker: Order. Will hon. Members leave the Chamber as quietly as possible?
Mr. Prescott: These Orders relate to Greece and Spain. A number of countries were involved but these two have been chosen for specific reasons. They are Orders for limiting the jurisdiction of the courts of the United Kingdom to entertaining proceedings relating to the remuneration or any contract of service of the master or commander or any member of the crew of any ship or aircraft belonging to a State.
Article 3 refers to:
"Proceedings relating to the remuneration or any contract of service of the master or a member of the crew of any ship belonging to the Kingdom of Greece shall not be entertained by any court in the United Kingdom unless a consular officer of the Kingdom of Greece has been notified of the intention to invoke the jurisdiction of that court and has not objected within a period of two weeks from that date of such notification and a statement to that effect is included among the details on which the claim is based at the time when the proceedings are commenced."
Under the Order, English courts will be limited in entertaining any illegal actions concerning wages for Greek seamen.
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It is necessary to explain the industrial situation in the industry to which the Order applies, namely, the shipping industry.
Mr. Albert Booth (Barrow-in-Furness): My hon. Friend has said that the Order has the effect of preventing British courts from entertaining claims in respect of Greek seamen's wages. Would he make it clear that it also applies to seamen of any other nationality on a ship registered in Greece? That appears to be the scope of the Order.
Mr. Prescott: That brings to light one of the legal difficulties. The Order could apply to a number of ships not necesarily flying the Greek flag. The Orders deal with Greece and Spain. Shipping is international. Ships flying the British flag may have British crews. A Liberian ship may have a Greek crew. A Greek ship may have a mixed crew. A ship of one country may be manned by the nationals of another country and registered in yet another country. This illustrates the difficult and complex legal problems involved.
The traditional maritime countries like Britain and some of the European countries employ their own nationals. But on the flags of convenience ships, about which complaints are constantly made because of the threat which they constitute to international standards of safety, welfare and wages, there is less concern for safety, good wages, welfare and satisfactory conditions on board. There is a great economic incentive for countries to register ships in flags of convenience countries because of the taxation policies which they pursue.
The number of flags of convenience ships is growing at a considerable rate. Many of them, though registered under the Liberian flag, are crewed by Greek nationals as well as other nationals. Recently a Greek ship owner who had many of his ships registered under the Liberian flag transferred them to the Greek flag, not because he had become patriotic, but because of the wages paid to Greek seamen and less concern for safety and welfare on Greek ships.
In 1949 Liberia had no vessels, but in 1969 it had 1,662 vessels with over 26 million gross registered tons—a considerable proportion of world shipping. A

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lowering of standards on these ships in an industry which is international inevitably lowers the international standards of traditional maritime countries. There is an economic incentive to register in flags of convenience countries, because it makes cheaper the operation of running the ship.
International control is exercised by all Governments through the International Labour Organisation, which is a body older than the United Nations set up under the League of Nations in 1919. The I.L.O. sets international minimum standards which all nations are requested to observe. Yet many flags of convenience countries—Liberia being the most flagrant offender—have observed only three of the 26 minimum standards contained in Conventions passed by the I.L.O. The United Nations has complained constantly about this and advocated that there should be a genuine link between the flag the ship carries and the responsibility of the nation, but that does not mean a great deal at this stage.
A ship called the "Kathy Hope Maline" came to the constituency of the hon. Member for Salford, West (Mr. Orme) crewed by Greek seamen who had not been paid for five months. Their wages were between £30 and £40 a month. They had been three days without food and the ship's water was blocked. The hon. Member for Salford, West tried to resolve the problems on the "Good Fortune". A further example is the "West Port". I could give many examples where no money had been paid for three months, where the men's families in Greece had received no money and were starving because of the company's refusal to pay and where the seamen required medical assistance. It is these rotten hulks of rat-infested vessels which constitute a threat to the maritime countries and to their standard of service, wages and conditions of employment. All this is dedicated to the glories of profit and competition and the international conventions are entirely ignored.
When unions receive complaints about these ships in our ports and men go on board to investigate the complaints as members of the International Transport Federation, they attempt to get the captain to pay the overdue wages and to improve the conditions on the ship. Our only
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hope is to appeal not to the captain's moral obligations but to the international trade union call of solidarity, which means, "If you do not give these men their rightful due we will see that the dockers will not unload your ship." The captain recognises this and we are able to force him to pay the overdue wages and, above all, to pay the men the average international wage.
Mr. Orme: Does not the National Union of Seamen, to which my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) belongs, help to maintain these standards, in addition to the dockers who unload the ships, and will not the Industrial Relations Bill undermine the work of the National Union of Seamen on behalf of seamen throughout the world?
Mr. Prescott: Yes, I am grateful for that intervention and I am about to develop this point. By this Order the Government will deny many seamen all hope of getting their rightful dues. What is now called a sympathy strike will, under the Industrial Relations Bill, become illegal, if it can be defined. Having heard lawyers give four or five different definitions of the same matter I no longer look upon them with such awe when it comes to the interpretation of a legal Clause.
It is important that the only sanction we exercise in this country is the traditional one of withdrawal of labour. But if a Greek seaman withdraws his labour, he will be liable to all sorts of criminal charges because of the articles of agreement under which he serves. This is a response from one worker in one country to a worker in another country. The matter of international solidarity in trade unions is therefore most important. The International Transport Workers' Federation has an important role in interpreting the seaman's rights. It is a powerful organisation with over 6 million members registered in 80 countries, with 320 organisations, which are made up primarily of transport workers, railwaymen, seamen, dockers, aviation workers, and so on.
When we go on board vessels and Greek crew members complain to us, we bring pressure to bear through the international organisation to get these men their rightful dues. To give an example of

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how we work, when a captain has agreed to give the men their rights we give him a blue certificate. This means that when the ship next reaches port it will be recognised as coming under a proper agreement of acceptable proportions which must be maintained. If such an agreement is not observed, it can be rescinded through international action. This is the sort of pressure we maintain internationally to improve the wages and conditions of the Greek seamen.
If it is now to be proposed the courts are the only body to which reference can be made and that such reference should be limited, the only sanction available in regard to the rights of Greek seamen, or indeed Spanish seamen, is for the man concerned to return to his own country and apply through his own trade unions or apply to the Greek court in an attempt to ge his grievance justified. Those are the two avenues open to him.
As many of my hon. Friends will know, the Greek trade unions have undergone a considerable amount of change. The experience of the Greek seamen's union has been no different from the experiences of many other trade unions in that country. Their leadership has been changed by Government decree, junta representatives have taken over and the Greek seamen have no faith in them. When we go on board these ships we are provided with ample evidence about the conditions in Greece. We are told "Do not send our case to Greece. Please support it here in London because we have no faith in our trade unions to deal with the problem in our own country."
The Greek seamen's union has been
seriously attacked by the junta and as in most fascist states the trade unions are always the first to be attacked. I do not think that we have yet got that fear in this country. However, in starting with legislation like the Industrial Relations Bill we are taking the first step on this road. It is the first step on the slippery slope.
Many of the arguments we have heard about the terrorising and replacing of trade union leaders and the gaoling of many of them in Greece had been borne out by a substantial report made by the International Labour Organisation.
Mr. Deputy Speaker (Miss Harvie Anderson): Order. The Chair has given great width to this debate, but I think the hon. Gentleman, on reflection, will agree that he is going rather wide on the Order which is now before us.
Mr. Prescott: I appreciate the difficulty, Mr. Deputy Speaker, and you have given me a considerable amount of latitude. But the position is somewhat difficult. The point I am trying to make is that if the unions in that country are not able to look after this man's case, I should have thought it was incumbent upon me at least to justify the point and not merely to say that those trade unions are dominated by the junta. I am quite prepared to say that you must believe what I say, but I think it is incumbent upon me to try to show to the Government that there is substantial evidence about the points I am making. But I take your point and will not deliberate too long on this.
Perhaps I may merely bring to the attention of the House the importance of the Commission which sat under Lord Devlin, and looked into this matter of trade union organisation and whether the Conventions of the country had been offended against—
Mr. Deputy Speaker: Order. I appreciate the point which the hon. Gentleman is trying to make. But I think he has made his point and it would be quite out of order if he were to continue along these lines for very long.
Mr. Prescott: May I take just one minute, Mr Deputy Speaker, to say that this Commission found that these two Conventions, which guarantee the right of association and the right to strike, had been seriously prejudiced; and that the actions of the Government in putting many trade unionists in gaol—
Mr Deputy Speaker: Order. The one thing that the hon. Gentleman really must not do is to go into the internal politics of another country to which he has referred in discussing this Merchant Shipping Order.
Mr. Peter Archer (Rowley Regis and Tipton): On a point of order, Mr. Deputy Speaker. While, of course, my hon. Friend and all of us accept your Ruling, I think we may be in a difficulty here.

2271
The purpose of this Order is to deprive certain people of the right of recourse to the courts of this country. Whether we agree that this is an acceptable situation must depend to a very great extent upon whether the alternative recourse is a real and acceptable one. For that reason, we would very respectfully ask you to enable us at least to canvass whether these alternative methods of recourse might be acceptable.
Mr. Deputy Speaker: I take the point of the hon. Gentleman and appreciate what he is aiming to do. But, nevertheless, the Chair must support the procedure followed with an Order such as this. The hon. Gentleman who had the Floor was straying rather far from that.
Mr. Prescott: I made the point that the Greek trade union movement is no longer effective. It has therefore been expelled from the international trade union movement and other bodies of which it was a member. So while I appreciate the point you make, Mr. Deputy Speaker, about internal politics it is fair to say this. If the man cannot have recourse to the courts of this country, then he must go to the courts of that country. I assume it is felt that justice can be achieved by going back to Greece, lodging a complaint about his contract and trying to get back his five months' wages which he has been denied. It has been shown by reports commissioned by the Council of Europe, which lawyers have investigated, that the very impartiality of the courts is seriously doubted. It is a country which has been dominated by a military dictatorship, with the courts ruled by the military, and their whole integrity is being seriously undermined. May I make one quotation from what the Prime Minister of that country said in regard to the courts?
Mr. Deputy Speaker: Order. That really would not be in order, and the hon. Gentleman must accept that he is straying too far from what the Chair can allow, with the greatest good will in the world for the hon. Member. I would ask him to make his point without further reference in that direction.
Mr. Prescott: I accept your Ruling, of course, Mr. Deputy Speaker. I am glad that the Foreign Secretary is present, and I am sure that he understands
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points and the difficulty of making them in moving this Prayer.
I want the Government to realise that this Order will deny to our seamen their rights to pursue claims in countries where those rights are not guaranteed in the way that they are here. This is very important, because it affects the character of international trade unionism. Many seamen come to this country with considerable sums owing to them. If it were possible to take contracts to court in the same way as collective agreements can be pursued in our courts, there would he more chance of getting justice in a British court than men in that position could hope for in the courts of a fascist State.
It is important to bear these points in mind. The Government must realise that this Order seriously limits the civil and human rights of certain individuals to appeal for justice. Those rights are guaranteed in this country. They are denied in their own. By denying such people those rights when they come to this country, the Government are assisting the operations of the junta.
10.36 p.m.
Mr. Albert Booth (Barrow-in-Furness): As my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) has made clear, our basic objection to this Order is that it places British seamen and those of a number of other nations outside the jurisdiction of British courts when they try to pursue claims arising out of their contracts of service. It has the further effect, in certain circumstances, of enabling them to be detained on ships registered in Greece, and detained in a way which would not be lawful but for this Order. However, our basic objecttion to the Order is that it leaves seamen to the mercy of foreign courts, since it rules out a line of defence which otherwise would be open to them.
Since we are considering two Orders, I submit that we are entitled to refer to the differences in practice between the courts of this country and those of Spain and Greece, and we are entitled to put before the House evidence of the differences since the Government has drawn a distinction between Spain and Greece in the Orders.
In the Spanish Order, certain additional protections are given to seamen serving

2273
on ships registered in Spain. They are not given to those serving on ships registered in Greece. If the Government make that distinction, we are entitled to discuss the reasons why we object either to such distinctions being drawn or such differences of jurisdiction being applied to a British seaman or even a Swedish seaman who happens to be serving on a ship registered in Spain, as opposed to a ship registered in Greece or, for that matter, one registered in the United Kingdom. That is the serious scope of the Orders.
The régimes of the countries whose courts will have jurisdiction as a result of the Orders have denied to their subjects liberties which we would consider fundamental. The experience of those who have represented seamen is that seamen do not trust the justice of those courts.
The Order relating to Greece extends the jurisdiction of Greek courts to all matters concerned with the contracts of service of ships registered in Greece. The nationality of the crew members may bear no relation to the country of registration of a ship. The tax system, the conditions of charter which apply in a particular maritime country and the insurance conditions of a country may have much more effect upon where the ship is registered than the nationality of the crew. Those international lawyers who had the highly complex task of examining where jurisdiction lay in the case of the "Torrey Canyon" found that five countries could claim some jurisdiction because of the highly complex arrangements of ownership and registration of international shipping today.
I further contend that the nature of a seaman's job is such that it can be more difficult for him to seek redress in a court than for people in many other trades and professions. By virtue of the short time that he is ashore in certain places, any restriction of access to a court of his choice can be more serious in his case. I believe that the serious restriction which these Orders place upon a seaman are intolerable and would make it impossible for him to obtain justice.
Article 4 of each Order enables a member of the crew of a ship registered in Greece or in Spain to be detained on board if it is alleged that he is in breach of the Greek or the Spanish law. I
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appreciate that certain defences are open to the man on board a Spanish registered ship which are not open to the man on board a Greek registered ship. Nevertheless, the Orders make lawful detention which otherwise would be unlawful. Therefore, the Orders considerably restrict the legal rights of a large number of seamen.
I question the practicability of operating Article 4 of either Order because a judgment has to be made whether a seaman is in breach of the law of another country. Who will make that decision? Who will represent the seaman if he contends that he is not in breach of the law of Greece or of Spain? Is the captain of the ship to be his judge? Is the captain's allegation to be sufficient to hold that man on board ship against his will'? Will he be denied, as I suspect, access to his consul? If so, a further traditional right of seamen is being denied in the laying of these Orders. This is further evidence that these are intolerable Orders. The Government must justify not only the taking away of legal rights of seamen in these Orders, but the difference between the two Orders.
Because the Government have sought to distinguish between Spain and Greece, it is for the Government to say why we should apply different standards to different countries. If the Government were being completely consistent and saying that every country should be accorded the same rights over seamen, that would be one thing, but that is not their position. They are saying that seamen who serve on ships registered in Spain need greater legal protection than those serving on ships registered in Greece. Are they doing this because Greece is a member of N.A.T.O.? It is up to them to say so: they have to justify these instruments.
My last complaint is that the Government have sought to prevent discussion of these instruments by the House. It was communicated to a number of my hon. Friends that these instruments would not be debated unless they gave an undertaking not to vote upon them. This is an underhand way of obtaining a disgraceful piece of delegated legislation. The only way in which the Foreign and Commonwealth Secretary can leave the House tonight with a clear conscience

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about these instruments is to withdraw them and let the House have a proper debate on the rights of seamen which are being taken away under this legislation.
10.46 p.m.
Mr. John Fraser (Norwood): It is not in dispute that we are dealing with two consular instruments which deny access to the British courts for seamen in certain circumstances, and mean that, in practice, a seaman will have to have recourse to courts within one of two Fascist States. The House should be extremely careful and circumspect about giving the possibility of denying jurisdiction in the British courts and returning men to States which do not know civil liberties but only a denial of human justice. The Under-Secretary would not do himself any discredit, but would command both the respect and the commendation of the House, if, after listening to the arguments, he decided to allow the Orders to be annulled. One is talking only of these two Fascist States and not of the others where the Orders have been allowed to go through.
There is a long-standing tradition that someone coming from an oppressed country on a ship has recourse to British courts and justice as we know it. The tradition goes back at least as far as the case of James Somerset, a slave who lay aboard ship in the Port of London and was released from his slavery on the writ of habeas corpus. This is a long-standing tradition which should not be breached.
These Orders mean that, if there is an objection by the consular official, the seaman is returned to the spider's web of the Fascist country from which he comes. I hope that I do not stray from the Rulings which have been given, but surely the only justification for denying the jurisdiction of the British courts to a seaman on board a ship which is registered in Spain or Greece is the knowledge or the assurance that the man will get equally good treatment in his own country.
I have some personal experience of the system in at least one of these countries. I was for a short time detained by the secret police in Athens. I will not give the whole story, but the explanation which
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was given when I was arrested was that they thought that I was a Greek. I was arrested for placing a wreath on Byron's statue. That gives some idea of the judicial system in question.
If there is going to be a guarantee of alternative good justice in another country, it really must be proved to the satisfaction of this House. There is no evidence that the judiciary—I speak only of Greek—will give the same guarantee as would be given in this country. To give one example, the examining magistrate in the Lambrakis case has been detained incommunicado, without access to his lawyer, since November of last year. For the Greek seaman who returns to Greece to sue for his wages, that is the sort of thing he faces and not the sort of thing which this House should countenance.
Just one other example—
Mr. Deputy Speaker: Order. I hope that the hon. Gentlemen's other example will not be quite the same as his previous one, because we are now getting very near the borderline.
Mr. Fraser: I obviously wish to obey your Ruling, Mr. Deputy Speaker. I would give only one short example—the fact that many of the Greek judges, civil, not criminal, were dismissed arbitrarily and summarily because they tried to uphold the constitution. It is into those circumstances that one would be returning seamen.
I have also had dealings in this country with Greek consular officials. It sometimes happens that a seaman or other employee of an organisation which is based in Greece comes here intending to escape from oppression, from arrest and, in some cases, to put it bluntly, from conscription into the army, which operates as a political force. That individual comes here wishing for freedom and for political arrest.
I have nothing but gratitude for the attitude of the Home Office and the Foreign Office in dealing with these cases sympathetically, and I am pleased to be able to say so. If, however, a man who comes aboard a ship, wishing to seek political asylum here and to escape from terrorism and pursuit in his own country, cannot claim the wages that are due to him when he arrives on our shores,

2277
if he has to return to that country to exercise his rights to recover his wages he is denied not only the right to obtain his wages in this country, but the right to freedom.
I hope that the Under-Secretary will give this matter most careful consideration. It could be an affront to the reputation of this country for upholding liberty and the right of persons who have come to our shores to obtain justice. I hope sincerely that the hon. Gentleman will allow the Orders to be withdrawn.
10.51 p.m.
Mr. Peter Archer (Rowley Regis and Tipton): I say at once that I do not like the regimes in either Greece or Spain. I say that by way of a declaration of interest. I do not propose to enlarge on it, because I respect your Rulings, Mr. Deputy Speaker, because my hon. Friends already elaborated to some extent on the reasons and because I have given reasons on other occasions. It was for that reason, however, that I was led to take an interest in the Orders. Having perused them, it strikes me that they raise questions which, if not of deeper significance, may be of wider significance.
Perhaps I may speak specifically of Statutory Instrument No. 1908, although most of my comments are equally applicable to both Orders. The avowed purpose of Statutory Instrument No. 1908, however, is to give effect to the consular convention of 17th April, 1953. If one looks at that convention and at Article 28, sure enough the result of the Order is to give effect to the obligation which we undertook under that convention.
The first query which springs to mind is why it took so long for us to implement it. That was 18 years ago. Normally, one would accept that it is eminently right that we should give effect to our international obligations. If, however, no one has complained over that long period, where has the situation altered so that it suddenly becomes necessary to take these steps? What recent events, what change in their attitude of the Government and what change in the nature of the requests made by the Greek Government have suddenly brought this matter to the attention of the authorities? If the world could live with the situation for 18 years,
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why is it suddenly impossible to live with it any longer?
I suppose that the obvious answer which the Under-Secretary may give—I am trying to assist him in replying to the debate—is that until the Consular Relations Act, 1968, it was not possible to make these Orders. There was no statute on the Statute Book which gave the Government authority to make them. They had no power to make them. Problems of this kind, however, partake rather of the nature of Medusa's head: we dispose of one and we are then confronted with a number of others.
Perhaps the first and obvious question which arises from that answer-assuming that that is the answer that the Under-Secretary will give—is why it took so long to put these powers on the Statute Book. Was the matter of so little urgency that until 1968 no one thought it necessary to invite the House to give the Government these powers? If it is said that the exigencies of the parliamentary timetable were such that for 16 years it was not possible for the House to be asked to give these powers to the Government, one can only conclude that against the weighty considerations which have been urged by my hon. Friends, there are very few considerations of weight in the other direction. For all that time, no one seemed to think that it was necessary to take this action.
If it is true that the parliamentary timetable did not admit of the passing of this legislation for all that time, what were we doing in 1953 in undertaking this obligation in the first place? Unless we are given the reasons why the situation has altered, one is driven to the conclusion that the considerations advanced by my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) remain unchallenged.
I wondered why we undertook this obligation. What was the purpose, I wanted to know, of this whole exercise. What purpose is served if one deprives seamen on certain sea-going ships of their right of recourse to British courts? There is nothing in the Order, in the Convention or in the Act to give an answer to this question. Finally, having examined those provisions, I went in desperation to the Second Reading debates when the Act

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was passing through the House. I thought that at least then the Government—admittedly, at that time it was a Government of a different political complexion—might have ventured the reason why this Measure was necessary. But they had not done so. Indeed, nobody showed sufficient curiosity to inquire about it. I must take my share of responsibility for that lack because I was an hon. Member at that time. Suffice to say that nobody inquired and nobody gave the answer.
At last I was driven to look up the OFFICIAL REPORT of the debates in Standing Committee. There, at one point, I found an inkling of the reason behind this whole exercise. It arose in a curious way because an hon. Member who is now a Minister—I will not take the matter further because I have not had an opportunity to warn him that I should be raising this issue—advanced a somewhat curious Amendment to what was then Clause 4, giving power to make this Order. He wanted to add the words "and aircraft", because at that time it referred only to sea-going vessels. The Minister who will reply to this debate supported him in that matter.
The argument advanced on behalf of the Amendment was curious in the extreme. It was that so many exciting and vital things were happening on aircraft that it was important that we should extend the jurisdiction of the British courts to take account of them. It was not explained how, by adding those words to a Clause the purpose of which was to restrict the right of access to the British courts, that would be achieved.
But in replying on that occasion, the then Minister responsible gave an indication of the purpose of the exercise. The reason is that what goes on on board a ship between master and man is an internal matter, and it would be inconvenient if, at least without reference to a consul, the matters were brought before the courts of the country in which that ship happened to find itself in harbour.
That was, in some ways, a puzzling answer. Generally speaking, if the proposition were that Greek seamen on a Greek vessel should bring their disputes before a Greek court, I would accede to
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that proposition, but my hon. Friend the Member for Barrow-in-Furness (Mr. Booth) indicated one respect in which that principle cannot be stated with such pristine clarity because there is no reference in the Order to Greek seamen. They might be seamen from Mexico, Malaya or Britain, but they are equally barred from access to the British courts. If that is to be justified, we shall need more reasoning than we have heard so far.
Again, my hon. Friend the Member for Kingston upon Hull, East, explained that what we have so far referred to as Greek ships, for the sake of shorthand. means nothing more than ships registered in Greece and carrying the Greek flag. We have heard a great deal about flags of convenience. It would not be within the rules of order to elaborate on all the disreputable reasons why sometimes ship owners resort to flags of convenience. They may be anxious to avoid their obligations to pay tax on their profits. They may wish to avoid their obligations to the international community in relation to pollution. Nothing has been said to indicate why a British seaman or even a Greek seaman on a Mexican vessel should find himself barred from the British courts by a Greek consul simply because the vessel happens to be flying a Greek flag.
The other argument that might be advanced is that the principle of reciprocity applies. It might be said that if we object to giving this power to Greek consuls possibly it will be equally denied to a United Kingdom consul in Greece, and a party to a dispute on board a British ship might find himself able to bring his dispute before the Greek courts. If he really wants to do it, that does not disturb me, although I find it hard to believe that anyone whom I know would be desperately anxious to resort to that. The principle of reciprocity does not help, because it would be just as easy and acceptable that the principle of reciprocity should apply in reverse as a reason for not implementing the agreement as for implementing it.
The Minister might well be able to give us at least some information that will enable the House to form a judgment. How many such Conventions have been made altogether? With how many countries? Are all those Conventions

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before the House, or are there some that have not been brought before the House? If not, why not? Can the hon. Gentleman tell us roughly how many ships flying the Greek flag are not owned by a Greek citizen, by someone domiciled in Greece or by a company registered in Greece? In other words, what is the extent of the use of the Greek flag as a flag of convenience? Can he give us some idea of what proportion of the crews of Greek ships consist of Greeks, and what proportion of people who are foreigners in Greece? If he says that he has had fairly short notice that this information would be required, can he tell us of the way in which in due course it will be placed before the House? Might he regard this as a reason for withdrawing the Orders meanwhile?
Mr. Booth: Does my hon. Friend agree that to test the principle of applying this equally to all countries it would be very interesting to inquire what percentage of Liberian-registered ships are crewed by Liberians?
Mr. Archer: The answer to that question certainly might give rise to some very interesting statistics. For the moment I am prepared to confine myself to the questions of the Greek ships. I suspect that a number of ship owners might wish to fly the Greek flag as a flag of convenience, because presumably as a member of the international community which on occasions has been found lacking in its responsibilities, the Greek Government are not very assiduous in controlling their shipping.
But there is one consideration which for me goes very much further than all these matters. It would be a serious enough matter if a seaman found himself deprived of the right of recourse to any court to claim his wages or to insist on the enforcement of a contract of employment.
But another matter in the Order goes even further. It has been mentioned by my hon. Friend the Member for Norwood (Mr. John Fraser). My attention was drawn to it by the Explanatory Note, which is not part of the Order. This limits the jurisdiction of the courts of the United Kingdom in relation to
"the detention on board of a member of the crew for a disciplinary offence…"
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I would not have recognised that it has this effect where the provision appears in the Order, because Article 4 is legislation by reference. Although I appreciate that there might be good reasons for that, it is not a particularly helpful kind of reference.
One turns to the Act. Section 6 says that, in certain circumstances, a seaman who is detained on board a Greek vessel, even in a British port, shall not have recourse to the British courts. This is a very worrying matter. There is a very long tradition, as has been said, in these islands that anyone who is threatened with the loss of his liberty or with persecution for his political or religious beliefs or with the possible loss of his life, may come to the area where the writ of the British Sovereign runs and may there find a guarantee of freedom. That is a principle too precious to be lightly jeopardised in a Statutory Instrument at eleven o'clock at night.
There are safeguards, of course, in Section 6, and it is only fair to point them out. It does not apply if
"… his detention is unlawful under the laws of …"
the State of the ship, or if
"…the conditions of detention are inhumane or unjustifiably severe; or
"there is reasonable cause for believing that his life or liberty will be endangered for reasons of race, nationality, political opinion or religion …"
One would expect to have safeguards of that kind in this legislation. But it raises a number of very serious questions which cannot be lightly disposed of in a debate of this kind, and some of them have already been referred to.
It is true, of course, that the courts will inquire into whether these conditions obtain. But the courts may make mistakes. There is no built-in safeguard against courts being misled on questions of fact. There are times when they must inevitably embark on questions of this kind. This is not one of those occasions, because here there is no necessity for it, and therefore no necessity to run the appalling risks which will obtain if the courts are misled.
Secondly, the onus of proving that these conditions obtain will be upon the seaman, and, as my hon. Friend has pointed out, there is no guarantee that he will have access to his lawyers or to

2283
the necessary evidence or the necessary correspondence which may have to be addressed to people back in his own country. He has to prove that his life or liberty are endangered in this way, and there is no guarantee that he will be afforded the instruments of proving them. It is difficult always when a British court has to decide a question of foreign law, but there are times when they have to embark upon it and there is no way of avoiding it. In this situation, the stakes are simply too high.
Neither the Greek nor the Spanish Governments have given us any reasons in the past to have any confidence about the way in which they will operate this kind of provision. So I return to the original question. What has transpired in the last 18 years that has suddenly made all these risks worth the running, that has suddenly required that we satisfy the Greek Government in this way? Why have they suddenly become more urgent in their demands? Is it really essential at this late hour that we give them what they ask?
11.9 p.m.
The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Anthony Kershaw): For the reasons which I shall explain, I shall ask the House to reject the Motion. First, let me make clear the scope of the remarks I shall make. I shall address myself to the content of the two Orders. I do not regard this as a suitable occasion for a general debate on our relations with Greece and Spain, still less for comment on their internal affairs. Nevertheless, I will try to satisfy hon. Members about the misgivings I know that they sincerely feel and which have led them to criticise the Orders. I hope to show them that their fears are unfounded.
It may be useful if at the outset I explain the background against which the Orders are made. The two Orders are part of a group of 18 such Orders made on 17th December under Sections 4, 5 and 6 of the Consular Relations Act 1968 and all but three of them were brought into force on 1st January, 1971, the date of the entry into force of the Act itself. Incidentally, I would point out that these Orders were laid before the House on 23rd December and not on
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12th January as the Motions state. Some other countries in respect of which Orders were made include Sweden, France, the United States, Japan, Poland and the Soviet Union.
As the House is aware, the Consular Relations Act had three main purposes: first, to give effect to the Vienna Convention on Consular Relations of 1963; second, to make certain arrangements in connection with the Commonwealth, and third, to permit Her Majesty's Government to give effect to or continue to give effect to certain provisions in bilateral consular or similar agreements. Sections 4, 5 and 6 of the Act belong to a group of Sections designed to serve the third of these purposes.
The general aim of Sections 4, 5 and 6 is to enable Orders in Council to be made which will provide for certain limitations upon the exercise of jurisdiction by British courts in respect of foreign ships and crews. Although it is not a requirement of the Act that such Orders should be made only in the case of States which have agreed to accord reciprocal treatment as regards British ships and crews whilst in their waters, as a matter of policy Orders are made only in these circumstances. Thus, in the case of each of the States in respect of which the 18 Orders mentioned were made, including the two under discussion, substantially reciprocal treatment is secured by the relevant provisions in our various consular conventions.
In view of our position as a State with major shipping interests, it is very much to our advantage to obtain such immunities. It is undesirable, inconvenient and expensive if a British ship is detained, possibly for a lengthy period, in a foreign port while matters which are essentially internal to the vessel, and which should therefore be settled in British courts are disputed before a foreign court.
I ask the hon. Member for Kingston upon Hull, East (Mr. Prescott) to bear this in mind—Greek seamen may in some circumstances which are set out in the Order have been deprived of action in the British courts, but if these Orders do not go through and are not reciprocated by Greece, we would be exposing our seamen to the jurisdiction of the courts of Greece, which he said were very unfairly run. I am surprised, also, that the

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hon. Member for Rowley Regis and Tipton (Mr. Peter Archer) should say that reciprocity is not important. I believe that it is very important indeed, and as a great maritime nation we have rather more interest than almost anyone else in making sure that our seamen are not exposed to risk in all the ports of the world to which they constantly have to go.
At the same time, I perfectly agree that there are limits to the degree to which it would be appropriate to derogate from the jurisdiction of our own courts over foreign shipping, and the Sections in question accordingly provide for certain safeguards to which I will briefly refer. I hope that the House will agree that we have struck a correct balance between the two considerations I have outlined.
Section 4 permits Orders to be made limiting the jurisdiction of our courts to entertain proceedings relating to the remuneration or contract of service of the master or a member of the crew. These are matters for the flag State of the vessel and with which other States should normally not concern themselves.
Section 5 permits Orders to be made limiting jurisdiction where offences are alleged to have been committed on board by the master or a member of the crew. The Section contains appropriate reservations to safeguard the interests of the United Kingdom as a coastal State. For example, it does not apply to offences which constitute serious crimes—that is, crimes attracting a sentence of more than five years' imprisonment in our law—or which are alleged to have been committed by or against a person who is a citizen of the United Kingdom and Colonies, or where questions of port safety or pollution, for example, arise.
Orders under Section 6 of the Act limit the jurisdiction of the courts to issue—
Mr. Archer: Before the hon. Gentleman leaves that other point, can he give an example of the kind of proceedings which might be brought in the Greek courts against British seamen?
Mr. Kershaw: The sorts of proceedings which would be brought in a Greek court, in the absence of any of these provisions, could be any proceedings for
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an affray, a fight, or anything like that. The slightest infraction of Greek law aboard a British ship in Greek waters could be taken to the Greek court. That would then be the forum in which it would have to be decided. The hon. Gentleman may ask how the police would know that an offence had been committed on board a British ship. Clearly that is not a very solid argument.
We are seeking to ensure that our seamen have the advantage of British law for offences of a minor sort when they are in Greek waters and that Greek seamen, again, on a reciprocal basis, shall not have to submit to British law when in British waters in such cases.
Mr. Booth: Surely what the hon. Gentleman is saying is not the case under the terms of the Order. A British seaman serving on any vessel registered in any country other than the United Kingdom will, on the application of this principle, be answerable to the court of the country in which the ship is registered. He will not have access to British courts, and therefore the right of access to British courts by British seamen is being taken away by the Orders.
Mr. Kershaw: The hon. Gentleman is not on the same point. The law applying to the ship is the law of the flag, in the absence of anything else. If a British seaman enlists on a ship registered anywhere else, it is the law of the country where the ship is registered which applies. If I did not express myself well, that is what I was trying to say.
Mr. Prescott: I have here a contract of agreement that is drawn up for one of these vessels. It contains a clause which specifically states that, although it is a ship under a Liberian flag, jurisdiction under the agreement will be in the Greek courts.
Mr. Kershaw: Flags of convenience are not relevant to this. The hon. Gentleman was barking up the wrong tree there. Flags of convenience do not arise here. It is only ships which are registered in Greece and Spain. That is what the two Orders are concerned with.
Mr. Prescott: There is a flag of convenience.
Mr. Kershaw: There is a flag of convenience, but not under these Orders. The

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Orders under Section 6 of the Act limit the jurisdiction of the courts to issue a writ of habeas corpus in respect of the detention on board ship of a member of the crew for a disciplinary offence.
Mr. Archer: What still puzzles me is that the examples which the hon. Gentleman gave are not examples of proceedings relating to remuneration or a contract of service. That is what this is about.
Mr. Kershaw: That is in Section 4. I am on Section 6. An offence under Section 6 is usually the internal concern of the vessel, but once more the Section contains safeguards. For example, it does not apply if the conditions of detention are inhumane, if the detention is contrary to the law of the flag State, or if there is reason to suppose that the life or liberty of the person concerned will be endangered for reasons of race, nationality, political opinion or religion in any country to which the ship is likely to go. The hon. Gentleman read that himself when he was speaking.
The hon. Member for Norwood (Mr. John Fraser) was disturbed by the possibility that we were in some way restricting what might loosely be called political asylum. He will see from the Section read out by his hon. Friend that that is not so.
Mr. John Fraser: I understand the problem about detention aboard ship. In practice, if a man has a large accumulation of wages due to him and has to return to Athens to claim it, it is not a question of a restriction on his freedom but it prevents him from coming off the ship into a free country.
Mr. Kershaw: That is assuming that he is unwilling to return to Greece in any circumstance, but that has nothing to do with the Orders. I gave the answer to the hon. Gentleman when I said that remuneration must be a matter for the flag State. If a seaman is unwilling to return to the courts of the country for other reasons, I am afraid that we cannot deal with that in these Orders.
Although it was found expedient to incorporate Sections 4 and 6 in the Act to remove any doubt as to the state of the law, it was considered that the various provisions in our consular treaties dealing with these matters were
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sufficiently in accordance with the law as it stood when they were concluded to permit effect to be given to them without specific legislation. It was always recognised, however, that the matters for which provision is now made in Section 5 would require legislation before the relevant provisions in our bilateral consular conventions could be implemented. Consequently, the entry into operation of these provisions was suspended pending the passage of the necessary legislation.
We have reached agreement in principle with the States concerned that the suspended provisions will be brought into operation when we are in a position to implement them. This is one of the purposes of Article 4 of the Spanish State Order.
The Spanish Order provides for the application to Spain of Sections 4, 5 and 6, whereas the Greek Order provides for the application of Sections 4 and 6 only. The hon. Member for Barrow-in-Furness (Mr. Booth) asked about this. This distinction arises from a difference between the two Conventions, in that the Anglo-Greek Convention does not at present impose any specific obligations as regards the matters dealt with in Section 5 of the Act—that is, the exercise of jurisdiction over offences committed on board a vessel. However, it does contain in Article 28(2) a statement of principle in which both parties express approval of the international practice whereby the coastal state does not exercise such jurisdiction. Certain other conventions contain a similar provision and it is hoped that at a convenient opportunity the relevant articles in the Anglo-Greek and the other Conventions mentioned can be amended and re-cast in mandatory form.
To sum up, there are three main reasons why the Government feel bound to oppose the Motions. First, if the Orders were to be annulled the United Kingdom would risk being in breach of its treaty obligations arising under the Consular Conventions with Greece and Spain. To fall into breach of a treaty would be contrary to the frequently expressed views and long-standing practice of the United Kingdom as regards the sanctity of international obligations.
Second, as I have explained, it would be against our interests since it is important for the United Kingdom, as one of

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the greatest maritime States, to obtain for its ships a similar degree of immunity from the exercise of jurisdiction by foreign States.
Finally, jurisdiction over shipping is only one of a number of matters which are dealt with in our consular treaties. Greece and Spain alike are countries to which very large numbers of British tourists and businessmen go every year. Both the Anglo-Spanish and Anglo- Greek Convention contain valuable provisions guaranteeing the status of our consulates and consuls and their right to exercise a wide variety of functions in protection of our nationals and their interests; for example, both Conventions provide valuable rights with regard to the notification of arrests and consular access to detained persons. The annulment of the Orders might well place these valuable rights in jeopardy.
The hon. Member for Kingston upon Hull, East was incorrect in thinking that these provisions applied to flags of convenience. The Orders apply only to ships registered in Greece and Spain. I have nothing to say in answer to the remarks made by several hon. Members about trade unions in Greece. This is not a matter dealt with in the Orders and I do not wish to say anything on the matter at this time.
Mr. Peter Archer: Are we in some way being misled? If a ship other than a Greek or Spanish ship is registered in Greece or Spain, is not that a situation where a flag of convenience applies?
Mr. Kershaw: A flag of convenience is not a legal term. What we are doing here is talking about Orders, which apply to ships which are registered in two countries. Whether those ships are re- garded as rat-infested hulks or whatever they may be, they are the ships we are talking about and none other.
Mr. Booth: The hon. Gentleman will agree that the Act to which these Orders relate refers to ships belonging to a country and in the definition Section it is laid down that "belonging to" means registered in. The general understanding of "belonging to a country", as far as 99.9 per cent. of our citizens are concerned, is "owned by that country". Many ships owned by a country are registered elsewhere and that is a practice of convenience.
Mr. Kershaw: I follow the hon. Member. I can assure him that these Orders apply only to ships registered in these two countries.
A word about habeas corpus. We are asked who is to decide whether the detention is lawful. Our British courts can investigate the circumstances under which someone is held and can decide whether his detention is unlawful under the laws of the flag State or whether he is held in inhumane conditions, in which case the Order would not apply to preclude intervention.
I was surprised to hear what the hon. Member for Barrow-in-Furness had to say about the Government having said that these Orders would be brought forward provided no one voted against them. I see the former Patronage Secretary sitting on the Opposition Front Bench and I am sure that he would never have agreed, or could have agreed, to such an arrangement. I assure hon. Members that no such proposition was ever made. If hon. Gentlemen feel they would like to go ahead and divide the House let them go ahead and do it. I hope that they will not feel that it is necessary.
Mr. Robert Mellish (Bermondsey): Before the Minister makes statements of that kind he ought to have consultations with his own Patronage Secretary.
Mr. Kershaw: I understood that there were no consultations at the moment. These great mysteries are not revealed to me.
Hon. Members have taken this opportunity to attack the Greek, and, to some extent, the Spanish, Governments and in particular their trade union arrangements. I do not think that those remarks help relations between our countries.
Mr. Prescott: They were not intended to.
Mr. Kershaw: The Greek Government is a member of N.A.T.O. —
Mr. John Fraser: Shame.
Mr. Kershaw: —which defends the freedom of which hon. Members have been making use tonight. It is not for us to tell the Greeks how to order their internal affairs, but as long-time friends of Greece we look forward to the restoration there of democratic processes.
Mr. Orme: Hear, hear.
Mr. Kershaw: Our relations with Greece are important to us and we intend that they shall be realistic and constructive. With regard to our relations with Spain, we welcome the new climate we have seen there. I do not think that hon. Members are helping very much by the attitude that they have taken to these countries tonight. I ask the House to reject this Motion.
Question put and negatived.

LOCAL AUTHORITY TRANSPORT (CONCESSIONARY FARES)
Motion made, and Question proposed, That this House do now adjourn.…[Mr. Fortescue.]
11.31 p.m.
Dr. John Gilbert (Dudley): I rise to raise the subject of the need for the Government to encourage local authorities to use their powers in relation to concessionary fares. The debate takes place in the context of some rather discouraging exchanges in which the Under-Secretary of State for the Environment, for whose presence I am grateful, participated at Question Time yesterday. It is no part of my purpose tonight to engage in recriminations about the past. I hope that something genuinely constructive will come out of the debate tonight.
Before I turn to the rôle which the Government might usefully play in this matter, I will discuss the problem in the round, because it is important to realise that we are dealing with a social problem of considerable and increasing magnitude. Above all, we are talking about human loneliness. We are not talking about handing out indiscriminate luxuries from a welfare State bonanza to those who do not need them. We are talking about assisting old people, blind people and disabled people to get out and about as much as their health permits, to enable them to do their shopping satisfactorily in the town centres of the community in which they live, and to enable them to visit their children and grandchildren who have so often—and this is particularly true in my constituency—moved away from an old council estate, where the grandparents were born and have
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lived all their lives, to a more modern estate some miles away but still in the same borough.
Bus fares, as is no secret in the House, are going up and up and up. In the area served by the Midland Red they will soon have gone un three times—drastic increases—in the space of a year or so. It has reached the point where taking a bus from one part of the county borough of Dudley to the shopping centre and back again is becoming quite beyond the means of old people who do not have private resources.
As I am sure the Under-Secretary of State will make clear before long, the position is that each local authority can make its own determination as to how it spends its money in these matters. In the exchanges at Question Time yesterday it was suggested that it was the in-discriminatory nature of concessionary fares, where they existed, that led to resentment among those who are unable because of physical incapacity to take advantage of them. This far from my experience.
Nobody in my constituency has complained that he or she does not want a concessionary bus fare scheme because they personally would not benefit from it. I will not draw attention to the hon. Gentleman who raised this point, because those sentiments are unworthy of the House. What undoubtedly leads to resentment is where one local authority runs such a scheme and another in a contiguous area does not. In the West Midlands conurbations on the western side Walsall, Warley, Wolverhampton and Birmingham all have schemes of varying degrees of generosity. My own Borough of Dudley does not, nor does the Borough of Stourbridge, but one never expects very much of Stourbridge. It must be one of the worst local authorities in the country. But one expects something better from the County Borough of Dudley.
The situation in the Coseley part of Dudley is that many old people have to shop in Wolverhampton but cannot get the benefit of concessionary fare schemes of this sort, whereas those across the county boundary border in Wolverhampton are enabled to take advantage of the scheme there. Apart from the question of shopping, there are also old

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people's social clubs which draw members from old people from either side of a local authority boundary. There is a great resentment when old people on one side of the border enjoy concessionary fares whereas old people on the other side of the border have no such scheme. There is no reason that such situations need exist. The powers exist for local authorities to introduce these schemes and they have existed for a long time.
In the area with which I am concerned agreements have already been negotiated between the Passenger Transport Authority and the relevant bus companies. It is notable that other boroughs have enough confidence in the generosity and readiness of their ratepayers to foot the bill on behalf of their older and less fortunate fellow citizens.
When accusations have been made that the local authorities of Dudley and Stourbridge are dragging their feet, the excuse has been given that schemes which have been negotiated with the P.T.A. have been unfair to the local authorities and cost too much. This is no reason for not introducing them, because the schemes contain provision for renegotiation. After a scheme has been operating for a year or so, it can always be discovered by an adequate audit whether the arrangements have been fair to both sides. It is simply a question of a community's determination to do its best to look after its old people's comfort, and in some cases necessity in regard to shopping, in their declining years.
Even more distressing is the situation of the disabled and the blind. The number of such people affected is mercifully small though probably far more than official statistics reveal. The cost of such schemes for old and handicapped people is therefore commensurately low. The attitude of councils which have failed to introduce schemes to assist the handicapped and the blind is even more incomprehensible. It will cost a small fraction of a penny rate.
In the County Borough of Dudley a scheme for the blind was negotiated 11 long months ago. One stalling device after another has been gone through to prevent this being introduced. This is where the Government could give a lead. They could easily send out a circular to local authorities expressing in enthusiastic terms support for such schemes and the
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general desirability of their being introduced.
There are precedents for a regional approach to problems of this sort. In the S.E.L.N.E.C. area, as I understand it, a great many local authorities have got together to introduce a uniform scheme of concessionary bus fares. As a result, all the local jealousies and unhappiness have been eliminated. But looking again at the wider matters concerned, the economic costs—if we have to talk about it in those terms—of introducing these schemes are negligible.
In the first place, they all operate at off-peak periods. There are no extra wages to be paid to the bus crews; there is no extra petrol to be used as the buses are running anyway; there is virtually no increase in running costs; and for all practical purposes there is no increase in administrative costs. It is simply a question of making transfer payments. There are no extra demands on the nation's economic resources.
But, most remarkable of all, is that the bus companies now want to introduce these schemes—which have been painstakingly negotiated over months in the past in an attempt to get local authorities and bus companies to live up to their responsibilities to old people and to the blind and the handicapped—off their own bat for the general public. In fact, the Midland Red is applying to the Traffic Commissioners in Birmingham this month, in order to introduce off-peak fare discounts for the general public. The general manager was quoted in The Times of 16th December last as saying:
"We hope the general public will respond and take advantage of the incentives to avoid wholesale reduction of services or later abandonment of the reduced fares."
In other words, here we have the general manager of the biggest bus company in the area pleading with the general public to use concessionary bus fare schemes that he is hoping to introduce for everybody. So it is not just a question of common humanity; it is good business, too.
The Government should investigate these schemes. They should have a look at all of them and see whether local authority objections that some are rigged to bring the bus company too high a return are justified. We should have an

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impartial body to review schemes which have been negotiated to see whether they are fair to both sides. If an impartial referee says that a bus company is trying to get too much, then the responsibility will be clear. On the other hand, if an impartial referee says that a scheme is fair to the local authority, then it is quite clear where the responsibility lies.
In July, 1970, one of my first questions on becoming a Member of this House was to request one of the hon. Gentleman's colleagues to publish a survey of all local authority concessionary fare schemes now in operation, disclosing specifically the length of time they had been available, the nature of the concessions in each scheme, the number of persons to whom the concessions extended and the effect on the rates in each case. As one might imagine, I had a negative and unencouraging answer. I hope that the Government will be prepared to think again and let us have enough information to enable a considered view to be taken of such schemes that are in the process of being introduced.
I should have liked to say this evening that this is really a case for national legislation. However, I realise that the rules of an Adjournment debate prevent me from advocating that course which, in my view, is the only effective one that will bring unimaginative, dilatory and indifferent local authorities to a long overdue realisation of their social responsibilities.
11.45 p.m.
The Under-Secretary of State for the Environment (Mr. Eldon Griffiths): This is the second debate about buses that we have had this week, both of them at a late hour, and I understand that there is to be yet another on Monday. The task of replying to all three has fallen to me, and perhaps it is not inappropriate to say that, in preparing myself, I visited Birmingham last Monday and opened a bus drivers' school belonging to the passenger transport authority in which the hon. Gentleman is interested. While there, I drove a double-decker bus, under the guidance of one of the instructors, and learned a good deal about the bus industry.
I was extremely impressed by the need for both skill and resourcefulness on the
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part of those who operate these great buses in heavy traffic. The public often complains about the bus industry, about the irregularity of some of its services and the impatient attitude of a very small minority of drivers and platform staff. But I pay tribute to the overwhelming majority of those who work on our buses and do a difficult and important job very well.
Dr. Gilbert: Hear, hear.
Mr. Griffiths: The background to this debate and to the hon. Gentleman's complaint, of course, is higher fares. He is right to point out that many elderly and disabled people living on small fixed incomes are disturbed by the rapid increase in the cost of their bus tickets. In the Midlands, there have been some very sharp increases over the last year. It was generally a very bad year for the whole of the bus industry. Midland Red, for example, has had three substantial jumps: in January and July of last year, and at the start of next week. Similarly, in the West Midlands Passenger Transport Authority, there have been two substantial increases: one last March and the other only six weeks ago.
Against that background, I am not surprised that bus passengers complain. They complain in my constituency, too. But it is no good trying to hide the reasons why this cost escalation is happening and why both bus passengers and bus companies are getting hurt in the process The reason is inflation. It is the inflation that the hon. Gentleman's Government launched during their years in power.
Dr. Gilbert: Oh, come!
Mr. Griffiths: Nearly three-quarters of the cost of bus operations is wages. And busmen's wages last year rose very steeply. This is the main reason, though not the only one, why fares had to go up and why the hon. Gentleman's constituents are complaining.
The other reasons are a decline in passenger traffic, due in part, I accept, to higher fares but mainly due to the increased use of motor cars, and a series of imposts laid upon the struggling bus industry not by the present Government but by the last Government, who now have the crust, in the person of the hon. Gentleman, to complain about the

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consequences of their own foolish policies. The increases in taxation which we hope to right, the restrictions on drivers' hours which we intend to relax, and the rigidities of the 1968 Transport Act, parts of which we are discarding in the interests of relieving bus transport of unnecessary interference, are the sources of the cost inflation which is now crippling many bus companies and producing the situation about which the hon. Gentleman complains.
Midland Red is the example in the hon. Gentleman's area. In 1970, the company's revenue fell by more than £500,000, and its expenditure rose by £750.000. Its estimated operating surplus of £572,000 became an actual loss of £669,000. No company, private or public, can go on at that rate. So I must tell the hon. Gentleman directly that, if fare concessions are to be found, they cannot come from the bus companies. Instead, the hon. Gentleman looks for this extra help from elsewhere, and he does not mind whether it comes from the Government or from the local authorities.
The Government for their part are already helping. We are helping by relief to the bus companies on their fuel tax, by a 25 per cent. grant to buy new one-man buses, by paying half of any Section 34 grant made to rural buses. All these Government measures help to keep down the rocketing rise in fares.
Dr. Gilbert: On a point of order. As the Minister has not addressed a single word to the subject, may I ask whether he is in order in proceeding, or can he roam as wide as he likes.
Mr. Speaker: Order. I have no control over what the Minister says at all.
Mr. Griffiths: If the hon. Gentleman will be patient, when I have sketched in the background I shall come to his problem; but it is fare concessions with which he is mainly concerned.
Local authorities all over the country not only have all the powers which they need to give concessions—but they are well aware that they have them, and an increasing number are using them.
These powers are contained in the Travel Concessions Acts, the Transport Act 1968, and the Transport (London) Act, 1969. They are available to help
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men over 65 and women over 60, the blind and the disabled, on the services of any bus operator.
In the Midlands area generally Midland Red wrote in August last year to the 98 local authorities giving details of two kinds of schemes for local authorities to adopt if they wished to give concessions.
One of these schemes is based on tickets. Under this scheme the local authorities would purchase a series of tickets from the company valued at 2p each for distribution in amounts which would be at the local authority's discretion. These tickets could be used in off peak periods and all day at the weekends.
The other kind of Midland Red scheme is based on passes. Under this scheme the local authorities would purchase passes allowing travel at children's fares during off-peak hours. The passes have varying upper fares limits which restricts the length of a journey which pensioners could undertake at the concessionary rates. I do not know how many Midland authorities have so far introduced schemes.
Dr. Gilbert: Why not find out?
Mr. Griffiths: I do not know, because there is no requirement on them whatsoever to notify the Secretary of State.
Dr. Gilbert: Why not?
Mr. Griffiths: I shall give the hon. Gentleman two or three examples. The first concerns the tickets scheme. The Bedworth Urban District Council introduced a scheme costing £6,000 on 1st January, 1970. The Wellington Borough Council introduced one on 1st October of last year at a cost of £4,680. The Shrewsbury Borough Council introduced a scheme costing £7,300 which also began on 1st October.
The second series of examples concerns passes. The Rugby Rural District Council introduced a scheme costing £8,100. The Rugby Borough Council is preparing to introduce a scheme based on 6p passes on 1st April this year, and it has purchased 5,000 passes at a cost of £17,875.
I now come to the Dudley area which the hon. Gentleman has seen fit to attack in this House where the Council is not

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able to answer back. The West Midlands Passenger Transport Executive is offering a scheme in the Dudley area whereby local authorities would pay for passes purchased from the P.T.E. for the elderly, the blind and the disabled. The passes will allow pensioners to travel at children's fares on any journey in the area on W.M.P.T.E. and Midland Red buses during off peak hours, though that is to exclude Saturdays. The blind and the disabled would be able to travel free at any time.
So far I am told that 11 local authorities in the Dudley area have entered into the schemes. I understand that the Dudley C.B.C. have not yet entered the scheme now offered by the P.T.E., but I am told that it is due to consider the subject again on 2nd March. This is council's business. It would be wholly wrong for me to try to influence it one way or the other in any decision which it makes. That is the heart of the matter.
The power to make fare concessions is a local power. Local authorities have many powers and duties in many fields besides transport, and they have many different human calls on their resources. Inevitably, there have to be priorities. Those priorities, rightly, are for the local authorites to settle themselves, according to their own local assessment of the most pressing social needs. The Government should not seek to influence them. This Government will certainly not pressure local authorities to spend their own money in ways which they do not wish to do. On the contrary, it is our policy to devolve more, not less, responsibility, away from Whitehall to the local level.
The hon. Gentleman produced a number of interesting arguments, but it was his conclusions which interested me. After the mountain had moved, all that he suggested was that we should introduce a circular and find an impartial referee. We have produced two circulars on this matter, the first shortly after the concession powers were first given and then a
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second explaining how the financing was to be arranged, but the circulars made plain to the local authorities, to the local Press and to all those concerned, the existence of the scheme and how it could be operated.
The suggestion apparently is that my Department should now issue a further circular. I do not believe that local authorities are anywhere near as blind to the circulars issued by the Government as the hon. Gentleman suggests. I have not the slightest doubt that Dudley C.B.C., and all the local authorities in that area, are perfectly well aware of their powers, and, moreover, as freely elected and responsible people, are perfectly capable of making the appropriate decision in the circumstances of their own localities. I believe that it is better that we should leave it to them to judge and not seek from this House to impose upon them duties which they may be able better to judge than we can here.
I have been asked whether we will publish lists of the schemes which are in operation in the OFFICIAL REPORT. We cannot do this, because, under the law which the hon. Gentleman's own party introduced, local authorities are under no obligation to report to us on the use which they make of their powers. This is perfectly understandable, since the powers and the schemes are entirely theirs, and the Secretary of State could not and would not seek to call for reports in those circumstances.
If the hon. Gentleman wishes locally to advocate concessions, let him do so. I have no doubt that he has. But I must ask him to accept that, in the judgment of this Government, it is wisest and most humane to leave to those locally elected councils the judgment of what is best for their particular circumstances.
Question put and agreed to.
Adjourned accordingly at three minutes to Twelve o'clock.